EXHIBIT 2.3
AMENDMENT NO. 1 dated as of July 27, 1998
(this "Amendment") to the AGREEMENT AND PLAN OF
---------
MERGER (the "Original Agreement" and, as amended,
------------------
this "Agreement") dated as of June 23, 1998, by
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and among PALESTRA ACQUISITION CORP., a Delaware
corporation ("Purchaser"), CHEMICAL XXXXXX
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CORPORATION, a Pennsylvania corporation (the
"Company"), and THE SHAREHOLDERS OF THE COMPANY
--------
NAMED ON SCHEDULE I ATTACHED TO THE ORIGINAL
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AGREEMENT (each, a "Shareholder", and
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collectively, the "Shareholders"). Capitalized
------------
term used but not defined herein shall have the
meanings ascribed to them in the Original
Agreement.
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving this Amendment and the transactions to which the Company is a party
contemplated hereby, and has agreed, upon the terms and subject to the
conditions set forth herein, to recommend that the Company's shareholders
approve this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
benefits to be derived from this Amendment and the representations, warranties,
covenants, agreements and conditions hereinafter set forth, the parties hereto
hereby agree as follows:
ARTICLE I
AMENDMENTS
1.1 PURCHASE PRICE; EFFECT ON CAPITAL STOCK.
---------------------------------------
(a) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Merger Consideration" and replacing it with the following:
""Merger Consideration" means the sum of (i) the Aggregate Cash
--------------------
Merger Consideration plus (ii) shares of New Preferred Stock having a
stated value equal to $5 million."
(b) Annex I to the Original Agreement is hereby amended by adding the
following thereto:
""Aggregate Cash Merger Consideration" means $72,800,000.
-----------------------------------
(c) Annex I to the Original Agreement is hereby amended by adding the
following thereto:
"New Preferred Stock" means shares of the Preferred Stock of MTL,
-------------------
the designations, rights and preferences of which are more
particularly described on Exhibit 2.1(b) hereto.
--------------
(d) Section 2.1(a) of the Original Agreement is hereby amended by
adding the following new sentence to the end thereof:
"Notwithstanding anything to the contrary contained in this
Agreement or in any Employment Agreement, the Purchaser shall be
obligated to pay in cash to the Shareholders an amount equal to but
not more than (i) the Aggregate Cash Merger Consideration, less (ii)
the product of (A) the aggregate number of Merger Shares that are to
be converted into MTL Stock pursuant to Section 2.1(c) and the
applicable Employment Agreements multiplied by (B) a fraction, the
numerator of which shall be the Merger Consideration less the Net
Transaction Expenses, and the denominator of which shall be the Merger
Share Number (the "MTL Stock Amount"), less (iii) the Net Transaction
----------------
Expenses."
(e) Sections 2.1(b)(iii), (iv) and (v) of the Original Agreement are
each hereby deleted in their entirety and shall be collectively replaced with
the following:
"(iii) the Merger Shares held by each Shareholder (other than the
Merger Shares that are to be converted into shares of MTL Stock)
shall, by virtue of the Merger and without any action on the part of
any Shareholder, cease to be outstanding and be converted into the
right to receive, subject to the terms and conditions of this
Agreement, (A) shares of New Preferred Stock having a stated value
equal to the product of such Shareholder's Common Equity Percentage
multiplied by $5 million and (B) cash in an amount equal to such
Shareholder's Cash Merger Consideration.
For purposes of the foregoing, "Cash Merger Consideration" means the
-------------------------
following:
(i) in respect of each Shareholder other than Xxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxxx, an amount equal to (A) the product of
such Shareholder's Common Equity Percentage multiplied by the
Aggregate Cash Merger Consideration, less (B) the product of the
Xxxxxxxx Special Merger Consideration multiplied by such Shareholder's
Post Xxxxxxxx Percentage, less (C) the product of the Xxxxxxx Special
Merger Consideration multiplied by such Shareholder's Post Xxxxxxx
Percentage, less (D) the product of such Shareholder's Percentage of
Merger Consideration multiplied by the Net Transaction Expenses;
(ii) in respect of Xxxxx X. Xxxxxxxx, an amount equal to (A)
the product of Xx. Xxxxxxxx'x Common Equity Percentage multiplied by
the Aggregate Cash Merger Consideration, plus (B) the Xxxxxxxx Special
Merger Consideration, less (C) the product of the Xxxxxxx Special
Merger Consideration multiplied by Xx. Xxxxxxxx'x Post Xxxxxxx
Percentage, less (D) the product of
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Xx. Xxxxxxxx'x Percentage of Merger Consideration multiplied by the
Net Transaction Expenses; and
(iii) in respect of Xxxxx X. Xxxxxxx, an amount equal to (A) the
product of Xx. Xxxxxxx'x Common Equity Percentage multiplied by the
Aggregate Cash Merger Consideration, plus (B) Xxxxxxx Special Merger
Consideration, less (C) the product of the Xxxxxxxx Special Merger
Consideration multiplied by Xx. Xxxxxxx'x Post Xxxxxxxx Percentage,
less (D) the product of Xx. Xxxxxxx'x Percentage of Merger
Consideration multiplied by the Net Transaction Expenses.
For purposes of the foregoing, the "Post Xxxxxxx Percentage" means in
-----------------------
respect of any Shareholder, the total number of Merger Shares held by such
Shareholder divided by the total number of Merger Shares held by all
Shareholders other than Xx. Xxxxxxx."
For purposes of the foregoing, the "Post Xxxxxxxx Percentage" means in
------------------------
respect of any Shareholder, the total number of Merger Shares held by such
Shareholder divided by the total number of Merger Shares held by all
Shareholders other than Xx. Xxxxxxxx."
1.2 DELIVERY OF FUNDS AND CERTIFICATES; SURRENDER OF CERTIFICATES.
-------------------------------------------------------------
(a) Section 2.2(a) of the Original Agreement is hereby amended by
deleting the words the "the funds necessary to pay the Merger Consideration
(taking into account the MTL Stock and subject to any setoffs as set forth in
Section 7.3(g) or Section 7.3(h))" contained therein and replacing such words
with the words "the funds necessary to pay the Aggregate Cash Merger
Consideration, less the Net Transaction Expenses, less the MTL Stock Amount and
less the aggregate amount of all setoffs pursuant to Section 7.3(g) and Section
7.3(h))."
(b) Section 2.2(b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"Each holder of an outstanding certificate or certificates which prior
thereto represented Merger Shares, upon surrender at, or as soon as
practicable after, the Effective Time of the Merger (as the case may
be) to the Transfer Agent of such certificate or certificates
(together with a letter of transmittal signed by such holder in
substantially the form of EXHIBIT A attached hereto), shall be
---------
entitled to the Cash Merger Consideration (subject to any setoffs as
set forth in Section 7.3(g) or Section 7.3(h)) and the shares of New
Preferred Stock into which such Merger Shares previously represented
by such certificate or certificates surrendered shall have been
converted pursuant to this Agreement. The Transfer Agent shall accept
such certificates and such letter of transmittal upon compliance with
such reasonable terms and conditions as the Transfer Agent may impose
to effect an orderly exchange thereof in accordance with normal
practices. After the Effective Time of the Merger, there shall be no
further transfer on the records of the Company or its transfer agent
of certificates representing Merger Shares which have been converted,
in whole or in part, pursuant to this Agreement, into the right to
receive cash, MTL Stock or New
3
Preferred Stock, and if such certificates are presented to the Company
for transfer, they shall be canceled against delivery of such
consideration. If cash or a certificate representing shares of MTL
Stock or New Preferred Stock is to be remitted to a name other than
that in which the certificate for Merger Shares surrendered for
exchange is registered, it shall be a condition of such exchange that
the certificate so surrendered shall be properly endorsed, with
signature guaranteed or otherwise in proper form for transfer. Until
surrendered as contemplated by this Section 2.2(b), each certificate
for Merger Shares shall be deemed at any time after the Effective Time
of the Merger to represent only the right to receive, subject to any
setoffs pursuant to Section 7.3(g) or Section 7.3(h), for each Merger
Share represented thereby upon such surrender, cash, shares of New
Preferred Stock and/or shares of MTL Stock, in the amount determined
pursuant to Section 2.1(b) or the applicable Employment Agreement, as
the case may be."
(c) Section 2.2(d) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"(d) All consideration (whether in the form of cash, New Preferred
Stock, MTL Stock or setoff pursuant to Section 7.3(g) or Section 7.3(h))
paid upon surrender of certificates representing Shares in accordance with
the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares so exchanged that were
previously represented by such certificates."
1.3 SETOFFS.
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Sections 7.3(g) and (h) of the Original Agreement are each hereby amended
by deleting the words "any Merger Consideration or other payments" in each such
Section and replacing it in each such Section with the words "Cash Merger
Consideration or other cash payments."
1.4 CONDITIONS.
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Section 7.3(p) of the Original Agreement is hereby amended by deleting
"$4,000,000; provided that, in the Shareholder Representative's sole discretion,
--------
such amount may be increased, at any time prior to two days after Purchaser
delivers a notice that it intends to terminate this Agreement pursuant to
Section 9.1 based upon the condition set forth in this Section 7.3(p) not being
satisfied, to an amount not to exceed $5,000,000 (such excess amount over
$4,000,000, the "Indemnity Cap Adjustment Amount"); it being understood that if
-------------------------------
such amount exceeds $5,000,000, Purchaser shall be under no obligation to effect
the Merger" and replacing it with "$6,500,000."
1.5 INDEMNIFICATION.
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(a) Section 8.6(b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"(b) Indemnity Limitations for the Shareholders. Except as
------------------------------------------
provided herein, the sum of all Losses pursuant to which
indemnification is payable by the
4
Shareholders in the aggregate pursuant to Section 8.1(a)(i) and
Section 8.1(a)(iv) shall not exceed the sum of (i) $8,250,000 (the
"Cap"), plus (ii) an amount equal to the Indemnity Cap Adjustment
--- ----
Amount (as adjusted, the "Adjusted Cap"), and no Shareholder shall be
------------
liable to Purchaser for any amount in excess of the sum of (x) the
Cash Merger Consideration received by such Shareholder (which shall
include for these purposes shares of MTL Stock), plus (y) the stated
value of all shares of New Preferred Stock received by such
Shareholder in connection with the consummation of the Merger (which
shall not include, for purposes hereof, shares issued as a payment-in
-kind dividend); provided, however, that in no event shall the
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limitations set forth in this Section 8.6(b) apply with respect to the
representations and warranties set forth in the Subject R&W or any
claim arising as a result of fraud. Notwithstanding anything else
provided herein or in the Original Agreement, any payment to Purchaser
in respect of Purchaser Losses, whether by setoff against the
Qualified Letters of Credit, cash payments, setoff against the New
Preferred Stock, or setoff or reduction made in respect of the stated
value of the New Preferred Stock or any dividends thereunder or
otherwise, shall be included in any calculation of amounts paid by the
Shareholders for the purpose of determining, and shall be credited
against, the Cap, the Adjusted Cap and the L/C Cap, and the amount of
the Qualified Letters of Credit shall be reduced to account for such
credit."
(b) Section 8.7 of the Original Agreement is hereby amended by (i)
deleting the words "Adjusted Cap" each time it appears therein and replacing it
with the words "L/C Cap" and (ii) adding a new sentence to the end thereof which
shall read as follows:
"Notwithstanding anything to the contrary contained herein, Purchaser
agrees not to draw on any Qualified Letter of Credit (i) prior to the
twenty-fourth month immediately following the Closing Date, unless at such
time all dividends on the shares of the New Preferred Stock have either (i)
been paid in cash or (ii) paid as a payment-in-kind dividend )("PIK
Shares"), the stated value of which has been reduced to zero, and (iii)
after the twenty fourth month immediately following the Closing Date, until
such time as the stated value of the outstanding PIK Shares has been
reduced to zero and the stated value of the outstanding shares of New
Preferred Stock that are issued at the Effective Time in connection with
the Merger has been reduced to $2.5 million."
