AMENDMENT NO. 10 TO AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT
NO. 10
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS
AMENDMENT NO. 10 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February
__, 2008 (the “Agreement”)
relating to the Credit Agreement referenced below, is by and among WOLVERINE
TUBE, INC., a Delaware
corporation (the “Company”),
certain of its Subsidiaries identified as Subsidiary Borrowers on the signature
pages hereto and any additional Subsidiaries of the Company which become parties
to the Credit Agreement in accordance with the terms thereof (collectively
referred to as the “Subsidiary
Borrowers”
and
individually referred to as a “Subsidiary
Borrower”)
(hereinafter, the Company and the Subsidiary Borrowers are collectively referred
to as the “Borrowers”
or
referred to individually as a “Borrower”),
each
of the financial institutions identified as Lenders on the signature pages
hereto (the “Lenders”
and
each individually, a “Lender”),
and
WACHOVIA BANK, NATIONAL ASSOCIATION, (“Wachovia”),
acting in the manner and to the extent described in Article XIII
of the
Credit Agreement (in such capacity, the “Administrative
Agent”).
Terms
used but not otherwise defined herein shall have the meanings provided in the
Credit Agreement and the provisions of Sections 1.2 and 1.3 of the Credit
Agreement related to the definitions shall apply herein.
WITNESSETH
WHEREAS,
a $35,000,000 credit facility has been extended to the Borrowers pursuant to
the
terms of that certain Amended and Restated Credit Agreement dated as of April
28, 2005 (as amended, modified or otherwise supplemented from time to time,
the
“Credit
Agreement”)
among
the Borrowers, the Lenders, and the Administrative Agent;
WHEREAS,
the Borrowers have requested that certain amendments be made to the Credit
Agreement as contemplated herein and the Lenders agree to amend such provisions
pursuant to the terms and conditions herein; and
WHEREAS,
the undersigned Lenders have agreed to amend the Credit Agreement as set forth
herein;
NOW,
THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
(A) Amendments.
1. Section
1.1 of the Credit Agreement is hereby amended by adding the following new
definition in the appropriate alphabetical order:
“Decatur
Accrued Amount”
has
the meaning set forth in the definition of Consolidated
EBITDA.
2. Each
of
the following definitions in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
“Borrowing
Base”
means a dollar
amount equal to the sum
of
(a) up to 85% of Eligible Accounts Receivable of the Credit Parties,
plus
(b)
the sum of (i) up to 60% of Eligible Inventory of all Credit Parties other
than
Wolverine Joining Technologies, LLC consisting of raw materials, finished goods,
work
in process and
billet inventory and (ii) the lesser of (A) $3,000,000 or (B) up to 60% of
Eligible Inventory of Wolverine Joining Technologies, LLC consisting of raw
materials, finished goods, work
in process
and
billet inventory, plus
(c)
the lesser of (A) up to 25% of the net book value of Eligible Equipment of
the
Credit Parties, determined in accordance with GAAP, and (B) $11,000,000
minus
(d)
reserves established from time to time by the Administrative Agent in its sole
discretion.
It
is
understood and agreed that the Agent shall reserve against the Borrowing Base
an
amount equal to 105% of the maximum amount that was available to be drawn under
any expired or terminated Consignment Letter of Credit until the
91st
day
following the expiration date or termination thereof or, if earlier, the date
on
which such Consignment Letter of Credit has been cash collateralized in
accordance with Section 2.8 hereof.
