-----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, NOoc9OyrQj6XAzpARDAtOrh2B36+rtngM7acvdarcM7zWkmregW/9JZ5paBsQ77E zmSrE2OtGsfe7TrjfUgSmQ== 0000895345-96-000191.txt : 19960807 0000895345-96-000191.hdr.sgml : 19960807 ACCESSION NUMBER: 0000895345-96-000191 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960806 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LACLEDE STEEL CO /DE/ CENTRAL INDEX KEY: 0000057187 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 430368310 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-03114 FILM NUMBER: 96604119 BUSINESS ADDRESS: STREET 1: ONE METROPOLITAN SQ CITY: ST LOUIS STATE: MO ZIP: 63102 BUSINESS PHONE: 3144251400 MAIL ADDRESS: STREET 1: ONE METROPOLITAN SQ CITY: ST LOUIS STATE: MO ZIP: 63102 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: IVACO INC CENTRAL INDEX KEY: 0000904962 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 430368310 STATE OF INCORPORATION: A8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: PLACE MERCANTILE STREET 2: 770 RUE SHERBROOKE OUEST CITY: MONTREAL QUEBEC CANA STATE: A8 ZIP: 00000 BUSINESS PHONE: 5142884545 MAIL ADDRESS: STREET 1: PLACE MERCANTILE STREET 2: 770 RUE SHERBROOKE QUEST CITY: MONTREAL CANADA STATE: A8 ZIP: 0000000000 SC 13D 1 United States Securities and Exchange Commission Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 16) Laclede Steel Company ___________________________________________________________________ (Name of Issuer) Common Stock, Par Value $13.33 Per Share ___________________________________________________________________ (Title Class of Securities) 505606 10 3 ___________________________________________________________________ (CUSIP Number) Ivaco Inc., Place Mercantile, 770 Rue Sherbrooke Ouest Montreal, Quebec, Canada H3A 1G1 Attn: Guy-Paul Massicotte, Vice-President, General Counsel and Secretary, (514) 288-4545 ___________________________________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 1, 1996 ___________________________________________________________________ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Check the following box if a fee is being paid with the statement / /. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 505606 10 3 Page 2 of 12 Pages ___________ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Ivaco Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b)/ / 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE IF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) 6 CITIZENSHIP OR PLACE OF ORGANIZATION Canada NUMBER OF 7 SOLE VOTING POWER SHARES 2,018,650 BENEFICIALLY 8 SHARED VOTING POWER OWNED 0 BY EACH 9 SOLE DISPOSITIVE POWER REPORTING 2,018,650 PERSON 10 SHARED DISPOSITIVE POWER WITH 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,018,650 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 49.8% 14 TYPE OF REPORTING PERSON CO Item 1. Security and Issuer This Amendment No. 16 restates in its entirety the text of the Statement of Schedule 13D initially filed in paper format by the undersigned on April 18, 1974 (which Schedule, as amended to date, is referred to as the "Schedule 13D"), relating to the common stock, par value $13.33 per share (the "Common Stock"), of Laclede Steel Company, a Delaware corporation (the "Company"). The Company's principal offices are located at One Metropolitan Square, 211 North Broadway, St. Louis, Missouri 63102. Item 2. Identity and Background (a)-(c), (f) The name and business address of the person filing this Amendment No. 16 is Ivaco Inc. ("Ivaco"), a Canadian corporation with its principal office at Place Mercantile, 770 Rue Sherbrooke Ouest, Montreal, Quebec, Canada H3A 1G1. Ivaco, through its subsidiaries, is primarily engaged in the manufacture and distribution of steel, fabricated steel products, and other diversified fabricated products, with operations in Canada and the United States. These products are marketed throughout Canada and the United States. Ivaco is a publicly-owned corporation whose common shares are traded on the Montreal and Toronto Stock Exchanges. The directors and officers of Ivaco and their principal occupations, business addresses and citizenship are as follows: Present Principal Occupation or Employment and Name and Principal Name and Citizenship Business Address Business of Employer ____________________ ____________________ ____________________ Paul Ivanier 770 Rue Sherbrooke Director, President Canadian ouest and Chief Executive Montreal, Quebec Officer of Ivaco Sydney Ivanier 770 Rue Sherbrooke Director and Senior Canadian ouest Vice-President of Montreal, Quebec Ivaco Michael Herling 770 Rue Sherbrooke Director and Senior Canadian ouest Vice-President of Montreal, Quebec Ivaco George Goldstein c/o Sivaco Wire Director and Senior Canadian Group Vice-President of 2859 Paces Ferry Road Ivaco Atlanta, Georgia 30339 Albert A. Kassab 770 Rue Sherbrooke Director, Senior Vice- Canadian ouest President and Chief Montreal, Quebec Financial Officer of Ivaco Guy-Paul Massicotte 770 Rue Sherbrooke Vice-President, Canadian ouest General Counsel and Montreal, Quebec Secretary of Ivaco Hugh Blakely 770 Rue Sherbrooke Vice-President and Canadian ouest Controller of Ivaco Montreal, Quebec Marie Baillargeon 770 Rue Sherbrooke Assistant General Canadian ouest Counsel and Assistant Montreal, Quebec Secretary of Ivaco Present Principal Occupation or Employment and Name and Name and Principal Citizenship Business Address Business of Employer ___________________ ____________________ ____________________ Pierre Cote 800, boul. Rene- Director of Ivaco and Canadian Levesques O. Chairman of Celanese Bureau 2300 Canada Inc. MONTREAL (Quebec) H3B (manufacturing 1Z1 corporation) Donald G. Lawson 1 Toronto Street Director of Ivaco and Canadian Suite 410 Chairman of Moss, Toronto, Ontario M5C Lawson & Co., Limited 2W3 (brokerage firm) Donald W. 770, rue Sherbrooke O. Director of Ivaco and McNaughton Bureau 1215 Partner, Les Associ's Canadian MONTREAL (Quebec) H3A D.W. McNaughton 1G1 Associates (management consultant) Gaston Pelletier 425, boul. de Director of Ivaco and Canadian Maisonneuve O. Vice-President, Les Bureau 1740 Conseillers MONTREAL (Quebec) H3A Financiers du St. 3G5 Laurent (financial services) William S. Cullens 100 Disco Road Director of Ivaco and Canadian Rexdale, Ontario M9W Non-Executive 1M1 Chairman of Canron Inc. (a subsidiary of Ivaco) (d) Neither Ivaco nor, to Ivaco's knowledge, any of its executive officers or directors, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years. (e) Neither Ivaco nor, to the best of its knowledge, any of its executive officers or directors is or has been during the last five years a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration As more fully described in Item 4, Ivaco has purchased $5.5 million (U.S.) of a new issue of preferred stock of the Company and has agreed, subject to certain conditions, to purchase up to $1.25 million (U.S.) of convertible preferred stock of the Company. The funds to consummate the completed purchase have, and the funds to consummate the proposed purchase are expected to, come from Ivaco's working capital. Item 4. Purpose of Transaction Ivaco has purchased $5.5 million (U.S.) of a new issue of preferred stock of the Company (the "Straight Preferred Stock") pursuant to a stock purchase agreement attached as Exhibit A hereto and incorporated herein by reference (the "Stock Purchase Agreement"). Payment for the shares of Straight Preferred Stock was made on August 1, 1996. The rights and privileges of the Straight Preferred Stock are more fully set forth in the Certificate of Designations, Preferences and Rights of Series A Preferred Stock of the Company, attached hereto as Exhibit B and incorporated herein by reference (the "Certificate of Designations"). The Straight Preferred Stock will be recapitalized (the "Recapitalization") into a convertible preferred stock of the Company (the "Convertible Preferred Stock"; together with the Straight Preferred Stock, the "Preferred Stock") upon stockholder approval of (i) a decrease in the par value of the Common Stock of the Company from $13.33 to $0.01, (ii) the Recapitalization as required by the NASD listing requirements regarding stockholder approval and (iii) the authorization of an additional 20 million shares of Common Stock. Absent conversion, the holders of the Preferred Stock shall have no right or power to vote on any matter submitted for stockholder approval, except as required by law or as provided in the Certificate of Designations. Ivaco has the right to require the Company to redeem the Straight Preferred Stock at the price it paid for such stock if the Recapitalization is not completed by October 31, 1996. The terms of the conversion rights of the Convertible Preferred stock are also set forth in the Certificate of Designations. The Company has agreed to give Ivaco certain demand registration rights with respect to the Preferred Stock that Ivaco purchased pursuant to the Stock Purchase Agreement and that it may purchase pursuant to the Standby Agreement (as described below), including any Common Stock issued upon conversion of the Preferred Stock. These registration rights are more fully described in the Registration Rights Agreement attached hereto as Exhibit C and incorporated herein by reference (the "Registration Rights Agreement"). Pursuant to the terms of the Stock Purchase Agreement, Ivaco will have the right to cause the Company to use its best efforts to cause its Board of Directors to nominate four (4) persons designated by Ivaco to serve on the Company's Board of Directors, and to use its best efforts to cause the stockholders of the Company to elect such persons, so long as Ivaco, or Ivaco together with any person with which Ivaco is acting in concert in connection with its investment in the Company, is the beneficial owner, within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, of at least 40% of the outstanding shares of Common Stock (assuming conversion of any Convertible Preferred Stock so held). In connection therewith, the Company has agreed not to change the number of Directors on the Board of Directors to a number higher than nine (9). In addition, Ivaco has agreed to purchase up to an additional $1.25 million (U.S.) of the Convertible Preferred Stock in the event the stockholders of the Company do not purchase at least $4.75 (U.S.) million of Convertible Preferred Stock pursuant to a rights offering (the "Rights Offering"), which the Company has agreed, under the terms of the Stock Purchase Agreement, to make if the Recapitalization is effected. Ivaco has the right to subscribe for additional shares of Preferred Stock in the Rights Offering up to an amount which, when combined with Common Stock and Preferred Stock (upon conversion) already held by Ivaco, would maintain Ivaco's current percentage holdings in the Company at approximately the same level. Ivaco's obligation to make the additional purchase will be subject to the terms and conditions of the Standby Agreement, a form of which is attached hereto as Exhibit D and incorporated herein by reference. The Standby Agreement would be executed immediately prior to the effectiveness of the registration statement filed with the Securities and Exchange Commission in connection with the Rights Offering. The purpose of the purchases of the Preferred Stock is to increase the working capital of the Company. Ivaco has indicated a willingness in principle to divest its ownership interest in the Company, but only if it realizes the value inherent in the investment, which it believes is substantially in excess of current public quotes on the shares trading on the NASDAQ National Market system. There can be no assurance that any such transaction will be consummated or of the timing of any such possible transaction. Notwithstanding the foregoing, Ivaco reserves the right to increase its ownership of the Common Stock or to make additional investments in the Company in the form of Preferred Stock or otherwise to the extent, in its judgment, circumstances warrant. Item 5. Interest in Securities of the Issuer (a)(i) According to Form 10-Q Quarterly Report filed by the Company with the Securities and Exchange Commission for the quarter ended March 31, 1996, the Company had 4,056,140 shares of Common Stock issued and outstanding. Accordingly, the 2,018,650 shares of Common Stock owned by Ivaco represent approximately 49.8% of the Company's issued and outstanding shares. If the Recapitalization is effected, the Preferred Stock would be convertible into Common Stock. The conversion ratio applicable to the Preferred Stock would be based upon the average closing market price of the Common Stock on the NASDAQ National Market system for the ten trading days prior to the date of the stockholder vote relating to the Recapitalization. (ii) To the best of Ivaco's knowledge, none of the executive officers or directors of Ivaco is the beneficial owner of Common Stock. (b) Ivaco has the sole power to vote and dispose of all 2,018,650 shares of Common Stock. (c) Neither Ivaco nor, to the best of its knowledge, any of its executive officers or directors, has engaged in any transaction in Common Stock during the past 60 days. (d) To the best of Ivaco's knowledge, no other person is known to have the right to receive, or the power to direct, the receipt of dividends from or proceeds from the sale of Common Stock that is the subject of this Schedule 13D. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings, or Relationships with Respect to Securities of the Issuer Except as contemplated by the Stock Purchase Agreement, the Registration Rights Agreement, the Standby Agreement and the Certificate of Designations described in Item 4, there are no contracts, understandings or relationships (legal or otherwise) among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, naming any persons listed in Item 2 hereof. Item 7. Material to be Filed as Exhibits Exhibit A - Stock Purchase Agreement Exhibit B - Certificate of Designations Exhibit C - Registration Rights Agreement Exhibit D - Form of Standby Agreement Signature After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: August 5, 1996. IVACO INC. By:/s/ Guy-Paul Massicotte ---------------------------------------------- Guy-Paul Massicotte Vice-President, General Counsel and Secretary EX-99 2 Exhibit A STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of July 30, 1996, by and between Ivaco Inc., a Canadian corporation ("Ivaco"), and Laclede Steel Company, a Delaware corporation (the "Company"). RECITALS A. Ivaco agrees to purchase from the Company, on the following terms and conditions, 366,667 shares (the "Series A Shares") of the Company's Series A Preferred Stock, no par value (the "Series A Preferred Stock") at a price of $15.00 per share. B. The Company agrees to sell to Ivaco, on the following terms and conditions, the Series A Shares. C. The Form of Certificate of Designation of the Company's Series A Preferred Stock is attached hereto as Exhibit A. NOW, THEREFORE, in consideration of the recitals and the mutual covenants, representations, warranties, conditions, and agreement hereinafter expressed, the Parties agree as follows: ARTICLE I PURCHASE AND SALE OF SERIES A SHARES 1.1 The Series A Shares. Upon the terms and subject to the conditions set forth in this Agreement, at Closing, the Company shall sell and deliver to Ivaco and Ivaco shall purchase and accept from the Company the Series A Shares, free and clear of all security interests, claims, and restrictions. 1.2 Consideration. The consideration that Ivaco shall pay the Company for the Series A Shares shall be Five Million Five Hundred Thousand Five Dollars ($5,500,005.00) ("Purchase Price"). 1.3 Closing. The consummation of the transactions contemplated hereby ("Closing") shall take place at the offices of the Company at 9:00 a.m. local time on the date hereof ("Closing Date"). 1.4 Deliveries of the Company at Closing. The Company shall issue and deliver to Ivaco a certificate or certificates evidencing the Series A Shares and the other agreements, certificates and other instruments referred to in this Agreement to be executed at or prior to the Closing. In addition, Bryan Cave LLP, counsel to the Company, shall deliver its opinion in the form of Exhibit B. 1.5 Deliveries of Ivaco at Closing. At Closing, Ivaco shall wire in immediately-available funds, to an account designated by the Company, the Purchase Price. 