(c) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Indemnity Cap Adjustment Amount" and replacing it with the
following:
""Indemnity Cap Adjustment Amount" means an amount, not to exceed $2.5
-------------------------------
million, equal to the excess of (i) (a) the sum of any EHS Damages which in
the written opinion of Purchaser's consultant (which shall be one or more
of the consultants listed on Schedule 7.3(p)(1)) are reasonably expected to
-------------------
be required to be incurred pursuant to EHS Requirements of Law due to
conditions other than those identified on Schedule 7.3(p)(2) discovered by
------------------
the Purchaser after the date hereof and prior to the Closing in the course
of Purchaser's due diligence or due to any new Proceeding or Order or any
new claim or amended claim arising in connection with any existing
Proceeding, Order or condition, plus (b) the reasonably expected costs
based on the Purchaser's
5
consultant's evaluation in writing, for full compliance and remediation
required pursuant to any EHS Requirement of Law (including pursuant to ISRA
and the Connecticut Transfer Act) resulting from the announcement or
consummation of the transactions contemplated by this Agreement over (ii)
$4,000,000.
(d) Annex I to the Original Agreement is hereby further amended by
adding the following thereto:
""L/C Cap" means, at any time, (i) the Cap, plus (ii) the Indemnity
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Cap Adjustment Amount, less (iii) the aggregate Preferred Stock Adjustment
----
Amount in effect at such time.
"Preferred Stock Adjustment Amount" means the sum of (i) the stated
---------------------------------
value of all outstanding PIK Shares that are issued or are required to be
issued pursuant to the terms of the New Preferred Stock as a payment-in-
kind dividend on shares of New Preferred Stock that are issued at the
Effective Time in connection with the Merger ("Initial PIK Shares"), plus
------------------
(ii) after the end of the twenty-fourth month immediately following the
Closing Date, if all shares of New Preferred Stock including all PIK Shares
have not been redeemed, $2.5 million, plus (iii) at Purchaser's option
(exercised by delivery of an irrevocable notice to the Shareholders
Representative), additional shares of New Preferred Stock that are issued
at the Effective Time in connection with the Merger having a stated value
equal to up to $2.5 million.
1.6 FINANCING.
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EXHIBIT E is hereby deleted in its entirety and replaced with EXHIBIT E
--------- ---------
hereto.
1.7 NOTES.
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(a) Purchaser covenants and agrees to use its commercially reasonable
best efforts to cause MTL Inc. to commence an offer to purchase up to all of the
outstanding Notes within five business days after the date hereof and to
complete such offer substantially in accordance with the terms and subject to
the conditions described in the draft of such offer to purchase which has been
previously provided to the Company. It is understood that any delay in
commencing such offer to purchase in connection with either (i) any act or
failure to act by the Company or any third party or (ii) Purchaser's compliance
with applicable law shall not constitute a breach of this Agreement.
(b) The Company agrees to use its commercially reasonable best
efforts (without incurring any costs) to cooperate with the Purchaser and the
holders of its Notes in connection with the offer to purchase set forth in
Section 1.7(a).
(c) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Transaction Expenses" contained therein and replacing it with
the following:
"Transaction Expenses" means all fees and expenses that are
--------------------
incurred by or on behalf of the Company or any Shareholder (whether
incurred prior to, at or after the Closing) in connection with the
preparation for, and consummation of,
6
the transactions contemplated hereby, by the other agreements referred
to herein or otherwise in connection with a sale of the Company,
including any payments to terminate or purchase options to purchase
equity interests of any Subsidiary (including payments to Xxxxxx
Xxxxxxx and Xxxxxxx Kannehan) (it being understood that Transaction
Expenses shall not include either (a) the $4,000,000 cost to obtain
the requisite consent of the holders of Notes to an amendment to the
terms of the Indenture, or the fees and expenses incurred by the
Company in connection with such solicitation of consents all as set
forth in Section 6.12 or (b) any costs incurred by the Purchaser, MTL
Inc. or Apollo Management, L.P., in connection with any offer to
purchase the Notes commenced by MTL Inc.).
(d) Sections 6.12 and 7.3(m) of the Original Agreement are hereby
deleted in their entirety.
1.8 CLOSING.
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Each party hereto agrees to use its commercially reasonable efforts to
consummate the Merger on or prior to August 31, 1998.
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 AGREEMENT.
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Except as modified by this Amendment, the Original Agreement shall remain
in full force and effect, enforceable in accordance with its terms.
2.2 COUNTERPARTS.
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This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
2.3 GOVERNING LAW.
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THIS AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL
LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION
OF THIS AMENDMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT
OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY
RELATED DOCUMENT MAY BE BROUGHT EXCLUSIVELY IN
0
XXX XXXXXX XX XXX XXXXX XX XXX XXXX OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH
PARTY HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF OR HIMSELF AND IN RESPECT OF
ITS OR HIS PROPERTY AND ASSETS, GENERALLY AND UNCONDITIONALLY THE JURISDICTION
OF THE AFORESAID COURTS.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
THE PURCHASER:
PALESTRA ACQUISITION CORP.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
THE COMPANY:
CHEMICAL XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V.P. & Secretary
XXXXX X. XXXXXXXX
XXXXXXXXX X. XXXXXXXX
XXXXXXXXX XXXXXXXXX XXXXXXXX
TENNESSEE ALEXIS XXXXXXXX
XXXXXXXX FAMILY TRUST
XXXXXX X. XXXXXXXX
XXXXXX XXXXXXXX
XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXXXXX X.
XXXXXXXX, DECEASED, F/B/O XXXX,
XXXX AND XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX
DECEASED, F/B/O XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXX XXXXXXXXX XXXXXXXX
XXXXXX XXXXXX
TRUSTEES F/B/O XXXXXXXXX CUTTING
XXXXXXXX
XXXXXX X. XXXXXXXXX
XXXXX X. XXXXXXX
XXXXXX X. XXXXX
XXXXXX X. XXXXXXXXX
XXXX X. XXXXX
J. XXXXXXX XXXXXXXX
XXXX X. XXXXXX
XXXXXX X. XXXXXXXX
X.X. XXXXX-XXXXXX
G. XXXXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxxx
Attorney-in-Fact
XXXXX X. XXXXXXXX
XXXXXXXXX X. XXXXXXXX
XXXXXXXXX XXXXXXXXX XXXXXXXX
TENNESSEE ALEXIS XXXXXXXX
XXXXXXXX FAMILY TRUST
XXXXXX X. XXXXXXXX
XXXXXX XXXXXXXX
XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXXXXX X.
XXXXXXXX, DECEASED, F/B/O XXXX,
XXXX AND XXXXXX XXXXXXXX
U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX
DECEASED, F/B/O XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXX XXXXXXXXX
XXXXXXXX
XXXXXX XXXXXX
TRUSTEES F/B/O XXXXXXXXX CUTTING
XXXXXXXX
XXXXXX X. XXXXXXXXX
XXXXX X. XXXXXXX
XXXXXX X. XXXXX
XXXXXX X. XXXXXXXXX
XXXX X. XXXXX
J. XXXXXXX XXXXXXXX
XXXX X. XXXXXX
XXXXXX X. XXXXXXXX
X.X. XXXXX-XXXXXX
G. XXXXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX
By: /s/ Xxxxxx XxXxxxxx
---------------------------
Xxxxxx XxXxxxxx
Attorney-in-Fact
EXHIBIT A
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LETTER OF TRANSMITTAL
for the surrender of certificate(s) formerly representing shares of the Common
Stock
of
CHEMICAL XXXXXX CORPORATION
in connection with its merger with
PALESTRA ACQUISITION CORP.
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DESCRIPTION OF CHEMICAL XXXXXX CORPORATION SHARES SURRENDERED
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Name and Address of Registered Holders
If there is any error in the name or
address shown below, please make the
necessary corrections. Certificate(s) Surrendered
-------------------------------------------------------------------------------------------------------------------------------
Certificate No. of Chemicals No. of
Number(s) Xxxxxx Shares Chemical
Represented by Xxxxxx Shares
Certificate(s) Surrendered
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-------------------------------------------------------------------------------------------------------------------------------
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
I, as the registered holder of the above described Chemical Xxxxxx
Shares of Chemical Xxxxxx Corporation ("Chemical Xxxxxx"), hereby tender to the
surviving corporation (the "Surviving Corporation") of the merger of Palestra
Acquisition Corp. ("Palestra") with and into Chemical Xxxxxx, such Chemical
Xxxxxx Shares pursuant to the Agreement and Plan of Merger dated as of June ___,
1998 (the "Merger Agreement"), among Palestra, Chemical Xxxxxx and the other
parties thereto.
I represent and warrant to the Surviving Corporation that I am the
true and lawful owner of the Chemical Xxxxxx Shares, and have full capacity,
power and authority to exchange the Chemical Xxxxxx Shares, free and clear of
all liens, restrictions and encumbrances of any kind whatsoever, and the
Chemical Xxxxxx Shares will not be subject to any adverse claim. I hereby
surrender to the Surviving Corporation all right, title and interest in and to
the Chemical Xxxxxx Shares and irrevocably constitute and appoint the Surviving
Corporation as my lawful attorney-in fact with full power of substitution, to
deliver such Chemical Xxxxxx Shares, together with all accompanying evidence of
authority, to the Surviving Corporation and to effect the exchange and
cancellation of such Chemical Xxxxxx Shares. I understand that the Surviving
Corporation may require additional documentation, and I agree, upon request, to
execute and deliver any additional documents or instruments deemed by the
Surviving Corporation necessary to complete the exchange of the Chemical Xxxxxx
Shares.
The authority conferred in this Letter of Transmittal shall not be
affected by, and shall survive, my death or incapacity, and any obligation I
have hereunder shall be binding upon my successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and personal and legal representatives. I
acknowledge that the tender of my Chemical Xxxxxx Shares is irrevocable.
2
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PLEASE SIGN AND DATE BELOW AS INDICATED
THEN PLEASE COMPLETE SUBSTITUTE FOR W-9
Name on Stock Certificate:
______________________________________________________________________
Signatures:___________________________________________________________
Signatures:___________________________________________________________
Date:____________, 1996
Name(s):______________________________________________________________
(Please Print)
Capacity:_____________________________________________________________
(Full Title)
Address:______________________________________________________________
Address:______________________________________________________________
(Include Zip Code)
Area Code and Telephone Number:_______________________________________
Tax Identification or Social Security Number:_________________________
--------------------------------------------------------------------------------
Must be signed by registered holder(s) exactly as name(s) appear(s) above or by
person(s) authorized to become registered holder(s) by certificate(s) and
documents transmitted. If signing is by an officer of a corporation, or by an
attorney, executor, administrator, trustee, guardian, agent or other person
acting in a fiduciary or representative capacity, please set forth full title.
See Instruction 1.
3
EXHIBIT E
---------
BANKERS TRUST COMPANY CREDIT SUISSE FIRST BOSTON
One Bankers Trust Plaza 00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
July 20, 1998
MTL, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Re: CLC Acquisition
Financing/Refinancing
Bank Commitment Letter
----------------------------------
Ladies and Gentlemen:
Reference is made to the Credit Agreement (as in effect on the date hereof,
the "Credit Agreement"), dated as of June 9, 1998, among MTL, Inc. ("MTL"), Levy
Transport, Ltd./Levy Transport Ltee. (the "Canadian Borrower"), various lending
institutions, Salomon Brothers Holding Company, as Documentation Agent ("SBHC"),
Bankers Trust Company, as Syndication Agent ("BTCo"), and Credit Suisse First
Boston, as Administrative Agent ("CSFB" and, together with BTCo, each, an
"Arranger" and collectively, the "Arrangers"). Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings provided such
terms in the Credit Agreement.
