8-K

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 20, 2003

MORTON INDUSTRIAL GROUP, INC.
(Exact name of registrant as specified in its charter)

Georgia	0-13198	38-0811650
(State of other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification No.)

1021 West Birchwood, Morton, Illinois 61550
(Address of principal executive offices) (Zip Code)

(309-266-7176)
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

TABLE OF CONTENTS

5th Amendment to Amended & Rstd Credit Agreement

Settlement Agreement

Stock Redemption Agreement

Item 5. Other Events

Morton Industrial Group, Inc. (the Company) has entered into an extension of its credit facility with a syndicate of banks led by Harris Trust and Savings Bank (the Harris syndicate) and has reached a settlement related to its redeemable preferred stock held by Worthington Industries, Inc. (Worthington).

The credit facility with the Harris syndicate is being extended through April 1, 2005 under terms comparable with the current terms, with the maturity date of outstanding warrants being extended through December 31, 2006. The extension, dated December 22, 2003, also permits the Company to enter into a settlement with Worthington as described below.

The Company issued $10 million (face value) of preferred stock to Worthington in April, 1999 which becomes redeemable on April 15, 2004. The Company and Worthington have reached a settlement, dated November 20, 2003, that provides for 30 monthly redemption payments of $50,000 each over a 3-year period (10 payments each year in 2004, 2005 and 2006) to fully redeem the preferred stock. Each payment will redeem 333 (or 334) shares of the 10,000 shares outstanding. As part of this settlement, all litigation between the Company and Worthington is settled and dismissed.

Exhibit 99.1

Fifth Amendment to Amended and Restated Credit Agreement

Exhibit 99.2

Settlement Agreement

Exhibit 99.3

Stock Redemption Agreement

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MORTON INDUSTRIAL GROUP, INC.
Date: December 29, 2003	By:	/s/ Rodney B. Harrison Rodney B. Harrison Vice President of Finance

EX-99.1 3 c81759exv99w1.htm 5TH AMENDMENT TO AMENDED & RSTD CREDIT AGREEMENT

Exhibit 99.1

FIFTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT

     This Fifth Amendment and Waiver to Amended and Restated Credit Agreement (herein, the “Amendment”) is made as of December 22, 2003, by and among Morton Industrial Group, Inc., a Georgia corporation (the “Borrower”), the Lenders party to the Credit Agreement hereinafter identified and defined, and Harris Trust and Savings Bank, as Agent for the Lenders (in such capacity, the “Agent”).

RECITALS

     A.     The Lenders currently extend credit to the Borrower on the terms and conditions set forth in that certain Amended and Restated Credit Agreement dated as of February 25, 2002, as amended, by and among the Borrower, the Guarantors, the Lenders, and the Agent (the “Credit Agreement”). All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.

     B.     The Borrower has requested that the Lenders extend the final maturity date of the Term Loans and the Revolving Credit, and make certain changes to the financial covenants and the Borrowing Base and certain other terms and provisions set forth in the Credit Agreement, and the Lenders are willing to agree to such changes, all on the terms and conditions herein set forth.

     C.     The Borrower has also requested that the Lenders waive any Default or Event of Default that would otherwise occur as a result of the entry by the Borrower into a Settlement Agreement dated as of November 20, 2003 (the “Settlement Agreement”) and related Stock Redemption Agreement dated on or about the date hereof (the “Stock Redemption Agreement”) relating to the settlement of certain litigation between the Borrower, Worthington Industries, Inc. and WI Products, Inc., f/k/a Worthington Custom Plastics, Inc. (“Worthington”) and the Lenders are willing to agree to such request, all on the terms and conditions herein set forth.

     Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. AMENDMENTS.

     Subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Credit Agreement shall be and hereby is amended as follows:

     1.1. Section 1.2 of the Credit Agreement is hereby amended by deleting the last sentence thereof and replacing it with a new sentence to read in its entirety as follows:

From and after the Fifth Amendment Effective Date, each Term Note shall mature in monthly installments, commencing on January 31, 2004 and continuing on the last day of each month occurring thereafter to and including March 31, 2005, with the principal installments on the Term Notes to aggregate (i) $250,000

for the installments due on January 31, 2004, February 28, 2004 and March 31, 2004 and (ii) and $500,000 per installment thereafter and through and including March 31, 2005, and with a final principal payment on all the Term Notes due on April 1, 2005 in an amount equal to all principal and interest not sooner paid (if any), and with the amount of each payment due on the Term Note held by each Lender to be equal to such Lender’s Term Percentage of such payment.

     1.2. Section 3.1(e) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     (e) Restructuring, Amendment and Accrued Fees. The Borrower shall pay to the Agent, for the ratable account of the Lenders, the following fees:

     (A) the restructuring fees referred to in the Credit Agreement as originally entered into, but payable as follows, namely, on the earliest of (i) April 1, 2005, (ii) the Termination Date (whether due to acceleration or otherwise) or (iii) the repayment in full of the aggregate principal amount of all Loans hereunder, the sum of (1) $250,000, representing a restructuring fee earned on the Effective Date of the Credit Agreement and (2) $450,000, representing other fees due and owing to the Lenders on the Effective Date of the Credit Agreement the payment of which has been deferred by agreement of the parties hereto;

     (B) a Third Amendment restructuring fee, which fee was earned on the Third Amendment Effective Date and the remaining unpaid amount of which, as of the Fifth Amendment Effective Date, is $150,000, to be payable in three installments on the 10th day of each month commencing on January 10, 2004 and with the final payment due and payable on March 10, 2004, provided that any portion of such fee remaining unpaid on the Termination Date shall become due and payable on the Termination Date; and

     (C) a Fifth Amendment restructuring fee in the amount of $300,000, such fee having been earned on the Fifth Amendment Effective Date and to be payable in twelve installments of $25,000 each on the 10^th day of each month commencing on April 10, 2004 and with the final payment due and payable on March 10, 2005, provided that any portion of such $300,000 fee remaining unpaid on the Termination Date shall become due and payable on the Termination Date.

     1.3. Section 3.3(a) of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     (a) Excess Cash Flow. No later than 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower and 90 days after the end of the fourth fiscal quarter of each fiscal year of the Borrower, the Borrower shall pay over to the Agent for the ratable benefit of the Lenders, as and for a mandatory prepayment, an amount equal to 75% of the amount by which EBITDA for such fiscal quarter exceeds the projected

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EBITDA for such fiscal quarter as identified in the Approved Base Case, each such prepayment to be allocated to the Term Loans until repaid in full, and then to prepay the Revolving Loans and prefund any outstanding Letters of Credit.

     1.4. Section 3.3(d) of the Credit Agreement is hereby amended by deleting the words “due on April 1, 2004” at the conclusion thereof and replacing them with the words “due on April 1, 2005”.

     1.5. The definition of “Approved Base Case” set forth in Section 5.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     “Approved Base Case” means the Borrower’s final base case projections, including all supplements thereto, delivered to the Lenders prior to the Fifth Amendment Effective Date covering the period through March 31, 2005.

     1.6. The definitions of “EBIT” and “EBITDA” set forth in Section 5.1 of the Credit Agreement are each hereby amended and restated to read in their entirety as follows:

     “EBIT” means, with reference to any period, Consolidated Net Income for such period plus all amounts deducted in arriving at such Consolidated Net Income for such period in respect of (i) Interest Expense for such period, plus (ii) federal, state and local income taxes for such period, plus (iii) with respect to any applicable accounting period of the Borrower, to the extent such charges against Consolidated Net Income are reflected on the Borrower’s annual audited financial statements for the most recent fiscal year then ended, (x) non-cash charges reflecting impairment charges arising from SFAS No. 142 (Goodwill and Other Intangible Assets), for such period, (y) non-cash charges for accretion of discount on, or interest on, preferred stock of the Borrower for such period, and (z) charges for workers’ compensation reserves, inventory valuation adjustments, group health care reserves and other year-end adjustments for such period not exceeding in the aggregate for all charges described in this clause (z) $1,000,000 in charges for all of the relevant fiscal year.