1.6 Restricted Nature of Series A Shares. Ivaco acknowledges that the Series A Shares, in its hands, will be restricted securities which may not be sold or offered for sale in the absence of an effective registration statement as to such Series A Shares under the Securities Act of 1933, as amended, or an opinion of counsel satisfactory to the Company that such registration is not required. In this regard, at Closing, the parties hereto shall enter into a Registration Rights Agreement, substantially in the form of Exhibit C hereto. ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Company. The Company represents and warrants to and agrees with Ivaco that: (a) The Company is a corporation duly organized and validly existing, is in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to carry on its business as described in the draft prospectus attached hereto as Exhibit D (the "Prospectus"). The Company is duly qualified as a foreign corporation and is in good standing in all other jurisdictions in which such qualification is required, provided however, that the Company need not be qualified in a jurisdiction in which its failure to qualify would not have a material adverse effect on its operations or financial condition. (b) The Company has full corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. (c) This Agreement has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (d) The holders of outstanding shares of capital stock of the Company and warrants, options or other securities to purchase shares of capital stock of the Company are not entitled to any preemptive rights to subscribe for the Series A Shares. (e) Since the quarterly report on Form 10-Q for the quarter ended March 31, 1996, there has been no material adverse change in the condition or general affairs, business, operations, assets or properties of the Company and its subsidiaries, financial or otherwise, other than as referred to in the Prospectus. (f) The Series A Shares have been duly authorized, and when issued and paid for, will be validly issued, fully paid and non-assessable, and upon stockholder approval of the (i) decrease in par value of the Company's common stock, par value $13.33 per share ("Common Stock"), (ii) increase in authorized shares of Common Stock, and (iii) recapitalization of Series A Preferred Stock into convertible preferred stock as contemplated by Section 11 of the Certificate of Designation for such series, the Common Stock issuable upon conversion of the Series A Shares will be duly authorized, and when issued, will be validly issued, fully paid and non-assessable. (g) The Board of Directors has authorized the (i) decrease in par value of the Common Stock, (ii) increase in authorized shares of Common Stock, and (iii) in order to comply with NASD requirements regarding stockholder approval, recapitalization of the Series A Preferred Stock into convertible preferred stock as contemplated by Section 11 of the Certificate of Designation for such series (the "Recapitalization"), and recommended such items to the stockholders of the Company for approval. (h) The Series A Shares and 50,000 shares of Series A Preferred Stock sold to members of management of the Company simultaneously with the execution of this Agreement are the only shares of Series A Preferred Stock issued and outstanding. (i) As of June 30, 1996, the Company's net assets total $11,442,000, its retained earnings (deficit) totals ($7,391,000), its stated capital totals $54,081,000 and its capital in excess of par totals $247,000. All such amounts are subject to audit. (j) The issuance of the Series A Shares and the execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the compliance with the terms of this Agreement will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or give rise to rights of termination under, any deed of trust, lease, sublease, the Certificate of Incorporation or by-laws of the Company or any of its subsidiaries, or any indenture, mortgage, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries, or its or their property is bound, or any applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries, or the properties or operations of any of them. (k) The computation as to the availability by the Company to make dividend payments under the terms of the two Financing Agreements, each dated October 1, 1976 between the City of Alton, Illinois and the Company attached hereto as Exhibit E is true and correct as of the date calculated and listed thereon. (l) Certain members of management of the Company have executed the stock purchase agreement for Series A Preferred Stock attached hereto as Exhibit F and will purchase an aggregate amount of $750,000 of the Company's Series A Preferred Stock simultaneously with the Closing. (m) The Company's Board of Directors has authorized, subject to approval by the stockholders of the Company of the reduction of the par value per share of the Company's common stock from $13.33 per share to $0.01 per share, subject to the requirements of the Delaware General Corporation Law, the reduction of capital by $54,027,784 and transfer such amount to surplus. (n) There are no restrictions or limitations on the payment of dividends on the Series A Preferred Stock which are more onerous than the limitations under the Financing Agreements dated October 1, 1976, between the City of Alton, Illinois and the Company except under the Delaware General Corporation Law. (o) The amendments and waivers with respect to the Loan and Security Agreement among certain financial institutions named therein, Bank America Business Credit, Inc., as Agent, the Company and certain subsidiaries of the Company, dated as of September 7, 1994, as amended (the "Loan Agreement"), attached hereto as Exhibit G either have become effective or shall become effective simultaneously with the Closing. (p) All existing employment agreements between the Company and its executive officers (the "Employment Agreements"), copies of which are attached hereto as Exhibit H, have been amended to eliminate the provisions regarding payments to be made upon a change in control. (q) Except as disclosed in public filings, the Company has no agreements or arrangements with its management or directors. (r) No event of default is existing under any indebtedness for borrowed money of the Company or any or its subsidiaries or under any indenture, mortgage, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries, or any of their property is bound. (s) The Prospectus does not and all documents filed by the Company with the Securities and Exchange Commission since January 1, 1994, did not at the time of filing, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading. (t) No consent is necessary for the consummation of the transactions contemplated hereby which has not been obtained. (u) The Company has not given registration rights to any person other than Ivaco and certain members of management in connection with the purchase of 50,000 shares of Series A Preferred Stock contemporaneously with the execution hereof. (v) Immediately prior and without giving effect to the transactions contemplated hereby, the authorized capital stock of the Company consists of (i) 5,000,000 shares of common stock, par value $13.33 per share, of which 4,056,140 shares are issued and outstanding, and (ii) 2,000,000 shares of preferred stock, no par value, of which 1,064,036 are designated Series A Preferred Stock, and none of which are issued and outstanding. 2.2. Representations and Warranties of Ivaco. Ivaco represents and warrants to the Company that the purchase of the Series A Shares has been duly authorized and this Agreement represents the legal, valid and binding obligation of Ivaco, enforceable in accordance with its terms and conditions. ARTICLE III COVENANTS OF THE COMPANY In further consideration of the agreements of Ivaco herein contained, the Company covenants as follows: 3.1 Nomination of Directors. As long as Ivaco or Ivaco together with any person with which Ivaco is acting in concert in connection with its investment in the Company is the beneficial owner, within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act"), of 40% or greater of the Company's Common Stock calculated by dividing (i) the number of shares of Common Stock owned by Ivaco plus the number of shares of Common Stock into which the Series A Preferred Stock owned by Ivaco, if converted, would be converted, by (ii) the total number of shares of Common Stock outstanding plus the number of shares of Common Stock into which the Series A Preferred Stock owned by Ivaco, if converted, would be converted, Ivaco shall have the right to cause the Company to use its best efforts to cause its Board of Directors to nominate four persons designated by Ivaco to serve on the Company's Board of Directors and to use its best efforts to cause the stockholders of the Company to elect such Directors, and the Company will not change the number of Directors on the Board of Directors to a number higher than nine (9). The failure of Ivaco to exercise its rights under this Section 3.1 at any time shall in no way be construed to limit the right of Ivaco to exercise its rights under this Section 3.1 at a later date. 3.2 Stockholder Approvals. The Company will use its best efforts to cause its stockholders to approve and authorize, as soon as possible and in any event on or before September 30, 1996, (a) an increase in the number of authorized shares of the Company's common stock from 5,000,000 to 25,000,000, (b) a reduction of the par value per share of common stock from $13.33 per share to $0.01 per share and (c) in order to comply with NASD requirements regarding stockholder approval, the Recapitalization. 3.3 Rights Offering. The Company will prepare and file a registration statement with the Securities and Exchange Commission with respect to a rights offering to all of the Company stockholders (the "Rights Offering"), entitling all such stockholders to subscribe, pro rata (excluding the right of Ivaco to subscribe for the amount of Series A Preferred Stock purchased by Ivaco hereunder), for 647,369 shares of the Company's Series A Preferred Stock. The Company shall prepare documentation regarding the Rights Offering in a form which is reasonably satisfactory to Ivaco and shall use its best efforts to consummate the Rights Offering prior to December 31, 1996. 3.4 Employment Agreements. As long as Ivaco or Ivaco together with any person with which Ivaco is acting in concert in connection with its investment in the Company is the beneficial owner, within the meaning of Section 13(d) of the Exchange Act of 40% or greater of the Company's Common Stock calculated by dividing (i) the number of shares of Common Stock owned by Ivaco plus the number of shares of Common Stock into which the Series A Preferred Stock owned by Ivaco, if converted, would be converted, by (ii) the total number of shares of Common Stock outstanding plus the number of shares of Common Stock into which the Series A Preferred Stock owned by Ivaco, if converted, would be converted, the Employment Agreements shall not be amended without the prior written consent of Ivaco. 3.5 No Purchases From Management. The Company will not purchase, directly or indirectly, or redeem any Series A Preferred Stock from officers or directors of the Company or any transferee of such persons unless the Company also offers to purchase shares of Series A Preferred Stock from Ivaco on a pro rata basis on the same terms and conditions. 3.6 No Dilutive Action. The Company will take no action prior to the date upon which the stockholders of the Company approve the Recapitalization which would cause an adjustment under Section 12 of the Certificate of Designation for the Series A Preferred Stock if such action was taken after the date upon which the stockholders of the Company approve the Recapitalization. 3.7 Listing of Securities. The Company will use its best efforts to list the Series A Preferred Stock, if eligible, on the principal national securities exchange on which the Common Stock is listed or if such stock is not then so listed, the NASDAQ National Market System, if eligible, or the over-the- counter market, as designated on the NASDAQ System Level 1 (or comparable system), if eligible. 3.8 Expenses of Ivaco. The Company shall pay all actual out-of-pocket expenses incurred by Ivaco in connection with the negotiation and execution of this Agreement and the purchase of the Series A Preferred Stock; provided, however, that the Company's obligation under this Section 3.8 shall be limited to $50,000, regardless of the total amount of expenses incurred by Ivaco. 3.9 Specific Performance. Because the breach or anticipated breach of the covenants provided for in this Section 3 will result in immediate and irreparable harm and injury to Ivaco, for which it will not have an adequate remedy at law, the Company agrees that Ivaco shall be entitled to relief in equity, including but not limited to specific performance, to remedy such breach or anticipated breach and to seek any and all other legal and equitable remedies to which Ivaco may be entitled. ARTICLE IV COVENANTS OF IVACO In further consideration of the agreements of the Company herein contained, Ivaco covenants as follows: 4.1 Rights Offering. Prior to the effectiveness of a registration statement with respect to the Rights Offering and delivery of the prospectus contained therein to the stockholders of the Company, Ivaco shall execute the Standby Agreement attached hereto as Exhibit I. ARTICLE V MISCELLANEOUS PROVISIONS 5.1 Notice. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made upon being delivered either by courier or fax delivery to the party for whom it is intended, provided that a copy thereof is deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States mail, bearing the address shown in this Section 5.1 for, or such other address as may be designated in writing hereafter by, such party: If to Ivaco: Ivaco Inc. Place Mercantile 770 Rue Sherbrooke Ouest Montreal, Quebec, Canada H3A 1G1 Attention: Paul Ivanier With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004-1980 Attention: Jeffrey Bagner If to the Company: Laclede Steel Company One Metropolitan Square 211 North Broadway St. Louis, Missouri 63102-2738 Attention: Michael H. Lane With a copy to: Bryan Cave LLP One Metropolitan Square, Suite 3600 St. Louis, Missouri 63102 Attention: Frank P. Wolff, Jr. 5.2 Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings relative to such subject matter. 5.3 Counterparts. This Agreement may be executed simultaneously in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 5.4 Headings; Interpretation. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Agreement. Each reference in this Agreement to an Article, Section, or Exhibit, unless otherwise indicated, shall mean an Article or a Section of this Agreement or an Exhibit attached to this Agreement, respectively. References herein to "days", unless otherwise indicated, are to consecutive calendar days. Both parties have participated substantially in the negotiation and drafting of this Agreement and agree that no ambiguity herein should be construed against the draftsman. 5.5 Assignment. This Agreement and all the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon Ivaco, its successors and assigns. Ivaco's right under Section 3.1 and Section 3.4 hereof can be assigned by Ivaco to anyone who becomes the beneficial owner of 40% or greater of the Company's Common Stock (as defined in Section 3.1 and Section 3.4 hereof) as a result of the Common Stock or Series A Preferred Stock transferred by Ivaco to such successors and assigns. 