“Consolidated
EBITDA”
means, for any applicable period of computation, without duplication, the sum
of
(i) Consolidated Net Income for such period, but excluding therefrom all
extraordinary items of income (determined in accordance with GAAP) and all
non-cash income related to the embedded derivatives associated with the Series
A
Preferred Stock recorded subsequent to the fiscal quarter ended July 1, 2007,
plus
(ii)
the aggregate amount of depreciation and amortization charges made in
calculating Consolidated Net Income for such period, plus
(iii) aggregate Consolidated Interest Expense for such period, plus
(iv)
the aggregate amount of all income taxes reflected on the consolidated
statements of income of the Consolidated Parties for such period,
plus
(v)
for the 10th,
11th
and
12th
Production Months of 2005, any backwardation losses in excess of $1,300,000
but
in no event greater than $3,000,000, in the aggregate, plus
(vi)(A) non-cash restructuring charges not to exceed $48,526,000 in
aggregate
for
the fiscal year ended
December 31, 2006 and (B) cash restructuring charges not to exceed
$7,600,000
in
aggregate
for
the fiscal year ended
December 31, 2006,
plus
(vii) for the fiscal quarter ended December 31, 2007, with respect to accrued
charges in the amount of $8,796,323 in connection with the plant located in
Decatur, Georgia (the “Decatur
Accrued Amount”),
the portion of the Decatur Accrued Amount which has not been paid in cash
minus
(viii) for each fiscal quarter ending after December 31, 2007, the portion
of
the unpaid Decatur Accrued Amount paid in cash during such period until the
unpaid Decatur Accrued Amount has been reduced to $0.00.
Except as otherwise provided herein, the applicable period of computation shall
be for the twelve (12) consecutive months ending as of the date of
determination.
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“Maturity
Date”
means April 28, 2009.
“Permitted
Securitization”
means the trade securitization transaction for an aggregate principal amount
of
third party investments, advances or sales of accounts receivable of up to
$75,000,000,
evidenced by that certain Receivables Sale Agreement, dated as of April 28,
2005
among the Securitization Companies and the SPC, as amended by that certain
Amendment No. 1, dated as of April 4, 2006, that certain Receivables Sale
Agreement, dated as of April 4, 2006, among Wolverine Tube (Canada), Inc. and
the SPC and that certain Second
Amended and Restated Receivables Purchase Agreement, dated as February __,
2008
among the SPC, Wolverine Finance, LLC, the Company, the liquidity banks from
time to time party thereto, The CIT Group/Business Credit, Inc., individually
and as co-agent, and Wachovia Bank, National Association, as
agent.
3. The
definition of Eligible Inventory in Section 1.1 of the Credit Agreement is
hereby amended by amending clause (viii) thereof in its entirety to read as
follows:
“(viii)
Inventory that is work in process which does not qualify as Eligible Inventory
in accordance with eligibility criteria determined by the Administrative Agent
in its sole discretion upon Agent’s receipt and review of appraisals of such
Inventory made by appraisers acceptable to the Administrative Agent, which
criteria shall include, but not be limited to, location, content, form,
Borrowers’ ability to report such Inventory in a manner satisfactory to the
Administrative Agent, valuation and advance rates; ”.
4. Section
7.1(d) of the Credit Agreement is hereby amended and restated in its entirety
to
read as follows:
Officer’s
Certificate.
At
the time of delivery of the financial statements provided for in Sections 7.1(a)
and (b), a certificate of a Senior Financial Officer of the Company
substantially in the form of Exhibit
I
to
the effect that no Default or Event of Default exists, or if any Default or
Event of Default does exist specifying the nature and extent thereof and what
action the Borrowers propose to take with respect thereto. In addition, for
each
fiscal quarter and, if the Fixed Charge Coverage Ratio is required to be
complied with in accordance with Section 8.1, monthly, such certificate shall
(i) demonstrate compliance with the financial covenants contained in Article
VIII by calculation thereof as of the end of each such fiscal period and, with
respect to the calculation of Consolidated EBITDA for each such fiscal period,
so long as the Decatur Accrued Amount has not been reduced to $0.00, such
calculation shall include a detailed reporting of (A) the initial amount accrued
for remediation of the Decatur, Georgia plant, (B) the cumulative amount paid
in
cash as of the applicable reporting date and (C) the remaining balance of the
Decatur Accrued Amount not yet paid in cash as of the applicable reporting
date,
and (ii) contain information regarding expenditures made by the Credit Parties
as to Permitted Investments and Capital Expenditures during the prior fiscal
quarter. In
addition to the foregoing, at the time of delivery of the financial statements
provided for in Sections 7.1(a) and (b), a certificate of the Company
substantially in the form of Exhibit L
demonstrating the adjustments made to Consolidated Net Income pursuant to
subsection (iii) of Consolidated Net Income.
