EXHIBIT 2.4
STOCK PLEDGE AGREEMENT
To: THE CIT GROUP/BUSINESS CREDIT, INC., as agent
From: LONE STAR TECHNOLOGIES, INC.
Address: 00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
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RE: LONE STAR STEEL COMPANY
T&N LONE STAR WAREHOUSE CO.
LONE STAR LOGISTICS, INC.
00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
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(herein collectively, the "Company" or the "Companies")
March 31, 2000
STOCK PLEDGE AGREEMENT
Gentlemen:
Reference is made to that certain Financing Agreement between the Companies, the
Agent and the Lenders party thereto, dated March 12, 1999, as the same may be
amended from time to time (the "Financing Agreement"). Capitalized terms used
herein and defined in the Financing Agreement shall have the same meanings as
specified therein unless otherwise specifically defined herein. As security for:
(a) the full and indefeasible payment and performance when due of all now
existing and future (i) Obligations of the undersigned (herein the "Pledgor")
arising pursuant to any guaranty now or hereafter executed by the Pledgor in
your favor (as Agent on behalf of the Lenders) regarding the Companies or any
one of them (herein collectively the "Guaranty") and (ii) Obligations of the
Companies or any one of them to you and/or the Lenders, in each case whether
absolute or contingent, however acquired by you, and whether arising under the
Financing Agreement and/or Guaranty as now written or as amended or supplemented
or augmented hereafter, in law or otherwise (herein collectively the
"Obligations"); (b) any liability or indebtedness you may incur because of any
guaranty you may issue at the request of the Company, including, without
limitation, any Letter of Credit Guaranty; (c) the amount of all expenses
(including reasonable attorneys' fees) incurred by you and/or the Lenders in
collecting or attempting to collect any of the Obligations whether from the
Companies or any one of them, the Pledgor or any other obligor or in realizing
upon collateral; and (d) any interest from the due date at the Default Rate of
Interest specified in the Financing Agreement on all amounts payable to you
hereunder (all of which are herein called the "Secured Obligations"), the
Pledgor hereby pledges,
assigns, transfers, delivers and sets over to you (as Agent on behalf of the
Lenders) all of its right, title and interest in and to the securities listed
on the attached schedule, issued as indicated on said schedule (the
"Securities").
This pledge includes all right, title and interest in and to and a continuing
lien upon and security interest in, all of said Securities together with any and
all rights, coupons, warrants or rights to subscribe, options, dividends,
liquidating dividends, splits, dividends paid in stock, dividends paid in
Securities, new or reclassified Securities, or any other property which the
Pledgor is or may hereafter become entitled to receive on account of such
Securities, any and all increments, substitutions, additions or replacements
thereof, and any and all proceeds thereof (all collectively hereinafter referred
to as the "Pledged Collateral").
This Stock Pledge Agreement is executed as an inducement to you to make loans or
advances to the Company or issue guaranties at the request of the Company, or
otherwise to extend credit or financial accommodations to the Company or to
enter into or continue a financing arrangement with the Company, and is executed
in consideration of your doing or having done any of the foregoing.
The Pledgor agrees that any of the foregoing shall be deemed to have been done
or extended by you in consideration of and in reliance upon the execution of
this Stock Pledge Agreement, but nothing herein shall obligate you to do any of
the foregoing.
The Pledgor shall be in default under this Pledge Agreement upon the occurrence
of any of the following (herein any such default shall be referred to as an
"Event of Default"):
1. the occurrence of any Default or Event of Default under the
Financing Agreement;
2. if any warranty, representation or statement contained in this
Stock Pledge Agreement is materially or substantially breached,
or is, or becomes materially or substantially untrue;
3. the commencement by or against the Pledgor of any bankruptcy,
insolvency, arrangement, reorganization, receivership or
similar proceedings under any federal or state law; or
4. the liability of the Pledgor under the Guaranty matures in
accordance with the provisions thereof.