You have advised us that MTL intends (i) to acquire all the capital stock
of Chemical Xxxxxx Corporation ("CLC") by way of a one-step merger of a newly-
formed wholly-owned subsidiary of MTL ("MTL Newco") with and into CLC (the
"Merger"), with CLC as the surviving corporation of such merger and (ii) to
effect a refinancing of (x) certain existing indebtedness of CLC and its
subsidiaries consisting of "indebtedness" deemed to exist pursuant to CLC's
receivables securitization program and CLC's existing senior revolving credit
facility and (y) CLC's existing 10-3/8% Senior Notes in an aggregate principal
amount equal to $100.0 million (the "CLC Senior Notes") pursuant to the CLC
Tender Offer/Consent Solicitation referred to below (with the refinancing
transactions referred to in clauses (x) and (y) being herein collectively called
the "Refinancing"). You have further advised us that the total consideration to
be paid in connection with the Merger and the Refinancing shall equal
approximately $267.0 million (including assumed debt and preferred stock of CLC
(the "CLC Preferred Stock"), fees, the tender premium paid in connection with
the Refinancing, expenses, after-tax severance payments and other consolidation-
related costs incurred in connection therewith and the financing thereof).
We understand that prior to the date of the consummation of the Merger (the
"Incremental Term Loan Borrowing Date"), CLC shall have commenced a tender
offer/consent solicitation (the "CLC Tender Offer/Consent Solicitation") with
respect to the CLC Senior Notes, pursuant to which (i) CLC shall offer to
purchase all of the outstanding CLC Senior Notes at a price acceptable to BTCo
and CSFB and (ii) consents shall be solicited to an amendment (the "CLC Senior
Notes Indenture Amendment") to the indenture relating to the CLC Senior Notes
(the "CLC Senior Notes Indenture"), on terms and conditions satisfactory to BTCo
and CSFB, which amendment would, inter alia, substantially eliminate the
----- ----
covenants currently contained in the CLC Senior Notes Indenture in a manner
satisfactory to the Arrangers (including, without limitation, any obligation of
CLC to make an offer to purchase outstanding CLC Senior Notes from holders of
CLC Senior Notes consenting to the CLC Senior Notes Indenture Amendment as a
result of the change of control of CLC occurring pursuant to the Merger). We
further understand that it shall be a condition to the Incremental Term Loan
Borrowing Date that the holders of at least a majority of the outstanding CLC
Senior Notes shall have tendered such CLC Senior Notes in connection with the
CLC Tender Offer/Consent Solicitation and the tender offer as described above
shall have been consummated and the CLC Senior Notes Indenture Amendment shall
have been entered into, in each case on or prior to such date.
We understand that the sources of funds needed to effect the Merger and the
Refinancing, to obtain the CLC Senior Notes Indenture Amendment and to pay all
fees and expenses incurred in connection therewith (including consent fees and
the tender premium payable pursuant to the CLC Tender Offer/Consent
Solicitation) shall be provided solely through (i) at least $27.0 million from
the issuance by MTL of equity to Apollo Management, L.P. (together, with its
affiliates, "Apollo") and certain other investors acceptable to the Arrangers
(which, in any event, may include existing shareholders of CLC) (such investors,
together with Apollo, the "Equity Investors") in a form, and on terms,
satisfactory to BTCo and CSFB in their sole discretion (the "CLC Equity
Financing"), with any issuance of preferred stock in connection with the CLC
Equity Financing to be in the form of pay-in-kind preferred stock (the "PIK
Preferred Stock") and (ii) the incurrence by MTL of the Incremental Senior Bank
Financing referred to below (the financing transactions described in preceding
clauses (i) and (ii) are herein collectively referred to as the "Financing
Transactions", with the Merger, the Refinancing, the CLC Tender Offer/Consent
Solicitation, the CLC Senior Notes Indenture Amendment, the Amendment and
Restatement referred to below and the Financing Transactions being herein
collectively called the "Transaction").
We further understand that the incremental senior secured bank financing
utilized to finance, in part, the Merger and the Refinancing and to pay the fees
and expenses incurred in connection with the Transaction shall be in the form of
(i) an add-on facility to the existing term loan tranche under the Credit
Agreement providing for an increase of $50.0 million in the Total Term Loan
Commitment as currently in effect under the Credit Agreement (the "Incremental A
Term Loan Facility"), to be made available to MTL pursuant to a single drawing
to be made on the date of the consummation of the Merger (the "Incremental Term
Loan Borrowing Date"), (ii) an additional term loan facility (the "B Term Loan
Facility") in the amount of $95.0 million, to be made available to MTL pursuant
to a single drawing to be made on the Incremental Term Loan Borrowing Date and
(iii) an additional term loan facility (the "C Term Loan Facility" and, together
with the Incremental A Term Loan Facility and the B Term Loan Facility, the
-2-
"Incremental Senior Bank Financing", with the Incremental Senior Bank Financing
and extensions of credit pursuant to the Credit Agreement (after giving effect
to the Amendment and Restatement) being herein collectively called the "Senior
Bank Financing") in the amount of $90.0 million, to be made available to MTL
pursuant to a single drawing to be made on the Incremental Term Loan Borrowing
Date. The Incremental Senior Bank Financing will be made available pursuant to
an amendment and restatement of the Credit Agreement (the "Amendment and
Restatement") providing for, inter alia, (i) the continuation of the credit
----- ----
facilities currently provided therein, (ii) the Incremental A Term Loan
Facility, (iii) the B Term Loan Facility and (iv) the C Term Loan Facility,
which Amendment and Restatement and Incremental Senior Bank Financing would be
on the terms and conditions specified in the preliminary summary of certain
terms and conditions attached hereto as Exhibit A (the "Summary of Terms").
Each of BTCo and CSFB is pleased to advise you (i) of its commitment, on a
several basis and subject to the terms and conditions contained herein and in
the attached Summary of Terms, to provide (x) 50.0%, in the case of BTCo and (y)
50.0%, in the case of CSFB, of the Incremental Senior Bank Financing and (ii)
that each of the Arrangers shall vote (with respect to its Commitments and
outstanding Loans) in favor of the Amendment and Restatement. Based on our
understanding of the structure of the proposed Transaction as set forth herein
and in the Summary of Terms, we are pleased to confirm that we are highly
confident that the consent of the Required Banks to the Amendment and
Restatement will be obtained.
In connection with the Senior Bank Financing, CSFB shall act as the sole
administrative agent, BTCo shall act as sole syndication agent and SBHC shall
act as sole documentation agent, in each case on terms satisfactory to BTCo,
CSFB, SBHC, MTL and you. The Arrangers shall manage all aspects of the
syndication of the Incremental Senior Bank Financing and, in connection
therewith, reserve the right, prior to or after execution of the Amendment and
Restatement, to syndicate all or a part of the Incremental Senior Bank Financing
to one or more financial institutions (together with the Arrangers and the
Banks, the "Lenders") approved by MTL (which approval shall not be unreasonably
withheld or delayed) that will become parties to the Amendment and Restatement
pursuant to such syndication. You agree actively to assist the Arrangers in
achieving a syndication that is satisfactory to the Arrangers, MTL and you.
Such syndication will be accomplished by a variety of means, including direct
contact during the syndication between senior management and advisors of MTL and
CLC (including, without limitation, Apollo) and the proposed Lenders. To assist
the Arrangers in their syndication efforts, you hereby agree both before and
after the Incremental Term Loan Borrowing Date (i) to provide and cause your
advisors to provide the Arrangers and the other Lenders upon request with all
reasonable information deemed necessary by us to complete syndication, including
but not limited to, information and evaluation prepared by you, MTL and CLC and
your and their respective advisors and (ii) to assist the Arrangers upon request
in the preparation of an Information Memorandum to be used in connection with
the syndication of the Incremental Senior Bank Financing, including making
available officers of MTL, MTL Newco, CLC and their respective subsidiaries from
time to time to attend and make presentations regarding the business and
prospects of MTL, MTL Newco, CLC and their respective subsidiaries, as
appropriate, at a meeting or meetings of Lenders or prospective Lenders.
-3-
Each of BTCo's and CSFB's commitment to provide a portion of the
Incremental Senior Bank Financing is expressly subject to (a) there not having
occurred since December 31, 1997 any material adverse change in the business,
properties, assets, operations, liabilities, condition (financial or otherwise)
or prospects of MTL and its subsidiaries taken as a whole, both before and after
giving effect to the Transaction, (b) there not having occurred since April 5,
1998 any material adverse change in the business, properties, assets,
operations, liabilities, condition (financial or otherwise) or prospects of CLC
and its subsidiaries taken as a whole, both before and after giving effect to
the Transaction and (c) the absence of any material adverse change after the
date hereof in the market for syndicated facilities similar in nature to the
Incremental Senior Bank Financing and the absence of any material disruption of
or a material adverse change in financial, banking or capital markets generally,
in each case as determined by BTCo and CSFB in their reasonable discretion.
To induce the Arrangers to issue this letter, you hereby agree that all
reasonable fees and expenses (including the reasonable fees and expenses of
counsel and consultants) of the Arrangers and their respective affiliates
arising in connection with the preparation, execution and delivery of this
letter, the Amendment and Restatement and the Incremental Senior Bank Financing
(and our due diligence and syndication efforts in connection therewith) and in
connection with the transactions described herein (the "Transaction Expenses")
shall be for your account in the event that the Merger and/or the Refinancing
are consummated; provided, however, that in the event you or any of your
-------- -------
affiliates receives any termination fee or expense reimbursement payable as a
result of the termination of the definitive agreements relating to the Merger,
you shall reimburse from the aggregate amount of such termination fee and
expense reimbursement so received the Arrangers' and their respective
affiliates' Transaction Expenses on a pro rata basis with all others (including
you and your affiliates) claiming expenses in connection with the transactions
described herein. You further agree, whether or not the Merger or the
Refinancing is consummated, the Incremental Senior Bank Financing is made
available or the Amendment and Restatement is executed, to indemnify and hold
harmless each Arranger, its affiliates and each director, officer, employee,
agent and representative thereof (each, an "indemnified person") from and
against any and all actions, suits, proceedings (including any investigations or
inquiries), claims, losses, damages, liabilities or expenses of any kind or
nature whatsoever (other than the Transaction Expenses, which shall be payable
as provided in the first sentence of this paragraph (and the proviso thereto))
which may be incurred by or asserted against or involve such Arranger, such
affiliate or any such indemnified person as a result of or arising out of or in
any way related to or resulting from the Transaction (or any element thereof),
this letter or the extension of the Incremental Senior Bank Financing
contemplated by this letter, or in any way arising from any use or intended use
of this letter or the proceeds of any of the Incremental Senior Bank Financing
contemplated by this letter and, upon demand, to pay and reimburse each
Arranger, each such affiliate and each indemnified person for any reasonable
legal or other out-of-pocket expenses incurred in connection with investigating,
defending or preparing to defend any such action, suit, proceeding (including
any inquiry or investigation) or claim (whether or not such Arranger, such
affiliate or any such indemnified person is a party to any action, suit or
proceeding out of which any such expenses arise and whether or not any such
action, suit or proceeding is between you and a Arranger or an indemnified
person or between a Arranger or an indemnified person and a third party or
otherwise); provided, however, that you shall not have to indemnify any
-------- -------
Arranger,
-4-
any of its affiliates or any indemnified person against any loss, claim, damage,
expense or liability which resulted primarily from the gross negligence or
willful misconduct of such Arranger, such affiliate or such indemnified person.
