-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P5W4Gt1qkKZdVw82y57gebqUSy8qe5ukP84h1yRorRZpZHaUztV4XZuscMze68pA iRukgJYvxNJocjfocRuIyw== 0000950115-98-001324.txt : 19980805 0000950115-98-001324.hdr.sgml : 19980805 ACCESSION NUMBER: 0000950115-98-001324 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980727 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980804 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMICAL LEAMAN CORP /PA/ CENTRAL INDEX KEY: 0000215425 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 232021808 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-08517 FILM NUMBER: 98676796 BUSINESS ADDRESS: STREET 1: 102 PICKERING WAY CITY: EXTON STATE: PA ZIP: 19341-0200 BUSINESS PHONE: 6103634200 MAIL ADDRESS: STREET 1: 102 PICKERING WAY CITY: EXTON STATE: PA ZIP: 19341 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 27, 1998 CHEMICAL LEAMAN CORPORATION ------------------------------------------------ (Exact name of Registrant as specified in charter) PENNSYLVANIA 000-8517 23-2021808 (State or Other Jurisdiction Commission (I.R.S. Employer of Incorporation or file number Identification Organization) Number) 102 Pickering Way, Exton, PA 19341-0200 (Address of principal executive offices) (610) 363-4200 (Registrant's telephone number, including area code) -1- Item 5. Other Events. On July 28, 1998, MTL Inc., a Florida corporation ("MTL"), announced that Palestra Acquisition Corp. ("Palestra"), a Delaware corporation and a wholly-owned subsidiary of MTL, had entered into an Amendment No. 1 (the "Amendment") to that certain Agreement and Plan of Merger ("CLC Merger Agreement"), dated as of June 23, 1998, by and among Palestra, Chemical Leaman Corporation ("CLC") and the shareholders of CLC (each, a "Shareholder" and, collectively, the "Shareholders") pursuant to which MTL had agreed, subject to the satisfaction of certain terms and conditions, to acquire all of the outstanding shares of common stock, $2.50 par value per share, of CLC ("CLC Common Stock") through the merger (the "CLC Merger") of Palestra with and into CLC, which thereby will become a wholly-owned subsidiary of MTL. The Shareholders have approved the CLC Merger Agreement and the Amendment. Under the terms of the Amendment, all shares ("Shares") of CLC Common Stock held by the Shareholders shall, by virtue of the CLC Merger, be converted into the right to receive an aggregate amount in cash (and MTL Common Stock, as described below) equal to $72.8 million, less Transaction Expenses (as defined in the Amendment) in excess of $100,000, plus shares of new preferred stock having a stated value equal to $5 million (collectively, "Merger Consideration"), subject to certain setoffs as set forth in the CLC Merger Agreement. A portion of the Shares held by certain Shareholders who are officers of CLC shall not be converted into cash, but in lieu thereof, shall be converted into shares of MTL Common Stock as set forth in their employment agreements. The Amendment also provides for the modification of certain of the covenants, conditions and indemnifications provided for in the CLC Merger Agreement. On July 28, 1998, MTL also announced that MTL had commenced a tender offer and consent solicitation (the "Offer") for the $100 million principal amount of outstanding 10 3/8% Senior Notes due 2005 of CLC ("Notes"). The Offer is subject to the completion of the CLC Merger. The Amendment and a copy of MTL's press release announcing the offer and the Amendment are attached hereto as Exhibit 2.1 and 99.1, respectively. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits 2.1 Amendment No. 1, dated as of July 27, 1998, to the Agreement and Plan of Merger dated as of June 23, 1998, by and among Palestra Acquisition Corp., Chemical Leaman Corporation and the shareholders of Chemical Leaman Corporation. *99.1 Press Release of MTL Inc., dated July 28, 1998, announcing commencement of the tender offer for the 10 3/8% Senior Notes due 2005 of CLC (Exhibit 99.1 to the Current Report on Form 8-K of MTL Inc. dated July 27, 1998 (SEC File No. 0-24180)). - ---------- * Incorporated by reference. -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CHEMICAL LEAMAN CORPORATION Date: August 3, 1998 By: /s/ David M. Boucher ---------------------- David M. Boucher, Senior Vice President