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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
BLISS & LAUGHLIN INDUSTRIES INC.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
093546109
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(CUSIP Number)
Robert B. McKeon
BRW Steel Corporation
c/o Veritas Capital, Inc.
Ten East Fiftieth Street
New York, NY 10022
Telephone: (212) 688-0020
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
With Copies to:
Robert A. Profusek
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
October 4, 1995
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(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 this statement / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
The information required in 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).
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SCHEDULE 13D
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CUSIP NO. 093546109 PAGE 2 OF 11 PAGES
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<S> <C> <C>
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NAME OF REPORTING PERSON BRW Steel Corporation
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) /X/(1)
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SEC USE ONLY
3
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SOURCE OF FUNDS* OO
4
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
6
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SOLE VOTING POWER N/A
7
NUMBER OF SHARES -----------------------------------------------------------------------------------------------------------
BENEFICIALLY OWNED SHARED VOTING POWER 774,059
BY 8
EACH -----------------------------------------------------------------------------------------------------------
REPORTING PERSON SOLE DISPOSITIVE POWER N/A
WITH 9
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SHARED DISPOSITIVE POWER 774,059
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 774,059
11
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 19.5%
13
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TYPE OF REPORTING PERSON CO
14
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
(Continued on following page.)
(1)BRW disclaims it is a "group" with the Management Stockholders (as
defined below). BRW Steel Corporation ("BRW"), B&L Acquisition Corporation
("BRW Sub") and the Management Stockholders executed a Stock Option Agreement
Page 2 of 11 Pages
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dated as of September 16, 1995 and amended by Amendment No. 1 dated as of
October 4, 1995 which provides, among other things, that the Management
Stockholders will vote their Shares in favor of a merger (the "Merger") of Bliss
& Laughlin Industries Inc. (the "Issuer") with BRW Sub pursuant to that certain
Amended Agreement and Plan of Merger (the "Merger Agreement") dated as of
October 4, 1995 executed among BRW, BRW Sub and the Issuer. The Management
Stockholders are: Gregory H. Parker, Roger G. Fein, as Trustee of the Gregory H.
Parker Irrevocable Family Trust under Trust Agreement dated October 31, 1988; F.
Elizabeth Parker; Anthony Romanovich, Barbara Romanovich; George W. Fleck; Joan
E. Fleck; Gerald E. Brady; Carole A. Brady; Michael A. DeBias; William P.
Daugherty Trust dated May 11, 1989, William P. Daugherty, Trustee; Ellen L.
Daugherty Trust dated May 11, 1989, Ellen J. Daugherty, Trustee; Chester J.
Pucilowski; Geraldine Pucilowski; Richard M. Bogdon; Phyllis Bogdon; Carl H.
Laib; and Richard W. Ressler. The Schedule 13D filed by the Management
Stockholders on or about September 26, 1995 and the subsequent Amendment No. 1
thereto relating to the Issuer's Common Stock are incorporated in their entirety
herein by reference.
Page 3 of 11 Pages
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SCHEDULE 13D
<TABLE>
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CUSIP NO. 093546109 PAGE 4 OF 11 PAGES
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<S> <C> <C>
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NAME OF REPORTING PERSON B & L Acquisition Corporation
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b)/X/(2)
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SEC USE ONLY
3
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SOURCE OF FUNDS* OO
4
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
6
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SOLE VOTING POWER N/A
7
NUMBER OF SHARES -----------------------------------------------------------------------------------------------------------
BENEFICIALLY OWNED SHARED VOTING POWER 774,059
BY 8
EACH -----------------------------------------------------------------------------------------------------------
REPORTING PERSON SOLE DISPOSITIVE POWER N/A
WITH 9
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SHARED DISPOSITIVE POWER 774,059
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 774,059
11
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 19.5%
13
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TYPE OF REPORTING PERSON CO
14
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
(Continued on following page.)
(2)BRW Sub disclaims it is a "group" with the Management Stockholders.
Pursuant to the Stock Option Agreement, the Management Stockholders have agreed
to vote all of the shares of the Issuer's common stock owned by such
Page 4 of 11 Pages
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Management Stockholder in favor of the Merger. The Schedule 13D filed by the
Management Stockholders on or about September 26, 1995 and the subsequent
Amendment No. 1 thereto are incorporated in their entirety herein by reference.