5.6 Governing Law. This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of the State of Delaware, without reference to its choice of law rules. IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed as of the date first above written. IVACO INC. By: /s/ Paul Ivanier ------------------------ Name: Paul Ivanier Title: President and Chief Executive Officer LACLEDE STEEL COMPANY By: /s/ John B. McKinney ------------------------ Name: John B. McKinney Title: President and Chief Executive Officer EX-99 3 Exhibit B CERTIFICATE OF DESIGNATIONS, PREFERENCES, AND RIGHTS OF SERIES A PREFERRED STOCK OF LACLEDE STEEL COMPANY. ____________________ Pursuant to Section 151 of the General Corporation Law of the State of Delaware ____________________ We, the undersigned, (i) President and Chief Executive Officer and (ii) Vice President - Finance, Treasurer and Secretary, respectively, of Laclede Steel Company (the "Company"), a corporation organized and existing under the General Corporation Law of the State of Delaware (the "General Corporation Law"), in accordance with Sections 141(f) and 151(g) thereof, hereby certify that the Board of Directors of the Company, at a meeting duly convened and held on July 19, 1996, and by written consent dated July 30, 1996, pursuant to authority expressly vested in the Board of Directors by the Company's Certificate of Incorporation, adopted the following resolutions: RESOLVED, that the Board of Directors of the Company (the "Board") hereby approves and authorizes the creation, issuance and sale, either in one or more public offerings or private placements, of up to One Million Sixty Four Thousand Thirty Six (1,064,036) shares of Series A Preferred Stock which shall be senior to all other classes of equity securities of the Company; and RESOLVED FURTHER, that in connection with the issuance of the Series A Preferred Stock, the Board designates a committee (the "Committee") consisting of John B. McKinney, a director of the Company, to fix the designations and any of the preferences or rights ("Terms") of the shares of Series A Preferred Stock relating to dividends, redemption, dissolution, any distribution of assets of the Company or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Company or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series; provided that the Committee shall fix the Terms of the Series A Preferred Stock as outlined at this meeting, with each share of Series A Preferred Stock (a) having no voting power, (b) having a dividend rate of 6% per annum, (c) to be recapitalized upon stockholder approval (the "Recapitalization") such that such shares would be convertible, at the option of the holders of such Series A Preferred Stock, into Common Stock of the Company (with a conversion price equal to 80% of the closing price of the Company's Common Stock for the ten trading days prior to stockholder approval), (d) having a dividend rate of 8% per annum if the Recapitalization is not approved by stockholders and (e) being redeemable if the Recapitalization is not approved by the stockholders; and We, the undersigned, (i) President and Chief Executive Officer and (ii) Vice President - Finance, Treasurer and Secretary, respectively, of the Company, in accordance with Sections 141(f) and 151(g) of the General Corporation Law, hereby certify that the Committee, at a meeting duly convened and held on July 19, 1996, pursuant to authority expressly vested in the Committee by the Board of Directors, adopted the following resolution: RESOLVED, that pursuant to the authority expressly granted to and vested in the Committee by the Board of Directors of the Company and the provisions of the Certificate of Incorporation of the Company, as amended, this Committee hereby creates and authorizes the issuance of a series of One Million Sixty-Four Thousand and Thirty-Six (1,064,036) shares of the Company's Series A Preferred Stock, no par value per share, and hereby fixes the designation, dividend rate, redemption provisions, voting powers, rights on liquidation or dissolution, and other preferences and relative, participating, optional or other special rights, and the qualifications, limitations, or restrictions thereof, as follows: 1. Designation; Rank. (A) The series of preferred stock of the Company, no par value per share (the "Preferred Stock"), created and authorized hereby shall be designated as the "Series A Preferred Stock" (the "Series A Preferred Stock"). The number of shares of Series A Preferred Stock shall be One Million Sixty-Four Thousand and Thirty-Six (1,064,036). (B) The Series A Preferred Stock, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, shall rank senior to the Common Stock and to all other classes and series of equity securities of the Company. Except as contemplated in Section 4.B, no other classes or series of equity securities of the Company subsequently issued shall rank senior to or on a parity with the Series A Preferred Stock as to dividend rights and rights upon liquidation, dissolution or winding up of the Company. The Series A Preferred Stock shall be junior to indebtedness issued from time to time, including debentures. 2. Dividends and Distributions. (A) Holders of shares of Series A Preferred Stock are entitled to receive, if, when and as declared by the Board of Directors of the Company out of assets of the Company legally available for payment, cumulative cash dividends, payable quarterly, at the rate of 6% per annum, or $0.90 per share per annum, from the date of issuance and for each quarterly dividend period thereafter. Dividends on the Series A Preferred Stock are payable quarterly in arrears to holders of record on the last day of March, June, September and December of each year to be paid on the 10th day thereafter; provided, however, that the first dividend will be payable to holders of record on December 31, 1996, prorated from the date of issuance, and there will be no dividend payable on September 30, 1996. Each such dividend is payable to holders of record as they appear on the books of the Company. Dividends on the Series A Preferred Stock are cumulative and accrue on a daily basis from the date of original issuance of the shares. (B) The Company shall not declare or pay or set apart for payment any dividends or other distribution on any series of its preferred stock, or any other class of capital stock of the Company ranking, as to dividends or upon liquidation, dissolution or winding up, on a parity with or junior to the Series A Preferred Stock for any period (other than dividends payable in Common Stock or another stock ranking junior to the Series A Preferred Stock as to dividends and upon liquidation), unless full cumulative dividends have been paid or declared and a sum sufficient for payment thereof is set apart for payment for all dividends on the Series A Preferred Stock. When dividends are not paid in full upon the Series A Preferred Stock and any other series of preferred stock ranking on a parity therewith as to dividends with the Series A Preferred Stock, all dividends declared upon shares of Series A Preferred Stock and any other series of preferred stock ranking on a parity therewith as to dividends shall be declared pro rata so that the amount of dividends declared per share on the Series A Preferred Stock and such other series of preferred stock ranking on a parity therewith shall in all cases bear to each other the same ratio that the accrued dividends per share of the shares of Series A Preferred Stock and such other series of preferred stock bear to each other. No interest shall be payable in respect of any dividend payment on the Series A Preferred Stock in arrears. Unless full cumulative dividends on the Series A Preferred Stock have been paid for all past dividend payment periods or declared and set apart for payment, no Common Stock or any other stock of the Company ranking junior to or on a parity with the Series A Preferred Stock can be redeemed, purchased, retired or otherwise acquired for consideration by the Company, except by conversion into or exchange for stock of the Company ranking junior to the Series A Preferred Stock as to dividends and upon liquidation, dissolution or winding up. (C) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (B) of this Section 2, purchase or otherwise acquire such shares at such time and in such manner. 3. Optional Redemption. Subject to the approval by the Company's stockholders of the Recapitalization as set forth in Section 11 hereof: (A) (i) After September 15, 2005, the Company may, at its sole option, redeem any or all of the outstanding shares of Series A Preferred Stock, at a cash redemption price per share of $15.00, plus accrued and unpaid dividends (whether or not earned or declared) thereon (the "Redemption Price"), subject to the Common Stock having a Current Average Closing Price equal to at least 200% of the Initial Average Closing Price. The term "Current Average Closing Price" shall mean the average closing price for 20 consecutive trading days prior to the date of notice of redemption on the principal national securities exchange on which the Common Stock is listed or if such stock is not then so listed, the closing price of the Common Stock as shown by the NASDAQ National Market System or, if no such closing price is available, at the average of the representative last bid and asked prices of such Common Stock in the over-the-counter market, as shown by the NASDAQ System Level 1 (or comparable system). The term "Initial Average Closing Price" shall mean the average closing price of the Common Stock on the NASDAQ National Market System for the ten trading days prior to the date on which the holders of shares of Common Stock of the Company approve and authorize the Recapitalization. At least two (2) business days prior to redemption, the Company shall deposit in escrow an amount sufficient to satisfy the redemption obligation. (ii) In the event that full dividends on the Series A Preferred Stock have not been paid or declared and set apart for payment for all past dividend periods, the Series A Preferred Stock may not be redeemed by the Company. (iii) The Company shall notify the holders of shares of the Series A Preferred Stock to be redeemed, at their respective addresses as the same appear upon the books of the corporation, not less than thirty (30) or more than sixty (60) business days prior to the date fixed for redemption; provided, however, that no defect in the notice to a holder shall affect the ability of the Company to redeem the shares of Series A Preferred Stock pursuant to this Section 3.(A). Payment of the redemption price of the shares of Series A Preferred Stock redeemed shall be made at such place or places of redemption as shall be determined by the Board of Directors of the Company and shall be made against the surrender for cancellation of the certificates for the shares redeemed. The notice of redemption provided for herein shall be irrevocable. (iv) If less than all of the outstanding shares of the Series A Preferred Stock are to be redeemed pursuant to this Section 3.(A), the Company will select the shares redeemed pro rata, provided that only whole shares shall be selected for redemption. (v) If the notice of redemption shall have been made as hereinbefore provided and if on or before the redemption date specified in such notice all funds necessary for such redemption shall have been set aside by the Company pursuant to this Section 3.(A) so as to be available for the benefit of the holders of the shares so called for such redemption, then from and after the date fixed for redemption the shares of Series A Preferred Stock so called for such redemption, notwithstanding that any certificate therefor shall not have been surrendered or cancelled, shall no longer be deemed outstanding, dividends thereon shall cease to accrue and all rights of the holders with respect to such shares (including, without limitation, the conversion rights provided for in Section 13) shall cease and terminate, except only the right of the holders thereof to receive upon surrender of the certificates therefor the amount payable upon redemption thereof, but without interest. (B) The Company may not redeem any shares of Series A Preferred Stock prior to September 15, 2005. Except as set forth in Section 11(A), a holder of shares of Series A Preferred Stock has no right to cause the Company to redeem such shares. 4. Voting Rights. (A) The holders of the Series A Preferred Stock shall not, except as otherwise required by law or as set forth herein, have any right or power to vote on any matter or in any proceeding or to be represented on any matter or in any proceeding or to be represented at, or to receive notice of, any meeting of stockholders. (B) Each holder of the Series A Preferred Stock shall be entitled to one vote for each share standing in his name on the transfer books of the Company as of the record date fixed for such purpose, on any matter as to which they shall be entitled to vote. Without the vote of the holders of at least two-thirds (2/3) of the number of shares of Series A Preferred Stock then outstanding, the Company shall not (i) amend, alter or repeal any of the preferences or rights of the holders of the Series A Preferred Stock so as to adversely affect such preferences and rights, or (ii) issue any shares of capital stock ranking senior to or on a parity with the Series A Preferred Stock with respect to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding-up of the Company. 5. Liquidation Rights. (A) In the event of any liquidation, dissolution or winding-up of the Company, the holders of the shares of the Series A Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, before any distribution of assets is made to holders of Common Stock or any other stock of the Company ranking junior to the Series A Preferred Stock as to liquidation, dissolution or winding-up of the Company, distributions in an amount equal to $15.00 per share (the "Liquidation Preference"), plus an amount equal to the accrued and unpaid dividends thereon. (B) If upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company, the amounts available with respect to the Series A Preferred Stock and any other shares or series of capital stock of the Company (the "Liquidation Parity Shares") ranking as to any distribution upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company on a parity with the Series A Preferred Stock are insufficient to pay in full the respective preferential amounts to which holders of shares of the Series A Preferred Stock and the Liquidation Parity Shares are entitled upon such liquidation, dissolution or winding-up, the holders of the Series A Preferred Stock and the Liquidation Parity Shares shall share ratably in any distribution of assets of the Company in proportion to the full respective preferential amounts to which they are entitled upon such liquidation, dissolution, or winding- up. (C) Neither the consolidation of nor merging of the Company with or into any other corporation or corporations, nor the sale of all or substantially all of the assets of the Company shall be deemed to be a liquidation, dissolution or a winding-up of the Company within the meaning of any of the provisions of this Section 5. 6. "Common Stock" Defined. References to "Common Stock" in Sections other than Sections 12.(A) and 12.(B) hereof shall mean any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company. References to "Common Stock" in Sections 12.(A) and 12.(B) hereof shall include only shares of the class designated as Common Stock as of the date of the original issuance of shares of the Series A Preferred Stock, or shares of the Company of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from such reclassification bears to the total number of shares of all classes resulting from all such reclassifications. 7. No Preemptive Rights. The holders of the Series A Preferred Stock shall not have any preemptive rights. 8. Holders. The term "holders" as used herein shall mean, in all cases, holders of record. 9. Extension of Time Periods. To the extent there are any time periods specified for action by the Company or the holders of Series A Preferred Stock, such time periods shall be extended to the extent required by applicable law, rule or regulatory requirement. 10. Reacquired Shares. Any shares of Series A Preferred Stock converted, redeemed, purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation, and upon the filing of an appropriate certificate with the Secretary of State of the State of Delaware, become authorized but unissued shares of Preferred Stock, no par value, of the Company subject to the conditions or restrictions on issuance set forth herein. 