and Chief Financial Officer -3- EXHIBIT INDEX Exhibit No. Description - ------- ----------- 2.1 Amendment No. 1, dated as of July 27, 1998, to the Agreement and Plan of Merger dated as of June 23, 1998, by and among Palestra Acquisition Corp., Chemical Leaman Corporation and the shareholders of Chemical Leaman Corporation. EX-2.1 2 AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER AMENDMENT NO. 1 dated as of July 27, 1998 (this "Amendment") to the AGREEMENT AND PLAN OF MERGER (the "Original Agreement" and, as amended, this "Agreement") dated as of June 23, 1998, by and among PALESTRA ACQUISITION CORP., a Delaware corporation ("Purchaser"), CHEMICAL LEAMAN CORPORATION, a Pennsylvania corporation (the "Company"), and THE SHAREHOLDERS OF THE COMPANY NAMED ON SCHEDULE I ATTACHED TO THE ORIGINAL AGREEMENT (each, a "Shareholder", and collectively, the "Shareholders"). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Original Agreement. WHEREAS, the Board of Directors of the Company has adopted resolutions approving this Amendment and the transactions to which the Company is a party contemplated hereby, and has agreed, upon the terms and subject to the conditions set forth herein, to recommend that the Company's shareholders approve this Amendment. NOW, THEREFORE, in consideration of the premises and the mutual benefits to be derived from this Amendment and the representations, warranties, covenants, agreements and conditions hereinafter set forth, the parties hereto hereby agree as follows: ARTICLE I AMENDMENTS 1.1 Purchase Price; Effect on Capital Stock. (a) Annex I to the Original Agreement is hereby amended by deleting the definition of "Merger Consideration" and replacing it with the following: ""Merger Consideration" means the sum of (i) the Aggregate Cash Merger Consideration plus (ii) shares of New Preferred Stock having a stated value equal to $5 million." (b) Annex I to the Original Agreement is hereby amended by adding the following thereto: ""Aggregate Cash Merger Consideration" means $72,800,000. (c) Annex I to the Original Agreement is hereby amended by adding the following thereto: "New Preferred Stock" means shares of the Preferred Stock of MTL, the designations, rights and preferences of which are more particularly described on Exhibit 2.1(b) hereto. (d) Section 2.1(a) of the Original Agreement is hereby amended by adding the following new sentence to the end thereof: "Notwithstanding anything to the contrary contained in this Agreement or in any Employment Agreement, the Purchaser shall be obligated to pay in cash to the Shareholders an amount equal to but not more than (i) the Aggregate Cash Merger Consideration, less (ii) the product of (A) the aggregate number of Merger Shares that are to be converted into MTL Stock pursuant to Section 2.1(c) and the applicable Employment Agreements multiplied by (B) a fraction, the numerator of which shall be the Merger Consideration less the Net Transaction Expenses, and the denominator of which shall be the Merger Share Number (the "MTL Stock Amount"), less (iii) the Net Transaction Expenses." (e) Sections 2.1(b)(iii), (iv) and (v) of the Original Agreement are each hereby deleted in their entirety and shall be collectively replaced with the following: "(iii) the Merger Shares held by each Shareholder (other than the Merger Shares that are to be converted into shares of MTL Stock) shall, by virtue of the Merger and without any action on the part of any Shareholder, cease to be outstanding and be converted into the right to receive, subject to the terms and conditions of this Agreement, (A) shares of New Preferred Stock having a stated value equal to the product of such Shareholder's Common Equity Percentage multiplied by $5 million and (B) cash in an amount equal to such Shareholder's Cash Merger Consideration. For purposes of the foregoing, "Cash Merger Consideration" means the following: (i) in respect of each Shareholder other than David R. Hamilton and David M. Boucher, an amount equal to (A) the product of such Shareholder's Common Equity Percentage multiplied by the Aggregate Cash Merger Consideration, less (B) the product of the Hamilton Special Merger Consideration multiplied by such Shareholder's Post Hamilton Percentage, less (C) the product of the Boucher Special Merger Consideration