Page 5 of 11 Pages
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This Amendment No. 1 to Schedule 13D (this "Amendment") on Bliss & Laughlin
Industries Inc., a Delaware corporation (the "Company"), is being filed on
behalf of BRW Steel Corporation, a Delaware corporation ("BRW") and B & L
Acquisition Corporation, a Delaware corporation ("BRW Sub") (BRW and BRW Sub
being hereinafter referred to collectively as the "Reporting Persons") to amend
the Schedule 13D (the "Schedule 13D") originally filed by the Reporting Persons
on September 28, 1995. Unless otherwise indicated, all capitalized terms used
herein shall have the meanings set forth in the Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 3 to the Schedule 13D is amended in its entirety to read as follows:
The Reporting Persons and the Management Stockholders executed Amendment
No. 1 dated as of October 4, 1995 to the Stock Option Agreement dated as of
September 16, 1995 among the Reporting Persons and the Management Stockholders
(collectively, the "Amended Stock Option Agreement"). The Amended Stock Option
Agreement provides BRW Sub with the right to acquire 774,059 shares (the
"Shares") of Common Stock from the Management Stockholders at a price per share
of $9.50 or such higher price as may be paid in a tender offer (the "Tender
Offer") to close the merger of BRW Sub with and into the Issuer (the "Merger").
The Reporting Persons and the Issuer entered into an Amended Agreement and Plan
of Merger dated as of October 4, 1995 (the "Amended Merger Agreement") which
supersedes the Agreement and Plan of Merger dated as of September 16, 1995 by
and among the Reporting Persons and the Issuer. The Amended Merger Agreement
provides that BRW Sub will merge with and into the Issuer and, upon the Merger,
each share of Common Stock will represent the right to receive $9.50 net or such
higher price as may be paid in the Tender Offer to close the Merger.
The amount of funds necessary to consummate the Merger under the Amended
Merger Agreement will be approximately $38 million (assuming BRW Sub has not
previously exercised the Option, in which case the additional funds necessary to
consummate the Merger would be approximately $31 million). BRW intends to use
the best available means for financing both the exercise of the Stock Option
Agreement and the consummation of the Merger, including a private placement of
debt securities or other available financing.
ITEM 4. PURPOSE OF TRANSACTION
Item 4 to the Schedule 13D is amended in its entirety to read as follows:
The purpose of obtaining the right to acquire the Shares pursuant to the
Amended Stock Option Agreement, a copy of which is attached hereto as Exhibit
99(A), is to facilitate BRW's acquisition of control of the Issuer. The terms
of the Amended Stock Option Agreement are discussed more fully in Item 6 below.
Concurrently with executing the Amended Stock Option Agreement, BRW Sub and the
Management Stockholders entered into Amendment No. 1 to the Stockholder Escrow
Agreements dated as of September 19, 1995 among BRW Sub, the Management
Stockholders and LaSalle National Trust, N.A. as Escrow Agent, based upon acts
or omissions occurring prior to October 4, 1995 (the "Stockholder Escrow
Agreements"). Amendment No. 1 to the Stockholder Escrow Agreements is attached
hereto as Exhibit 99(C). The Reporting Persons and the Issuer entered into the
Amended Merger Agreement, a copy of which is attached hereto as Exhibit 99(B)
and the terms of which are hereby incorporated by reference, when they executed
Amendment No. 1 to the Stock Option Agreement. In addition, the Reporting
Persons entered into with the Management Stockholders Amendment No. 1 to the
Amended Stock Option Agreement dated as of October 18, 1995, which is attached
hereto as Exhibit 99(D), and entered into with the Issuer Amendment No. 1 to the
Amended Merger Agreement dated as of October 18, 1995, which is attached hereto
as Exhibit 99(E). These amendments were executed in order to change the
deadline by which the Merger must be completed from January 15, 1996 to
January 31, 1996.
Upon consummation of the Merger under the Amended Merger Agreement, each
issued and outstanding share of the Issuer will be converted into the right to
receive $9.50 net in cash or such higher price as may be paid in the Tender
Offer to close the Merger, and shares held by BRW and BRW Sub and all unissued
shares will be canceled. Shares of BRW Sub will be converted into shares in the
Issuer.
Page 6 of 11 Pages
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The Issuer is obligated to engage in a proxy solicitation and hold a
special shareholder meeting to obtain shareholder approval for the Merger.
Under the terms of the Merger, the Issuer shall not engage in activities aimed
at encouraging the submission of offers relating to the acquisition of the
equity interest in the Issuer.