11. Recapitalization of Shares of Series A Preferred Stock. (A) If the requisite holders of shares of Common Stock of the Company do not approve and authorize, on or before October 31, 1996, (i) in order to comply with NASD requirements regarding stockholder approval, the terms and conditions of Section 12 hereof (whether at a stockholders meeting or by written consent or otherwise), (ii) an increase in the number of authorized shares of the Company's Common Stock from 5,000,000 to 25,000,000, and (iii) a reduction of the par value per share of Common Stock from $13.33 per share to $0.01 per share (collectively, the "Recapitalization"), then (1) the per annum dividend rate of the Series A Preferred Stock shall automatically be increased by 2% percent to 8% per annum, or $1.20 per share per annum, from January 1, 1997 and for each quarterly dividend period thereafter and (2) each holder of shares of Series A Preferred Stock shall automatically be granted the right to have the Company redeem all of its shares of Series A Preferred Stock upon 30 days prior notice to the Company at the Redemption Price. (B) If the holders of shares of Common Stock of the Company approve and authorize, on or before December 31, 1996, the Recapitalization, each share of the Series A Preferred Stock owned by such holder shall, without any further action by the Company or such holder, be automatically recapitalized and, in addition to the designations, rights, qualifications, limitations and/or restrictions set forth above, the Series A Preferred Stock shall be subject to the additional terms set forth in Section 12 hereof. (C) The term "Recapitalization Approval Date" shall mean the date on which the holders of shares of Common Stock of the Company approve and authorize the Recapitalization. 12. Conversion into Common Stock. (A) Upon the Recapitalization Approval Date, each share of Series A Preferred Stock shall be immediately convertible, at the option of the holders thereof, at the office of the Company or any transfer agent for the Series A Preferred Stock, into the number of shares of Common Stock determined by dividing 15 by the Conversion Price. The term "Conversion Price" shall mean 80 percent of the Initial Average Closing Price. The Conversion Price is subject to adjustment as provided in this Section 12. Upon the conversion of any shares of Series A Preferred Stock into shares of Common Stock, all declared, accrued but unpaid dividends on shares of converted Series A Preferred Stock shall be paid in cash by the Company to the holders of such converted Series A Preferred Stock, subject to adjustment as provided in this Section 12. (B) If the Company (i) pays a dividend or makes a distribution on its outstanding shares of Common Stock, in shares of its Common Stock; (ii) subdivides its outstanding shares (by reclassification or otherwise) of Common Stock into a greater number of shares; (iii) combines, consolidates, or reclassifies its outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of its Common Stock any shares of its capital stock; then the Conversion Price in effect immediately before such action shall be adjusted so that the holder of the Series A Preferred Stock thereafter exchanged will be entitled to receive, upon the exchange thereof, the number of shares of capital stock of the Company which he would have been entitled to receive immediately prior to such action if the Series A Preferred Stock had been exchanged immediately before the record date (or, if no record date, the effective date) for such action. The adjustment shall become effective immediately after the close of business on the record date in the case of a dividend or distribution and immediately after the close of business on the effective date in the case of a subdivision, combination or reclassification. If as a result of an adjustment, a holder of the Series A Preferred Stock upon exchange of the Series A Preferred Stock may receive shares of two or more classes of capital stock of the Company, the Company shall determine the allocation of the adjusted Conversion Price between the classes of capital stock. After such allocation, the Conversion Price of each class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock contained in this Section 12. (C) Other than in situations provided for in Section 12(A), if the Company issues or sells (or in accordance with this Section 12 is deemed to have issued or sold) any shares of its Common Stock for a consideration per share less than the Conversion Price in effect immediately prior to the time of such issue or sale and/or the Company issues or sells (or in accordance with this Section 12 is deemed to have issued or sold) any shares of its Common Stock for a consideration per share less than the then current market price on the date of such issue or sale, then, forthwith upon such issue or sale, the Conversion Price shall be reduced to the lower of the prices (calculated to the nearest cent) determined as follows: (I) by dividing (i) an amount equal to the sum of (a) the number of shares of Common Stock outstanding immediately prior to such issue or sale (including as outstanding all shares of Common Stock issuable upon exchange of the then outstanding shares of Series A Preferred Stock) multiplied by the then existing Conversion Price, and (b) the consideration, if any, received by the Company upon such issue or sale, by (ii) the total number of shares of Common Stock outstanding immediately after such issue or sale (including as outstanding all shares of Common Stock issuable upon exchange of the then outstanding shares of Series A Preferred Stock); and (II) by multiplying the Conversion Price in effect immediately prior to the time of such issue or sale by a fraction, the numerator of which shall be the sum of (i) the number of shares of Common Stock outstanding immediately prior to such issue or sale (including as outstanding all shares of Common Stock issuable upon exchange of the then outstanding shares of Series A Preferred Stock) multiplied by the then current market price immediately prior to such issue or sale plus (ii) the consideration received by the Company upon such issue or sale, and the denominator of which shall be the product of (iii) the total number of shares of Common Stock outstanding immediately after such issue or sale (including as outstanding all shares of Common Stock issuable upon exchange of the then outstanding shares of Series A Preferred Stock), multiplied by (iv) the then current market price immediately prior to such issue or sale. (D) If the Company in any manner grants, issues or sells (whether directly or by assumption in a merger or otherwise) any rights to subscribe for or to purchase, or any options or warrants for the purchase of, Common Stock or any stock or securities convertible into or exchangeable for Common Stock (such rights or options or warrants being herein called "Options" and such convertible or exchangeable stock or securities being herein called "Convertible Securities") whether or not such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities (determined by dividing (I) the total amount, if any, received or receivable by the Company as consideration for the granting, issuance or sale of such Options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus, in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (II) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options) shall be less than the Conversion Price in effect immediately prior to the time of the granting, issuance or sale of such Options (or less than the then current market price per share of Common Stock, determined as of the date of granting, issuance or sale of such Options, as the case may be), then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued for such price per share as of the date of granting, issuance or sale of such Options and thereafter shall be deemed to be outstanding. Except as otherwise provided in Section 12(F), no adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. (E) If the Company in any manner issues (whether directly or by assumption in a merger or otherwise) or sells any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing (I) the total amount received and receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (II) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Conversion Price in effect immediately prior to the time of such issue or sale (or less than the then current market price, determined as of the date of such issue or sale of such Convertible Securities, as the case may be), then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued for such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding, provided that except as otherwise provided in Section 12(F) below, no adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Option to purchase any such Convertible Securities for which adjustments of the Conversion Price have been or are to be made pursuant to other provisions of this Section 12, no further adjustment of the Conversion Price shall be made by reason of such issue or sale. (F) Upon the happening of any of the following events, namely, if the purchase price provided for in any Option referred to in Section 12(D), the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to in Section 12(D) or Section 12(E), or the rate at which any Convertible Securities referred to in Section 12(D) or Section 12(E) are convertible into or exchangeable for Common Stock shall change at any time (other than under or by reason of provisions designed to protect against dilution), the Conversion Price in effect at the time of such event shall forthwith be readjusted to the Conversion Price which would have been in effect at the time of such event had such Options or Convertible Securities remaining outstanding at the time of such event provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold: and on the expiration of any such Option or the termination of any such right to convert or exchange such Convertible Securities, the Conversion Price then in effect hereunder shall forthwith be increased to the Conversion Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued, and the Common Stock issuable thereunder shall no longer be deemed to be outstanding. If the purchase price provided for in any such Option referred to in Section 12(D) or the rate at which any Convertible Securities referred to in Section 12(D) or 12(E) are convertible into or exchangeable for Common Stock shall be reduced at any time under or by reason of provisions with respect thereto designed to protect against dilution, then in case of the delivery of Common Stock upon the exercise of any such Option or upon conversion or exchange of any such Convertible Security, the Conversion Price then in effect hereunder shall forthwith be adjusted to such respective amount as would have been obtained had such Option or Convertible Security never been issued as to such Common Stock and had adjustments been made upon the issuance of the shares of Common Stock delivered as aforesaid (provided that the current market price used in such determination shall be the current market price on the date of issue of such Option or Convertible Security), but only if as a result of such adjustment the Conversion Price then in effect hereunder is thereby reduced. (G) Other than in situations provided for in Section 12(B), if the Company declares a dividend, or makes any other distribution, upon any stock of the Company payable in Common Stock, Options or Convertible Securities, any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend or distribution shall be deemed to have been issued or sold without consideration. (H) If any shares of Common Stock, Options or Convertible Securities are issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Company therefor, without deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. If any shares of Common Stock, Options or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined by the Board of Directors of the Company, without deduction of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any Options shall be issued in connection with the issue and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued without consideration. In case any shares of Common Stock, Options or Convertible Securities shall be issued in connection with any merger or consolidation in which the Company is the surviving corporation and the rights of the holders of Common Stock are not affected, the amount of consideration therefor shall be deemed to be the fair value as determined by the Board of Directors of the Company of such portion of the assets and business of the non-surviving corporation as such Board shall determine to be attributable to such Common Stock, Options or Convertible Securities, as the case may be. (I) In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities, or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. (J) The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account or in the treasury of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock for the purposes of this Section 12. (K) In case of any consolidation or merger of the Company (other than a merger or consolidation in which the Company is the surviving corporation and the rights of the holders of Common Stock are not affected) or in the event of any sale of all or substantially all of the assets of the Company, the holder of each share of the Series A Preferred Stock then outstanding shall have the right thereafter, subject to the terms and conditions of this Section 12, to exchange such share into the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger, or sale by a holder of the number of shares of Common Stock into which such share of Series A Preferred Stock would have been entitled to be exchanged into immediately prior to such consolidation, merger, or sale; and effective provision shall be made in the Certificate of Incorporation or Charter of the resulting or surviving corporation or otherwise so that the provisions set forth in this Section 12 shall thereafter be applicable, as nearly as practicable, to any such other shares of stock and other securities and property deliverable upon exchange of the Series A Preferred Stock remaining outstanding or other exchangeable or convertible preferred stock received by the holders in place thereof; and any such resulting or surviving corporation shall expressly assume the obligation to deliver, upon the exercise of the exchange privilege, such shares, securities or property as the holders of the Series A Preferred Stock remaining outstanding, or other exchangeable or convertible preferred stock received by the holders in place thereof, may be entitled to, and to make provisions for the protection of the exchange right as provided (unless such resulting or surviving corporation assumes such obligation). In case securities or property other than shares of Common Stock shall be issuable or deliverable upon exchange as aforesaid, then all reference in this Section (K) shall be deemed to apply, so far as appropriate and as nearly as practicable, to such other securities or property. The provisions of this Section (K) shall similarly apply to successive consolidations, mergers, or sales. (L) For the purpose of any computation under this Section 12, the current market price per share of Common Stock at any date shall be deemed to be the average closing price of the Company's Common Stock for any 30 consecutive trading days within the 45 trading days immediately prior to the date in question. The closing price for each day shall be the last reported sale of Common Stock on the principal national securities exchange on which the Common Stock may be listed or if such stock is not then so listed, the closing price of the Common Stock as shown by the NASDAQ National Market System or, if no such closing price is available, at the average of the representative last bid and asked prices of such Common Stock in the over-the-counter market, as shown by the NASDAQ System Level 1 (or comparable system) or in the absence of any of the foregoing, the fair market value as determined by the Board of Directors (whose determination made in good faith shall be conclusive). (M) The Company may at its option elect not to issue fractional shares of Common Stock upon any exchange, in which case, the Company shall pay in cash an amount equal to the current market price per share plus all accrued but unpaid dividends multiplied by such fractional interest. Any determination that the Company or the Board of Directors makes regarding fractional shares is conclusive. (N) (a) Notwithstanding the provisions of this Section 12, (i) no adjustment of the Conversion Price shall be required for three years after the Recapitalization Approval Date unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect, but in such case any adjustment that would otherwise be required then to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment. All calculations under this Section 12 shall be made and rounded to the nearest one-hundredth of a share or the nearest one ten- millionth of a fraction in the case of the Conversion Price, as the case may be: (ii) no adjustment need be made for sales of Common Stock pursuant to a plan for reinvestment