multiplied by such Shareholder's Post Boucher Percentage, less (D) the product of such Shareholder's Percentage of Merger Consideration multiplied by the Net Transaction Expenses; (ii) in respect of David R. Hamilton, an amount equal to (A) the product of Mr. Hamilton's Common Equity Percentage multiplied by the Aggregate Cash Merger Consideration, plus (B) the Hamilton Special Merger Consideration, less (C) the product of the Boucher Special Merger Consideration multiplied by Mr. Hamilton's Post Boucher Percentage, less (D) the product of 2 Mr. Hamilton's Percentage of Merger Consideration multiplied by the Net Transaction Expenses; and (iii) in respect of David M. Boucher, an amount equal to (A) the product of Mr. Boucher's Common Equity Percentage multiplied by the Aggregate Cash Merger Consideration, plus (B) Boucher Special Merger Consideration, less (C) the product of the Hamilton Special Merger Consideration multiplied by Mr. Boucher's Post Hamilton Percentage, less (D) the product of Mr. Boucher's Percentage of Merger Consideration multiplied by the Net Transaction Expenses. For purposes of the foregoing, the "Post Boucher Percentage" means in respect of any Shareholder, the total number of Merger Shares held by such Shareholder divided by the total number of Merger Shares held by all Shareholders other than Mr. Boucher." For purposes of the foregoing, the "Post Hamilton Percentage" means in respect of any Shareholder, the total number of Merger Shares held by such Shareholder divided by the total number of Merger Shares held by all Shareholders other than Mr. Hamilton." 1.2 Delivery of Funds and Certificates; Surrender of Certificates. (a) Section 2.2(a) of the Original Agreement is hereby amended by deleting the words the "the funds necessary to pay the Merger Consideration (taking into account the MTL Stock and subject to any setoffs as set forth in Section 7.3(g) or Section 7.3(h))" contained therein and replacing such words with the words "the funds necessary to pay the Aggregate Cash Merger Consideration, less the Net Transaction Expenses, less the MTL Stock Amount and less the aggregate amount of all setoffs pursuant to Section 7.3(g) and Section 7.3(h))." (b) Section 2.2(b) of the Original Agreement is hereby deleted in its entirety and replaced with the following: "Each holder of an outstanding certificate or certificates which prior thereto represented Merger Shares, upon surrender at, or as soon as practicable after, the Effective Time of the Merger (as the case may be) to the Transfer Agent of such certificate or certificates (together with a letter of transmittal signed by such holder in substantially the form of Exhibit A attached hereto), shall be entitled to the Cash Merger Consideration (subject to any setoffs as set forth in Section 7.3(g) or Section 7.3(h)) and the shares of New Preferred Stock into which such Merger Shares previously represented by such certificate or certificates surrendered shall have been converted pursuant to this Agreement. The Transfer Agent shall accept such certificates and such letter of transmittal upon compliance with such reasonable terms and conditions as the Transfer Agent may impose to effect an orderly exchange thereof in accordance with normal practices. After the Effective Time of the Merger, there shall be no further transfer on the records of the Company or its transfer agent of certificates representing Merger Shares which have been converted, in whole or in part, pursuant to this Agreement, into the right to receive cash, MTL Stock or New 3 Preferred Stock, and if such certificates are presented to the Company for transfer, they shall be canceled against delivery of such consideration. If cash or a certificate representing shares of MTL Stock or New Preferred Stock is to be remitted to a name other than that in which the certificate for Merger Shares surrendered for exchange is registered, it shall be a condition of such exchange that the certificate so surrendered shall be properly endorsed, with signature guaranteed or otherwise in proper form for transfer. Until surrendered as contemplated by this Section 2.2(b), each certificate for Merger Shares shall be deemed at any time after the Effective Time of the Merger to represent only the right to receive, subject to any setoffs