This letter is issued for your benefit only and no other person or entity may
rely thereon. Neither any Arranger, any of its affiliates nor any other Lender
shall be responsible or liable to you or any other person for any consequential
damages which may be alleged as a result of this letter or any failure to
provide the Incremental Senior Bank Financing.
Each Arranger reserves the right to employ the services of its affiliates
(including, without limitation, in the case of BTCo, BT Alex. Xxxxx Incorporated
("BTAB"), and, in the case of CSFB, Credit Suisse First Boston Corporation
("CSFBC")) in providing the services contemplated by this letter and to
allocate, in whole or in part, to such affiliates certain fees payable to the
Arrangers in such manner as the Arrangers and such affiliates may agree in their
sole discretion. You acknowledge that the Arrangers may share with any of their
respective affiliates (including BTAB and CSFBC), and such affiliates may share
with the Arrangers, any information relating to MTL, MTL Newco, CLC and their
respective affiliates and subsidiaries (including, without limitation, any non-
public customer information regarding the creditworthiness of such entities),
the Transaction, subject to the Arrangers' customary treatment of customer
confidential information. You also acknowledge that the Arrangers and/or any of
their respective affiliates may be providing other services and/or other
financing to you in connection with the Transaction and that this letter relates
only to the Senior Bank Financing, with all such other services and financing to
be agreed upon pursuant to other documentation.
You are not authorized to show or circulate this letter or any portion
thereof to any other person or entity (other than Apollo, CLC and your and their
legal and financial advisors in connection with your and their evaluation
hereof) until such time as you have accepted this letter as provided in the
penultimate paragraph hereof. In any event, neither you nor any of your
affiliates is authorized to disclose the terms of the related fee letter (the
"Fee Letter") without our prior written consent, unless (and then only to the
extent) required by law. If this letter is not accepted by you as provided in
the penultimate paragraph hereof, you are to immediately return this letter (and
any copies hereof) to the undersigned.
Except as otherwise expressly set forth herein, the provisions of the three
preceding paragraphs shall survive any termination of this letter.
Each of the Arrangers shall have the right to review and approve all public
announcements and filings relating to the Transaction which refer to BTCo, CSFB
or the other Lenders before they are made (such approval not to be unreasonably
withheld or delayed).
The willingness of each of BTCo and CSFB to provide their respective
commitments as set forth above will terminate on October 31, 1998, unless
definitive documentation evidencing the Incremental Senior Bank Financing,
satisfactory in form and substance to BTCo and CSFB, shall have been entered
into prior to such date and the Incremental Term Loan Borrowing Date shall have
occurred.
If you are in agreement with the foregoing, please sign and return to BTCo
and CSFB the enclosed copy of this letter, together with an executed copy of the
Fee Letter. This offer shall
-5-
terminate at 5:00 P.M., New York time, on July 22, 1998 unless a signed copy of
this letter, together with a signed copy of the Fee Letter, has been delivered
to BTCo and CSFB (including by way of facsimile transmission) by such time.
-6-
This letter may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
shall be an original, but all of which, when taken together, shall constitute
one agreement. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
GOVERNING CONFLICTS OF LAWS, AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS LETTER
IS HEREBY WAIVED. YOU HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION
WITH ANY DISPUTE RELATED TO THIS LETTER OR ANY MATTERS CONTEMPLATED HEREBY. This
letter and the Fee Letter represent the entire understanding of the parties with
respect to the matters addressed herein and may only be amended in writing.
Very truly yours,
BANKERS TRUST COMPANY
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Name: XXXXX X. XXXXX
CREDIT SUISSE FIRST BOSTON
By:_____________________________
Title:
By:_____________________________
Name:
Title:
Agreed to and Accepted this
_________ day of _________, 1998
MTL, INC.
By:_____________________
Title:
-7-
This letter may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
shall be an original, but all of which, when taken together, shall constitute
one agreement. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
GOVERNING CONFLICTS OF LAWS, AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS LETTER
IS HEREBY WAIVED. YOU HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION
WITH ANY DISPUTE RELATED TO THIS LETTER OR ANY MATTERS CONTEMPLATED HEREBY. This
letter and the Fee Letter represent the entire understanding of the parties with
respect to the matters addressed herein and may only be amended in writing.
Very truly yours,
BANKERS TRUST COMPANY
By:_______________________________
Name:
CREDIT SUISSE FIRST BOSTON
By: [SIGNATURE ILLEGIBLE]
-------------------------------
Title: Director
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: XXXXXXXXXXX X. XXXXXXXXXX
Title: Director
Agreed to and Accepted this
_________ day of _________, 1998
MTL, INC.
By:_____________________
Title:
-7-
This letter may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
shall be an original, but all of which, when taken together, shall constitute
one agreement. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
GOVERNING CONFLICTS OF LAWS, AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS LETTER
IS HEREBY WAIVED. YOU HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION
WITH ANY DISPUTE RELATED TO THIS LETTER OR ANY MATTERS CONTEMPLATED HEREBY. This
letter and the Fee Letter represent the entire understanding of the parties with
respect to the matters addressed herein and may only be amended in writing.
Very truly yours,
BANKERS TRUST COMPANY
By:__________________________________
Name:
CREDIT SUISSE FIRST BOSTON
By:__________________________________
Title:
By:__________________________________
Name:
Title:
Agreed to and Accepted this
20/th/ day of July, 1998
MTL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Title: SVP CPO
-7-
EXHIBIT A
---------
SUMMARY OF CERTAIN TERMS
AND CONDITIONS/1/
----------------------
1. Description of the Incremental Senior Bank Financing
----------------------------------------------------
A. Incremental Incremental term loan facility in an aggregate principal
A Term Loan amount of $50.0 million (the "Incremental A Term Loan
Facility: Facility").
Maturity: The Incremental A Term Loan Facility will mature on the
Final Maturity Date (as defined in the Credit
Agreement).
Amortizations: Annual amortization of the loans under the Incremental
A Term Loan Facility (the "Incremental A Term Loans",
with the Term Loans outstanding under the Credit
Agreement being herein called the "Existing A Term
Loans", and the Incremental A Term Loans and the
Existing A Term Loans being herein collectively called
the "A Term Loans") shall be required on a basis
consistent with the amortization currently provided for
the Existing A Term Loans under the Credit Agreement.
Use of Proceeds: Incremental A Term Loans shall be utilized by the U.S.
Borrower to finance the Merger and the Refinancing and
to pay fees and expenses incurred in connection with the
Transaction.
Availability: Incremental A Term Loans may only be incurred by the
U.S. Borrower on the date of the consummation of the
Merger (the "Incremental Term Loan Borrowing Date"). No
amount of Incremental A Term Loans once repaid may be
reborrowed.
B. B Term Loan Term loan facility in an aggregate principal amount of
Facility: $95.0 million (the "B Term Loan Facility").
Maturity: The B Term Loan Facility will mature on the date (the "B
Term Loan Facility Maturity Date") occurring seven years
after the initial Borrowing Date (as defined in the
Credit Agreement).
Amortizations: Annual amortization (payable in four equal quarterly
installments or, in the case payments pursuant to clause
(y) or (z) below, two quarterly installments) of the
loans under the B Term Loan Facility (the "B Term
Loans") shall be required (x) for each annual period
prior to the sixth anniversary of the Initial Borrowing
Date, in an amount equal to 1% of the initial aggregate
principal amount of the B Term Loan Facility, (y) for
the one-half year period commencing on the sixth
anniversary of the Initial Borrowing Date and ending on
the date occurring six
-----------------------
/1/ All capitalized terms used herein but not defined herein shall have
the meanings provided in the Commitment Letter attached hereto (the
"Commitment Letter").
and one-half years after the Initial Borrowing Date, in an
amount equal to 1% of the initial aggregate principal amount
of the B Term Loan Facility and (z) for the one-half year
period commencing on the date occurring six and one-half
years after the Initial Borrowing Date and ending on the B
Term Loan Facility Maturity Date, in an amount equal to all
then remaining principal of the B Term Loans.
Use of Proceeds: B Term Loans shall only be utilized by the U.S. Borrower to
finance the Merger and the Refinancing and to pay fees and
expenses incurred in connection with the Transaction.
Availability: B Term Loans may only be incurred by the U.S. Borrower on
the Incremental Term Loan Borrowing Date. No amount of B
Term Loans once repaid may be reborrowed.
C. C Term Loan Term Loan Facility in an aggregate principal amount of $90.0
Facility: million (the "C Term Loan Facility").
Maturity: The C Term Loan Facility will mature on the date (the "C
Term Loan Facility Maturity Date") occurring seven and one-
half years after the Initial Borrowing Date.
Amortizations: Annual amortization (payable in four equal quarterly
installments or, in the case of the C Term Stub Period
referred to below, two quarterly installments) of the loans
under the C Term Loan Facility (the "C Term Loans" and,
together with the Incremental A Term Loans and the B Term
Loans, the "Incremental Term Loans" with the Incremental
Term Loans, the Existing A Term Loans and the Revolving
Loans (as defined in the Credit Agreement) being herein
called the "Loans") shall be required (x) for each annual
period prior to the seventh anniversary of the Initial
Borrowing Date, in an amount equal to 1% of the initial
aggregate principal amount of the C Term Loan Facility and
(y) for the one-half year period commencing on the seventh
anniversary of the Initial Borrowing Date and ending on the
C Term Loan Facility Maturity Date (the "C Term Stub
Period"), in an amount equal to all then remaining principal
of the C Term Loans.
Use of Proceeds: C Term Loans shall only be utilized by the U.S. Borrower to
finance the Merger and the Refinancing and to pay fees and
expenses incurred in connection with the Transaction.
Availability: C Term Loans may only be incurred by the U.S. Borrower on
the Incremental Term Loan Borrowing Date. No amount of C
Term Loans once repaid may be reborrowed.
-2-
II. Certain Terms Applicable to the Incremental Senior Bank Financing and
---------------------------------------------------------------------
the Senior Bank Financing.
--------------------------
U.S. Borrower: MTL, Inc.
Arrangers: CSFB and BTCo.
Administrative Agent CSFB.
and Collateral Agent:
Syndication Agent: BTCo.
Documentation Agent: SBHC.
Lenders: The Arrangers and a syndicate of lenders (including the
Banks) formed by the Arrangers (collectively, the
"Lenders") and approved by the U.S. Borrower (which
approval shall not be unreasonably withheld or
delayed).
Guaranties: The U.S. Borrower (except with respect to amounts owing
by it under the Senior Bank Financing as a direct
obligor) and each direct and indirect wholly-owned
domestic subsidiary of the U.S. Borrower (including,
without limitation, CLC and each wholly-owned domestic
subsidiary of CLC acquired in connection with the
Merger) shall be required to provide an unconditional
guaranty of all amounts owing under the Senior Bank
Financing (collectively, the "U.S. Guaranties", with
each entity required to provide a Guaranty being herein
called a "U.S. Guarantor"). Without limiting the
foregoing, the Incremental Senior Bank Financing shall
be required to be guaranteed equally and ratably with
the Dollar Loans (as defined in the Credit Agreement)
which are part of the Senior Bank Financing.
The U.S. Guaranties shall contain terms and
conditions reasonably satisfactory to the Arrangers.
Security: The obligations of the U.S. Borrower and the U.S.
Guarantors shall be secured by (x) a first priority
perfected pledge of all capital stock and notes owned
by the U.S. Borrower and its subsidiaries, provided
--------
that no more than 65% of the voting stock of foreign
subsidiaries of the U.S. Borrower and the U.S.