3
5. A
new
Section 8.4 shall be added to the Credit Agreement immediately following Section
8.3 to read as follows:
8.4 Minimum
Excess Availability
Excess
Availability shall be at least $2,500,000 at all times.
6. Each
of
the Schedules attached to the Credit Agreement is hereby deleted and replaced
by
the corresponding Schedule attached to this Agreement.
(B) Representations
and Warranties.
Each
Credit Party hereby represents and warrants that (i) the representations
and warranties contained in Article VI of the Credit Agreement are true and
correct in all material respects on and as of the date hereof as though made
on
and as of such date (except for those representations and warranties which
by
their terms relate solely to an earlier date) and after giving effect to the
transactions contemplated herein, (ii) no Default or Event of Default
exists under the Credit Agreement on and as of the date hereof and after giving
effect to the transactions contemplated herein, (iii) it has the corporate,
limited liability company or limited partnership power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and has
taken all necessary organizational action to authorize the execution, delivery
and performance by it of this Agreement; (iv) it has duly executed and
delivered this Agreement, and this Agreement constitutes its legal, valid and
binding obligation enforceable in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws affecting the rights of creditors generally or by general principles of
equity and (v) neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated therein, nor performance of and compliance with the
terms and provisions thereof will violate
or conflict in any material respect with any material provision of its articles
or certificate of incorporation or certificate of limited partnership or
certificate of formation, bylaws, agreement of limited partnership or limited
liability company agreement or violate, contravene or conflict in any material
respect with contractual provisions of, or cause an event of default under,
any
indenture, including without limitation the 2008 Senior Note Indenture and
2009
Senior Note Indenture, loan agreement, mortgage, deed of trust, contract or
other agreement or instrument to which it is a party or by which it may be
bound.
(c) Effectiveness.
This
Agreement shall become effective upon satisfaction of all of the following
conditions precedent:
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1. Executed
Agreement.
The
Administrative Agent shall have received a fully executed counterpart of this
Agreement from each party hereto.
2. Permitted
Securitization Amendment.
The
Administrative Agent shall have received a fully executed copy of the Second
Amended and Restated Receivables Purchase Agreement, dated as of February
__, 2008, which agreement shall be in full force and effect and not subject
to
any unsatisfied conditions precedent, and to which the Administrative Agent
and
the Lenders hereby consent.
3. Amendment
Fee; Expenses.
The
Administrative Agent shall have received from the Borrowers an amendment fee
of
$65,000 in connection with this Agreement and payment of all reasonable costs
and expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Agreement, including without limitation the
reasonable fees and expenses of Xxxxx Xxxxx LLP, and all previously incurred
fees and expenses which remain outstanding on the effective date of this
Agreement.
4. Other
Conditions Precedent.
The
Borrowers shall have completed all proceedings taken in connection with the
transactions contemplated by this Agreement and delivered to the Administrative
Agent all other documentation and other items incident thereto, and each shall
be satisfactory to the Administrative Agent and its legal counsel.
(C) No
Other Modification.
Except
to the extent specifically provided to the contrary in this Agreement, all
terms
and conditions of the Credit Agreement (including Exhibits and Schedules
thereto) and the other Credit Documents shall remain in full force and effect,
without modification or limitation. This Agreement shall not operate as a
consent to any other action or inaction by the Borrowers or any other Credit
Party, or as a waiver or amendment of any right, power, or remedy of any Lender
or the Administrative Agent under the Credit Agreement or any other Credit
Document nor constitute a consent to any such action or inaction, or a waiver
or
amendment of any provision contained in the Credit Agreement or any other Credit
Document except as specifically provided herein. Each of the Credit Parties
acknowledges, confirms and agrees that the Credit Documents to which it is
a
party remain in full force and effect as of the date hereof and continue to
secure all Obligations of each such Credit Party to any Lender or the
Administrative Agent, and
novation
of any kind is hereby expressly disclaimed.