pursuant to Section 7.3(g) or Section 7.3(h), for each Merger Share represented thereby upon such surrender, cash, shares of New Preferred Stock and/or shares of MTL Stock, in the amount determined pursuant to Section 2.1(b) or the applicable Employment Agreement, as the case may be." (c) Section 2.2(d) of the Original Agreement is hereby deleted in its entirety and replaced with the following: "(d) All consideration (whether in the form of cash, New Preferred Stock, MTL Stock or setoff pursuant to Section 7.3(g) or Section 7.3(h)) paid upon surrender of certificates representing Shares in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares so exchanged that were previously represented by such certificates." 1.3 Setoffs. Sections 7.3(g) and (h) of the Original Agreement are each hereby amended by deleting the words "any Merger Consideration or other payments" in each such Section and replacing it in each such Section with the words "Cash Merger Consideration or other cash payments." 1.4 Conditions. Section 7.3(p) of the Original Agreement is hereby amended by deleting "$4,000,000; provided that, in the Shareholder Representative's sole discretion, such amount may be increased, at any time prior to two days after Purchaser delivers a notice that it intends to terminate this Agreement pursuant to Section 9.1 based upon the condition set forth in this Section 7.3(p) not being satisfied, to an amount not to exceed $5,000,000 (such excess amount over $4,000,000, the "Indemnity Cap Adjustment Amount"); it being understood that if such amount exceeds $5,000,000, Purchaser shall be under no obligation to effect the Merger" and replacing it with "$6,500,000." 1.5 Indemnification. (a) Section 8.6(b) of the Original Agreement is hereby deleted in its entirety and replaced with the following: "(b) Indemnity Limitations for the Shareholders. Except as provided herein, the sum of all Losses pursuant to which indemnification is payable by the 4 Shareholders in the aggregate pursuant to Section 8.1(a)(i) and Section 8.1(a)(iv) shall not exceed the sum of (i) $8,250,000 (the "Cap"), plus (ii) an amount equal to the Indemnity Cap Adjustment Amount (as adjusted, the "Adjusted Cap"), and no Shareholder shall be liable to Purchaser for any amount in excess of the sum of (x) the Cash Merger Consideration received by such Shareholder (which shall include for these purposes shares of MTL Stock), plus (y) the stated value of all shares of New Preferred Stock received by such Shareholder in connection with the consummation of the Merger (which shall not include, for purposes hereof, shares issued as a payment-in-kind dividend); provided, however, that in no event shall the limitations set forth in this Section 8.6(b) apply with respect to the representations and warranties set forth in the Subject R&W or any claim arising as a result of fraud. Notwithstanding anything else provided herein or in the Original Agreement, any payment to Purchaser in respect of Purchaser Losses, whether by setoff against the Qualified Letters of Credit, cash payments, setoff against the New Preferred Stock, or setoff or reduction made in respect of the stated value of the New Preferred Stock or any dividends thereunder or otherwise, shall be included in any calculation of amounts paid by the Shareholders for the purpose of determining, and shall be credited against, the Cap, the Adjusted Cap and the L/C Cap, and the amount of the Qualified Letters of Credit shall be reduced to account for such credit." (b) Section 8.7 of the Original Agreement is hereby amended by (i) deleting the words "Adjusted Cap" each time it appears therein and replacing it with the words "L/C Cap" and (ii) adding a new sentence to the end thereof which shall read as follows: "Notwithstanding anything to the contrary contained herein, Purchaser agrees not to draw on any Qualified Letter of Credit (i) prior to the twenty-fourth month immediately following the Closing Date, unless at such time all dividends on the shares of the New Preferred Stock have either (i) been paid in cash or (ii) paid as a payment-in-kind dividend )("PIK Shares"), the stated value of which has been reduced to zero, and (iii) after the twenty fourth month immediately following the Closing Date, until such time as the stated value of the outstanding PIK