of dividends or interest and no adjustment need be made for a change in the par value of the Common Stock; (iii) no adjustment need be made in connection with the issuance of shares of Common Stock upon exchange of the Series A Preferred Stock; (iv) no adjustment need be made in connection with the issuance of any rights or shares of Common Stock in connection with the Company's rights offering pursuant to which rights to purchase Series A Preferred Stock will be distributed to the Company's stockholders; (v) no adjustment need be made by virtue of the issue of any additional securities of the Company in accordance with the terms of such securities (by way of dividend or otherwise); and (vi) no adjustment need be made by virtue of the exercise of presently outstanding employee stock options which are exercisable at a cash price per share equal to or greater than the then current market price per share of Common Stock at the date of issuance of such options. (b) The Board of Directors shall have the power to resolve any ambiguity or correct any error in this Section 12 and its action in so doing, as evidenced by a Board resolution, shall be final and conclusive. (c) The certificate of any independent firm of public accountants of recognized national standing selected by the Board of Directors shall be satisfactory evidence of the correctness of any computation made in this Section 12. (O) Whenever there is an adjustment requiring a change in the Conversion Price, a statement signed by the Secretary of the Company describing specifically the event giving rise to such adjustment and stating the adjustment which shall be made to the Conversion Price shall be filed at the principal office of the Company. The statement so filed shall be open to inspection by any holder of record of shares of the Series A Preferred Stock. The Company shall at the time of filing any such statement mail notice to the same effect to holders of shares of the Series A Preferred Stock at their addresses appearing on the books of the Company or supplied by them to the Company for the purpose of notice. In addition, the Company shall include a notice of Conversion Price with each dividend payment on the Series A Preferred Stock or otherwise give notice thereof promptly after the due date for each such dividend, whenever there has been a change in the Conversion Price since the last previous dividend due date. (P) In order to convert any shares of Series A Preferred Stock, a holder shall deliver to the Company at the office of the Company, or at such other place or places, if any, as the Board of Directors of the Company may determine (after giving written notice thereof to all holders), certificates, duly endorsed to the Company or in blank, of the shares of Series A Preferred Stock to be converted, together with appropriate evidence of the payment of any transfer or similar tax, if required to be paid by the holder thereof pursuant to the last sentence of this paragraph, and instructions in writing to the Company to exchange such shares and specifying the name and address of the person, corporation, firm or other entity to whom such shares are to be issued, whereupon the Company will issue (i) the number of shares of Common Stock issuable on exchange thereof as of the time of such surrender and as promptly as practicable thereafter will deliver certificates for such shares of Common Stock, (ii) cash for any remaining fraction of a share if the Company so elects, as provided in Section 12(M) above, and (iii) cash in an amount equal to all accrued but unpaid dividends, with respect to each share of Series A Preferred Stock exchanged. The Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon exchange; provided, however, that the holder shall pay any such tax which is due because such shares are to be issued in a name other than that of such holder. If for any reason the Company is unable to pay any unpaid dividends on the shares of Series A Preferred Stock being exchanged, the Company will pay such unpaid dividends to the exchanging holder as soon thereafter as funds of the Company are legally available for such payment. At the request of any such exchanging holder, the Company will provide such holder with written evidence of its obligation to such holder. The Company shall from and after the Recapitalization Approval Date take all necessary corporate action to reserve for issuance upon exchange of the Series A Preferred Stock a sufficient number of shares out of the authorized Common Stock for the exchange of each outstanding share of Series A Preferred Stock in accordance with its terms. (Q) If (i) the Company takes any action that would require an adjustment in the Conversion Price pursuant to this Section 12; or (ii) there is a voluntary or involuntary liquidation, dissolution or winding-up of the Company; the Company shall provide notice of such action in the manner set forth in Section 12(O), stating therein the proposed record date for a distribution or the effective date of a reclassification, consolidation, merger, lease, transfer, liquidation, dissolution or winding-up, at least fifteen (15) days in advance of such date. Failure to mail the notice or any defect therein shall not affect the validity of the transaction. (R) Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value (if any) of the Common Stock deliverable upon exchange of the Series A Preferred Stock, the Company will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Conversion Price. (S) The Company from time to time may decrease the Conversion Price by an amount for any period of time if the period is at least 20 days and if the decrease is irrevocable during the period. Whenever the Conversion Price is decreased, the Company shall give notice of the decrease at least 15 days prior to the date the decreased Conversion Price takes effect, in the manner set forth in Section 12(O) above, which notice shall state the decreased Conversion Price and the period it will be in effect. A decrease in the Conversion Price pursuant to this Section 12(S) shall not otherwise change or adjust the Conversion Price otherwise in effect for purposes of this Section 12. IN WITNESS WHEREOF, the Company has caused this Certificate of Designation, Preferences, and Rights of Series A Preferred Stock of the Company to be duly executed this 30th day of July, 1996. LACLEDE STEEL COMPANY /s/ John B. McKinney ----------------------------- John B. McKinney President and Chief Executive Officer ATTEST: /s/ Michael H. Lane - ----------------------------- Michael H. Lane Vice President - Finance, Treasurer and Secretary (Corporate Seal) EX-99 4 Exhibit C REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of July 30, 1996, is made and entered into by and between LACLEDE STEEL COMPANY, a Delaware corporation (the "Company"), IVACO INC., a Canadian corporation ("Ivaco"), JOHN B. McKINNEY, MICHAEL H. LANE, J. WILLIAM HEBENSTREIT, LARRY J. SCHNURBUSCH and H. BRUCE NETHINGTON (collectively, the "Management Purchasers"). RECITALS A. The Company and Ivaco have entered into a Stock Purchase Agreement dated as of July 30, 1996 (the "Stock Purchase Agreement"), whereby Ivaco has purchased 366,667 shares of the Company's Series A Preferred Stock, no par value, (the "Series A Preferred Stock") at a price of $15.00 per share; A. The Company and each of the Management Purchasers separately entered into a Management Stock Purchase Agreement dated as of July 30, 1996 (the "Management Stock Purchase Agreements"), whereby the Management Purchasers have purchased an aggregate of 50,000 shares of Series A Preferred Stock at a price of $15.00 per share; B. Upon approval by the stockholders of the Company of (1) a reduction of the par value per share of the Company's common stock from $13.33 per share to $0.01 per share and (2) an increase in the number of authorized shares of the Company's common stock from 5,000,000 to 25,000,000, and (3) the recapitalization of Series A Preferred Stock, each share of Series A Preferred Stock will become convertible at the option of the holder into shares of the Company's common stock as contemplated by Section 11 of the Certificate of Designation for such series. C. Pursuant to a standby purchase agreement, Ivaco may also purchase certain additional shares of Series A Preferred Stock. D. Ivaco may desire, in the future, to sell to the public some or all of the shares of Series A Preferred Stock, and/or any common stock issued upon conversion of Series A Preferred Stock. E. The Company therefore deems it to be in its best interest to set forth the rights of Ivaco in connection with public offerings and sales of such shares of Series A Preferred Stock and common stock issued upon conversion of Series A Preferred Stock. NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereinafter set forth, and intending to be legally bound hereby, the Company and Ivaco hereby agree as follows: 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Effective Date" shall mean the date of this Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The terms "register," "registered," and "registration" shall mean a registration effected by the preparation and filing of a Registration Statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement by the SEC. "Holder(s)" shall mean Ivaco and the Management Purchasers, so long as it or they hold any Registrable Securities, and any person owning Registrable Securities who is a permitted assignee of rights under Section 12 of this Agreement. "Registrable Securities" shall mean the shares of (1) any Series A Preferred Stock issued to Ivaco pursuant to the Stock Purchase Agreement and any common stock issued upon conversion of such Series A Preferred Stock, (2) any Series A Preferred Stock issued to the Management Purchasers pursuant to the Management Purchase Agreements and any common stock issued upon conversion of such Series A Preferred Stock, and (3) any Series A Preferred Stock issued to Ivaco pursuant to the Standby Agreement which is attached as Exhibit I to the Stock Purchase Agreement and any common stock issued upon conversion of such Series A Preferred Stock, and, in each case, all shares of common stock or other securities issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, in exchange for, or in replacement of any shares of Series A Preferred Stock. The term "Registrable Securities" excludes, however, any security (i) the sale of which has been effectively registered under the Securities Act and which has been disposed of in accordance with a Registration Statement, (ii) that has been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof (including, without limitation, transactions pursuant to Rules 144 and 144A of the Securities Act) such that the further disposition of such securities by the transferee or assignee is not restricted under the Securities Act, (iii) that have been sold in a transaction in which such rights are not, or cannot be, assigned, or (iv) for which the Registration Rights have expired pursuant to Section 11 of this Agreement. "Registration Expenses" shall mean all expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, all (i) registration, qualification and filing fees; (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of any Registrable Securities being registered); (iii) printing expenses; (iv) internal expenses of the Company (including, without limitation, all salaries and expenses of officers and employees of the Company performing legal or accounting duties); (v) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of comfort letters customarily requested by underwriters); and (vi) fees and expenses of listing any Registrable Securities on any national securities exchange. "Registration Rights" shall mean the rights of the Holders to cause the Company to register Registrable Securities pursuant to Sections 2 and 3 of this Agreement. "Registration Statement" shall mean any registration statement or similar document that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus or preliminary prospectus included therein, all amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits to such Registration Statement and all material incorporated by reference in such Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 2. Demand Registration. (a) If the Company shall receive at any time on or after September 15, 1996, a written request from any Holder(s) of Registrable Securities (collectively, the "Initiating Holder") representing at least twenty percent (20%) of the Registrable Securities or the amount of Registrable Securities equivalent to 50,000 shares of Series A Preferred Stock in the case of Ivaco, that the Company file a Registration Statement covering the registration of no less than twenty percent (20%) of the Registrable Securities or the amount of Registrable Securities equivalent to 50,000 shares of Series A Preferred Stock in the case of Ivaco, as specified in the written request of the Initiating Holder (the "Registration Request"), then the Company shall (i) within five (5) days of the receipt of such Registration Request, give written notice of such Registration Request to Ivaco, and (ii) use its reasonable best efforts to as promptly as practicable file a Registration Statement covering the registration of all Registrable Securities with respect to which the Company receives, within the twenty (20) days immediately following the Registration Request, a request for inclusion in the registration from the Holder(s) thereof (an "Inclusion Request") and the Company shall effect as soon as practicable the registration of such Registrable Securities. Each Inclusion Request shall also specify the aggregate number of shares of Registrable Securities proposed to be registered. Ivaco shall have the right to effect up to three (3) demand registrations pursuant to this Section 2. Holders other than the Initiating Holder shall have the right to participate in any registration pursuant to this Section 2. (b) the Company shall not be obligated (i) to effect more than three registrations pursuant to this Section 2 requested by Ivaco, (ii) to effect any registration pursuant to this Section 2 within one (1) year after the effective date of any registration of Registrable Securities pursuant to a demand registration or any other registration of Registrable Securities which the Holders were afforded the opportunity to register all Registrable Securities under the Securities Act which the Holders desired to register, (iii) to effect any registration pursuant to this Section 2 if, in the written opinion of counsel to the Company, reasonably satisfactory to the requesting Holder, the sale or disposition of such Holder's Registrable Securities, in the manner proposed by such Holder, may be effected without registering such Securities under the Securities Act. (c) If any demand registration is an underwritten offering the Holders of a majority of the Registrable Securities to be included in such demand registration will select a managing underwriter or underwriters to administer the offering, which underwriter or underwriters shall be reasonably satisfactory to the Company. 