In the event of the happening of any such Event of Default, then on ten (10)
days prior notice to the Pledgor, without the curing of such default within such
time, you may, without demand of performance, advertisement or notice of
intention to sell, or of the time or place of sale, and without notice to
redeem, or other notice or demand whatsoever to or upon the Pledgor (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), forthwith or at any time or times thereafter, transfer to and/or
register in your name, or the name of your nominee, any or all of the Pledged
Collateral and/or collect, receive, appropriate and realize upon said Pledged
Collateral. In addition, and also without any of the aforesaid demands,
advertisements, and/or notices, upon the occurrence of any Event of Default as
defined herein, you may sell, assign, transfer and deliver the whole or any part
of the Pledged Collateral then held by you under this Stock Pledge Agreement or
subject to this Stock Pledge Agreement in one or more parcels, at public or
private sale or sales, at any Exchange Broker's Board, at your office or
elsewhere, on such terms and conditions, and at such prices as you may deem
advisable, for cash, upon credit, or for future delivery, with the right on your
part to become the purchaser thereof at any such sale or sales, free and clear
of any right to equity of redemption (which
right or equity is hereby expressly waived and released). Any notice of sale,
disposition, or other intended action by you required by applicable law and
sent to the Pledgor at least ten (10) days prior to such action shall
constitute reasonable notice to the Pledgor. Prior to exercising your rights
contained herein you may in your discretion forward the various coupons coming
due on any bonds covered hereby directly to the Pledgor for collection.
Notwithstanding the foregoing or any provision to the contrary contained
herein, you shall not be entitled to sell or otherwise realize upon the Pledged
Collateral until ten (10) days after a demand for payment has been made under
that certain Limited Guaranty dated March 31, 2000 executed by Pledgor in your
favor and then only if the Pledgor has failed to pay its obligations thereunder
in full.
Net proceeds of any such disposition as aforesaid, after deduction all costs,
including reasonable attorney's fees and expenses of every kind incurred
therein, shall be applied to the payment in whole or in part, in such order as
you may elect, of any of the Secured Obligations, whether then due or not due.
You agree to pay over and return any remaining balance to the Pledgor or to any
person entitled thereto, upon proper demand being made therefor, and if there be
any deficiency, the Pledgor and the Company shall continue to be fully liable
for same.
Further, you are hereby expressly granted the right and irrevocable proxy, in
the event of the happening of any Event of Default (as defined herein), and on
ten (10) days prior notice to the Pledgor, without the curing of such Event of
Default within such time, to transfer to yourself or to your nominee any or all
of the Pledged Collateral or to register same in your name on the books of the
company or entity issuing same; to receive cash dividends, coupons and income
thereon and to hold the same as additional collateral security hereunder, or to
apply it against the Secured Obligations and to exercise any voting rights with
respect to said Collateral for any purposes as you in your discretion deem
advisable, and to otherwise exercise as to such Pledged Collateral, all rights,
powers and remedies as the owner thereof.
The Pledgor hereby represents and warrants that the Pledged Collateral is owned
by the Pledgor absolutely, and is free and clear of all liens and encumbrances
except for the pledge in your favor and except for Permitted Encumbrances (as
defined in the Financing Agreement); that there are no restrictions upon the
pledge or transfer of any of the Pledged Collateral; that the Pledgor has full
right to pledge and transfer the same in accordance with the terms and
conditions of this Stock Pledge Agreement, free of all encumbrances (except said
Permitted Encumbrances) and without the consent of any other person, firm,
entity or corporation and without the need to notify the issuing company and/or
obtain their consent to the pledge; and that said Pledged Collateral is not
subject to any assessment. The Pledgor agrees to defend its title to the Pledged
Collateral at its own cost and expense, and to pay, satisfy and discharge and
any all assessments, liens or charges now or thereafter placed upon the Pledged
Collateral.
In the event that it becomes necessary to comply with any Federal or State law
or regulation or to make or file any registration thereunder in order for you to
exercise any of your rights hereunder, the Pledgor expressly agrees to do or
will cause to be done all acts and prepare and execute all documents necessary
to affect such compliance or registration, and to bear all reasonable costs in
connection therewith. The Pledgor agrees to indemnify and to hold you harmless
from and against any claim or liability; and to hold you harmless from and
against any claim or liability caused by (i) any untrue statement of material
fact, or omission to state a material fact (as required in any registration or
prospectus) or (ii) a failure to register or comply with any such law or
regulation.
The Pledgor recognizes that you may be unable to effect a public sale of any or
all of the Collateral, by reason of certain prohibitions contained in the
Securities Act of 1933 and applicable state securities law or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group
of purchasers which will be obligated to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to you
than if such sale were a public sale and agrees that such circumstances shall
not, in and of themselves, result in a determination that such sale was not
made in a commercially reasonable manner. You shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time necessary
to permit the issuer to register such securities for public sale under the
Securities Act of 1933, or under applicable state securities laws, even if the
issuer agrees to do so.