     “EBITDA” means, with reference to any period, Consolidated Net Income for such period plus all amounts deducted in arriving at such Consolidated Net Income for such period in respect of (i) Interest Expense for such period, plus (ii) federal, state and local income taxes for such period, plus (iii) all amounts properly charged for depreciation of fixed assets and amortization of intangible assets during such period on the books of the Borrower and its Subsidiaries, plus (iv) with respect

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to any applicable accounting period of the Borrower, to the extent such charges against Consolidated Net Income are reflected on the Borrower’s annual audited financial statements for the most recent fiscal year then ended, (x) non-cash charges reflecting impairment charges arising from SFAS No. 142 (Goodwill and Other Intangible Assets), for such period, (y) non-cash charges for accretion of discount on, or interest on, preferred stock of the Borrower for such period, and (z) charges for workers’ compensation reserves, inventory valuation adjustments, group health care reserves and other year-end adjustments for such period not exceeding in the aggregate for all charges described in this clause (z) $1,000,000 in charges for all of the relevant fiscal year.

     1.7. The definition of “Indebtedness” set forth in Section 5.1 of the Credit Agreement is hereby amended by deleting the word “and” following clause (vi) thereof and replacing it with a comma, deleting the period at the end of clause (vii) thereof and replacing it with the word “and”, and adding immediately thereafter a new clause (viii), reading in its entirety as follows:

(viii) with respect to the Borrower or any of its Subsidiaries, all obligations of such Persons to pay the Purchase Price (and, to the extent all or any portion of such amount is reinstated pursuant to the Stock Redemption Agreement, the Stated Redemption Amount) for the Subject Stock under, and as such capitalized terms are defined in, the Stock Redemption Agreement.

     1.8. The definition of “Other Asset Value” set forth in Section 5.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     “Other Asset Value” means, prior to March 31, 2004, $2,121,000, and from and after March 31, 2004, $2,000,000, provided that such Other Asset Value shall be further reduced (but not below $0), effective 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower and 90 days after the end of the fourth fiscal quarter of each fiscal year of the Borrower, by 25% of the amount by which EBITDA for such fiscal quarter exceeds the projected EBITDA for such fiscal quarter as identified in the Approved Base Case.

     1.9. The definition of “Termination Date” set forth in Section 5.1 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     “Termination Date” means (x) April 1, 2005, or (y) if earlier, such earlier date on which the Revolving Credit Commitments are terminated in whole pursuant to Sections 3.4, 9.2 or 9.3 hereof.

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     1.10. Section 5.1 of the Credit Agreement is hereby amended by adding new definitions of “Fifth Amendment”, “Fifth Amendment Effective Date”, “Settlement Agreement” and “Stock Redemption Agreement” thereto, each in its appropriate order in the alphabetical sequence, each such definition to read in its entirety as follows:

     “Fifth Amendment” means that certain Fifth Amendment and Waiver to Amended and Restated Credit Agreement, dated as of December 22, 2003, by and among the Borrower, the Lenders and the Agent.

     “Fifth Amendment Effective Date” means the date upon which the Fifth Amendment becomes effective pursuant to its terms.

     “Settlement Agreement” shall have the meaning given to such term in the Fifth Amendment.

     “Stock Redemption Agreement” shall have the meaning given to such term in the Fifth Amendment.

     1.11. Section 8.6 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     Section 8.6. Interest Coverage Ratio. The Borrower will, as of the last day of each monthly accounting period of the Borrower ending on or about any date specified below, maintain an Interest Coverage Ratio as of such date of not less than:

	INTEREST COVERAGE RATIO
PERIOD ENDING ON OR ABOUT	SHALL NOT BE LESS THAN
December 31, 2003	1.05 to 1.0
January 31, 2004	1.30 to 1.0
February 29, 2004	1.40 to 1.0
March 31, 2004	1.40 to 1.0
April 30, 2004	1.50 to 1.0
May 31, 2004	1.60 to 1.0
June 30, 2004	1.75 to 1.0
July 31, 2004	1.90 to 1.0
August 31, 2004	2.00 to 1.0
September 30, 2004	2.20 to 1.0
October 31, 2004	2.35 to 1.0

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	INTEREST COVERAGE RATIO
PERIOD ENDING ON OR ABOUT	SHALL NOT BE LESS THAN
November 30, 2004	2.50 to 1.0
December 31, 2004	2.55 to 1.0
January 31, 2005	2.50 to 1.0
February 28, 2005	2.50 to 1.0
March 31, 2005	2.50 to 1.0

     1.12. Section 8.7 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     Section 8.7. Cash Flow Leverage Ratio. The Borrower shall not, at any time during any monthly accounting period of the Borrower ending on or about any date specified below, permit the Cash Flow Leverage Ratio at any time during such monthly accounting period to be greater than:

	CASH FLOW LEVERAGE
	RATIO SHALL NOT BE
PERIOD ENDING ON OR ABOUT	GREATER THAN
December 31, 2003	4.60 to 1.0
January 31, 2004	3.80 to 1.0
February 29, 2004	3.75 to 1.0
March 31, 2004	3.70 to 1.0
April 30, 2004	3.65 to 1.0
May 31, 2004	3.55 to 1.0
June 30, 2004	3.50 to 1.0
July 31, 2004	3.35 to 1.0
August 31, 2004	3.30 to 1.0
September 30, 2004	3.15 to 1.0
October 31, 2004	3.05 to 1.0
November 30, 2004	2.95 to 1.0
December 31, 2004	2.90 to 1.0
January 31, 2005	2.80 to 1.0
February 28, 2005	2.80 to 1.0
March 31, 2005	2.80 to 1.0

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     1.13. Section 8.8 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     Section 8.8. EBITDA. The Borrower will maintain EBITDA for each twelve fiscal month period ending on the dates specified below in an amount not less than the sum indicated to the right of such date below:

TWELVE FISCAL MONTH	EBITDA SHALL NOT
PERIOD ENDING	BE LESS THAN:
December 31, 2003		$10,000,000
January 31, 2004		$10,500,000
February 28, 2004		$10,500,000
March 31, 2004		$10,500,000
April 30, 2004		$10,500,000
May 31, 2004		$10,500,000
June 30, 2004		$10,750,000
July 31, 2004		$11,000,000
August 31, 2004		$11,500,000
September 30, 2004		$11,500,000
October 31, 2004		$12,000,000
November 30, 2004		$12,250,000
December 31, 2004		$12,250,000
January 1, 2005		$12,250,000
February 1, 2005		$12,250,000
March 1, 2005		$12,250,000

     1.14. Section 8.9 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     Section 8.9. Fixed Charge Coverage Ratio. The Borrower will not, as of the last day of each monthly accounting period of the Borrower ending on or about any date specified below, permit the Fixed Charge Coverage Ratio to be less than:

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	FIXED CHARGE COVERAGE
	RATIO SHALL NOT BE LESS
PERIOD ENDING ON OR ABOUT	THAN
December 31, 2003	1.05 to 1.0
January 31, 2004	1.05 to 1.0
February 28, 2004	1.05 to 1.0
March 31, 2004	1.05 to 1.0
April 30, 2004	1.05 to 1.0
May 31, 2004	1.05 to 1.0
June 30, 2004	1.10 to 1.0
July 31, 2004	1.20 to 1.0
August 31, 2004	1.20 to 1.0
September 30, 2004	1.25 to 1.0
October 31, 2004	1.30 to 1.0
November 30, 2004	1.30 to 1.0
December 31, 2004	1.35 to 1.0
January 31, 2005	1.35 to 1.0
February 28, 2005	1.35 to 1.0
March 31, 2005	1.35 to 1.0

     1.15. Section 8.10 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

     Section 8.10. Capital Expenditures. The Borrower will not, nor will it permit any Subsidiary to, expend or (without duplication) become obligated to expend, in each case for Capital Expenditures aggregating for the Borrower and its Subsidiaries (taken together) in excess of (i) $3,700,000 during fiscal 2003, (ii) $4,500,000 during fiscal 2004 and (iii) $1,250,000 during the period from January 1, 2005 through and including the Termination Date.

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     1.16. Section 8.11 of the Credit Agreement is hereby amended by deleting the word “and” at the end of clause (g) thereof, replacing the period at the end of clause (h) thereof with “; and”, and adding a new clause (i) thereof, reading in its entirety as follows:

     (i) all obligations of the Borrower to pay the Purchase Price (and, to the extent all or any portion of such amount is reinstated pursuant to the Stock Redemption Agreement, the Stated Redemption Amount) for the Subject Stock under, and as such capitalized terms are defined in, the Stock Redemption Agreement.