Guarantors shall be required to be pledged to secure
the obligations of the U.S. Borrower under the Senior
Bank Financing unless such pledge may be effected
without giving rise to a "deemed dividend" tax
liability under applicable law or any other material
adverse tax consequence and (y) a first priority
perfected security interest in all other tangible and
intangible assets (including, without limitation,
receivables, contracts, contract rights, securities,
intellectual property, inventory, equipment and real
estate) of the U.S. Borrower and each U.S. Guarantor,
subject to customary exceptions for transactions of
this type. Without limiting the foregoing, the
Incremental Senior Bank Financing shall be
-3-
required to be secured equally and ratably with the Dollar
Loans which are part of the Senior Bank Financing.
All documentation evidencing the security required pursuant
to the immediately preceding paragraph shall be in form and
substance satisfactory to the Arrangers, and shall
effectively create first priority security interests in the
property purported to be covered thereby.
Interest Rates: At the option of the U.S. Borrower, the Loans (including the
Incremental Term Loans) may be maintained from time to time
as (x) Base Rate Loans which shall bear interest at the
Applicable Margin in excess of the Base Rate in effect from
time to time or (y) Reserve Adjusted Eurodollar Loans which
shall bear interest at the Applicable Margin in excess of
the Eurodollar Rate (adjusted for maximum reserves) as
determined by the Administrative Agent for the respective
interest period, provided that until the earlier to occur of
--------
(x) the 90th day following the Incremental Term Loan
Borrowing Date (or, if later, the last day of the third
interest period described below) and (y) that date upon
which the Arrangers have determined (and notify the U.S.
Borrower) that the primary syndication of the Incremental
Senior Bank Financing (and the resultant addition of
institutions as Lenders) has been completed, Incremental
Term Loans maintained as Reserve Adjusted Eurodollar Loans
may only be incurred with three successive one-month
interest periods (and all Reserve Adjusted Eurodollar Loans
at any time outstanding during a period described above in
this proviso shall at all times have the same interest
period), with the first such interest period beginning
within five Business Days of the Incremental Term Loan
Borrowing Date, the second such interest period beginning on
the last day of the first interest period and the third
interest period beginning on the last day of the second
interest period.
"Base Rate" shall mean the higher of (x) 1/2 of 1% in excess
of the Federal Funds Rate and (y) the rate that the
Administrative Agent announces from time to time as its
prime lending rate, as in effect from time to time.
"Applicable Margin" shall mean initially the percentage per
annum equal to (i) in the case of A Term Loans and Revolving
Loans maintained as (x) Reserve Adjusted Eurodollar Loans,
2.000% and (y) Base Rate Loans, 1.000%, (ii) in the case of
B Term Loans maintained as (x) Reserve Adjusted Eurodollar
Loans, 2.250% and (y) Base Rate Loans, 1.250% and (iii) in
the case of C Term Loans maintained as (x) Reserve Adjusted
Eurodollar Loans, 2.500% and (y) Base Rate Loans, 1.500%;
provided that (i) the Applicable Margin in respect of the
--------
Loans will be subject to quarterly adjustments to
percentages to be determined (based upon the achievement of
certain financial ratios), with the first test date for any
downward adjustment to be in respect of the financial
statements delivered for the first fiscal quarter ending
after the six month anniversary of the Incremental Term Loan
Borrowing Date (based on the financial performance for the
four quarter period most recently ended), (ii) the
Applicable Margins set forth above (without giving effect to
any downward adjustment pursuant to clause (i) of this
proviso) shall apply at any time a
-4-
default or event of default exists under the Senior Bank
Financing and (iii) in no event will the Applicable Margin
applicable to Revolving Loans and Existing A Term Loans
under the Amendment and Restatement be less than the
Applicable Margin applicable to such loans under the Credit
Agreement (prior to giving effect to the Amendment and
Restatement).
Interest periods of 1, 2, 3, 6 or, to the extent available
to each Lender with loans and/or commitments under the
Senior Bank Financing, 9 or 12 months, shall be available in
the case of Reserve Adjusted Eurodollar Loans.
The Senior Bank Financing shall include customary protective
provisions for such matters as defaulting banks, capital
adequacy, increased costs, actual reserves, funding losses,
illegality and withholding taxes.
Interest in respect of Base Rate Loans shall be payable
quarterly in arrears on the last business day of each fiscal
quarter. Interest in respect of Reserve Adjusted Eurodollar
Loans shall be payable in arrears at the end of the
applicable interest period and every three months in the
case of interest periods in excess of three months. Interest
will also be payable at the time of repayment of any Loans
and at maturity. All calculations of interest on Loans and
commitment fees shall be based on a 360-day year and actual
days elapse.
Default Interest: Overdue principal, interest and other amounts shall bear
interest at a rate per annum equal to the greater of (i) the
rate which is 2% in excess of the rate otherwise applicable
to Base Rate Loans from time to time and (ii) the rate
which is 2% in excess of the rate then borne by such
borrowings. Such interest shall be payable on demand.
Voluntary Voluntary prepayments of Incremental Term Loans shall be
Prepayments/ permitted on substantially the same basis as currently
Commitment provided for Existing A Term Loans in the Credit Agreement.
Reductions: In addition, all voluntary prepayments of (x) A Term Loans,
B Term Loans and C Term Loans shall be applied pro rata to
--- ----
reduce the then remaining scheduled installments of the
respective facilities and (y) A Term Loans, B Term Loans and
C Term Loans shall be allocated among such facilities on a
pro rata basis.
--- ----
Mandatory Mandatory repayments of Incremental Term Loans shall be
Repayments/ required on substantially the same basis as currently
Commitment provided for Existing A Term Loans in the Credit Agreement,
Reductions: with appropriate modifications thereto as shall be agreed.
All mandatory repayments of (x) A Term Loans, B Term Loans
and C Term Loans will be applied pro rata to reduce future
--- ----
scheduled amortization payments in respect of the respective
facilities and (y) A Term Loans, B Term Loans and C Term
Loans shall be applied on a pro rata basis among such
--- ----
facilities. In addition, (i) the Total Revolving Loan
Commitment under the Credit Agreement shall be required to
be permanently reduced to $75.0 million on the Incremental
Term Loan Borrowing Date and (ii) mandatory reductions to
the commitments under the C Term Loan Facility shall be
required on the Incremental Term Loan Borrowing Date in an
amount equal to the aggregate
-5-
principal amount of the outstanding CLC Senior Notes after
giving effect to the Refinancing.
Commitment The commitments under the Commitment Letter shall terminate
Termination: on October 31, 1998 unless definitive Credit Documents (as
defined below) have been executed and delivered and the
Incremental Term Loan Borrowing Date has occurred prior to
such date.
Additional The Arrangers and the other Lenders shall receive such fees
Fees: as have been separately agreed upon.
Documentation: The Lenders' commitments will be subject to the negotiation,
execution and delivery of the Amendment and Restatement (and
related security documentation, guaranties, etc.)
(collectively, the "Credit Documents") reasonably consistent
with the terms of the Commitment Letter and this Summary of
Terms and otherwise in form and substance satisfactory to
the Arrangers, in each case prepared by White & Case,
counsel to the Arrangers. It is understood and agreed that
all such documentation shall be in substantially the same
form as, and (except as described herein) shall contain
substantially the same terms and provisions (including,
without limitation, representations and warranties,
covenants and events of default) as are contained in the
Credit Agreement and the Credit Documents (as defined in the
Credit Agreement), with such additions or modifications as
are described in this Term Sheet or as BTCo or CSFB
determines are necessary or desirable for transactions of
this type.
Conditions On substantially the same basis as contained in the Credit
Precedent: Agreement, with such modifications thereto as are typical
for this type of facility and any other conditions
appropriate in the context of the Transaction. Without
limiting the foregoing, the following conditions shall apply
to the effectiveness of the Amendment and Restatement, the
occurrence of the Incremental Term Loan Borrowing Date and
the borrowings under the Incremental Senior Bank Financing
to occur on such date:
(i) The structure and all terms of, and the documentation
for, the Transaction shall be reasonably satisfactory
to the Arrangers and the Required Lenders (including,
without limitation, the maturity, limitation on cash
dividends payable, dividend rate and redemption
provisions of any PIK Preferred Stock). The Agreement
and Plan of Merger (the "Merger Agreement"), dated as
of June 23, 1998, between CLC, Palestra Acquisition
Corp. and certain shareholders of CLC, shall be in the
form furnished to the Arrangers prior to the date of
the Commitment Letter, with such amendments,
modifications and waivers thereto (and the schedules
thereto) as shall be consented to by each Arranger.
All conditions in the documentation governing the
Transaction (including the accuracy of all
representations and warranties in all material
respects) shall have been satisfied to the reasonable
satisfaction of the Arrangers and not waived,
-6-
except with the consent of each Arranger. The
Transaction shall have been consummated in accordance
with the documentation therefor and all applicable law.
After giving effect to the Transaction, MTL and its
subsidiaries shall have no outstanding indebtedness or
preferred stock other than pursuant to the Financing
Transactions, the Senior Subordinated Notes, the CLC
Senior Notes (to the extent not tendered pursuant to
the CLC Tender Offer/Consent Solicitation), the CLC
Preferred Stock with an aggregate stated amount not to
exceed $4.5 million and certain other indebtedness of
MTL, CLC and their respective subsidiaries acceptable
to the Arrangers existing on the Incremental Term Loan
Borrowing Date in an aggregate outstanding amount not
to exceed an amount to be mutually agreed upon.
(ii) CLC shall have commenced the CLC Tender Offer/Consent
Solicitation and the CLC Senior Notes Indenture
Amendment shall have been entered into on or prior to
the Incremental Term Loan Borrowing Date. The CLC
Tender Offer/Consent Solicitation and the CLC Senior
Notes Indenture Amendment (and all terms and conditions
thereof) shall be in form and substance satisfactory to
BTCo and CSFB and the period for tendering CLC Senior
Notes pursuant to the CLC Tender Offer/Consent
Solicitation shall have terminated. A majority of the
holders of outstanding CLC Senior Notes shall have
tendered such CLC Senior Notes pursuant to the CLC
Tender Offer/Consent Solicitation and the tender offer
pursuant thereto shall have been consummated on or
prior to the Incremental Term Loan Borrowing Date.
(iii) MTL shall have used the aggregate amount received from
the CLC Equity Financing (x) to make payments owing in
connection with the Merger and the Refinancing and (y)
to pay fees in connection with the Financing
Transactions, in each case before utilizing any
proceeds of Loans for any such purpose.
(iv) Since December 31, 1997, there shall have been no
material adverse change in the business, property,
assets, operations, liabilities, condition (financial
or otherwise) or prospects of MTL and its subsidiaries
taken as a whole, both before and after giving effect
to the Transaction, and since April 5, 1998, there
shall have been no material adverse change in the
business, property, assets, operations, liabilities,
condition (financial or otherwise) or prospects of CLC
and its subsidiaries taken as a whole, both before and
after giving effect to the Transaction.
(v) All Incremental Term Loans and other financing to the
U.S. Borrower and the Canadian Borrower shall be in
full compliance with all requirements of Regulations G,
T, U and X of the Board of Governors of the Federal
Reserve System.
-7-
(vi) The Lenders shall have received such opinions and other
appropriate factual information and expert advice as
follows: (i) legal opinions from counsel, in form and
substance and covering matters, acceptable to the
Arrangers and the Required Lenders and (ii) a solvency
certificate from the chief financial officer of MTL with
respect to MTL and its subsidiaries (on a consolidated
basis), MTL (on a stand-alone basis), and the Canadian
Borrower (on a stand-alone basis), after giving effect to
the consummation of the Transaction and the financing
therefor, reasonably acceptable to the Arrangers and the
Required Lenders.