Until the Merger is consummated, the Issuer's business will continue to
operate in the usual course of business. During that time period, the Issuer is
prohibited from issuing shares, splitting up, combining with another entity,
entering any agreements to lend or borrow money, and disposing of or acquiring
any material properties or assets, except in the ordinary course of business.
BRW Sub has agreed that for one year following the Merger if it: (i) sells
or exchanges all or substantially all of the stock in the Issuer: (ii) mergers
or consolidates the Issuer; or (iii) sells substantially all the assets of the
Issuer, BRW Sub will pay 50% of the profit from such transaction to each
stockholder whose shares were converted.
The Amended Merger Agreement does not require BRW to raise $50,000,000 in
debt financing by December 29, 1995 as a condition to consummation of the
Merger. The Issuer still must have received an independent evaluation of the
expected solvency of BRW and BRW Sub after the consummation of the Merger.
The Amended Merger Agreement may be terminated by mutual written consent.
It may be unilaterally terminated by BRW if: (i) the Issuer publicly withdraws
its approval of the Merger, (ii) a third party becomes the beneficial owner of
forty-five percent or more of the Issuer's shares; (iii) except for the pending
lawsuit No. 95 C 5426 in the U.S. District Court for the Northern District of
Illinois, Stelco, Inc. takes any legal action that would prevent the Merger from
taking place before January 31, 1996; (iv) a tender or exchange offer is
commenced by a third party to acquire twenty percent of the stock in the Issuer
at a price of more than $9.50 per share; (v) the Issuer breaches the Amended
Merger Agreement; (vi) the results of BRW's environmental due diligence review
of the Company are unsatisfactory; or (vii) the conditions to BRW's obligations
are not satisfied. The Amended Merger Agreement may be unilaterally terminated
by the Issuer if (a) the Merger is not consummated by January 31, 1996; (b) the
Issuer receives a more favorable offer (pursuant to the conditions described
below); (c) the conditions to the Issuer's obligations have not been satisfied
by January 31, 1996; or (d) BRW breaches the Amended Merger Agreement. The
Amended Merger Agreement may be terminated by either party (i) if a court or
governmental agency shall have issued an order or ruling, or otherwise acted to
restrain, enjoin or prohibit the Merger; or (ii) if Stelco Inc. exercises all
of its rights of first refusal under the Bliss & Laughlin Right of First Refusal
and Standstill Agreement dated May 11, 1990 (the "First Refusal Agreement").
The Amended Merger Agreement permits the Issuer to terminate the Amended
Merger Agreement unilaterally if (I) (a) a Qualified Bidder (as hereinafter
defined) makes a bona fide offer on or before November 3, 1995, (b) the Issuer's
Board of Directors determines in its good faith judgment and in the exercise of
its fiduciary duties that such offer is more favorable to the Issuer's
stockholders than the Merger, and (c) the Company gives BRW at least five
calendar days prior written notice of its intent to terminate the Amended Merger
Agreement or (II) the Company does not receive from its financial advisor an
opinion as to the fairness of the transaction from a financial point of view. A
"Qualified Bidder" is a person or entity (i) whose offer is only subject to
ordinary and customary conditions for consummation and is not subject to any
condition as to financing and (ii) who submits its offer in writing no later
than November 3, 1995. The Issuer's right to terminate the Amended Merger
Agreement upon receipt of a more favorable offer is conditioned upon the payment
to BRW of the cancellation fee. In addition, such termination right will cease
with respect to such other offer if, within the 5-day notice period, BRW
notifies the Issuer that it will match, in all material respects, the terms and
conditions of such other offer.
If the Issuer terminates the Amended Merger Agreement because either (i) a
Qualified Bidder makes an offer more favorable to the Issuer's stockholders than
the Merger, or (ii) the non-receipt of the fairness opinion from its investment
advisor, or BRW terminates the Amended Merger Agreement because either (y)
action by Stelco Inc. has the effect of preventing the Merger or (z) a third
party commences a tender or exchange offer to acquire twenty percent or more of
the Issuer's stock at a price greater than $9.50 per share, the Issuer must pay
BRW, as liquidated damages, a cash cancellation fee of $3,000,000 plus
reimbursement for all out-of-pocket expenses and fees incurred by BRW up to
$400,000. If the Issuer terminates the Amended Merger Agreement because of the
failure of BRW to consummate the Merger by January 31, 1996 and all other
Page 7 of 11 Pages
<PAGE>
conditions to the Merger are satisfied, then BRW must pay the Issuer as
liquidated damages the sum of $2,000,000, unless BRW has previously terminated
the Amended Merger Agreement pursuant to the procedures specified above.