3. Incidental Registration. In the event that (but without any obligation to do so), after the Effective Date, the Company proposes to register any shares of Registrable Securities in connection with the underwritten public offering of such shares solely for cash on any form of Registration Statement in which the inclusion of Registrable Securities is appropriate (other than a registration (i) relating solely to the sale of securities to participants in a Company stock plan, (ii) pursuant to a Registration Statement on Form S-4 or Form S-8 (or any successor forms) or any form that does not include substantially the same information, other than information relating to the selling shareholders or their plan of distribution, as would be required to be included in a demand registration statement under Section 2 covering the sale of Registrable Securities, (iii) in connection with any dividend reinvestment or similar plan or (iv) for the sole purpose of offering securities to another entity or its security holders in connection with the acquisition of assets or securities of such entity or any similar transaction), the Company shall promptly give Ivaco written notice of such registration at least thirty (30) days before the anticipated filing date of any such Registration Statement. Upon the written request of any Holder within fifteen (15) days after the date of such notice from the Company, the Company shall cause to be registered under the Securities Act all of the Registrable Securities that such Holder has so requested to be registered on such Registration Statement. The Company shall not be required to proceed with, or maintain the effectiveness of, any registration of its securities after giving the notice herein provided, and the right of any Holder to have Registrable Securities included in such Registration Statement shall be conditioned upon participation in any underwriting to the extent provided herein. The Company shall not be required to include any Registrable Securities in such underwriting unless the Holders thereof enter into an underwriting agreement with the underwriter(s) selected by the Company in customary form, and upon terms and conditions agreed upon between the Company and such underwriter(s). In the event that the underwriter(s) shall advise the Company that marketing or other factors require that less than 100% of the Registrable Securities requested by the Holder or Holders of Registrable Securities be underwritten, then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto. The underwriter(s) may exclude some or all of the Registrable Securities from such underwriting to the extent and in the amount that the underwriter(s) advise the Company that less than 100% of the Registrable Securities requested to be registered can be marketed and the number of Registrable Securities, if any, that may be included in the underwriting shall be allocated among all Holders thereof in proportion (as nearly as practicable) to the number of Registrable Securities which each Holder requested be included in such registration; provided, however, that the number of Registrable Securities requested to be registered by the Management Purchasers shall be reduced to zero before the number of Registrable Securities requested to be registered by Ivaco shall be reduced by any amount. Nothing in this Section 3 is intended to or shall diminish the number of securities to be included by the Company in such underwriting. The Company and the underwriter(s) selected by the Company shall make all determinations with respect to the timing, pricing and other matters related to the offering of securities pursuant to this Section 3. 4. Registration Procedure. Whenever required under this Agreement to effect the registration of the Registrable Securities, the Company shall as expeditiously as reasonably possible: (a) prepare and file with the SEC, as soon as practicable, a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective, and keep such Registration Statement effective for up to one hundred eighty (180) days or such shorter period as shall be required to sell all of the Registrable Securities covered by such Registration Statement; notwithstanding the foregoing, the Company shall have no obligation to cause any Registration Statement to become effective prior to the date the Company has published its financial results for the third fiscal quarter of 1996. If the Holders of a majority of the Registrable Securities to be included in such registration statement notify the Company in writing that they have selected one firm of attorneys ("Sellers Counsel") to represent them in connection with such registration, then at least five business days before filing with the Commission such registration statement, the Company will furnish to Sellers Counsel copies of such registration statement as proposed to be filed, and thereafter will furnish to each seller of Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller and to change the registration statement (but not including any document incorporated therein by reference) as it relates to such seller or Sellers Counsel as requested by such seller or Sellers Counsel on a timely basis, and to reasonably consider other changes to the registration statement (but not including any document incorporated therein by reference) reasonably requested by such seller or Sellers Counsel on a timely basis, in light of the requirements of the Securities Act and any other applicable laws and regulations; (b) prepare and file with the SEC such amendments, post-effective amendments and supplements to such Registration Statement and the prospectus used in connection with such Registration Statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement; (c) furnish to the Holders, without charge, such number of copies of a prospectus, including a preliminary prospectus, and any amendments or supplements thereto as such Holders may reasonably request and a reasonable number of copies of the then-effective Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (d) promptly after the filing of any document that is to be incorporated by reference into a Registration Statement or prospectus, provide copies of such document to Ivaco; (e) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a registration statement at the earliest possible moment and to prevent the entry of such an order; (f) use its reasonable best efforts to register and qualify the securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided, however, that the Company shall not be required to qualify to do business, file a general consent to service of process or subject itself to taxation in any such states or jurisdictions where it would not otherwise be required to so qualify to do business or consent to service of process or subject itself to taxation; (g) if it knows thereof, notify the Holders of shares covered by such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which in its judgment the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (h) use its reasonable best efforts to cause all Registrable Securities covered by the Registration Statement to be listed on each national securities exchange on which shares of the Company's Common Stock are then listed, if eligible, or if the Common Stock is not then so listed, the NASDAQ National Market System, if eligible, or in the over- the-counter market, as shown by the NASDAQ System Level 1 (or comparable system), if eligible; (i) cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends, and enable such Registrable Securities to be in such denominations and registered in such names as the Holders may request at least two (2) business days prior to any sale of Registrable Securities; and (j) pay or cause to be paid all Registration Expenses. 5. Right to Withdraw Registration Request. The Holders may withdraw a request for registration or inclusion hereunder at any time but shall lose one (1) of their rights to cause the Company to register the Registrable Securities pursuant to Section 2 hereof if a request for registration under Section 2 was withdrawn; provided, however, that if the request is withdrawn as a result of information concerning the business or financial condition of the Company which materially and adversely differs from information regarding the Company publicly available on the date on which such registration was requested, the foregoing provisions shall not be applicable. 6. Right to Withdraw Registration. Notwithstanding anything herein to the contrary, the Company may delay, suspend or withdraw any registration or qualification of Registrable Securities required pursuant to this Agreement if the Company in good faith determines that any such registration would adversely affect an offering of any securities of the Company which is then in process or if the Company is aware of other pending developments or any material corporate event and the Company is not in a position to timely prepare and file such Registration Statement, or to move forward with the processing of such Registration Statement by the SEC. If the Company exercises its right to withdraw a registration pursuant to this Section 6 or the registration fails to become effective for any reason, the related request to register shall not be counted as an exercise of a demand registration right under Section 2 hereof. 7. Obligation of Holders to Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities that the Holders thereof furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such Registrable Securities as shall be required under the Securities Act or the Exchange Act to effect the registration of the Holders' Registrable Securities. The Holders agree that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in Section 4(f) hereof, the Holders shall forthwith discontinue disposition of the Registrable Securities pursuant to the then current prospectus until (i) the Holders are advised in writing by the Company that a new Registration Statement covering the offer of Registrable Securities has become effective under the Securities Act, or (ii) the Holders receive copies of a supplemented or amended prospectus contemplated by Section 4 hereof, or (iii) until the Holders are advised in writing by the Company that the use of the then current prospectus may be resumed. The Company shall use its reasonable best efforts to limit the duration of any discontinuance of disposition of Registrable Securities pursuant to this paragraph. 8. Effectiveness of Registration. Notwithstanding the obligation of the Company to effect no more than three (3) registrations requested pursuant to Section 2 hereof, a registration requested pursuant to Section 2 hereof shall not be deemed to have been effected if (i) the Registration Statement has not been kept effective for the period required under Section 4(a) of this Agreement, or (ii) the offering of Registrable Securities pursuant to such registration does not commence due to any reason other than withdrawal by the Holder. 9. Indemnification and Contribution. (a) Indemnification by the Company. In the event any Registrable Securities are included in a Registration Statement pursuant to this Agreement, the Company hereby agrees to indemnify and hold harmless the Holders, their partners, officers, employees and directors and each person who controls such Holder (within the meaning of the Securities Act) and any agent thereof against all losses, claims, damages, liabilities or expenses (including reasonable expenses of investigation), joint or several, or actual or threatened actions in respect thereof (collectively, "Losses") to which such Holders may become subject under the Securities Act, or otherwise, to the extent such Losses arise out of, or are based upon, any untrue statement or alleged untrue statement of any material fact contained in such Registration Statement, any related preliminary, final or summary prospectus, or any amendment or supplement thereto, or any document incorporated by reference into any of the foregoing, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Holders for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Losses; provided, however, that the Company will not be so liable to the extent that any such Losses arise out of, or are based upon, an untrue statement or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact in such Registration Statement, such preliminary, final or summary prospectus, or any such amendment or supplement thereto, or any such document incorporated by reference into any of the foregoing, in reliance upon, and in conformity with, information furnished in writing to the Company by or on behalf of the Holders expressly for use in such document; provided, further, that the Company shall not be liable, and this indemnification agreement shall not apply, to the extent that any such Losses are attributable to the failure of the Holders (or agent acting on their behalf) to deliver a final prospectus (or amendment or supplement thereto) that corrects a material misstatement or omission contained in the preliminary prospectus (or final prospectus) or to any misstatement or omission of the Holders' selling broker(s). In connection with an underwritten offering, the Company will indemnify the underwriters thereof, their partners, officers, employees and directors and each person who controls such underwriters (within the meaning of the Securities Act) and any agent thereof at least to the same extent as provided above with respect to the indemnification of the Holders of Registrable Securities. (b) Indemnification by the Holders of Registrable Securities. With respect to written information furnished to the Company expressly for use in connection with any registration pursuant to the terms of this Agreement by or on behalf of any Holder for use in a Registration Statement, any related preliminary, final or summary prospectus, or any supplement or amendment thereto, or any document incorporated by reference into any of the foregoing, the Holders whose shares are being registered pursuant to the Registration Statement shall agree in writing to severally, and not jointly, indemnify and hold harmless the Company, and its directors, officers and employees and each person, if any, who "controls" (within the meaning of the Securities Act) the Company (the "the Company Indemnitees") against any Losses to which the Company or such other person entitled to indemnification hereunder may become subject under the Securities Act, or otherwise, insofar as such Losses arise out of, or are based upon, any untrue statement or alleged untrue statement of any material fact contained in such Registration Statement, such preliminary, final or summary prospectus, or any such amendment or supplement thereto, or any such document incorporated by reference into any of the foregoing, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and such Holders shall reimburse the Company Indemnitees for any legal or other expenses reasonably incurred by it or them in connection with investigating or defending any such Losses, in each case to the extent, but only to the extent, that the same arises out of, or is based upon, an untrue statement or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact in such Registration Statement, such preliminary, final or summary prospectus, any such amendment or supplement thereto, or any such document incorporated by reference into any of the foregoing, in reliance upon, and in conformity with, such information. (c) Conduct of Indemnification Proceedings. Promptly after receipt by an indemnified party hereunder of notice of any claim or the commencement of any action by a claimant not an indemnified party hereunder ("Third-Party Claim"), the indemnified party shall, if a claim for indemnification in respect thereof is expected to be made by such indemnified party against an indemnifying party, promptly notify such indemnifying party in writing of such Third-Party Claim as soon as is reasonably practicable after said claim is actually known to the indemnified party; provided, however, that the right of an indemnified party to be indemnified hereunder in respect of Third-Party Claims shall not be adversely affected by such indemnified party's failure to notify the indemnifying party of such Third-Party Claim unless, and then only to the extent that, an indemnifying party is actually damaged or suffers any Loss or incurs any additional expense as a result thereof. The omission so to notify the indemnifying party will not relieve the indemnifying party from any liability that it may have to any indemnified party under law or otherwise than under this Section 9. If any such Third-Party Claim is brought against an indemnified party, and it promptly notifies the indemnifying party thereof, the indemnifying party shall be entitled to assume the defense thereof with counsel selected by the indemnifying party and reasonably satisfactory to the indemnified party provided that the indemnifying party notifies the indemnified party of its election to assume the defense of such claim within twenty (20) days of receipt of notice of the claim from the indemnified party. After the indemnifying party gives notice to the indemnified party of its election to assume the defense of such Third-Party Claim, (i) except as set forth below, the indemnifying party shall not be liable to the indemnified party for any legal or other expense subsequently incurred by the indemnified party in connection with the defense thereof, (ii) the indemnifying party shall not be liable for the costs and expenses of any settlement of such claim or action unless such settlement was effected with the written consent of the indemnifying party, which shall not be unreasonable withheld, or the indemnified party waived any rights to indemnification hereunder in writing, in which case the indemnified party may effect a settlement without such consent at its own cost and expense, and (iii) the indemnified party shall be obligated to cooperate with the indemnifying party in the investigation of such claim or action and shall not unreasonably prejudice the indemnifying party's subrogation rights. The indemnified party will have the right to employ its counsel in any such action, but the fees and expenses of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded that there may be a conflict of interest between the indemnifying party and the indemnified party in the conduct of the defense of such action (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying party has not in fact employed counsel to assume the defense of such action within twenty (20) days after receiving notice of the commencement of the action, in each of which cases the fees and expenses of counsel will be at the expense of the indemnifying party or parties. All such fees and expenses will be reimbursed promptly as they are incurred. (d) Contribution. If for any reason the indemnification provided for in Sections 9(a) or (b) hereof is unavailable to an indemnified party or is insufficient to hold it harmless as contemplated therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss in such proportion as is appropriate to reflect not only the relative benefits received by the indemnifying party and the indemnified party, but also the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. With respect to any claim, no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) Survival of Indemnification. The obligations under this Section 9 shall survive the completion of any offering of Registrable Securities in a Registration Statement pursuant to this Agreement, and otherwise. (f) Limitation. Anything to the contrary contained in this Section 9 hereof notwithstanding, no Holder of Registrable Securities shall be liable for indemnification and contribution payments aggregating an amount in excess of the maximum amount received by such holder in connection with any sale of Registrable Securities as contemplated herein. 