Shares has been reduced to zero and the stated value of the outstanding shares of New Preferred Stock that are issued at the Effective Time in connection with the Merger has been reduced to $2.5 million." (c) Annex I to the Original Agreement is hereby amended by deleting the definition of "Indemnity Cap Adjustment Amount" and replacing it with the following: ""Indemnity Cap Adjustment Amount" means an amount, not to exceed $2.5 million, equal to the excess of (i) (a) the sum of any EHS Damages which in the written opinion of Purchaser's consultant (which shall be one or more of the consultants listed on Schedule 7.3(p)(1)) are reasonably expected to be required to be incurred pursuant to EHS Requirements of Law due to conditions other than those identified on Schedule 7.3(p)(2) discovered by the Purchaser after the date hereof and prior to the Closing in the course of Purchaser's due diligence or due to any new Proceeding or Order or any new claim or amended claim arising in connection with any existing Proceeding, Order or condition, plus (b) the reasonably expected costs based on the Purchaser's 5 consultant's evaluation in writing, for full compliance and remediation required pursuant to any EHS Requirement of Law (including pursuant to ISRA and the Connecticut Transfer Act) resulting from the announcement or consummation of the transactions contemplated by this Agreement over (ii) $4,000,000. (d) Annex I to the Original Agreement is hereby further amended by adding the following thereto: ""L/C Cap" means, at any time, (i) the Cap, plus (ii) the Indemnity Cap Adjustment Amount, less (iii) the aggregate Preferred Stock Adjustment Amount in effect at such time. "Preferred Stock Adjustment Amount" means the sum of (i) the stated value of all outstanding PIK Shares that are issued or are required to be issued pursuant to the terms of the New Preferred Stock as a payment-in-kind dividend on shares of New Preferred Stock that are issued at the Effective Time in connection with the Merger ("Initial PIK Shares"), plus (ii) after the end of the twenty-fourth month immediately following the Closing Date, if all shares of New Preferred Stock including all PIK Shares have not been redeemed, $2.5 million, plus (iii) at Purchaser's option (exercised by delivery of an irrevocable notice to the Shareholders Representative), additional shares of New Preferred Stock that are issued at the Effective Time in connection with the Merger having a stated value equal to up to $2.5 million. 1.6 Financing. Exhibit E is hereby deleted in its entirety and replaced with Exhibit E hereto. 1.7 Notes. (a) Purchaser covenants and agrees to use its commercially reasonable best efforts to cause MTL Inc. to commence an offer to purchase up to all of the outstanding Notes within five business days after the date hereof and to complete such offer substantially in accordance with the terms and subject to the conditions described in the draft of such offer to purchase which has been previously provided to the Company. It is understood that any delay in commencing such offer to purchase in connection with either (i) any act or failure to act by the Company or any third party or (ii) Purchaser's compliance with applicable law shall not constitute a breach of this Agreement. (b) The Company agrees to use its commercially reasonable best efforts (without incurring any costs) to cooperate with the Purchaser and the holders of its Notes in connection with the offer to purchase set forth in Section 1.7(a). (c) Annex I to the Original Agreement is hereby amended by deleting the definition of "Transaction Expenses" contained therein and replacing it with the following: "Transaction Expenses" means all fees and expenses that are incurred by or on behalf of the Company or any Shareholder (whether incurred prior to, at or after the Closing) in connection with the preparation for, and consummation of, 6 the transactions contemplated hereby, by the other agreements referred to herein or otherwise in connection with a sale of the Company, including any payments to terminate or purchase options to purchase equity interests of any Subsidiary (including payments to Robert Johnson and William Kannehan) (it being understood that Transaction Expenses shall not include either (a) the $4,000,000 cost to obtain the requisite consent of the holders of Notes to an amendment to the terms of the Indenture, or the fees and expenses incurred by the Company in connection with such solicitation of consents all as set forth in Section 6.12 or (b) any costs incurred by the Purchaser, MTL Inc. or Apollo Management, L.P., in connection with any offer to purchase the Notes commenced by MTL Inc.). (d) Sections 6.12 and 7.3(m) of the Original Agreement are hereby deleted in their entirety. 