The Amended Merger Agreement requires the Reporting Parties to execute an
instrument releasing the Management Stockholders from any claims or causes of
action arising from any breach or alleged breach of the Amended Merger
Agreement, the Stock Option Agreement and the Stockholder Escrow Agreements.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 to the Schedule 13D is amended in its entirety to read as follows:
The Reporting Persons and the Management Stockholders executed the Amended
Stock Option Agreement dated as of October 4, 1995, a copy of which is attached
hereto as Exhibit 99(A) and the terms of which are incorporated herein by
reference. Concurrently with executing the Amended Stock Option Agreement, BRW
Sub and the Management Stockholders entered into Amendment No. 1 to the
Stockholder Escrow Agreements. Amendment No. 1 to the Stockholder Escrow
Agreements is attached hereto as Exhibit 99(C). The Reporting Persons and the
Issuer entered into the Amended Merger Agreement, a copy of which is attached
hereto as Exhibit 99(B) and the terms of which are hereby incorporated by
reference, when they executed the Amended Stock Option Agreement. The terms of
the Amended Merger Agreement are discussed more fully in Item 4 above. In
addition, the Reporting Persons entered into Amendment No. 1 to the Amended
Stock Option Agreement dated as of October 18, 1995 with the Management
Stockholders, which is attached hereto as Exhibit 99(D), and entered into
Amendment No. 1 to the Amended Merger Agreement dated as of October 18, 1995
with the Issuer, which is attached hereto as Exhibit 99(E). These amendments
were executed in order to change the deadline by which the Merger must occur
from January 15, 1996 to January 31, 1996.
Pursuant to the Amended Stock Option Agreement, the Management Stockholders
have granted BRW Sub the right to purchase 774,059 shares of Common stock at a
price per share of $9.50 or higher. In addition, BRW Sub may exercise the Stock
Option at any time prior to January 31, 1996 or termination of the Merger
Agreement due to a material breach by BRW Sub. If a Management Stockholder
sells the shares covered by the Stock Option Agreement before October 4, 1996,
50% of the proceeds in excess of $7.75 per share must be paid to BRW Sub.
Notwithstanding anything in the Stock Option Agreement to the contrary, the
Stock Option may not be exercised and no Stockholder may transfer his shares
unless all Shares of all Stockholders are purchased and acquired.
If BRW Sub sells the Shares on or before the first anniversary date of the
Stock Option Agreement, 50% of the net sales proceeds reserved by BRW Sub must
be paid to Management Stockholders, pro rata in accordance with share holdings.
Each Management Stockholder has agreed to use his best efforts to prevent
the Issuer from taking additional action including issuing additional stock,
except pursuant to existing option plans or arrangements, issuing any additional
debt or selling any assets. Furthermore, each Management Stockholder has agreed
to vote his Shares in favor of the Merger, not vote his Shares in favor of any
action or agreement which would result in a material breach of the Amended
Merger Agreement, and vote his Shares against any action or agreement which
would impede the Merger. Each Management Stockholder will use his best efforts
to cause restrictions on transfer and rights of first refusal under the First
Refusal Agreement to terminate and to permit the sale to BRW Sub of his
Stockholder's Shares under the Stock Option Agreement.
BRW has guaranteed each and every obligation of BRW Sub under the Merger
Agreement.
Stelco Inc. has certain rights of first refusal under the First Refusal
Agreement with respect to the Shares. If Stelco Inc. exercises such rights of
first refusal, the Management Stockholders have agreed to pay BRW Sub a cash
cancellation fee equal to the product of (i) the sum of $1,250,000 plus expenses
of up to $250,000 and (ii) a fraction, the numerator of which is the number of
Shares and the denominator of which is 774,059.
Page 8 of 11 Pages
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The Amended Stock Option requires the Reporting Parties to execute an
instrument releasing the Management Stockholders from any claims or causes of
action arising from any breach or alleged breach of the Stock Option Agreement
and the Stockholder Escrow Agreements based upon acts or omissions occurring
prior to October 4, 1995.