(vii) Each of the U.S. Guaranties shall have been executed and
delivered. The security agreements required as described
under the heading "Security" above shall have been
executed and delivered in form, scope and substance
reasonably satisfactory to the Arrangers, and the Lenders
shall have a first priority perfected security interest in
all assets as are required above.
(viii) There shall have been no material adverse change after the
date hereof to the syndication market for credit
facilities similar in nature to the Incremental Senior
Bank Financing contemplated herein and there shall not
have occurred and be continuing a material disruption of
or material adverse change in financial, banking or
capital markets that would have a material adverse effect
on the syndication, in each case as determined by the
Arrangers in their reasonable discretion.
(ix) All costs, fees, expenses (including, without limitation,
legal fees and expenses) and other compensation
contemplated hereby or any letter executed in connection
herewith and payable to the Lenders or the Arrangers (or
their respective affiliates) shall have been paid to the
extent due.
(x) Absence of material adverse change, absence of material
litigation, absence of default or unmatured default under
the Senior Bank Financing, continued accuracy of
representations and warranties in all material respects
and receipt of such documentation as shall be required by
the Arrangers.
(xi) The Total Revolving Loan Commitment under the Credit
Agreement shall have been permanently reduced to $75.0
million and the U.S. Borrower and/or the Canadian Borrower
shall have repaid outstanding Dollar Revolving Loans or
Canadian Dollar Revolving Loans, as the case may be, to
the extent required by the Credit Agreement as a result of
such reduction.
(xii) The Required Banks shall have entered into the Amendment
and Restatement, thereby consenting to the Amendment and
Restatement
-8-
and the extension of the Incremental Senior Bank
Financing on the terms set forth herein.
Covenants: Substantially similar to those contained in the Credit
Agreement, with such modifications deemed necessary or
desirable by the Arrangers in the context of the
proposed transaction, including, without limitation,
restrictions on (x) dividends payable on PIK Preferred
Stock, (y) voluntary prepayments of the Senior
Subordinated Notes, the CLC Senior Notes (to the extent
any remain outstanding after giving effect to the
Refinancing) and other indebtedness and (z) amendments
of the Merger Agreement, the Senior Subordinated Notes,
the outstanding CLC Senior Notes (if any), any PIK
Preferred Stock and the CLC Preferred Stock.
Representations and Substantially identical to those contained in the
Warranties; Events of Credit Agreement, with such modifications deemed
Default: necessary or desirable by the Arrangers in the
context of the Transaction.
Assignments and Permitted by any Lender on substantially the same basis
Participations: as contained in the Credit Agreement, with appropriate
modifications thereto as are deemed necessary or
desirable by the Arrangers.
Governing Law: The rights and obligations of the parties under the
Credit Documents shall be construed in accordance with
and governed by the law of the State of New York.
Required Lenders: Majority.
-9-
EXHIBIT 2.1(B)
TERMS OF NEW PREFERRED STOCK
----------------------------
--------------------------------------------------------------------------------
ISSUER MTL Inc.
--------------------------------------------------------------------------------
STATED VALUE $5,000,000. The stated value of the outstanding shares
of New Preferred Stock (including Initial PIK Shares
but excluding all other PIK Shares) will be reduced by
$1 for each $1 of Purchaser Losses; provided that the
--------
aggregate amount of such reduction will not exceed the
sum of (i) $2.5 million, plus (ii) the stated value of
all Initial PIK Shares. The stated value will be
further reduced by the stated value of all shares of
New Preferred Stock that reduced the L/C Cap pursuant
to clause (iii) of the definition of Preferred Stock
Adjustment Amount. Any setoff against Purchaser Losses
set forth above will reduce that L/C Cap.
Any setoff or reduction of PIK Shares issued will
result in an immediate, automatic and irrevocable loss
of any PIK shares issued as a dividend on such setoff
or reduced stock. The parties agree that the
Shareholders shall receive no credit for such loss
because the intention is that the Shareholders would
not have been entitled to receive such shares in any
event. To effectuate the foregoing, the parties further
agree that, at any time, the stated value of all PIK
Shares other than Initial PIK Shares will equal (i) the
aggregate stated value of all such PIK Shares
multiplied by (ii) a fraction, the numerator of which
is the aggregate amount following any such reduction of
the stated value of the Initial PIK Shares pursuant to
the preceding paragraph and the denominator of which is
the aggregate stated value of all Initial PIK Shares
(without giving effect to any reductions to the stated
value thereof).
--------------------------------------------------------------------------------
DIVIDENDS 8% per annum, payable annually in arrears and payable
in kind at Issuer's option for three years from
issuance date. Dividends will be payable on the stated
value on the applicable payment date of all outstanding
shares of New Preferred Stock (including all shares
issued at the Effective Time in connection with the
Merger and all PIK Shares previously issued).
Dividends on shares of common stock will not be paid
unless all accrued dividends on New Preferred Stock
have been paid.
--------------------------------------------------------------------------------
MATURITY Ninth anniversary from the Closing Date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPTIONAL REDEMPTION Redeemable any time at Issuer's option at the following
prices (plus accrued and unpaid dividends):
Premium to
Date Stated Value
---- ------------
Closing Date to 42nd Month 100%
Beg. of 43rd month to end of 54th month 105%
Beg. of 55th month to end of 66th month 110%
Beg. of 67th month to end of 78th month 115%
Thereafter 120%
--------------------------------------------------------------------------------
CHANGE OF CONTROL Upon sale of Issuer to a non-affiliated third party or
other change of control to a non-affiliated third
party, shares of New Preferred Stock would be
mandatorily redeemable for the redemption value set
forth above.
--------------------------------------------------------------------------------
IPO Up to 50% of net proceeds of primary offering to be
used to redeem shares of New Preferred Stock for the
redemption value set forth above.
--------------------------------------------------------------------------------
LIQUIDATION PREFERENCE Upon liquidation, shares of New Preferred Stock would
be senior to common stock and would be entitled to
receive the redemption value set forth above.
--------------------------------------------------------------------------------
EXCHANGEABILITY Shares of New Preferred Stock can be exchanged at the
Issuer's option for Junior Subordinated Debt of the
Issuer, which shall be subject to the same rights of
offset and adjustment. The Junior Subordinated Debt
will contain substantially similar terms and conditions
as the terms and conditions of the New Preferred Stock,
including terms and conditions relating to dividends,
maturity, optional redemption, change of control, IPO,
liquidation preference and voting rights.
--------------------------------------------------------------------------------
VOTING RIGHTS Holders of shares of New Preferred Stock will be
entitled to a separate class vote for any amendment to
the Certificate of Designations in respect of the New
Preferred Stock to the extent that such amendment
adversely affects the holders of the New Preferred
Stock.
--------------------------------------------------------------------------------
Exhibit 2.4
AMENDMENT NO. 2 dated as of August 25, 1998
(this "Amendment") to the AGREEMENT AND PLAN OF
---------
MERGER dated as of June 23, 1998, by and among
PALESTRA ACQUISITION CORP., a Delaware
corporation ("Purchaser"), CHEMICAL XXXXXX
---------
CORPORATION, a Pennsylvania corporation (the
"Company"), and THE SHAREHOLDERS OF THE COMPANY
--------
NAMED ON SCHEDULE I ATTACHED TO THE ORIGINAL
----------
AGREEMENT (each, a "Shareholder", and
-----------
collectively, the "Shareholders"), as amended by
------------
Amendment No. 1 dated July 27, 1998 (as so
amended, the "Original Agreement" and, as amended
------------------
by this Amendment, this "Agreement"). Capitalized
---------
terms used but not defined herein shall have the
meanings ascribed to them in the Original
Agreement.
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving this Amendment and the transactions to which the Company is a party
contemplated hereby, and has agreed, upon the terms and subject to the
conditions set forth herein, to recommend that the Company's shareholders
approve this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
benefits to be derived from this Amendment and the representations, warranties,
covenants, agreements and conditions hereinafter set forth, the parties hereto
hereby agree as follows:
ARTICLE I
AMENDMENTS
1.1 LETTERS OF TRANSMITTAL.
--- ----------------------
(a) Section 2.2(b) of the Original Agreement is hereby amended by
deleting "(together with a letter of transmittal signed by such holder in
substantially the form of EXHIBIT A attached hereto)" and "and such letter of
---------
transmittal" therefrom.
(b) EXHIBIT D to the Original Agreement is hereby deleted in its
---------
entirety.
1.2 CONDITIONS.
--- ----------
(a) Purchaser acknowledges and agrees that the conditions set forth in
Section 7.3(p) is hereby deemed waived or satisfied and any further compliance
thereunder is hereby waived.
(b) Section 7.3(l) of the Original Agreement is hereby deleted in its
entirety and replaced with the following: Subject to Section 6.14, the Company
shall have filed a General Information Notice (GIN) with the NJDEP with respect
to the Real Property located in New Jersey."
1.3 INDEMNIFICATION.
--- ---------------
(a) Section 8.4(e)(i) of the Original Agreement is hereby amended by
deleting the following therefrom: "rate of interest on the notes sold by the
Surviving Corporation or its Affiliates in connection with the consummation of
the transactions contemplated by this Agreement" and replacing it with "10%."
(b) Section 8.6(b) of the Original Agreement is hereby amended by
deleting the following therefrom: "the sum of (i) $8,250,000 (the "Cap"), plus
--- ----
(ii) an amount equal to the Indemnity Cap Adjustment Amount (as adjusted, the
"Adjusted Cap")" and replacing it with the following "the sum of (i) $10,750,000
-------------
(the "Cap"), plus (ii) the stated value of all shares of New Preferred Stock
--- ----
issued at the Effective Time in connection with the Merger (the "Closing Date
------------
Shares"), plus (iii) the stated value of all shares of New Preferred Stock
------ ----
issued as a payment-in-kind dividend ("PIK Shares") that are issued or are
----------
required to be issued pursuant to the terms of the New Preferred Stock as a
payment-in-kind dividend on Closing Date Shares (the "Initial PIK Shares") (the
------------------
sum of (i), (ii) and (iii), the "Adjusted Cap")."
------------
(c) Section 8.7 of the Original Agreement is hereby amended by (i)
deleting the words "L/C Cap" and replacing it with the words "Cap" each time
"L/C Cap" appears therein and (ii) deleting the last sentence thereof in its
entirety and adding the following:
"With respect to any Purchaser Losses (including, without
limitation, payments referred to in Section 8.4) arising out of
conditions identified on Schedule 7.3(p)(2), the Purchaser shall only
------------------
draw upon the Qualified Letter of Credit and shall not reduce the
stated value of the outstanding shares of New Preferred Stock. With
respect to any payments referred to in Section 8.4 only (other than
those Purchaser Losses arising out of conditions identified on
Schedule 7.3(p)(2)), the Purchaser shall be entitled, in its sole
------------------
discretion, to either draw against the Qualified Letter of Credit or
reduce the stated value of the outstanding shares of New Preferred
Stock. In such event, Purchaser may make an election to draw against
the Qualified Letter of Credit by delivering a written notice to such
effect to the Shareholders' Representative. In the absence of such
notice, the Purchaser will be deemed to have elected to reduce the
stated value of the outstanding shares of New Preferred Stock.
Notwithstanding anything to the contrary contained in this Agreement,
Xxxxx X. Xxxxxxxx and Xxxxxx XxXxxxxx shall be entitled to deliver the
Qualified Letters of Credit after the Effective Time. If the Purchaser
does not receive the Qualified Letters of Credit at the Effective
Time, it shall reduce the Cash Merger Consideration to be paid to each
Shareholder by the product of (x) such Shareholders Common Equity
2
Percentage and (y) the amount of the Cap (the "Holdback Amount"). The
---------------
aggregate Holdback Amount shall be deposited by the Purchaser in a
segregated interest-bearing bank account and shall secure, in part,
the Shareholders' obligations pursuant to Article VIII. Purchaser
shall be entitled to withdraw amounts from such segregated bank
account to the same extent that it would have been entitled to draw
upon the Qualified Letters of Credit. Promptly after receipt of the
Qualified Letters of Credit, the Purchaser shall pay the Holdback
Amount to the Shareholders (together with interest earned thereon),
subject to any reductions pursuant to the immediately preceding
sentence.