10. Amendment of Registration Rights. Any provision of this Agreement may be amended or the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Ivaco. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Holder of any Registrable Securities and the Company. 11. Assignment of Registration Rights. The Registration Rights may be assigned by Ivaco to a permitted transferee or assignee of Registrable Securities and such transferee or assignee shall be deemed a Holder for purposes hereof, provided that (i) the Company is, promptly upon such transfer, furnished with written notice of the name and address of such transferee or assignee and the Registrable Securities with respect to which such Registration Rights are being assigned, (ii) the transfer of such Registrable Securities is effected in accordance with all applicable securities laws, (iii) immediately following such transfer the further disposition of such Registrable Securities by the transferee or assignee is restricted to comply with the Securities Act, and (iv) the transferee executes and agrees to be bound by this Agreement, a counterpart of which executed by transferee shall be furnished to the Company. 12. Information Confidential. The Holders may not use any information received by them pursuant to this Agreement in violation of the Exchange Act or reproduce, disclose, or disseminate such information to any other person (other than its employees or agents having a need to know the contents of such information and its attorneys), except to the extent reasonably related to the exercise of rights under this Agreement, unless such information has been made available to the public generally (other than by such recipient in violation of this Section 12) or such recipient is required to disclose such information by a governmental body or regulatory agency or by law in connection with a transaction that is not otherwise prohibited hereby. 13. Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made upon being delivered either by courier or fax delivery to the party for whom it is intended, provided that a copy thereof is deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States or Canadian mail, bearing the address shown in this Section for, or such other address as may be designated in writing hereafter by, such party: If to the Company: Laclede Steel Company One Metropolitan Square 211 North Broadway St. Louis, Missouri 63102-2738 Attention: Michael H. Lane With a copy to: Bryan Cave LLP One Metropolitan Square, Suite 3600 St. Louis, Missouri 63102 Attention: Frank P. Wolff, Jr. Telephone: (314) 259-2000 Facsimile: (314) 259-2020 If to Ivaco: Ivaco Inc. Place Mercantile 770 Rue Sherbrooke Ouest Montreal, Quebec, Canada H3A 1G1 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004-1980 Attention: Jeffrey Bagner 14. Earnings Statement. The Company will make generally available to its security holders as soon as possible, but no later than 45 days after the close of the period covered thereby (or 90 days if the period ends December 31), an earnings statement (in form complying with the provisions of Rule 158 of the regulations promulgated under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date (as defined in said Rule 158) of the Registration Statement. 15. Successors. This Agreement shall inure to the benefit of and be binding upon the successors of each of the parties and the assigns of Ivaco. 16. Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 17. Headings. The headings to sections and paragraphs in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation hereof. 18. Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the substantive laws of the State of Delaware, without reference to its principles of choice of law. 19. Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 20. Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above. IVACO INC. By: /s/ Paul Ivanier ---------------------------- Name: Paul Ivanier Title: President and Chief Executive Officer LACLEDE STEEL COMPANY By: /s/ John B. McKinney ---------------------------- Name: John B. McKinney Title: President and Chief Executive Officer EX-99 5 Exhibit D FORM OF STANDBY AGREEMENT THIS STANDBY AGREEMENT (the "Agreement") is entered into as of ______________, 1996, by and between Ivaco Inc., a Canadian corporation ("Ivaco"), and Laclede Steel Company, a Delaware corporation (the "Company"). RECITALS A. The Company proposes to issue (the "Rights Offering"), upon the terms and subject to the conditions set forth in the Prospectus (as hereinafter defined), rights (the "Rights") to purchase 647,369 shares of its Series A Preferred Stock, no par value per share (the "Series A Preferred Stock"), exercisable at $15.00 per share and evidenced by transferable certificates (the "Rights Certificates"). The Rights and the Series A Preferred Stock issuable and issued upon exercise thereof are hereinafter sometimes collectively referred to as the "Securities." B. The Securities are described in the Prospectus referred to below. Ivaco desires to purchase from the Company that number of shares of Series A Preferred Stock, not to exceed 83,333 shares, at a price of $15.00 per share, or an aggregate purchase price of $1,249,995, to the extent that the Company receives subscriptions for less than 316,667 shares, or $4,750,000, of Series A Preferred Stock. C. The sale of the Series A Preferred Stock contemplated hereby has been approved by the stockholders of the Company. D. This Agreement shall be executed immediately prior to the effectiveness of the Registration Statement filing with the Securities and Exchange Commission in connection with the Rights Offering. NOW, THEREFORE, in consideration of the recitals and the mutual covenants, representations, warranties, conditions, and agreement hereinafter expressed, the parties agree as follows: ARTICLE I STANDBY COMMITMENT FOR PURCHASE AND SALE OF SERIES A SHARES 1.1. Purchase and Sale of Series A Shares. Subject to the terms and conditions herein set forth, if the number of shares of Series A Preferred Stock subscribed for in the Rights Offering is less than 316,667, Ivaco agrees to purchase and the Company agrees to sell at the price of $15.00 per share, a number of shares of Series A Preferred Stock (the "Series A Shares") equal to the difference, if positive, between (i) 316,667 and (ii) the number of shares of Series A Preferred Stock subscribed for in the Rights Offering; provided, however, that the number of Series A Shares to which Ivaco shall be required to subscribe shall not exceed the difference between (i) 83,333 and (ii) the number of shares of Series A Preferred Stock subscribed for by Ivaco in the Rights Offering. 1.2 Payment and Delivery. Subject to the provisions of this Agreement, payment for and delivery of the Series A Shares shall be made in accordance with the terms and conditions of the Rights Offering, as set forth in the Prospectus. Promptly upon completion of the Rights Offering the Company shall give Ivaco notice (the "Completion Notice"), in accordance with the provisions of Section 7.1 hereof, of the number of shares of Series A Preferred Stock which were sold in the Rights Offering and the number of shares of Series A Preferred Stock which Ivaco is required to purchase pursuant to this Agreement. Ivaco shall purchase such shares of Series A Preferred Stock pursuant to this Agreement within ten (10) days of receipt by Ivaco of the Completion Notice. 1.3. Registration Statement and Prospectus; Public Offering. On August __, 1996, the Company filed with the Securities and Exchange Commission (the "Commission"), pursuant to the Securities Act of 1933, as amended (the "Securities Act"), and the published rules and regulations adopted by the Commission under it (the "Rules"), a registration statement, including a preliminary prospectus (the "Prospectus"), relating to the Securities. The Company will use its best efforts to permit such registration statement to become effective. The registration statement as amended at the time it becomes effective (the "Effective Date"), including financial statements and all exhibits, is called the "Registration Statement." 1.4. Termination of Obligation of Ivaco. Upon the purchase by Ivaco of the number of shares of Series A Preferred Stock required to be purchased by Ivaco pursuant to Section 1 hereof, Ivaco shall have no further obligation to purchase shares of Series A Preferred Stock either under this Agreement or in the Rights Offering. ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Representations and Warranties of the Company. The Company represents and warrants to and agrees with Ivaco that: (a) On the Effective Date and the date the Prospectus is first filed (if required) with the Commission pursuant to Rule 424(b) and, if the Prospectus is not filed pursuant to Rule 424(b) of the Rules, on the date of any filing pursuant to Rule 424(b) of the Rules, when any post-effective amendment to the Registration Statement becomes effective or any amendment or supplement to the Prospectus is filed with the Commission and at the Closing Date, the Registration Statement, the Prospectus and any such amendment or supplement will comply in all material respects, with the requirements of the Securities Act and the Rules, and no part of the Registration Statement, the Prospectus or any such amendment or supplement will include any untrue statement of a material fact or omit to state a material fact required to be stated in it or necessary to make the statements in it not misleading; except that this representation does not apply to statements or omissions made in reliance on and in conformity with information relating to Ivaco furnished in writing to the Company by Ivaco expressly for use in the Registration Statement, Prospectus, amendment or supplement. (b) The holders of outstanding shares of capital stock of the Company and warrants, options or other securities to purchase shares of capital stock of the Company are not entitled to any preemptive rights to subscribe for the Series A Shares. (c) The Company is a corporation duly organized and validly existing, is in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to carry on its business as described in the Prospectus. The Company is duly qualified as a foreign corporation and is in good standing in all other jurisdictions in which such qualification is required; provided however, that the Company need not be qualified in a jurisdiction in which its failure to qualify would not have a material adverse effect on its operations or financial condition. (d) The Company has full corporate power and authority to enter into and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. (e) This Agreement has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (f) The Company has a duly authorized and outstanding capitalization as set forth in the Prospectus and the Securities conform to the description thereof contained therein and such description conforms with the rights set forth in the instruments defining the same. (g) The financial statements and schedules filed with and as part of the Registration Statement present fairly the financial position of the Company as of the respective dates thereof and the results of operations of the Company for the periods covered thereby, all in conformity with generally accepted principles of accounting applied on a consistent basis throughout the entire period involved and from period to period. Since the respective dates of such financial statements there has been no material adverse change in the condition or general affairs of the Company, financial or otherwise, other than as referred to in the Prospectus. (h) Since the quarterly report on Form 10-Q for the quarter ended March 31, 1996, there has been no material adverse change in the condition or general affairs, business, operations, assets or properties of the Company and its subsidiaries, financial or otherwise, other than as referred to in the Prospectus. (i) The Rights and Series A Preferred Stock issuable upon exercise of the Rights have been duly authorized and, when issued and paid for, will be validly issued, fully paid and non-assessable and the holders thereof will not be subject to personal liability by reason of being such holders, and the common stock, par value $0.01 per share ("Common Stock"), issuable upon conversion of the Series A Shares will be duly authorized, and when issued, will be validly issued, fully paid and non-assessable. (j) Deloitte & Touche LLP, who are certifying the financial statements filed with the Commission as a part of the Registration Statement, are independent public accountants as required by the Securities Act and the Rules. (k) The issuance of the Rights Certificates and the Securities and the execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the compliance with the terms of the Rights Certificates and this Agreement will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or give rise to rights of termination under, any deed of trust, lease, sublease, the Certificate of Incorporation or by-laws of the Company or any of its subsidiaries, or any indenture, mortgage, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries, or its or their property is bound, or any applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries, or the properties or operations of any of them. (l) 416,667 shares of Series A Preferred Stock issued to Ivaco and members of management of the Company on July 30, 1996, are the only shares of Series A Preferred Stock issued and outstanding. (m) Except as disclosed in public filings, the Company has no agreements or arrangements with its management or directors. (n) As of June 30, 1996, the Company's net assets total $11,442,000, its retained earnings (deficit) totals ($7,391,000), its stated capital totals $54,081,000 and its capital in excess of par totals $247,000. All such amounts are subject to audit. (o) The Prospectus does not and all documents filed by the Company with the Securities and Exchange Commission since January 1, 1994, did not at the time of filing, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading. (p) No consent is necessary for the consummation of the transactions contemplated hereby which has not been obtained. (q) The Company has not given registration rights to any person other than Ivaco and certain members of management in connection with the purchase of 50,000 shares of Series A Preferred Stock contemporaneously with the execution hereof. (r) There are no restrictions or limitations on the payment of dividends on the Series A Preferred Stock which are more onerous than the limitations under the Financing Agreements dated October 1, 1976, between the City of Alton, Illinois and the Company except under Delaware General Corporation Law. (s) Amendments and waivers with respect to the Loan and Security Agreement dated as of September 7, 1994, as amended, among certain financial institutions named therein, Bank America Business Credit, Inc., as Agent, the Company and certain subsidiaries of the Company shall remain in effect at the completion of the Rights Offering. (t) No event of default shall be existing under any indebtedness for borrowed money of the Company or any or its subsidiaries or under any indenture, mortgage, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries, or any of their property is bound. 