(D) Equipment
Appraisal.
The
parties hereto acknowledge and agree that if
the
Obligations are not refinanced in whole on or prior to March 31, 2008, the
Administrative Agent shall exercise its right to engage an appraiser acceptable
to the Administrative Agent, at Borrowers’ expense, to appraise the Eligible
Equipment, and upon the Administrative Agent’s receipt and review of any such
appraisal, the Administrative Agent may adjust eligibility requirements and
reserves related thereto in its sole discretion.
5
(G) Affirmation
of Obligations. The
Credit Parties hereby affirm the liens and security interests created and
granted in the Credit Documents and agree that this Agreement shall in no manner
adversely effect or impair such liens and security interests. The Credit Parties
also affirm that they are bound by all terms of the Credit Agreement and that
they are responsible for the observance and full performance of the obligations
thereunder.
(H) Release.
In
consideration of entering into this Agreement, each Credit Party
(a) represents and warrants to the Administrative Agent and each Lender
that as of the date hereof there are no causes of action, claims, actions,
proceedings, judgments, suits, demands, damages or offsets against or defenses
or counterclaims to its Obligations or Secured Obligations under the Credit
Documents and furthermore, such Credit Party waives any and all such causes
of
action, claims, actions, proceedings, judgments, suits, demands, damages,
offsets, defenses or counterclaims whether known or unknown, arising prior
to
the date of this Agreement and (b) releases the Administrative Agent and
each Lender and each of their respective Affiliates, Subsidiaries, officers,
employees, representatives, agents, counsel and directors from any and all
actions, causes of action, claims, actions, proceedings, judgments, suits,
demands, damages and liabilities of whatever kind or nature, in law or in
equity, now known or unknown, suspected or unsuspected to the extent that any
of
the foregoing arises from any action or failure to act with respect to any
Credit Document, on or prior to the date hereof.
(I) Governing
Law.
This
Agreement shall be governed by and construed and interpreted in accordance
with
the laws of the State of North Carolina, without regard to the principles
governing conflicts of laws thereof.
(J) INCORPORATION
BY REFERENCE OF CERTAIN PROVISIONS.
THE
PROVISIONS IN SECTIONS 14.5, 14.6, 14.8, 14.9, 14.10, 14.12, 14.13, 14.14,
14.15, 14.19 AND 14.24 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS
MUTANDIS.
[SIGNATURE
PAGES FOLLOW]
6
Each
of
the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.
COMPANY:
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WOLVERINE
TUBE, INC.
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By:
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Name:
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Title:
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SUBSIDIARY
BORROWERS:
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TF
INVESTOR, INC.
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By:
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Name:
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Title:
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TUBE
FORMING HOLDINGS, INC.
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By:
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Name:
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Title:
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TUBE
FORMING, L.P.
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By:
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Tube
Forming Holdings, Inc.,
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its
General Partner
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By:
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Name:
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Title:
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WOLVERINE
FINANCE, LLC
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By:
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Name:
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Title:
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SMALL
TUBE MANUFACTURING, LLC
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By:
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Name:
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Title:
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WOLVERINE
JOINING TECHNOLOGIES, LLC
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By:
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Name:
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Title:
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WOLVERINE
CHINA INVESTMENTS, LLC
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By:
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Wolverine
Tube, Inc.,
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its
Managing Member
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By:
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Name:
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Title:
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WT
HOLDING COMPANY, INC.
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By:
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Name:
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Title:
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AGENT
AND LENDERS:
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WACHOVIA
BANK,
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NATIONAL
ASSOCIATION, in its capacity
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as
Administrative Agent and as a Lender
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By:
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Name:
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Title:
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(signature
pages end)