     1.17. Section 8.30 of the Credit Agreement is hereby amended by deleting the words “ending December 31, 2003” in the second line thereof and replacing them with the words “ending December 31, 2006”.

     1.18. A new Section 8.33 is hereby added to the Credit Agreement immediately following the existing Section 8.32, reading in its entirety as follows:

     Section 8.33. Worthington Settlement Documents. The Borrower will not, nor will it permit any Subsidiary to, amend or modify any of the terms or provisions of either of the Settlement Agreement or the Stock Redemption Agreement without the prior written consent of the Required Lenders. The Borrower will not, nor will it permit any Subsidiary to, prepay or otherwise advance the time for the payment of any amounts due, or pay more than the amounts otherwise due, under the Settlement Agreement or the Stock Redemption Agreement without the prior written consent of the Required Lenders. Without limiting the foregoing, the Borrower will not pay, or permit any Subsidiary to pay, more than $50,000 during any month as a payment of the Purchase Price (as defined in the Stock Redemption Agreement) for the Subject Stock (as defined in the Stock Redemption Agreement), unless such additional payment is a Deferred Payment (as defined in the Stock Redemption Agreement) or interest on a Deferred Payment which, pursuant to the terms of the Stock Redemption Agreement, may no longer be deferred. If the making of any payment due under the Stock Redemption Agreement would constitute a Payment Default or a Statutory Default (as those terms are defined in the Stock Redemption Agreement), the Borrower will, and will cause any Subsidiary to, defer such payment under the Stock Redemption Agreement in accordance with the terms thereof.

SECTION 2. WAIVER.

     By signing below, subject to the satisfaction of the conditions precedent set forth below, the Lenders hereby waive any violation of Section 8.15 or any other provision of the Credit Agreement or any other Loan Document and any Default or Event of Default which could or would otherwise be caused by the entry by the Borrower into and its performance of its obligations under each of the Settlement Agreement, the Stock Redemption Agreement and a

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certain Steel Supply Agreement between Worthington Steel Company and the Borrower dated on or about the date of the Settlement Agreement (the “Steel Supply Agreement”, and collectively with the Settlement Agreement and the Stock Redemption Agreement, the “Worthington Settlement Documents”), provided that it is hereby understood by the parties hereto that this waiver shall not be understood (i) to waive any Default or Event of Default that may at any time be caused, in whole or in part, by any violation of the financial covenants set forth in the Credit Agreement as a result of the treatment by the Borrower and the Lenders of the obligations of the Borrower under the Stock Redemption Agreement to pay the Purchase Price and/or the Stated Redemption Amount, as the case may be (each as defined in the Stock Redemption Agreement), as “Indebtedness” as defined in the Credit Agreement, or (ii) to affect the ability of the Lenders to declare the existence of, or exercise any right or remedy with respect to, any Default or Event of Default of the type described in the immediately preceding clause (i) or any Default or Event of Default resulting from any cause other than the performance by the Borrower of its obligations under the Worthington Settlement Documents.

SECTION 3. CONDITIONS PRECEDENT.

     The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

     3.1. The Borrower, the Agent, and the Lenders shall have executed and delivered this Amendment, and the Guarantors shall have executed and delivered their consent to this Amendment in the space provided for that purpose below.

     3.2. The Borrower and the holders of the Bank Warrants shall have executed and delivered amendments thereto in form satisfactory to each such holder extending the Expiration Dates (as defined in the Bank Warrants) to December 31, 2006.

     3.3. The Borrower shall have delivered to the Agent certified copies of resolutions of the Board of Directors of the Borrower and each Guarantor authorizing the execution and delivery of this Amendment.

     3.4. Legal matters incident to this Amendment shall be satisfactory to the Agent and the Lenders and their counsel.

     3.5. The Borrower shall have paid all fees and expenses of counsel to the Agent with respect to the preparation of this Amendment as well as all prior fees and charges of counsel to the Agent incurred prior to the date hereof which remain outstanding and unpaid.

     3.6. The Borrower shall have delivered to the Agent a fully executed copy of an agent’s fee letter relating to the Credit Agreement.

     3.7. The Borrower shall have executed and delivered to the Agent supplements to each mortgage delivered under the Credit Agreement, duly executed, reflecting the terms of this Amendment.

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     3.8. The Borrower shall have consented to be delivered to the Agent a date-down endorsement for each policy of title insurance and all endorsements thereunder delivered in connection with the Credit Agreement in form and substance acceptable to the Agent from the issuer of such policy or another title insurance company acceptable to the Agent, maintaining the existing level of coverage under each such policy, provided that any such endorsements which are not available on the effective date hereof will be delivered by the Borrower not later than 90 days after the effective date hereof.

     3.9. The Borrower shall have delivered to the Agent copies of each of the Settlement Agreement, Stock Redemption Agreement and Steel Purchase Agreement, each certified as true and correct on and as of the date hereof by a responsible officer of the Borrower.

SECTION 4. REPRESENTATIONS.

     In order to induce the Lenders to execute and deliver this Amendment, the Borrower hereby represents to the Lenders that as of the date hereof, and after giving effect to this Amendment, (a) the representations and warranties set forth in Section 6 of the Credit Agreement are and shall be and remain true and correct in all material respects (except that for purposes of this paragraph the representations contained in Section 6.4 shall be deemed to refer to the most recent financial statements of the Borrower delivered to the Lenders) and (b) the Borrower is in full compliance with all of the terms and conditions of the Credit Agreement after giving effect to this Amendment and no Default or Event of Default has occurred and is continuing under the Credit Agreement or shall result after giving effect to this Amendment.

SECTION 5. RELEASE OF CLAIMS.

     TO INDUCE THE LENDERS AND THE AGENT TO ENTER INTO THIS AMENDMENT, THE BORROWER AND THE GUARANTORS HEREBY RELEASE, ACQUIT, AND FOREVER DISCHARGE THE LENDERS, THE AGENT AND THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS, ATTORNEYS, ADVISORS, CONSULTANTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL LIABILITIES, CLAIMS, DEMANDS, ACTIONS, AND CAUSES OF ACTION OF ANY KIND (IF THERE ARE ANY), WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, DISPUTED OR UNDISPUTED, AT LAW OR IN EQUITY, THAT THEY NOW HAVE OR EVER HAD AGAINST THE LENDERS, THE AGENT AND THE OTHER PARTIES IDENTIFIED ABOVE, OR ANY ONE OR MORE OF THEM INDIVIDUALLY, UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

SECTION 6. MISCELLANEOUS.

     6.1. The Borrower has heretofore executed and delivered to the Agent and the Lenders certain of the Collateral Documents. The Borrower hereby acknowledges and agrees that, notwithstanding the execution and delivery of this Amendment, the Collateral Documents remain in full force and effect and the rights and remedies of the Agent and the Lenders thereunder, the obligations of the Borrower thereunder, and the liens and security interests created and provided for thereunder remain in full force and effect and shall not be affected, impaired, or discharged

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hereby. Nothing herein contained shall in any manner affect or impair the priority of the liens and security interests created and provided for by the Collateral Documents as to the indebtedness which would be secured thereby prior to giving effect to this Amendment.

     6.2. Except as specifically amended herein or waived hereby, the Credit Agreement shall continue in full force and effect in accordance with its original terms. Reference to this specific Amendment need not be made in the Credit Agreement, the Notes, or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.

     6.3. The Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by the Agent and the Lenders in connection with the preparation, execution and delivery of this Amendment and the documents and transactions contemplated hereby, including the reasonable fees and expenses of counsel for the Agent with respect to the foregoing.

     6.4. This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. This Amendment shall be governed by the internal laws of the State of Illinois.

[SIGNATURE PAGES TO FOLLOW]

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     This Fifth Amendment and Waiver to Amended and Restated Credit Agreement is entered into by the parties hereto as of the date and year first above written.