The Amended Stock Option Agreement states that all shares covered by the
Stock Option Agreement have been delivered into an escrow account pursuant to
the Stockholder Escrow Agreements. BRW Sub and the Management Stockholders
entered into an Amendment No. 1 to the Stockholder Escrow Agreements dated as of
October 4, 1995, under which the Stockholder Escrow Agreements were amended to
reflect the fact that the Stock Option Agreement had been modified. In
addition, both Amendment No. 1 to the Stock Option Agreement and Amendment No. 1
to the Stockholder Escrow Agreements noted that William P. Daugherty as Trustee
of the William P. Daugherty Trust dated May 11, 1989 and Ellen L. Daugherty, as
Trustee of the Ellen L. Daugherty Trust dated May 11, 1989, have deposited
33,228 and 25,450 Shares, respectively (collectively, the "Daugherty Shares") in
escrow and that the Escrow Agent has delivered to Gregory H. Parker his 58,678
Shares deposited in escrow by him pending receipt of the Daugherty Shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99(A) Form of Amended Stock Option Agreement dated as of
October 4, 1995 between B & L Acquisition Corporation,
BRW Steel Corporation and the Management Stockholders
listed therein.
Exhibit 99(B) Amended Agreement and Plan of Merger dated as of October 4,
1995 by and among B & L Acquisition Corporation, BRW Steel
Corporation and Bliss & Laughlin Industries Inc.
Exhibit 99(C) Form of Amendment No. 1 to the Stockholder Escrow Agreement
dated as of October 4, 1995 by and among BRW Sub, LaSalle
National Trust, N.A. and the Management Stockholders.
Exhibit 99(D) Form of Amendment No. 1 to the Amended Stock Option
Agreement dated as of October 18, 1995 between B & L
Acquisition Corporation, BRW Steel Corporation and the
Management Stockholders listed therein.
Exhibit 99(E) Form of Amendment No. 1 to the Amended Agreement and Plan
of Merger dated as of October 18, 1995 by and among B & L
Acquisition Corporation, BRW Steel Corporation and Bliss &
Laughlin Industries Inc.
Page 9 of 11 Pages
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Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of November 2, 1995.
BRW Steel Corporation
By: Thomas Campbell
-------------------------------------
Name: Thomas Campbell
-----------------------------------
Title: Co-Chairman
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Page 10 of 11 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of November 2, 1995.
B & L Acquisition Corporation
By: Thomas Campbell
-------------------------------------
Name: Thomas Campbell
-----------------------------------
Title: Exec. Vice President
----------------------------------
Page 11 of 11 Pages
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EXHIBIT 99(A)
FORM OF
AMENDED STOCK OPTION AGREEMENT
THIS AMENDED STOCK OPTION AGREEMENT (this "Agreement"), dated as of
October 4, 1995, by and among B&L ACQUISITION CORPORATION, a Delaware
corporation (the "Purchaser"), BRW STEEL CORPORATION, a Delaware corporation
("Parent"), and the Management Stockholders (who are individually named on
Schedule A hereto) of the Company (as defined below) who are parties to that
certain First Refusal Agreement (as defined in Section 2) (each Management
Stockholder, a "Stockholder"; collectively all the Management Stockholders, the
"Stockholders"), being the owner of certain shares of common stock, $.01 par
value per share (the "Common Stock"), of BLISS & LAUGHLIN INDUSTRIES INC., a
Delaware corporation (the "Company").
WHEREAS, the Purchaser, Parent and the Company are concurrently herewith
entering into an Amended Agreement and Plan of Merger dated as of the date
hereof (the "Merger Agreement"), which provides, upon the terms and subject to
the conditions thereof, for the merger of the Purchaser with and into the
Company (the "Merger").
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser desires to acquire an option from the Stockholders to
purchase an aggregate of 774,059 shares of Common Stock of the Company. The
number of such shares pertaining to each Stockholder is set forth opposite the
Stockholder's name on Schedule A hereto (as to each Stockholder, the "Shares");
and in order to induce the Purchaser to proceed with the Merger, the
Stockholders desire to grant an option to the Purchaser to purchase the Shares,
all upon the terms and conditions of this Agreement.
WHEREAS, the taking of various steps which are necessary in order to
accomplish the Merger will require the Purchaser and the Company to spend
significant sums of money and use substantial amounts of time of their key
employees.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto,
intending legally to be bound, do hereby agree as follows:
1. GRANT OF STOCK OPTION. The Stockholder hereby grants to the
Purchaser an exclusive and irrevocable option (the "Stock Option") to purchase
during a period commencing on the date hereof (the "Option Commencement Date"),
subject to the provisions of Section 3 below, and ending on the Termination Date
(hereinafter defined), the Shares at a price per share of $9.50, or any higher
price paid by Purchaser for a share of Common Stock of the Company in the Merger
or any other merger of the Company with Purchaser or Parent or in a tender offer
by Purchaser or Parent for shares of common stock of the Company, payable as
provided in Section 3 below (the "Purchase Price"). The Option Price shall be
paid in cash at the Closing (as hereinafter defined).