The Pledgor affirms and certifies that the Secured Obligations were not, and
will not be, incurred for the purpose of providing or obtaining any credit for
purchasing or trading in registered equity securities or other marketable
securities.
The Pledgor hereby agrees at your request to execute all necessary stock powers
in blank, to have the signatures on said powers guaranteed, to execute a letter
or other form confirming that the Pledged Collateral is not being pledged to you
for the purpose of providing or obtaining any credit for purchasing or trading
in registered equity securities or other marketable securities, and to execute
any further documents or papers whatsoever in order to carry out the intent and
purpose of this Stock Pledge Agreement.
The pledge provided for herein shall be in addition to, and shall not be deemed
to affect, modify or limit any other rights, collateral, agreements or security
which you may now or hereafter hold whether granted or given to you by the
Pledgor, the Company or by any other person, firm or corporation.
It is understood and agreed that the rights and remedies herein enumerated are
not intended to be exhaustive but are in addition to any other rights or
remedies at law or in equity. You shall have the absolute right in your sole
discretion to determine the order in which your rights and remedies are to be
exercised, and your exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies or be deemed to be a waiver thereof. No
act of forbearance, or agreement to forebear the enforcement of, or extension of
the date of maturity of, any Secured Obligation, shall in any way constitute a
release of, or a waiver or relinquishment of any of your rights or remedies.
The Pledgor expressly waives and relinquishes any rights of subrogation,
reimbursement, indemnity or recourse to or with respect to any of the assets or
properties of the Company.
For purposes hereof "Company" shall mean Companies or any one of the Companies
as applicable, and "you" shall mean The CIT/Group Business credit, Inc. as Agent
on behalf of the Lenders and the Agent and the Lenders, as applicable and
construed to give the broadest possible meaning consistent herewith and as set
forth in the Agreement.
Notwithstanding anything herein to the contrary, this Stock Pledge Agreement and
the pledge of the Pledged Collateral shall terminate automatically and without
notice effective as of the effective date of the termination of that certain
Limited Guaranty dated March 31, 2000 executed by Pledgor in favor of The CIT
Group/Business Credit, Inc. Immediately upon such termination, Agent, on behalf
of the Lenders, shall take any and all further steps as may be necessary or
appropriate to document such termination and the release of the Pledged
Collateral.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
TO THE EXTENT THAT TEXAS LAW MAY EVER APPLY TO THIS PLEDGE AGREEMENT, THE
FINANCING AGREEMENT AND THE OTHER LOAN DOCUMENTS, NOTWITHSTANDING THE FOREGOING
CHOICE OF LAW, THE PROVISIONS OF CHAPTER 346 (OTHER THAN SECTION 346.004
THEREOF) OF THE TEXAS FINANCE CODE (VERNONS TEXAS CODE ANNOTATED), AS AMENDED
FROM TIME TO TIME (AS AMENDED, THE "TEXAS FINANCE CODE"), SHALL NOT BE
APPLICABLE TO ANY LOAN(S) OR EXTENSIONS OF CREDIT EVIDENCED BY THE FINANCING
AGREEMENT AND/OR THE PROMISSORY NOTES, AND THE GUARANTOR HEREBY WIAVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY AND ALL DEFENSES AND CLAIMS BASED ON
SURETYSHIP AND APPLICABLE USUARY STATUTES AND PROVISIONS.
This Stock Pledge Agreement shall be binding on the heirs, administrators,
executors, successors and assigns of the Pledgor, and shall inure to the benefit
of you and your successors and assigns.
Very truly yours,
LONE STAR TECHNOLOGIES, INC.
BY: /s/ Xxxxxxx X. Xxxxxxx
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TITLE: Vice President - Finance
Address: 00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
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SCHEDULE TO STOCK PLEDGE AGREEMENT BETWEEN THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT AND LONE STAR TECHNOLOGIES, INC. (THE "PLEDGOR")
Issuer Owner Certificate # # of Shares
-------- ------- --------------- -------------
Bellville Tube Corporation Lone Star Technologies, Inc. 2 100%
(formerly, Bellville Acquisition, Inc.)
LONE STAR TECHNOLOGIES, INC.
(the "Pledgor")
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Vice President - Finance