MORTON INDUSTRIAL GROUP, INC.
By		/s/ Rodney B. Harrison
	Name	Rodney B. Harrison
	Title	VP of Finance
Accepted and agreed to.
HARRIS TRUST AND SAVINGS BANK
By		/s/ B. W. Stratton
	Name	B. W. Stratton
	Title	Senior Vice President
BRANCH BANKING & TRUST CO.
By		/s/ Word C. Clark, Jr.
	Name	Word C. Clark, Jr.
	Title	Senior Vice President
U.S. BANK NATIONAL ASSOCIATION
f/k/a Firstar Bank, N.A.
By		/s/ Ronald Shapiro
	Name	Ronald Shapiro
	Title	Vice President
LASALLE BANK NATIONAL ASSOCIATION
By		/s/ James D. Thompson
	Name	James D. Thompson
	Title	Group Senior Vice President
NATIONAL CITY BANK
By		/s/ John R. DeFrancesco
	Name	John R. DeFrancesco
	Title	Senior Vice President

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GUARANTORS’ ACKNOWLEDGEMENT AND CONSENT

     Each of the undersigned hereby acknowledges and agrees that it is a Guarantor under the terms of Section 11 of the Credit Agreement and, as such has executed and delivered certain Collateral Documents pursuant to the Credit Agreement. The undersigned hereby consent to the Fifth Amendment and Waiver to Amended and Restated Credit Agreement as set forth above and agree to the terms thereof, including, without limitation, Section 5 thereof, and the undersigned hereby confirm that their guaranties and the Collateral Documents executed by them, and all of the obligations of the undersigned thereunder, remain in full force and effect. The undersigned further agree that the consent of the undersigned to any further amendments to the Credit Agreement shall not be required as a result of this consent having been obtained. The undersigned acknowledge the Lenders are relying on this acknowledgement and consent in entering into the Fifth Amendment and Waiver to Amended and Restated Credit Agreement with the Borrower.

MORTON METALCRAFT CO.
By		/s/ Daryl R. Lindemann
	Name	Daryl R. Lindemann
	Title	Vice President
MORTON METALCRAFT CO. OF NORTH CAROLINA
By		/s/ Daryl R. Lindemann
	Name	Daryl R. Lindemann
	Title	Vice President
MORTON METALCRAFT CO. OF SOUTH CAROLINA
By		/s/ Daryl R. Lindemann
	Name	Daryl R. Lindemann
	Title	Vice President
MID CENTRAL PLASTICS, INC.
By		/s/ Daryl R. Lindemann
	Name	Daryl R. Lindemann
	Title	Vice President

B&W METAL FABRICATORS, INC.
By		/s/ Daryl R. Lindemann
	Name	Daryl R. Lindemann
	Title	Vice President

-2- EX-99.2 4 c81759exv99w2.htm SETTLEMENT AGREEMENT

Exhibit 99.2

SETTLEMENT AGREEMENT

     This Settlement Agreement (together with the exhibits incorporated by reference herein, the “Agreement”) is dated as of the 20th day of November, 2003, by and between WORTHINGTON INDUSTRIES, INC., an Ohio corporation (“Worthington Industries”), and WI PRODUCTS, INC., an Ohio corporation formerly known as Worthington Custom Plastics, Inc. (“WI Products”) (Worthington Industries and WI Products are sometimes collectively referred to as “Worthington”) and MORTON INDUSTRIAL GROUP, INC., a Georgia corporation (“Morton”).

     1.     Recitals. This Agreement is made with reference to the following facts and objectives:

A. WI Products is the beneficial owner and holder of record of 10,000 shares of the Series 1999A Preferred Stock, no par value (the “Shares”), of Morton.

B. Worthington Industries and WI Products have filed a lawsuit (the “Litigation”) against Morton entitled Worthington Industries, Inc. and W.I. Products, Inc., f/k/a Worthington Custom Plastics, Inc., v. Morton Industrial Group, Inc., and Morton Custom Plastics, Inc., Case No. C2-00-504, in the United States District Court for the Southern District of Ohio-Eastern Division.

C. Morton is in the business of fabricating steel parts and products for its customers, and Worthington Industries, through its subsidiaries, is in the business, among others, of supplying steel.

D. The parties hereto wish to resolve and settle the disputes now pending between them in the Litigation, provide for the redemption of the Shares, and provide for certain terms and conditions regarding the supplying of raw steel by Worthington Industries or one or more of its subsidiaries to Morton in the future, on the terms and conditions hereinafter provided.

     2.     Stock Redemption. At the Closing (as defined in Section 5 of this Agreement), WI Products and Morton shall execute and deliver the Stock Redemption Agreement (the “Stock Redemption Agreement”), attached hereto as Exhibit A and made a part hereof by this reference, pursuant to which the Shares will be purchased and redeemed by Morton in accordance with the terms and conditions set forth in the Stock Redemption Agreement.

     3.     Mutual Releases and Dismissal of Litigation. At the Closing, Worthington Industries, WI Products, and Morton, shall execute, acknowledge and deliver the Mutual Release (the “Mutual Release”), attached hereto as Exhibit B and made a part hereof by this reference. As soon as practicable after the Closing, Worthington Industries and WI Products shall take such actions as may be required in order to cause the dismissal with prejudice of the Litigation as to Morton, and Morton shall take such actions as may be required in order to cause the dismissal with prejudice of all claims and counterclaims brought by Morton in the Litigation as to Worthington Industries and WI Products.

     4.     Steel Supply Agreement. At the Closing, Worthington Steel Company, a subsidiary of Worthington Industries, and Morton shall execute and deliver the Steel Supply Agreement (the “Steel Supply Agreement”), attached hereto as Exhibit C and made a part hereof by this reference, whereby Worthington Steel Company will supply raw steel to Morton over a three-year term commencing January 1, 2004.

     5.     Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place on such date and at such time as mutually agreed upon by the parties and in any event not later than December 31, 2003. The date and time as of which the Closing actually takes place shall be referred to as the “Closing Date”.

     6.     Representations and Warranties of Morton. Morton hereby represents and warrants to Worthington that:

(a)	Morton is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Georgia. Morton has full corporate power and authority to conduct its business as it is now being conducted.
(b)	Morton has full corporate power and authority to enter into, execute and deliver this Agreement, the Stock Redemption Agreement, the Mutual Release and the Steel Supply Agreement (collectively, the “Worthington/Morton Relationship Agreements”) and to perform its obligations thereunder. Each of the Worthington/Morton Relationship Agreements has been duly approved and authorized by all requisite corporate action.
(c)	Neither the execution and delivery by Morton of the Worthington/Morton Relationship Agreements nor the performance by Morton of its obligations thereunder will, directly or indirectly (with or without notice or lapse of time or both): (i) contravene, conflict with or result in a violation of any provision of any articles of incorporation, bylaws or other organizational documents of Morton, each as amended to date, or any resolution adopted by the board of directors (or any committee thereof) or the shareholders of Morton; (ii) require any approval or consent of, or filing with, any agency, authority, body, board, commission, court, instrumentality, legislature or office of any nature whatsoever of any federal, state, county, district, municipal, city, foreign or other government or quasi-government unit or political subdivision (“Governmental Authority”) or any other person, other than such approvals, consents and filings which shall have been obtained or made prior to the Closing; (iii) contravene, conflict with, or result in any breach or violation of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, any material agreement to which Morton is a party or by which Morton or its property or assets may be bound; and (iv) violate any statute, ordinance, bylaw, code, rule, regulation, restriction, permit, judgment, order, writ, injunction, decree, determination or award of any Governmental Authority (“Legal Requirements”), including, without limitation, the Georgia Business Corporation Code, to which Morton or any of its property or assets may be subject.