1.8 Closing. Each party hereto agrees to use its commercially reasonable efforts to consummate the Merger on or prior to August 31, 1998. ARTICLE II MISCELLANEOUS PROVISIONS 2.1 Agreement. Except as modified by this Amendment, the Original Agreement shall remain in full force and effect, enforceable in accordance with its terms. 2.2 Counterparts. This Amendment may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute one agreement. 2.3 Governing Law. THIS AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AMENDMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY RELATED DOCUMENT MAY BE BROUGHT EXCLUSIVELY IN 7 THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH PARTY HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF OR HIMSELF AND IN RESPECT OF ITS OR HIS PROPERTY AND ASSETS, GENERALLY AND UNCONDITIONALLY THE JURISDICTION OF THE AFORESAID COURTS. * * * 8 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. The Purchaser: PALESTRA ACQUISITION CORP. By: /s/ Joshua J. Harris ------------------------------- Name: Joshua J. Harris Title: President The Company: CHEMICAL LEAMAN CORPORATION By: /s/ David M. Boucher ------------------------------- Name: David M. Boucher Title: Senior Vice President and Chief Financial Officer DAVID R. HAMILTON CATHARINE C. HAMILTON CATHARINE ELIZABETH HAMILTON TENNESSEE ALEXIS HAMILTON HAMILTON FAMILY TRUST SAMUEL C. HAMILTON GEORGE MCFADDEN JOHN H. MCFADDEN TRUSTEES U/W/O ALEXANDER B. MCFADDEN, DECEASED, F/B/O JOHN, MARY AND GEORGE MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN, DECEASED, F/B/O GEORGE MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN DECEASED, F/B/O JOHN H. MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN, DECEASED, F/B/O MARY JOSEPHINE MCFADDEN LESLEY TAYLOR TRUSTEES F/B/O ELIZABETH CUTTING MCFADDEN EUGENE C. PARKERSON DAVID M. BOUCHER PHILIP J. RINGO REUBEN M. ROSENTHAL JACK H. ELROD J. STEPHEN HAMILTON LEON F. PALMER DENNIS R. COPELAND F.C. COLON-OSORIO G. MICHAEL CRONK KAREN SZABO LLOYD FRANK LLOYD By: /s/ David R. Hamilton ------------------------------- David R. Hamilton Attorney-in-Fact DAVID R. HAMILTON CATHARINE C. HAMILTON CATHARINE ELIZABETH HAMILTON TENNESSEE ALEXIS HAMILTON HAMILTON FAMILY TRUST SAMUEL C. HAMILTON GEORGE MCFADDEN JOHN H. MCFADDEN TRUSTEES U/W/O ALEXANDER B. MCFADDEN, DECEASED, F/B/O JOHN, MARY AND GEORGE MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN, DECEASED, F/B/O GEORGE MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN DECEASED, F/B/O JOHN H. MCFADDEN TRUSTEES U/W/O GEORGE MCFADDEN, DECEASED, F/B/O MARY JOSEPHINE MCFADDEN LESLEY TAYLOR TRUSTEES F/B/O ELIZABETH CUTTING MCFADDEN EUGENE C. PARKERSON DAVID M. BOUCHER PHILIP J. RINGO REUBEN M. ROSENTHAL JACK H. ELROD J. STEPHEN HAMILTON LEON F. PALMER DENNIS R. COPELAND F.C. COLON-OSORIO G. MICHAEL CRONK KAREN SZABO LLOYD FRANK LLOYD By: /s/ George McFadden ------------------------------- George McFadden Attorney-in-Fact
Exhibit 2.1(b) Terms of New Preferred Stock - ----------------------------------------------------------------------------------------------------------------------------- Issuer MTL Inc. - ----------------------------------------------------------------------------------------------------------------------------- Stated Value $5,000,000. The stated value of the outstanding shares of New Preferred Stock (including Initial PIK Shares but excluding all other PIK Shares) will be reduced by $1 for each $1 of Purchaser Losses; provided that the aggregate amount of such reduction will not exceed the sum of (i) $2.5 million, plus (ii) the stated value of all Initial PIK Shares. The stated value will be further reduced by the stated value of all shares of New Preferred Stock that reduce the L/C Cap pursuant to clause (iii) of the definition of Preferred Stock Adjustment Amount. Any setoff against Purchaser