Without limiting the foregoing, Xx. Xxxxxxxx and Xx. XxXxxxxx
agree to use their best efforts to obtain the Qualified Letters of
Credit within ninety days immediately following the Closing Date."
(d) Annex I to the Original Agreement is hereby amended by deleting
the definitions of "Indemnity Cap Adjustment Amount" and "Preferred Stock
Adjustment Amount" therefrom.
1.4 SETOFFS.
--- -------
Section 8.8 of the Original Agreement is hereby deleted in its entirety and
replaced with the following: "Except as expressly contemplated by this Agreement
or the terms of the New Preferred Stock, sums due under this Article VIII shall
------------
not be set off against or subject to set-off by, other sums due to and from the
parties hereto."
1.5 NEW PREFERRED.
--- -------------
Exhibit 2.1(b) to the Original Agreement is hereby amended by deleting
the first paragraph in the second column of the row entitled "Stated Value" and
replacing it with the following:
"$5,000,000. The stated value of the outstanding shares of New
Preferred Stock (including Initial PIK Shares but excluding all other
PIK Shares) will be reduced by $1 for each $1 of Purchaser Losses
(including, without limitation, payments referred to in Section 8.4)
in respect of which the Purchaser does not elect (if applicable) to
draw against the Qualified Letter of Credit in accordance with and as
limited by Section 8.7 of the Agreement.
In the event that any Person sells, transfers or otherwise
disposes of shares of New Preferred Stock to any Person (including the
Company) in accordance with the terms thereof, such Person shall
deposit simultaneously with such sale, transfer or other disposition
the then applicable Escrow Amount with an escrow agent selected by the
Company (the "Escrow Agent"). The Escrow Amount shall be held by the
------------
Escrow Agent pursuant to an escrow agreement that is satisfactory to
the Purchaser and the Shareholders' Representative. The Escrow Agent
shall pay to the Purchaser Indemnified Person such amounts and at such
times
3
as the stated value of the sold, transferred or disposed of shares of
New Preferred Stock would have been reduced pursuant to the terms
thereof (together with interest earned thereon). The remaining Escrow
Amount shall be released to such Person upon resolution of the matters
referred to in Section 8.4 and payment of amounts due thereunder. For
purposes hereof, "Escrow Amount" shall mean the Stated Value of all
-------------
shares of New Preferred Stock that are being sold, transferred or
otherwise disposed of."
1.6 D&O INSURANCE.
--- -------------
The Original Agreement is hereby amended by adding a new Section 6.18,
which shall read in its entirety as follows:
"6.18 D&O Insurance. Purchaser acknowledges that prior to the
-------------
Effective Time, the Company may obtain and pay for an insurance policy
pursuant to which the officers and directors of the Company and its
Subsidiaries shall have, for a period of six years following the Effective
Time, fully-paid and non-cancelable directors and officers insurance
relating to events occurring prior to the Closing Date. The parties agree
that the fees and expenses incurred or to be incurred in connection with
such insurance policy, including any premiums related thereto, shall
constitute Transaction Expenses. Purchaser agrees (a) not to cancel or
otherwise amend or modify the terms of such insurance and (b) to reasonably
cooperate with the Shareholders Representative, the Company issuing and
underwriting such insurance policy and the broker relating thereto as
necessary or appropriate from time to time in connection with such
insurance and/or claims thereunder (it being understood that after the
Effective Time, none of the Purchaser, the Company or any of their
respective Affiliates shall have any obligation to incur any expenses in
connection with any such cooperation). Nothing contained in this Section
6.18 shall limit or eliminate any existing indemnity obligation that the
Company currently has to its directors and officers under any
indemnification or employment agreement, under the Company's Articles of
Incorporation or By-laws (in each case, as disclosed to Purchaser pursuant
to this Agreement) each as in effect on the date hereof) or under
applicable law."
1.7 ARTICLES OF INCORPORATION.
--- -------------------------
(a) EXHIBIT A and EXHIBIT B to the Original Agreement are hereby
--------- ---------
deleted in their entirety and replaced with EXHIBIT A and EXHIBIT B hereto,
--------- ---------
respectively.
(b) Section 1.4 of the Original Agreement is hereby amended by
deleting "and restated in their entirety to read as set forth in EXHIBIT C
---------
hereto" and replacing it with the following: "as set forth in the exhibit to
the Delaware Certificate of Merger."
(c) EXHIBIT C to the Original Agreement is hereby deleted in its
---------
entirety.
4
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 AGREEMENT.
--- ---------
Except as modified by this Amendment, the Original Agreement shall remain
in full force and effect, enforceable in accordance with its terms.
2.2 COUNTERPARTS.
--- ------------
This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
2.3 GOVERNING LAW.
--- -------------
THIS AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL
LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF
THIS AMENDMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF
LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY
RELATED DOCUMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH PARTY HERETO HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF OR HIMSELF AND IN RESPECT OF ITS OR HIS PROPERTY AND ASSETS,
GENERALLY AND UNCONDITIONALLY THE JURISDICTION OF THE AFORESAID COURTS.
* * *
5
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
THE PURCHASER:
PALESTRA ACQUISITION CORP.
By: /s/ Xxxxxxx X. X'Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. X'Xxxxx, Xx.
Title:
THE COMPANY:
CHEMICAL XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President &
Secretary
XXXXX X. XXXXXXXX
XXXXXXXXX X. XXXXXXXX
XXXXXXXXX XXXXXXXXX XXXXXXXX
TENNESSEE ALEXIS XXXXXXXX
XXXXXXXX FAMILY TRUST
XXXXXX X. XXXXXXXX
XXXXXX XXXXXXXX
XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXXXXX X.
XXXXXXXX, DECEASED, F/B/O XXXX,
XXXX AND XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX
DECEASED, F/B/O XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXX XXXXXXXXX
XXXXXXXX
XXXXXX XXXXXX
TRUSTEES F/B/O XXXXXXXXX CUTTING
XXXXXXXX
XXXXXX X. XXXXXXXXX
XXXXX X. XXXXXXX
XXXXXX X. XXXXX
XXXXXX X. XXXXXXXXX
XXXX X. XXXXX
J. XXXXXXX XXXXXXXX
XXXX X. XXXXXX
XXXXXX X. XXXXXXXX
X.X. XXXXX-XXXXXX
G. XXXXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX
By: /s/ Xxxxxx XxXxxxxx
---------------------------------
Xxxxxx XxXxxxxx
Attorney-in-Fact
XXXXX X. XXXXXXXX
XXXXXXXXX X. XXXXXXXX
XXXXXXXXX XXXXXXXXX XXXXXXXX
TENNESSEE ALEXIS XXXXXXXX
XXXXXXXX FAMILY TRUST
XXXXXX X. XXXXXXXX
XXXXXX XXXXXXXX
XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXXXXX X.
XXXXXXXX, DECEASED, F/B/O XXXX,
XXXX AND XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXXXX XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX
DECEASED, F/B/O XXXX X. XXXXXXXX
TRUSTEES U/W/O XXXXXX XXXXXXXX,
DECEASED, F/B/O XXXX XXXXXXXXX
XXXXXXXX
XXXXXX XXXXXX
TRUSTEES F/B/O XXXXXXXXX CUTTING
XXXXXXXX
XXXXXX X. XXXXXXXXX
XXXXX X. XXXXXXX
XXXXXX X. XXXXX
XXXXXX X. XXXXXXXXX
XXXX X. XXXXX
J. XXXXXXX XXXXXXXX
XXXX X. XXXXXX
XXXXXX X. XXXXXXXX
X.X. XXXXX-XXXXXX
G. XXXXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx
Attorney-in-Fact
CERTIFICATE OF MERGER
OF
PALESTRA ACQUISITION CORP.
INTO
CHEMICAL XXXXXX CORPORATION
Pursuant to Section 252 of the
Delaware General Corporation Law
The undersigned corporation organized and existing under and by
virtue of the General Corporation Law of Delaware.
DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
NAME State of Incorporation
---- ----------------------
PALESTRA ACQUISITION Delaware
CORP.
CHEMICAL XXXXXX Pennsylvania
CORPORATION
SECOND: That an Agreement and Plan of Merger between the parties to
the merger has been approved, adopted, certified, executed and acknowledged by
each of the constituent corporations in accordance with the requirements of
Section 252 of the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the merger is
Chemical Xxxxxx Corporation.
FOURTH: That the existing Articles of Incorporation of the surviving
corporation shall be amended as set forth in Exhibit A attached hereto.
---------
FIFTH: That the executed Agreement and Plan of Merger is on file at
the principal place of business of the surviving corporation, the address of
which is 000 Xxxxxxxxx Xxx, Xxxxx, XX 00000-0000.
SIXTH: That a copy of the Agreement and Plan of Merger will be
furnished by the surviving corporation, on request and without cost, to any
stockholder of any constituent corporation.
SEVENTH: That the surviving corporation may be served with process in
the State of Delaware in any proceeding for enforcement of any obligation of the
constituent corporation of this State, as well as for enforcement of any
obligation of the surviving corporation arising from the merger, including any
suit or other proceeding to enforce the right of any stockholders as determined
in appraisal proceedings pursuant to the provisions of Section 262 of the
General Corporation Law of the State of Delaware, and irrevocably appoints the
Secretary of State of the State of Delaware as its agent to accept service of
process in any such suit or proceedings. The address to which a copy of such
process shall be mailed by the Delaware Secretary of State is 000 Xxxxxxxxx Xxx,
Xxxxx, XX 00000-0000.
EIGHTH: That this Certificate of Merger shall be effective upon its
filing with the Secretary of State of Delaware.
* * * * * * * * * *
Dated: August __, 1998
CHEMICAL XXXXXX CORPORATION
By:______________________
Name:
Title:
(CHANGES) BUREAU USE ONLY:
DOCKETING STATEMENT DSCB: 15-134B (Rev 95) ___ REVENUE ____ LABOUR & INDUSTRY
___ OTHER ________________________
FILING FEE: NONE FILE CODE ________________________
FILED DATE _______________________
This form (file in triplicate) and all accompanying documents shall be mailed
to:
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
X.X.XXX 0000
XXXXXXXXXX, XX 00000-0000
Part I. COMPLETE FOR EACH FILING:
Current name of entity or registrant affected by the submittal to
which this statement relates: (survivor or new entity if merger or
consolidation)
Chemical Xxxxxx Corporation
----------------------------------------------------------------------------------------------------------------------
Entity number, if known: 647190 NOTE: ENTITY NUMBER is the computer index number assigned to an entity upon initial
------
filing in the Department of State.