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(d)	This Agreement constitutes the valid and legally binding obligation of Morton, enforceable against Morton in accordance with its terms. Upon execution and delivery of each of the other Worthington/Morton Relationship Agreements, such Worthington/Morton Relationship Agreements will constitute the valid and legally binding obligations of Morton, enforceable against Morton in accordance with their respective terms.
(e)	Morton is able to pay its debts as they become due in the usual course of business and Morton is not the subject of bankruptcy, receivership, custodianship or any similar proceeding.
(f)	The consummation by Morton of the transactions contemplated by the Worthington/Morton Relationship Agreements including, without limitation, the purchase and redemption of the Shares pursuant to the Stock Redemption Agreement, will not (i) cause the total assets of Morton to be less than the sum of its total liabilities plus the amount which would be required to satisfy preferential shareholder rights upon dissolution of Morton; or (ii) render Morton unable to pay its debts as they become due in the usual course of business.
(g)	Morton is currently able to make the payments to WI Products contemplated by the Stock Redemption Agreement in accordance with the terms thereof, and based on Morton’s good faith projections for the period during which payments are to be made by Morton to WI Products under the terms of the Stock Redemption Agreement, Morton will be able to make the payments to WI Products contemplated by the Stock Redemption Agreement in accordance with the terms thereof, in each case without the making of such payment(s) (i) constituting a breach or default, or causing Morton to be in breach or default, under any agreement relating to Morton’s obligations to Harris Bank (individually and as agent for other lenders) (or any lending institution which replaces Harris Bank as Morton’s principal lender) for borrowed money or (ii) violating Section 14-2-640 of the Georgia Business Corporation Code.
(h)	Morton has access to the funds which will be required to satisfy its obligations under the Worthington/Morton Relationship Agreements.
(i)	Morton has furnished to Worthington all information concerning the assets, operations, business prospects and financial condition of Morton as Worthington has requested and has truthfully answered all questions about the same asked by Worthington or its representatives.

     7.     Representations and Warranties of Worthington. Worthington Industries and WI Products hereby jointly and severally represent and warrant to Morton that:

(a) Each of Worthington Industries and WI Products is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Ohio. Each of Worthington Industries and WI Products has full corporate power and authority to conduct its business as it is now being conducted.

3

(b)	Each of Worthington Industries and WI Products has full corporate power and authority to enter into, execute and deliver the Worthington/Morton Relationship Agreements to which it is a party and perform its obligations thereunder. Each of the Worthington/Morton Relationship Agreements to which Worthington Industries or WI Products is a party has been duly approved and authorized by all requisite corporate action.
(c)	Neither the execution and delivery by either Worthington Industries or WI Products of the Worthington/Morton Relationship Agreements to which it is a party nor the performance of their respective obligations thereunder will, directly or indirectly (with or without notice or lapse of time or both): (i) contravene, conflict with or result in a violation of any provision of any articles of incorporation, code of regulations or other organizational documents of Worthington Industries or WI Products, each as amended to date, or any resolution adopted by the board of directors (or any committee thereof) or the shareholders of Worthington Industries or WI Products; (ii) require any approval or consent of, or filing with, any Governmental Authority or any other person, other than such approvals, consents and filings which shall have been obtained or made prior to the Closing; (iii) contravene, conflict with, or result in any breach or violation of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, any material agreement to which Worthington Industries or WI Products is a party or by which either of them or any of their respective properties or assets may be bound; and (iv) violate any Legal Requirement to which Worthington Industries or WI Products or any of their respective properties or assets may be subject.
(d)	This Agreement constitutes the valid and legally binding obligation of Worthington Industries, enforceable against Worthington Industries in accordance with its terms. Upon execution and delivery of each of the other Worthington/Morton Relationship Agreements to which Worthington Industries is a party, such Worthington/Morton Relationship Agreements will constitute the valid and legally binding obligations of Worthington Industries, enforceable against Worthington Industries in accordance with their respective terms.
(e)	This Agreement constitutes the valid and legally binding obligation of WI Products, enforceable against WI Products in accordance with its terms. Upon execution and delivery of each of the other Worthington/Morton Relationship Agreements to which WI Products is a party, such Worthington/Morton Relationship Agreements will constitute the valid and legally binding obligations of WI Products, enforceable against WI Products in accordance with their respective terms.

     8.     Conditions Precedent to Morton’s Obligation to Close. Morton’s obligation to take the actions required to be taken by Morton at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Morton, in whole or in part):

4

(a)	Each of the representations and warranties of Worthington Industries and WI Products contained in this Agreement shall be true, complete and correct on and as of the Closing Date and Worthington Industries and WI Products shall have delivered the certificate of a duly authorized officer of each of Worthington Industries and WI Products to that effect.
(b)	All of the covenants and obligations that Worthington Industries and WI Products are required to perform or comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually) shall have been duly performed and complied with. Worthington Industries and WI Products shall have delivered the certificate of a duly authorized officer of each of Worthington Industries and WI Products to the foregoing effect.
(c)	Worthington Industries and WI Products shall have executed and delivered each of the Worthington/Morton Relationship Agreements to which they are parties and any other documents required under the terms of this Agreement to be delivered by them at the Closing.
(d)	Morton’s financial institution lenders (Harris Bank led syndicate) must have approved and consented to the Worthington/Morton Relationship Agreements and the transactions contemplated thereby.
(e)	The board of directors and, if required, shareholders of Morton shall have approved the Worthington/Morton Relationship Agreements and the transactions contemplated thereby.
(f)	No Governmental Authority shall have taken, or threatened to take, any action restraining or prohibiting the transactions contemplated by the Worthington/Morton Relationship Agreements and there shall not be in effect any order restraining, enjoining or otherwise preventing consummation of the transactions contemplated by the Worthington/Morton Relationship Agreements.

     9.     Conditions Precedent to Worthington’s Obligation to Close. The obligations of Worthington Industries and WI Products to take the actions required to be taken by each of them at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Worthington Industries and WI Products, in whole or in part):

(a)	Each of the representations and warranties of Morton contained in this Agreement shall be true, complete and correct on and as of the Closing Date and Morton shall have delivered the certificate of a duly authorized officer of Morton to that effect.
(b)	All of the covenants and obligations that Morton is required to perform or comply with pursuant to this Agreement at or prior to Closing (considered collectively), and each of these covenants and obligations (considered individually) shall have

5

	been duly performed and complied with. Morton shall have delivered the certificate of a duly authorized officer of Morton to the foregoing effect.
(c)	Morton shall have executed and delivered each of the Worthington/Morton Relationship Agreements and any other documents required under the terms of this Agreement to be delivered by Morton at the Closing.
(d)	Morton’s financial institution lenders (Harris Bank led syndicate) must have approved and consented to the Worthington/Morton Relationship Agreements and the transactions contemplated thereby.
(e)	The board of directors of each of Worthington Industries and WI Products shall have approved the Worthington/Morton Relationship Agreements and the transactions contemplated thereby.
(f)	No Governmental Authority shall have taken, or threatened to take, any action restraining or prohibiting the transactions contemplated by the Worthington/Morton Relationship Agreements and there shall not be in effect any order restraining, enjoining or otherwise preventing consummation of the transactions contemplated by the Worthington/Morton Relationship Agreements.
(g)	Worthington and Morton Custom Plastics, LLC (“MCP”), a debtor in bankruptcy, by and through its Trustee, shall have entered into a mutual release providing for the release of all claims between them and for dismissal with prejudice of all claims and counterclaims brought by Worthington and MCP in the Litigation as to MCP and Worthington, respectively.

     10.     Cooperation. The parties hereto agree to cooperate with each other to obtain satisfaction of the conditions precedent to the consummation of the transactions contemplated by this Agreement; and agree, upon the reasonable request of the other, to execute, acknowledge and deliver any and all such further documents, and to do and perform any and all such other acts as may be necessary or appropriate to carry out the intent and purposes of this Agreement. If requested by Morton’s lenders, WI Products shall enter into an intercreditor agreement with Morton’s lenders on terms reasonably acceptable to Worthington.

     11.     Failure to Close. If the Closing of the transactions contemplated by this Agreement has not occurred by December 31, 2003, either Worthington Industries and WI Products on the one hand, or Morton, on the other, may terminate this Agreement and all further obligations of the parties under this Agreement will thereupon terminate, except that if this Agreement is terminated by a party because of a breach of the Agreement by the other party or because one or more of the conditions of the terminating party’s obligations under this Agreement are not satisfied as a result of the other party’s failure to comply with its obligations under this Agreement, the terminating party’s right to pursue all legal remedies will survive such termination unimpaired.