Losses set forth above will reduce the L/C Cap. Any setoff or reduction of PIK Shares issued will result in an immediate, automatic and irrevocable loss of any PIK Shares issued as a dividend on such setoff or reduced stock. The parties agree that the Shareholders shall receive no credit for such loss because the intention is that the Shareholders would not have been entitled to receive such shares in any event. To effectuate the foregoing, the parties further agree that, at any time, the stated value of all PIK Shares other than Initial PIK Shares will equal (i) the aggregate stated value of all such PIK Shares multiplied by (ii) a fraction, the numerator of which is the aggregate amount following any such reduction of the stated value of the Initial PIK Shares pursuant to the preceding paragraph and the denominator of which is the aggregate stated value of all Initial PIK Shares (without giving effect to any reductions to the stated value thereof). - ----------------------------------------------------------------------------------------------------------------------------- Dividends 8% per annum, payable annually in arrears and payable in kind at Issuer's option for three years from issuance date. Dividends will be payable on the stated value on the applicable payment date of all outstanding shares of New Preferred Stock (including all shares issued at the Effective Time in connection with the Merger and all PIK Shares previously issued). Dividends on shares of common stock will not be paid unless all accrued dividends on New Preferred Stock have been paid. - ----------------------------------------------------------------------------------------------------------------------------- Maturity Ninth anniversary from the Closing Date. - -----------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------- Optional Redemption Redeemable any time at Issuer's option at the following prices (plus accrued and unpaid dividends): Premium to Date Stated Value ---- ------------ Closing Date to 42nd Month 100% Beg. of 43rd month to end of 54th month 105% Beg. of 55th month to end of 66th month 110% Beg. of 67th month to end of 78th month 115% Thereafter 120% - ----------------------------------------------------------------------------------------------------------------------------- Change of Control Upon sale of Issuer to a non-affiliated third party or other change of control to a non-affiliated third party, shares of New Preferred Stock would be mandatorily redeemable for the redemption value set forth above. - ----------------------------------------------------------------------------------------------------------------------------- IPO Up to 50% of net proceeds of primary offering to be used to redeem shares of New Preferred Stock for the redemption value set forth above. - ----------------------------------------------------------------------------------------------------------------------------- Liquidation Preference Upon liquidation, shares of New Preferred Stock would be senior to common stock and would be entitled to receive the redemption value set forth above. - ----------------------------------------------------------------------------------------------------------------------------- Exchangeability Shares of New Preferred Stock can be exchanged at the Issuer's option for Junior Subordinated Debt of the Issuer, which shall be subject to the same rights of offset and adjustment. The Junior Subordinated Debt will contain substantially similar terms and conditions as the terms and conditions of the New Preferred Stock, including terms and conditions relating to dividends, maturity, optional redemption, change of control, IPO, liquidation preference and voting rights. - ----------------------------------------------------------------------------------------------------------------------------- Voting Rights Holders of shares of New Preferred Stock will be entitled to a separate class vote for any amendment to the Certificate of Designations in respect of the New Preferred Stock to the extent that such amendment adversely affects the holders of the New Preferred Stock. - -----------------------------------------------------------------------------------------------------------------------------
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