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