     12.     Notices. All notices and other communications which may be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when received by telecopy, provided that the sender has retained a copy of the notice

6

showing the date and time of receipt, (c) upon delivery by Federal Express, similar expedited delivery service or recognized courier, or (d) three days after being mailed by registered or certified first class mail, postage prepaid, return receipt requested, to the party to whom the notice of communication is being given, as follows:

If to Worthington Industries
or WI Products:

c/o Worthington Industries, Inc.
Attn: Secretary
200 Old Wilson Bridge Road
Columbus, Ohio 43085
Facsimile Number: (614) 840-3706

With copy to:

Elizabeth Turrell Farrar
Vorys, Sater, Seymour and Pease LLP
52 East Gay Street
Columbus, Ohio 43215
Facsimile Number: (614) 719-4708

If to Morton:

Morton Industrial Group, Inc.
Attn: President
1021 W. Birchwood
Morton, Illinois 61550
Facsimile Number: (309) 263-1841

With copy to:

Gene A. Petersen
Husch & Eppenberger, LLC
401 Main Street, Suite 1400
Peoria, Illinois 61602
Facsimile Number: (309) 637-4928

     Any party hereto may change from time to time its address for notices and communications under this Agreement by notice given under the terms of this Section.

     13.     Survival; Indemnification.

(a)	All representations, warranties, covenants and obligations shall survive the Closing.
(b)	Morton shall indemnify, defend and hold harmless Worthington Industries and WI Products and their respective officers, directors, employees and agents

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(collectively, the “Worthington Indemnified Persons”) from, and will pay to the Worthington Indemnified Persons the amount of, any loss, liability, claim, damage, expense, fine or penalty (collectively, “Damages”), arising out of, resulting from or relating to any breach by Morton of any representation or warranty of Morton pursuant to this Agreement or any other Worthington/Morton Relationship Agreement or any failure of Morton to duly perform any covenant or obligation to be performed by Morton pursuant to this Agreement or any other Worthington/Morton Relationship Agreement, including, without limitation, the obligation to cause the dismissal with prejudice of all claims and counterclaims brought by Morton and MCP in the Litigation as to Worthington Industries and WI Products.

(c)

Worthington Industries and WI Products shall jointly and severally indemnify, defend and hold harmless Morton and its officers, directors, employees and agents (collectively, the “Morton Indemnified Persons”) from, and will pay to the Morton Indemnified Persons the amount of any Damages arising out of, resulting from or relating to with any breach by Worthington Industries or WI Products of any representation or warranty of either pursuant to this Agreement or any other Worthington/Morton Relationship Agreement or any failure by either to duly perform any covenant or obligation to be performed by Worthington Industries or WI Products pursuant to this Agreement or any other Worthington/Morton Relationship Agreement.

     14.     Benefit; Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted successors and assigns. Neither Worthington Industries and WI Products, on the one hand, nor Morton, on the other, may assign this Agreement without the prior written consent of the other party; provided, however, that Worthington Industries or WI Products may assign this Agreement, in whole or in part, to any affiliate of Worthington Industries without any such consent: however, any such assignment shall not relieve Worthington Industries or WI Products of their obligations under this Agreement.

     15.     No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of the parties and their respective permitted successors and assigns, and are not intended to confer third-party beneficiary rights upon any other person except Worthington Steel Company in respect of the Steel Supply Agreement.

     16.     Entire Agreement. This Agreement, the other Worthington/Morton Relationship Agreements and the documents referred to in this Agreement, contain the entire understanding of the parties with respect to the subject matter of this Agreement. There are no restrictions, agreements, promises, warranties, covenants or undertakings other than those expressly set forth herein or therein. This Agreement supersedes all prior agreements and understandings among the parties with respect to its subject matter. This Agreement may be amended only by a written instrument duly executed by all of the parties or their permitted successors or assigns.

     17.     Waiver. No failure on the part of a party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of a party in exercising any power,

8

right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. A party shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

     18.     Choice of Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to such State’s conflict of laws rules (except that matters relating to the internal affairs of Morton shall be governed by Georgia law). Each of the parties, acting for itself and its successors and assigns, hereby expressly and irrevocably consents to the exclusive jurisdiction of the State and Federal Courts located in Columbus, Ohio for any litigation arising out of this Agreement and irrevocably waives, to the fullest extent permitted by law, any objection based on forum non conveniens or any objection to venue of any such action.

     19.     Headings. The section headings contained in this Agreement are for the convenience of the parties in reference only and are not intended to define or limit the contents of their sections.

     20.     Severability. If any term, condition or provision of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement, other than such term, condition or provision, shall not be affected thereby and shall remain in full force and effect and shall be valid and enforceable to the fullest extent permitted by law.

     21.     Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same Agreement.

[rest of page intentionally left blank;
signatures on following page]

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed by their duly authorized officers to be effective as of the day and year first above written.

WORTHINGTON INDUSTRIES, INC.
By:		/s/ Dale T. Brinkman
Name:		Dale T. Brinkman
Title:		Vice President - Administration - General Counsel - Secretary
WI PRODUCTS, INC., f/k/a Worthington Custom Plastics, Inc.
By:	/s/ Dale T. Brinkman
Name:		Dale T. Brinkman
Title:		Vice President - Secretary
MORTON INDUSTRIAL GROUP, INC.
By:	/s/ William D. Morton
Name:		William D. Morton
Title:		President

10 EX-99.3 5 c81759exv99w3.htm STOCK REDEMPTION AGREEMENT

Exhibit 99.3

STOCK REDEMPTION AGREEMENT

     This Stock Redemption Agreement (the “Agreement”) is dated as of the 23rd day of December, 2003 (the “Effective Date”), by and between MORTON INDUSTRIAL GROUP, INC., a Georgia corporation (the “Company”), and WI PRODUCTS, INC., an Ohio corporation formerly known as Worthington Custom Plastics, Inc. (the “Stockholder”).

     1.     RECITALS: This Agreement is made with reference to the following facts and objectives:

     A. The Stockholder is the beneficial owner and holder of record of 10,000 shares of the Company’s Series 1999A Preferred Stock, no par value (the “Subject Stock”).

     B. Under the terms of the designation of preferences, limitations and relative rights (the “Designation of Rights”) of the Subject Stock, the Company is to purchase or redeem all of the shares of the Subject Stock five years after the date of initial issuance of any of such shares and pay the holders of the shares so purchased or redeemed an amount (the “Stated Redemption Amount”) equal to $1,000 per share plus the unpaid accumulated dividends accrued thereon (including such dividends which have accrued but not been declared).

     C. In connection with the resolution and settlement of the disputes now pending as to the Company, the Stockholder and Worthington Industries, Inc., an Ohio corporation which is the ultimate parent of the Stockholder (“Worthington Industries”), in the litigation (the “Litigation”) entitled Worthington Industries, Inc. and W.I. Products, Inc., f/k/a Worthington Custom Plastics, Inc. v. Morton Industrial Group, Inc. and Morton Custom Plastics, Inc., Case No. C2-00-504, filed in the United States District Court for the Southern District of Ohio-Eastern Division, the Company and the Stockholder desire to provide for an accord and satisfaction in respect of the Stated Redemption Amount which would otherwise be payable by the Company to the Stockholder, pursuant to which (i) the Stockholder shall sell, and the Company shall purchase and redeem, the Subject Stock at the price and on the terms and conditions hereinafter provided, and (ii) the Company shall purchase from Worthington Industries, and Worthington Industries shall sell to the Company, raw steel over a three-year term commencing January 1, 2004, on the terms and conditions set forth in that certain Steel Supply Agreement dated as of the Effective Date (the “Steel Supply Agreement”).

     D. The execution and delivery of this Agreement by each of the Company and the Stockholder is a condition precedent to the closing of the transactions contemplated by that certain Settlement Agreement, dated as of

     November 20, 2003 (the “Settlement Agreement”), between the Stockholder and Worthington Industries and the Company.

     2.     SALE AND PURCHASE: The Stockholder agrees to sell to the Company, and the Company agrees to purchase from the Stockholder and redeem, in installments, all of the shares of the Subject Stock at the price and on the terms and conditions hereinafter set forth. The obligation of the Company to purchase all of the shares of the Subject Stock from the Stockholder in accordance with the terms and conditions of this Agreement shall be deemed to be an accord in respect of the Company’s obligation to purchase or redeem and pay the Stated Redemption Amount in respect of the Subject Stock under the terms of the Designation of Rights, which accord shall only be satisfied by actual performance by the Company of each of its obligations under this Agreement and shall not represent a novation of obligations of the Company in respect of the Stated Redemption Amount or the Subject Stock.