2.2. Representations and Warranties of Ivaco. Ivaco represents and warrants to the Company that the purchase of the Series A Shares has been duly authorized and this Agreement represents the legal, valid and binding obligation of Ivaco, enforceable in accordance with its terms and conditions and Ivaco has as of the date of this Agreement, the financial wherewithal to honor its commitments hereunder. ARTICLE III RIGHTS OFFERING The Company will distribute at no charge to holders of its Common Stock transferable subscription rights (each, a "Right"), with each such Right entitling the holder thereof to subscribe for and to purchase Series A Preferred Stock, all on the terms and conditions set forth in the registration statement filed with the Commission on ______________, 1996. ARTICLE IV COVENANTS OF THE COMPANY In further consideration of the agreements of Ivaco herein contained, the Company covenants as follows: 4.1 Effectiveness of Registration Statement. The Company will use its best efforts to cause the Registration Statement to become effective and will advise Ivaco immediately, and confirm the advice in writing, (i) when the Registration Statement, or any post-effective amendment to the Registration Statement, shall have become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the necessity of amending or supplementing the Prospectus or any amended Prospectus in order to then meet the requirements of the Securities Act, (iii) of any request of the Commission for amendment or supplementation of the Registration Statement or Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary or amended preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the institution of any proceedings for any of such purposes. The Company will use its best efforts to prevent the issuance of any such stop order or of any order preventing or suspending such use and to obtain as soon as possible the lifting thereof, if issued. 4.2 Compliance with Exchange Act. The Company will comply to the best of its ability with the Securities Act and the Rules and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder so as to permit the continuance of sales of, and dealings in, the Securities under the Securities Act and the Exchange Act. Subject to the provisions of subsection (a) of this Section 4.5, if at any time when a Prospectus is required to be delivered under the Securities Act (i) an event shall have occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein not untrue or misleading or to make the Prospectus comply with the Securities Act or (ii) the proposed offering of the Securities makes it necessary to amend or supplement the Prospectus, the Company promptly will amend or supplement the Prospectus (and if a Post- Effective Amendment to the Registration Statement is necessary in connection therewith, will promptly prepare and file the same and will use its best efforts to cause the same to become effective) as necessary to permit the lawful use of the Prospectus in connection with the distribution of the Securities. 4.3 Blue Sky Compliance. The Company will comply to the best of its ability with applicable blue sky laws so as to permit the continuance of sales of and dealings in the Series A Shares thereunder. The Company, however, shall not be obligated to qualify as a foreign corporation or file any general consent to service of process under the laws of any such jurisdiction or subject itself to taxation as doing business in any such jurisdiction. The Company will take the necessary action to qualify the Securities in connection with the offer and sale thereof by the Company, under the laws of such jurisdictions as may be deemed advisable by the Company in respect of the offer of the Securities to the holders of its Common Stock. 4.4 Earnings Statement. The Company will make generally available to its security holders as soon as possible, but no later than 45 days after the close of the period covered thereby (or 90 days if the period ends December 31), an earnings statement (in form complying with the provisions of Rule 158 of the regulations promulgated under the Securities Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date (as defined in said Rule 158) of the Registration Statement. 4.5 Costs and Expenses. The Company will pay and bear all costs and expenses in connection with (i) the preparation and filing with the Commission of the Registration Statement (including financial statements and exhibits), preliminary prospectuses and Prospectus and any amendments or supplements thereto, (ii) the issue and delivery of the Series A Shares hereunder to Ivaco and (iii) the qualifying of the Securities under the laws of certain jurisdictions as aforesaid, including filing fees and fees and disbursements of counsel in connection therewith. 4.6 Authorized Shares. The Company will maintain the exerciseability of the Rights in accordance with the terms of the Rights Offering, including, but not limited to, maintaining at all times sufficient reserved, authorized but unissued shares of Series A Preferred Stock for issuance upon exercise thereof. 4.7 Specific Performance. Because the breach or anticipated breach of the covenants provided for in this Section 4 will result in immediate and irreparable harm and injury to Ivaco, for which it will not have an adequate remedy at law, the Company agrees that Ivaco shall be entitled to relief in equity, including but not limited to specific performance, to remedy such breach or anticipated breach and to seek any and all other legal and equitable remedies to which Ivaco may be entitled. ARTICLE V CONDITIONS TO OBLIGATIONS OF IVACO The obligations of Ivaco to purchase and pay for the Series A Shares which they have agreed to purchase hereunder are subject to the accuracy (as of the date hereof and the Closing Date) of and compliance with the representations and warranties of the Company herein, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to the following additional conditions. 5.1 Legal Opinion. Prior to the purchase and sale of the Series A Preferred Stock contemplated hereby, the Company will deliver a legal opinion of its counsel, similar in substance to the form of Exhibit B to the Stock Purchase Agreement dated July 30, 1996 by and between Ivaco and the Company. 5.2 Certificate of Officer. Prior to the purchase and sale of the Series A Preferred Stock contemplated hereby, Ivaco shall have received a certificate signed by an officer of the Company, subject to no qualification, certifying that the representations and warranties of the Company contained herein are true and correct. In case any of the conditions specified above in this Article V shall not have been fulfilled, this Agreement may be terminated by Ivaco on notice to the Company. ARTICLE VI INDEMNIFICATION 6.1 Indemnification of Ivaco. The Company will indemnify and hold harmless Ivaco and its respective directors, officers, employees and agents, and each person, if any, who controls Ivaco within the meaning of Section 15 of the Securities Act against any and all losses, claims, damages and liabilities, joint or several (including any investigation, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) (collectively, the "Losses"), to which they, or any of them, may become subject under the Securities Act, the Exchange Act or other Federal or state statutory law or regulation, at common law, or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based on any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Registration Statement or the Prospectus or any amendment or supplement thereto, or the omission or alleged omission to state in such document a material fact required to be stated in it or necessary to make the statements in it not misleading, provided that the Company will not be liable to the extent that such loss, claim, damage or liability is based on an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with information furnished in writing to the Company by or on behalf of Ivaco expressly for use in the document. This indemnity agreement will be in addition to any liability that the Company might otherwise have. 6.2 Indemnification of the Company. Ivaco will indemnify and hold harmless the Company and its directors, officers, employees and agents, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, to the same extent as the foregoing indemnity from the Company to Ivaco, but only insofar as Losses arise out of or are based on any untrue statement or omission or alleged untrue statement or omission made in or in reliance on and in conformity with information furnished in writing to the Company, by or on behalf of Ivaco expressly for use in preparation of the documents in which the statement or omission is made or alleged to be made. This indemnity agreement will be in addition to any liability that Ivaco might otherwise have. 6.3 Control of Litigation. Promptly after receipt by an indemnified party hereunder of notice of any claim or the commencement of any action by a claimant not an indemnified party hereunder ("Third-Party Claim"), the indemnified party shall, if a claim for indemnification in respect thereof is expected to be made by such indemnified party against an indemnifying party, promptly notify such indemnifying party in writing of such Third-Party Claim as soon as is reasonably practicable after said claim is actually known to the indemnified party; provided, however, that the right of an indemnified party to be indemnified hereunder in respect of Third- Party Claims shall not be adversely affected by such indemnified party's failure to notify the indemnifying party of such Third- Party Claim unless, and then only to the extent that, an indemnifying party is actually damaged or suffers any Loss or incurs any additional expense as a result thereof. The omission so to notify the indemnifying party will not relieve the indemnifying party from any liability that it may have to any indemnified party under law or otherwise than under this Section 6.3. If any such Third-Party Claim is brought against an indemnified party, and it promptly notifies the indemnifying party thereof, the indemnifying party shall be entitled to assume the defense thereof with counsel selected by the indemnifying party and reasonably satisfactory to the indemnified party provided that the indemnifying party notifies the indemnified party of its election to assume the defense of such claim within twenty (20) days of receipt of notice of the claim from the indemnified party. After the indemnifying party gives notice to the indemnified party of its election to assume the defense of such Third-Party Claim, (i) except as set forth below, the indemnifying party shall not be liable to the indemnified party for any legal or other expense subsequently incurred by the indemnified party in connection with the defense thereof, (ii) the indemnifying party shall not be liable for the costs and expenses of any settlement of such claim or action unless such settlement was effected with the written consent of the indemnifying party, which shall not be unreasonable withheld, or the indemnified party waived any rights to indemnification hereunder in writing, in which case the indemnified party may effect a settlement without such consent at its own cost and expense, and (iii) the indemnified party shall be obligated to cooperate with the indemnifying party in the investigation of such claim or action and shall not unreasonably prejudice the indemnifying party's subrogation rights. The indemnified party will have the right to employ its counsel in any such action, but the fees and expenses of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded that there may be a conflict of interest between the indemnifying party and the indemnified party in the conduct of the defense of such action (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying party has not in fact employed counsel to assume the defense of such action within twenty (20) days after receiving notice of the commencement of the action, in each of which cases the fees and expenses of counsel will be at the expense of the indemnifying party or parties. All such fees and expenses will be reimbursed promptly as they are incurred. ARTICLE VII MISCELLANEOUS PROVISIONS 7.1 Notice. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made upon being delivered either by courier or fax delivery to the party for whom it is intended, provided that a copy thereof is deposited, postage prepaid, certified or registered mail, return receipt requested, in the United States mail, bearing the address shown in this Section 7.1 for, or such other address as may be designated in writing hereafter by, such party: If to Ivaco: Ivaco Inc. Place Mercantile 770 Rue Sherbrooke Ouest Montreal, Quebec, Canada H3A 1G1 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004-1980 Attention: Jeffrey Bagner If to the Company: Laclede Steel Company One Metropolitan Square 211 North Broadway St. Louis, Missouri 63102-2738 Attention: Michael H. Lane With a copy to: Bryan Cave LLP One Metropolitan Square, Suite 3600 St. Louis, Missouri 63102 Attention: Frank P. Wolff, Jr. 7.2 Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings relative to such subject matter. 7.3 Assignment; Binding Agreement. This Agreement and various rights and obligations arising hereunder shall inure to the benefit of and be binding upon Ivaco, its successors, and assigns and the Company, its successors, and permitted assigns. Neither this Agreement nor any of the rights, interests, or obligations hereunder shall be transferred, delegated, or assigned (by operation of law or otherwise) by either of the Parties hereto without the prior written consent of the other party (which consent shall not be unreasonably withheld), except that Ivaco shall have the right to transfer and assign its rights hereunder to purchase the Series A Shares and any other rights or benefits afforded to it by this Agreement to any entity which at the time of such transfer and assignment is controlled by Ivaco. The parties agree that Ivaco can assign its rights hereunder to any third party. 7.4 Counterparts. This Agreement may be executed simultaneously in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 7.5 Headings; Interpretation. The article and section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of the Agreement. Each reference in this Agreement to an Article, Section, Schedule or Exhibit, unless otherwise indicated, shall mean an Article or a Section of this Agreement or a Schedule or Exhibit attached to this Agreement, respectively. References herein to "days", unless otherwise indicated, are to consecutive calendar days. Both parties have participated substantially in the negotiation and drafting of this Agreement and agree that no ambiguity herein should be construed against the draftsman. 7.6 Termination of the Agreement. If the closing of the transactions contemplated by this Agreement has not occurred, this Agreement may be terminated by a party hereto without further liability or obligation if (a) such party is not in breach or violation hereof and (b) the conditions to such party's obligations at Closing have not been satisfied by December 31, 1996. 7.7 Governing Law. This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of the State of Delaware, without reference to its choice of law rules. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first above written. IVACO INC. By: ------------------------------- Name: Paul Ivanier Title: President and Chief Executive Officer LACLEDE STEEL COMPANY By: ------------------------------- Name: John B. McKinney Title: President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----