Incorporation/qualification date in Pa.: Xxxxx 0, 0000 Xxxxx of Incorporation: Pennsylvania
------------- ------------
Federal Identification Number: ___________________________________________________________
Specified effective date, if any: Upon filing
----------------------------------------------------------
Part II. COMPLETE FOR EACH FILING This statement is being submitted with (check proper box):
_____ AMENDMENT: complete Section A only
x MERGER, CONSOLIDATION OR DIVISION: complete Section B, C or D
-----
_____ CONSOLIDATION: complete Section C
_____ DIVISION: complete Section D
_____ CONVERSION: complete Section A and E only
_____ STATEMENT OF CORRECTION: complete Section A only
_____ STATEMENT OF TERMINATION: complete Section H
_____ STATEMENT OF REVIVAL: complete Section G
_____ DISSOLUTION BY SHAREHOLDERS OR INCORPORATORS BEFORE COMMENCEMENT OF BUSINESS: complete Section F only
PART III. COMPLETE IF APPROPRIATE: The delayed effective date of the accompanying submittal is:
___________________________________________________________________
month day year hour, if any
DSCB: 15-134B (Rev 95)-2
_____ Section A. CHANGES TO BE MADE TO THE ENTITY NAMED IN PART I: (Check box/boxes which pertain)
______ Name: ____________________________________________________________________________________________________
______ Registered Office: _______________________________________________________________________________________
Xxxxxx & xxxxxx/XX xxxxxx & xxx xxxxxx Xxxx Xxxxx Xxx Xxxxxx
______ Purpose: _________________________________________________________________________________________________
______ Stock: aggregate number of shares authorized ______________________ (attach additional provisions, if any)
______ Term of Existence: _______________________________________________________________________________________
______ Other: ___________________________________________________________________________________________________
X SECTION B. MERGER (Complete Section A if any changes to surviving entity):
----
MERGING ENTITIES ARE: (List ONLY the MERGING ENTITIES-SURVIVOR IS LISTED IN PART 1)
1. Name: Chemical Xxxxxx Corporation
--------------------------------------------------------------------------------------------------------
Entity Number, if known: 647190 Inc./quali. date in Pa.: 3/2/77 State of Incorporation: PA
--------------- --------------- -----
2. Name: Palestra Acquisition Corp.
--------------------------------------------------------------------------------------------------------
Entity Number, if known: _______________ Inc./quali. date in Pa.:_____________ State of Incorporation: DE
-------
Attach sheet containing above corporate information if there are any additional merging entities.
____ SECTION C. CONSOLIDATION (NEW entity information should be completed in Part 1. Also, complete and attach
DOCKETING STATEMENT DSCB:15-134A for the NEW entity formed.)
CONSOLIDATING ENTITIES ARE:
1. Name: ________________________________________________________________________________________________________
Entity Number, if known: _______________ Inc./quali. date in Pa.: _____________ State of Incorporation: ______
2. Name: ________________________________________________________________________________________________________
Entity Number, if known: _______________ Inc./quali. date in Pa.: _____________ State of Incorporation: ______
Attach sheet containing above corporate information if there additional consolidating entities.
_______ SECTION D. DIVISION (Forming NEW entity(s) named below. Also, complete
and attach DOCKETING STATEMENT DSCB:15-134A For EACH new
entity formed by division.)
_____________ 1. ______________________________________________________
Entity Number Name
_____________ 1. ______________________________________________________
Entity Number Name
Attach sheet if there are additional entities to be named:
CHECK ONE:
______ Entity named in Part I survives. (Any changes, complete Section
A)
______ Entity named in Part I does not survive.
_______ SECTION E. CONVERSION (Complete Section A)
CHECK ONE:
______ Converted from nonprofit to profit
______ Converted from profit to nonprofit
_______ SECTION F. DISSOLVED BY SHAREHOLDERS OR INCORPORATORS BEFORE
COMMMENCEMENT OF BUSINESS
_______ SECTION G. STATEMENT OF REVIVAL Entity named in Part I hereby revives
its charter or articles which were
forfeited by Proclamation or expired.
(Complete Section A if any changes
have been made to the revived
entity.)
_______ SECTION H. STATEMENT OF TERMINATION
_____________________ filed in the Department of State on
(type of filing made)
___________________________________ is/are hereby terminated.
month day year hour, if any
If merger, consolidation or division, list all entities involved, other
than that listed in Part I:
_____________ 1. ______________________________________________________
Entity Number Name
_____________ 2. ______________________________________________________
Entity Number Name
Attach sheet containing above information if there are additional
entities involved.
Microfilm Number________ Filed with the Department of State on___________
Entity Number_____________
Secretary of the Commonwealth
ARTICLES OF MERGER-DOMESTIC BUSINESS CORPORATION
DSCB: 15-1926(Rev 90)
In compliance with the requirements of 15 Pa.C.S.(S) 1926 (relating to
articles of merger or consolidation), the undersigned business corporations,
desiring to effect a merger, hereby state that:
1. The name of the corporation surviving the merger is: Chemical Xxxxxx
---------------
Corporation
-----------
2. (CHECK AND COMPLETE ONE OF THE FOLLOWING):
X The surviving corporation is a domestic business corporation and the
---
(a) ADDRESS of its current registered office in this Commonwealth or
(b) NAME of its commercial registered office provider and the county
of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
(a)_________________________________________________________________________
Number and Street City State Zip County
(b) c/o: CT Corporation System, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 Philadelphia
-----------------------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
_______ The surviving corporation is a qualified foreign business corporation
incorporated under the laws of _______________ and the (a) ADDRESS of its
current registered office in this Commonwealth or (b) NAME of its commercial
registered office provider and the county of venue is (the Department is hereby
authorized to correct the following information to conform to the records of the
Department):
(a)___________________________________________________________________
Number and Street City State Zip County
(b) c/o:______________________________________________________________
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located
for venue and official publication purposes.
______ The surviving corporation is a nonqualified foreign business corporation
incorporated under the laws of __________ and the address of its principal
office under the laws of such domiciliary jurisdiction is:
______________________________________________________________________
Number and Street City State Zip
3. The NAME and the ADDRESS of the registered office in this Commonwealth or
NAME of its commercial registered office provider and the county of venue
of each other domestic business corporation and qualified foreign business
corporation which is a party to the plan of merger are as follows:
NAME OF CORPORATION ADDRESS OF REGISTERED OFFICE OR NAME OF COMMERCIAL REGISTERED OFFICE PROVIDER COUNTY
C.T.Corporation System 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 Philadelphia
------------------------------------------------------------------------------------------------------------------------
________________________________________________________________________________________________________________________
4. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
X The plan of merger shall be effective upon filing these Articles of
----
Merger in the Department of State.
The plan of merger shall be effective on:__________________ at______________
----
Date Hour
5. The manner in which the plan of merger was adopted by each domestic corporation is as follows:
NAME OF CORPORATION MANNER OF ADOPTION
Chemical Xxxxxx Corporation Adopted by the directors pursuant to 15 Pa. C.C.(S) 1924(a)
-----------------------------------------------------------------------------------------------
Palestra Acquisition Corp. Adopted by the directors pursuant to 15 Pa. C.C.(S) 1924(a)
-----------------------------------------------------------------------------------------------
6. (STRIKE OUT THIS PARAGRAPH IF NO FOREIGN CORPORATION IS A PARTY TO THE
MERGER). The plan was authorized, adopted or approved, as the case may be,
by the foreign business corporation (or each of the foreign business
corporations) party to the plan in accordance with the laws of the
jurisdiction in which it is incorporated.
7. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
The plan of merger is set forth in full in Exhibit A attached hereto
and made a part hereof.
----
X Pursuant to 15 Pa.C.S.(S) 1901 (relating to omission of certain
----
provisions, if any, of the plan of merger that amend or constitute
the operative Articles of Incorporation of the surviving corporation
as in effect subsequent to the effective date of the plan are set
forth in full in Exhibit A attached hereto and made a part hereof.
The full text of the plan of merger is on file at the principal place of
business of the surviving corporation, the address of which is:
000 Xxxxxxxxx Xxx Xxxxx Xxxxxxxxxxxx 00000-0000
------------------------------------------------------------------------------------------------------------------
Number and street City State Zip County
IN TESTIMONY WHEREOF, the undersigned corporation or each undersigned
corporation has caused these Articles of Merger to be signed by a duly
authorized officer thereof this________ day of __________, 19_____.
Chemical Xxxxxx Corporation Palestra Acquisition Corp.
--------------------------- -------------------------------
(Name of Corporation) (Name of Corporation)
BY:________________________ BY:____________________________
(Signature) (Signature)
TITLE:_____________________ TITLE:_________________________
EXHIBIT A
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
________________
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
CHEMICAL XXXXXX CORPORATION
________________
In compliance with the Business Corporation Law of 1988 and pursuant
to authorizing resolutions of the board of directors, the articles of
incorporation of Chemical Xxxxxx Corporation are hereby amended as follows:
A. The first paragraph of Section 5 of the Articles of Incorporation
is hereby deleted and replaced with the following:
"5. The aggregate number of shares which the Corporation shall have
authority to issue is Eleven Thousand (11,000) shares, of which One
Thousand (1,000) shares shall be shares of Preferred Stock without par
value, and Ten Thousand (10,000) shares shall be shares of Common Stock
with a par value of $0.01 per share. Nothing contained herein shall amend
or modify in any way the Statements With Respect to Shares relating to the
Corporation's outstanding shares of Preferred Stock or adversely affect in
any way the terms thereof."
B. The Articles of Incorporation are hereby amended by adding the
following new Paragraphs 8, 9 and 10 thereto:
"8. A director of the corporation shall not be personally liable to
the corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, or (iii) for any transaction from which the director derived
any improper personal benefit. If the Business Corporation Law is amended after
the date of incorporation of the corporation to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Business Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or modification.
9. For the management of the business and for the conduct of the affairs
of the corporation, and in further definition, limitation and regulation of the
powers of the corporation and of its directors and shareholders, it is further
provided:
(a) In furtherance and not in limitation of the powers conferred by the
laws of the Commonwealth of Pennsylvania, the Board of Directors is expressly
authorized and empowered:
(i) to make, alter, amend or repeal the By-laws in any manner not
inconsistent with the laws of the Commonwealth of Pennsylvania or these Articles
of Incorporation;
(ii) without the assent or vote of the shareholders, to authorize
and issue securities and obligations of the corporation, secured or unsecured,
and to include therein such provisions as to redemption, conversion or other
terms thereof as the Board of Directors in its sole discretion may determine,
and to authorize the mortgaging or pledging, as security therefor, of any
property of the corporation, real or personal, including after-acquired
property;
(iii) to determine whether any, and if any, what part, of the net
profits of the corporation or of its surplus shall be declared in dividends and
paid to the shareholders, and to direct and determine the use and disposition of
any such net profits or such surplus; and
(iv) to fix from time to time the amount of net profits of the
corporation or of its surplus to be reserved as working capital or for any other
lawful purpose.
In addition to the powers and authorities herein or by statute expressly
conferred upon it, the Board of Directors may exercise all such powers and do
all such acts and things as may be exercised or done by the corporation,
subject, nevertheless, to the provisions of the laws of the Commonwealth of
Pennsylvania, of these Articles of Incorporation and of the By-laws of the
corporation.
(b) Any director or any officer elected or appointed by the shareholders
or by the Board of Directors may be removed at any time in such manner as shall
be provided in the By-laws of the corporation.
-2-
(c) From time to time any of the provisions of these Articles of
Incorporation may be altered, amended, or repealed, and other provisions
authorized by the laws of the Commonwealth of Pennsylvania at the time in force
may be added or inserted, in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the shareholders of the corporation by
these Articles of Incorporation are granted subject to the provisions of this
paragraph (c).
10. Whenever a compromise or arrangement is proposed between the
corporation and its creditors or any class of them and/or between the
corporation and its shareholders or any class of them, any court of equitable
jurisdiction within the Commonwealth of Pennsylvania may, on the application in
a summary way of the corporation or of any creditor or shareholder thereof or on
the application of any receiver or receivers appointed for the corporation or on
the application of trustees in dissolution, order a meeting of the creditors or
class of creditors, and/or of the shareholders or class of shareholders of the
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the shareholders or class of
shareholders of the corporation, as the case may be, agree on any compromise or
arrangement and to any reorganization of the corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the shareholders or class of shareholders, of the corporation, as the case
may be, and also on the corporation."
-3-