     3.     PURCHASE PRICE FOR SUBJECT STOCK: The purchase price to be paid by the Company to the Stockholder for the Subject Stock shall be One Million Five Hundred Thousand Dollars ($1,500,000) (the “Purchase Price”) payable in installments, without interest, as follows:

				Number of Shares
				of Subject Stock
				to be Purchased
	Amount of		from and Delivered
Installment Due Date	Installment			by Stockholder
January 15, 2004	$	50,000			333
February 15, 2004	$	50,000			333
March 15, 2004	$	50,000			334
April 15, 2004	$	50,000			333
May 15, 2004	$	50,000			333
June 15, 2004	$	50,000			334
August 15, 2004	$	50,000			333
September 15, 2004	$	50,000			333
October 15, 2004	$	50,000			334
November 15, 2004	$	50,000			333
January 15, 2005	$	50,000			333
February 15, 2005	$	50,000			334
March 15, 2005	$	50,000			333
April 15, 2005	$	50,000			333
May 15, 2005	$	50,000			334
June 15, 2005	$	50,000			333
August 15, 2005	$	50,000			333
September 15, 2005	$	50,000			334
October 15, 2005	$	50,000			333
November 15, 2005	$	50,000			333
January 15, 2006	$	50,000			334

				Number of Shares
				of Subject Stock
				to be Purchased
	Amount of		from and Delivered
Installment Due Date	Installment			by Stockholder
February 15, 2006	$	50,000			333
March 15, 2006	$	50,000			333
April 15, 2006	$	50,000			334
May 15, 2006	$	50,000			333
June 15, 2006	$	50,000			333
August 15, 2006	$	50,000			334
September 15, 2006	$	50,000			333
October 15, 2006	$	50,000			333
November 15, 2006	$	50,000			334

provided, however, that if the making of any such installment payment would (a) constitute a breach or default, or cause the Company to be in breach or default, under any agreement relating to its obligations to Harris Bank (individually and as agent for other lenders) (or any lending institution which replaces Harris Bank as the Company’s principal lender) for borrowed money (a “Payment Default”), or (b) such payment cannot then be made under Section 14-2-640 of the Georgia Business Corporation Code (a “Statutory Default”), then such installment payment (the “Deferred Payment”) shall be deferred until the first such time as the Deferred Payment may be made without a Payment Default or a Statutory Default. In the event that the payment by the Company of any installment of the Purchase Price is to be deferred by the Company in accordance with this Section 3, the Company shall give written notice (a “Deferral Notice”) to the Stockholder at least five business days before the applicable Installment Due Date. The Deferred Payment shall bear interest at the rate of 12% per annum until the Deferred Payment is made in full, which interest shall be due and payable at the time the Deferred Payment is made. In no event, however, shall the payments to be made in respect of the Purchase Price under this Section 3 be deferred beyond January 15, 2007, at which time any unpaid amount of the Purchase Price, together with any unpaid amount of the interest payable in respect of Deferred Payments, shall be due and payable by the Company to the Stockholder in full irrespective of any Payment Default, but only if and to the extent that payment of a distribution to shareholders could then be made under Section 14-2-640 of the Georgia Business Corporation Code; provided, however, that in no such event shall the Company be deemed to be relieved of its obligation to make the payment to the Stockholder contemplated by Section 4 of this Agreement as a result of the Company’s failure to pay the Purchase Price and any interest payable in respect of Deferred Payments in full by January 15, 2007.

     4.     SURVIVAL OF STATED REDEMPTION AMOUNT: In the event that the Company has not paid the Purchase Price and any interest payable in respect of Deferred Payments in full by January 15, 2007, then the original obligation of the Company for purchase or redemption of the remaining Subject Stock to be purchased and payment of the Stated Redemption Amount therefor under the terms of the Designation of Rights shall survive and the Company shall be obligated to pay to the Stockholder on or before January 31, 2007, an amount in respect thereof determined as follows:

(A)	Total amount represented by installments of the Purchase Price not actually received from the Company by the Stockholder	x    (B)	$	10,000,000,	=    (C)	Total amount due and payable to the Stockholder
	$1,500,000

; provided, however, that if the Stockholder is required to return any installment of the Purchase Price previously paid by the Company for any reason, the amount so returned shall not be deemed to have been paid by the Company. The amount to be paid in respect of the Stated Redemption Amount so determined shall be due and payable by the Company to the Stockholder on or before January 31, 2007, but only if and to the extent that payment of a distribution to shareholders could then be made under Section 14-2-640 of the Georgia Business Corporation Code; provided, however, that in no such event shall the Company be deemed to be relieved of its obligation to make the payment to the Stockholder contemplated by this Section 4 but for the foregoing clause and such payment shall be made in full, together with interest at the rate of 12% per annum from December 31, 2006 until the amount payable under this Section 4 is paid in full, at the first such time as payment of a distribution to shareholders in such amount could be made under Section 14-2-640 of the Georgia Business Corporation Code. Costs and expenses incurred by the Stockholder in collecting the amount due under this Section 4, including reasonable attorneys’ fees, shall be payable to the Stockholder by the Company.

     5.     DELIVERY OF SUBJECT STOCK: Upon receipt of each payment of an installment of the Purchase Price specified in Section 3 of this Agreement, the Company shall be deemed to have purchased and redeemed the number of shares of the Subject Stock specified in Section 3 in respect of such installment, and the Stockholder shall deliver to the Company one or more certificates evidencing such number of shares, together with a duly executed stock power authorizing the transfer of such shares to the Company. The shares shall be delivered free and clear of any liens or encumbrances of any kind.

     6.     REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER: The Stockholder hereby represents and warrants to the Company that:

          (a) As of the date of this Agreement, the Stockholder is the sole beneficial owner and holder of record all of the shares of the Subject Stock, and such shares are free and clear of any liens or encumbrances of any kind.

          (b) The Stockholder is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Ohio and has full corporate power and authority to conduct its business as it is now being conducted.

          (c) The Stockholder has full corporate power and authority to enter into, execute and deliver this Agreement and perform its obligations hereunder. This Agreement has been duly approved and authorized by all requisite corporate action.

          (d) Neither the execution and delivery by the Stockholder of this Agreement nor the performance by the Stockholder of its obligations hereunder will, directly or indirectly (with or without notice or lapse of time or both): (i) contravene, conflict with or result in a violation of any provision of the articles of incorporation, code of regulations or other organizational documents of the Stockholder, each as amended to date, or any resolution adopted by the board of directors (or any committee thereof) or the shareholders of the Stockholder; (ii) require any approval or consent of, or filing with, any agency, authority, body, board, commission, court, instrumentality, legislature or office of any nature whatsoever of any federal, state, county, district, municipal, city, foreign or other government or quasi-government unit or political subdivision (“Governmental Authority”) or any other person, other than such approvals, consents and filings which have been obtained or made prior to the Effective Date; (iii) contravene, conflict with, or result in any breach or violation of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of any material agreement to which the Stockholder is a party or by which the Stockholder or its property or assets may be bound; and (iv) violate any statute, ordinance, bylaw, code, rule, regulation, restriction, permit, judgment, order, writ, injunction, decree, determination or award of any Governmental Authority (“Legal Requirements”) to which the Stockholder or any of its property or assets may be subject.

          (e) This Agreement constitutes the valid and legally binding obligation of the Stockholder enforceable against the Stockholder in accordance with its terms.

          (f) The Stockholder has been furnished all information concerning the assets, operations, business prospects and financial condition of the Company requested by the Stockholder and been given the opportunity to ask questions of the Company about the same.

     7.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company hereby represents and warrants to the Stockholder that:

          (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Georgia. The Company has full corporate power and authority to conduct its business as it is now being conducted.

          (b) The Company has full corporate power and authority to enter into, execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly approved and authorized by all requisite corporate action.