2. EXERCISE OF STOCK OPTION. Provided that (a) Stelco Inc.
("Stelco") has not purchased the Shares pursuant to the exercise of Stelco's
rights under Section 3.3 or 3.4 of the Right of First Refusal and Standstill
Agreement dated May 11, 1990 (the "First Refusal
<PAGE>
Agreement") (such purchase a "First Refusal Purchase"), (b) no preliminary or
permanent injunction or other order issued by any federal or state court of
competent jurisdiction in the United States of America shall be in effect which
would prohibit the purchase or delivery of Shares hereunder and (c) any
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (the "HSR Act") shall have expired with respect to such purchase and
delivery, the Purchaser may exercise the Stock Option, in whole, at any time or
from time to time, from the Option Commencement Date until that date (the
"Termination Date") which is the earlier of (i) January 15, 1996, or (ii)
termination of the Merger Agreement due to a material breach by the Purchaser of
its obligations under the Merger Agreement. Stockholder agrees that if, prior
to the first anniversary of the date of this Agreement, the Stockholder or any
assignee of the Stockholder or the Company enters into an agreement to sell or
exchange all or substantially all of the Common Stock of the Company held by the
Stockholder or any affiliate of the Stockholder to or with a third party
(including any such sale or exchange pursuant to a merger, or a tender or
exchange offer), Stockholder or any assignee of the Stockholder will promptly
pay Purchaser an amount equal to fifty percent (50%) of the difference between
the Subsequent Share Price (as defined below) received for the Shares in such
subsequent transaction and the product of $7.75 and the number of Shares. For
the purposes of this Section 2, "Subsequent Share Price" shall mean the sum of
the aggregate consideration received by the Stockholder or any assignee of the
Stockholder in the transaction reduced by the expenses and out-of-pocket fees
incurred by Stockholder or its affiliates or on their behalf in connection with
the sale of the Shares. If the Stockholder or any assignee of the Stockholder
or the Company receives consideration other than cash, the Stockholder may elect
to pay the amount due the Purchaser under this Section 2 in like kind
consideration or in cash. Prior to the Termination Date, other than as
permitted in Section 4 below, the Stockholder will not take, and will refrain
from taking, any action which would have the effect of preventing or disabling
the Stockholder from delivering the Shares to the Purchaser upon exercise of the
Stock Option or from otherwise performing its obligations under this Agreement.
Anything in this Agreement to the contrary notwithstanding, this Stock Option
may not be exercised and no Stockholder may transfer his, her or its Shares
hereunder unless all Shares of all Stockholders are purchased and acquired, it
being understood and agreed that the payment of the Purchase Price for all
Shares of all Stockholders shall be an express condition to the purchase of any
Shares of any individual Stockholder hereunder.
3. DELIVERY OF SHARES; ESCROW ARRANGEMENTS; PAYMENT FOR SHARES. The
Stockholders have delivered in escrow to LaSalle National Trust, N.A. (the
"Escrow Agent") pursuant to Stockholder Escrow Agreements dated as of September
19, 1995 by and among the Purchaser, each Stockholder and the Escrow Agent, (i)
duly executed share certificates representing the Shares accompanied by stock
powers endorsed in blank and with signatures guaranteed and such other documents
as may be reasonably necessary to transfer record ownership of Shares into the
Purchaser's name on the stock transfer books of the Company or (ii) book
confirmation of the transfer of Shares to the account of the Escrow Agent or its
nominee with the Depository Trust Company. If this Agreement is terminated, the
unpurchased Shares and any certificates for the unpurchased shares and related
stock powers and other documents shall be returned to the Stockholder within two
business days following such
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<PAGE>
termination; provided, however, if a cancellation fee and expenses are owed
under Section 14 hereof, the Shares shall remain in the account of the Escrow
Agent until the Stockholder has paid such cancellation fee and expenses in full.
The Stockholder and Purchaser agree to enter into an Amendment No. 1 to
Stockholder Escrow Agreement with the Escrow Agent, substantially in the form of
Attachment A hereto. At any Closing hereunder, the Purchaser shall deliver an
aggregate principal amount of $9.50, or any higher price paid by Purchaser for a
share of Common Stock of the Company in the Merger or any other merger of the
Company with Purchaser or Parent or in a tender offer by Purchaser or Parent for
shares of common stock of the Company, times the number of Shares being
purchased (the "Exercised Option Shares") in cash or a certified or cashier's
check or by wire transfer of immediately available funds to a bank account
designated by the Escrow Agent (the "Purchase Price"), for distribution to
Stockholder in compliance with the terms of the Escrow Agreement.
4. COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, the Stockholder agrees, until the Termination
Date, not to:
(a) sell, transfer, pledge, assign or otherwise dispose of, or
enter into any contract, option or other transfer, pledge, assignment or
other disposition of, any Shares, except that (i) if required by the terms
of the First Refusal Agreement, the Stockholder may sell the Shares to
Stelco pursuant to a First Refusal Purchase, or (ii) the Stockholder, upon
a minimum of three (3) days prior written notice to the Purchaser and upon
expiration of any rights Stelco may have to purchase the Shares under the
First Refusal Agreement, may sell or transfer the Shares to a purchaser or
transferee that is a citizen of the United States of America or Canada and
executes with the Purchaser an agreement containing the same terms hereof;
provided, however, that no sale or transfer shall be permitted hereunder
to any purchaser or transferee that Parent believes, in its reasonable
judgment, intends or may intend to engage in any transaction which may
involve a change of control such as a merger, reorganization or
acquisition of the Company, other than the transactions contemplated by
the Merger Agreement or this Agreement;
(b) acquire any additional shares of Common Stock without the
prior written consent of Purchaser other than pursuant to the exercise of
existing stock options or similar rights;
(c) enter into a voting agreement with respect to any Shares; or
(d) directly or indirectly, initiate discussions or engage in
negotiations with any corporation, partnership, person or other entity or
group (other than Purchaser) concerning any possible acquisition of the
Shares or any possible merger, purchase of assets, purchase of stock or
similar transactions involving the Company or any major asset of the
Company.
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<PAGE>
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND PARENT. The
Purchaser and Parent jointly and severally hereby represent and warrant to the
Stockholder as follows:
(a) AUTHORITY RELATIVE TO THIS AGREEMENT. The Purchaser and
Parent each is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Purchaser and
Parent each has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized by all necessary corporate action
on the part of the Purchaser and Parent, has been validly executed and
delivered by a duly authorized officer of the Purchaser and Parent, and
constitutes a valid and binding agreement of the Purchaser and Parent,
enforceable against the Purchaser and Parent in accordance with its terms.
(b) NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH
INSTRUMENTS TO WHICH PURCHASER OR PARENT IS PARTY. The execution and
delivery of this Agreement and the performance by Parent or Purchaser of
their respective obligations hereunder will not (i) violate the charter or
bylaws of Parent or Purchaser; (ii) assuming satisfaction of the
requirements set forth in clause (iii) below, violate any provision of law
applicable to Parent or Purchaser; (iii) except for (1) requirements under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
requirements, if any, arising out of the HSR Act, require any consent,
approval, filing or notice under any provision of law applicable to Parent
or Purchaser or any of Parent's other subsidiaries; or (iv) require any
consent, approval or notice under, or violate or constitute a default
under, or permit the termination of any provision of, or result in the
acceleration of the maturity or performance of any obligation of, or
result in the creation or imposition of any lien upon any properties,
assets or businesses of, Parent or Purchaser or any of Parent's other
subsidiaries under, any note, bond, indenture, mortgage, deed of trust,
lease, franchise, permit, authorization, license, contract, instrument or
other agreement or commitment, or any order, judgment or decree, to which
Parent or Purchaser or any of Parent's other subsidiaries is a party or by
which Parent, Purchaser or any of Parent's other subsidiaries or any of
the assets or properties of Parent, Purchaser or any of Parent's other
subsidiaries is bound or encumbered, which in any of the foregoing cases
would have a material adverse effect on Parent and its subsidiaries taken
as a whole or would prohibit or interfere with the consummation of this
Agreement.
(c) DISTRIBUTION. The Purchaser will acquire the Shares upon
exercise of the Stock Option for its own account and not with a view to
any resale or distribution thereof and will not sell the Shares unless
such Shares are registered under the Securities Act of 1933 (the
"Securities Act") or unless an exemption from registration is available.