          (c) Neither the execution and delivery by the Company of this Agreement nor the performance by the Company of its obligations hereunder will, directly or indirectly (with or without notice or lapse of time or both): (i) contravene, conflict with or result in a violation of any provision of the articles of incorporation, bylaws or other organizational documents of the Company, each as amended to date, or any resolution adopted by the board of directors (or any

committee thereof) or the shareholders of the Company; (ii) require any approval or consent of, or filing with, any Governmental Authority or any other person, other than such approvals, consents and filings which have been obtained or made prior to the Effective Date; (iii) contravene, conflict with or result in any breach or violation of any provision of, or give any person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, any material agreement to which the Company is a party or by which the Company or its property or assets may be bound; and (iv) violate any Legal Requirement to which the Company or any of its property or assets may be subject, including, without limitation, the Georgia Business Corporation Code.

          (d) This Agreement constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms.

          (e) The Company is able to pay its debts as they become due in the usual course of business and the Company is not the subject of any bankruptcy, receivership, custodianship or similar proceeding.

          (f) The consummation by the Company of the transactions contemplated by this Agreement will not (i) cause the total assets of the Company to be less than the sum of its total liabilities plus the amount which would be required to satisfy preferential shareholder rights upon dissolution of the Company; or (ii) render the Company unable to pay its debts as they become due in the usual course of business.

          (g) The Company is currently able to make the payments to the Stockholder contemplated by this Agreement in accordance with the terms hereof, and based on the Company’s good faith projections for the period during which payments are to be made by the Company to the Stockholder under the terms of this Agreement, the Company will be able to make the payments to the Stockholder contemplated by this Agreement in accordance with the terms hereof, in each case without the making of such payment(s) constituting a Payment Default or a Statutory Default.

          (h) The Company has access to the funds which will be required to satisfy its obligations under this Agreement.

          (i) The Company has furnished to the Stockholder all information concerning the assets, operations, business prospects and financial condition of the Company requested by the Stockholder and has truthfully answered all questions about the same asked by the Stockholder or its representatives.

     8.     DEFAULT: In the event of the default by the Company in the payment of any installment of the Purchase Price under Section 3 of this Agreement, as to which the Stockholder has not received a timely Deferral Notice, which default remains uncured for a period of 10 days after the Stockholder has given written notice to the Company of such default and with respect to which default the Company has not given the Stockholder a Deferral Notice within such period of ten days (the “Default Date”), then the original obligation of the Company for purchase or redemption of the remaining Subject Stock to be purchased and payment of the Stated

Redemption Amount therefor under the terms of the Designation of Rights shall survive and the Company shall be obligated to immediately pay to the Stockholder an amount in respect thereof determined as follows:

(A)	Total amount represented by installments of the Purchase Price not actually received from the Company by the Stockholder	x    (B)	$	10,000,000,	=    (C)	Total amount due and payable to the Stockholder
	$1,500,000

The amount to be paid in respect of the Stated Redemption Amount pursuant to this Section 8 shall be due and payable by the Company to the Stockholder, but only if and to the extent that payment of a distribution to shareholders could then be made under Section 14-2-640 of the Georgia Business Corporation Code; provided, however, that in no such event shall the Company be deemed to be relieved of its obligation to make the payment to the Stockholder contemplated by this Section 8 but for the foregoing clause and such payment shall be made in full at the first such time as payment of a distribution to shareholders in such amount could be made under Section 14-2-640 of the Georgia Business Corporation Code. Such amount shall bear interest at the rate of 12% per annum from the Default Date until such amount, together with such interest, is paid in full. Costs and expenses of collection incurred by the Stockholder, including reasonable attorneys’ fees, shall be payable to the Stockholder by the Company.

     9.     INDEMNIFICATION:

          (a) The Company shall indemnify, defend and hold harmless the Stockholder and its officers, directors, employees and agents (collectively, the “Worthington Indemnified Persons”) from, and will pay to the Worthington Indemnified Persons the amount of, any loss, liability, claim, damage, expense, fine or penalty (collectively, “Damages”) arising out of, resulting from or relating to, any breach by the Company of any representation or warranty of the Company pursuant to this Agreement or any failure by the Company to duly perform any covenant or obligation to be performed by the Company pursuant to this Agreement.

          (b) The Stockholder shall indemnify, defend and hold harmless the Company and its officers, directors, employees and agents (collectively, the “Morton Indemnified Persons”) from, and will pay to the Morton Indemnified Persons the amount of any Damages arising out of, resulting from or relating to any breach by the Stockholder of any representation or warranty of the Stockholder pursuant to this Agreement or any failure by the Stockholder to duly perform any covenant or obligation to be performed by the Stockholder pursuant to this Agreement.

     10.     BENEFIT; ASSIGNMENT: This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted successors and assigns. Neither the Company nor the Stockholder may assign this Agreement without the prior written consent of the other party; provided, however, that the Stockholder may assign this Agreement, in whole or in part, to any affiliate of Worthington Industries without any such consent, provided, however, that any such assignment shall not relieve the Stockholder of its obligations under this Agreement.

     11.     NO THIRD PARTY BENEFICIARY: The terms and provisions of this Agreement are intended solely for the benefit of the parties and their respective permitted successors and assigns, and are not intended to confer third-party beneficiary rights upon any other person.

     12.     FURTHER ACTIONS: Each of the parties hereto shall, upon the reasonable request of the other, execute, acknowledge and deliver any and all such further documents and take any and all such other actions as may be necessary or appropriate to carry out the intent and purposes of this Agreement.

     13.     NOTICES: All notices and other communications which may be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when received by telecopy, provided that the sender has retained a copy of the notice showing the date and time of receipt, (c) upon delivery by Federal Express, similar expedited delivery service or recognized courier, or (d) three days after being mailed by registered or certified first class mail, postage prepaid, return receipt requested, to the party to whom the notice or communication is being given, as follows:

If to Stockholder:	WI Products, Inc. Attn: Secretary 200 Old Wilson Bridge Road Columbus, Ohio 43085 Facsimile Number: (614) 840-3706
With copy to:	Elizabeth Turrell Farrar Vorys, Sater, Seymour and Pease LLP 52 East Gay Street Columbus, Ohio 43215 Facsimile Number: (614) 719-4708
If to the Company:	Morton Industrial Group, Inc. Attn: President 1021 W. Birchwood Morton, Illinois 61550 Facsimile Number: (309) 263-1841
With copy to:	Gene A. Petersen Husch & Eppenberger, LLC

401 Main Street, Suite 1400
Peoria, Illinois 61602
Facsimile Number: (309) 637-4928

     Either party hereto may change from time to time its address for notices and communications under this Agreement by notice given under the terms of this Section.

     14.     CHOICE OF LAW; SUBMISSION TO JURISDICTION: This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to such State’s conflict of laws rules (except that matters relating to the internal affairs of the Company shall be governed by Georgia law). Each of the parties, acting for itself and its successors and assigns, hereby expressly and irrevocably consents to the exclusive jurisdiction of the State and Federal Courts located in Columbus, Ohio for any litigation arising out of this Agreement and irrevocably waives, to the fullest extent permitted by law, any objection to such action based on forum non conveniens or any objection to venue of any such action.

     15.     WAIVER: No failure on the part of a party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of a party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. A party shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

     16.     SEVERABILITY: If any term, condition or provision of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement, other than such term, condition or provision, shall not be affected thereby and shall remain in full force and effect and shall be valid and enforceable to the fullest extent permitted by law.

     17.     HEADINGS: The section headings contained in this Agreement are for convenience of the parties in reference only and are not intended to define or limit the contents of their sections.

     18.     ENTIRE AGREEMENT: This Agreement contains the entire understanding of the parties with respect to the subject matter of this Agreement. There are no restrictions, agreements, promises, warranties, covenants or undertakings other than those expressly set forth herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Agreement may be amended only by a written statement duly executed by both of the parties or their permitted successors or assigns.

     19.     COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same Agreement.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed by their duly authorized officers to be effective as of the day and year first above written.

MORTON INDUSTRIAL GROUP, INC.
By:	/s/ William D. Morton
Name:	William D. Morton
Title:	Chairman
WI PRODUCTS, INC., f/k/a Worthington Custom Plastics, Inc.
By:	/s/ Dale T. Brinkman
Name:	Dale T. Brinkman
Title:	Secretary

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