(d) RESALE PRIOR TO THE EFFECTIVE TIME. Purchaser agrees that,
if prior to the earlier of the Effective Time (as defined in the Merger
Agreement) or the first anniversary of the date of this Agreement, the
Purchaser or any assignee of the Purchaser or the Company enters into an
agreement to sell or exchange all or substantially all of
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<PAGE>
the Common Stock of the Company held by the Purchaser or an affiliate of
the Purchaser to or with an unaffiliated third party, Purchaser or any
assignee of the Purchaser will promptly pay Stockholder an amount equal to
fifty percent (50%) of the difference between the Subsequent Share Price
(as defined below) received for such subsequent transaction and the
product of $9.50 times the number of Shares. For the purposes of this
Section 5(d), "Subsequent Share Price" shall mean the sum of the aggregate
consideration received by the Purchaser or any assignee of the Purchaser
in the transaction attributable to the Shares reduced by the expenses and
out of pocket fees incurred by Purchaser or its affiliates or on their
behalf in connection with the sale of the Shares. If the Purchaser or any
assignee of the Purchaser receives consideration other than cash, the
Purchaser may elect to pay the amount due the Stockholder under this
Section 5(d) in like kind consideration or in cash.
(e) RESALE SUBSEQUENT TO THE EFFECTIVE TIME. Subsequent to the
Effective Time, Purchaser agrees that, if prior to the first anniversary
of the date of this Agreement, the Purchaser or any assignee of the
Purchaser, the Company or the Surviving Corporation (as defined in the
Merger Agreement) enters into an agreement to (i) sell or exchange all or
substantially all of the Common Stock of the Company or the Surviving
Corporation to or with, or (ii) merge or consolidate the Company or the
Surviving Corporation to, an unaffiliated third party, Purchaser or any
assignee of the Purchaser, the Company and the Surviving Corporation will
jointly promptly pay Stockholder an amount equal to fifty percent (50%) of
the product of (y) the difference between the Aggregate Transaction Value
(as defined below) received for such subsequent transaction and
$62,000,000 and (z) a fraction, the numerator of which is the number of
Shares and the denominator of which is the number equal to the total of
(1) the number of shares of Common Stock of the Company issued and
outstanding as of the Effective Time plus (2) the number of shares of
Common Stock of the Company underlying stock options for which the option
holder is entitled to payment under Section 1.3(e) of the Merger Agreement
plus (3) the number of share equivalents for which the participant under
the Directors' Deferred Compensation Plan is entitled to payment under
Section 1.3(f) of the Merger Agreement. For the purposes of this Section
5(e), "Aggregate Transaction Value" shall mean the sum of the aggregate
consideration received by the sellers in the transaction (reduced by the
present value of any future or contingent obligations retained by the
sellers) plus the aggregate liabilities assumed by the acquiring party in
the transaction. If the Purchaser or any assignee of the Purchaser, the
Company or the Surviving Corporation receives consideration other than
cash, the Purchaser may elect to pay the amount due the Stockholder under
this Section 5(e) in like kind consideration or in cash.
6. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder represents and warrants to the Purchaser the following:
(a) TITLE TO SHARES. The Stockholder has good and marketable
title to the Shares, not subject to any hypothecation, pledge or lien,
with no restrictions on voting
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<PAGE>
rights and other incidents of record and beneficial ownership incident
thereto, and the absolute right to grant Purchaser the option to purchase
the Shares and the right to sell and transfer the Shares to the Purchaser
free and clear of all claims, liens, pledges, security interests,
restrictions or encumbrances of any nature whatsoever, except for the
restrictions under the First Refusal Agreement. Solely for the purposes
of this Agreement and the Merger, Stockholder hereby waives and agrees not
to assign his rights of first refusal under all First Refusal Agreements
to which he or it and other stockholders of the Company are parties,
provided that such waiver and agreement not to assign terminate when this
Agreement terminates. On consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof, the Purchaser will
acquire good and marketable title to the Shares free and clear of all
claims, liens, pledges, security interests, resolutions or encumbrances of
any nature whatsoever except for the rights of first refusal held by other
Stockholders of the Company under First Refusal Agreements.
(b) AUTHORIZATION AND VALIDITY. The Stockholder has the power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of the Stockholder, enforceable in accordance with its
terms.
(c) COMPLIANCE WITH INSTRUMENTS. Neither the execution or
delivery of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby will violate any provisions of any law
applicable to the Stockholder or agreement to which the Stockholder is a
party, except for any rights of first refusal held by other Stockholders
of the Company under First Refusal Agreements.
(d) SUPPORT OF MERGER. The Stockholder agrees that he will vote
all of his Shares in favor of the Merger Agreement at any Stockholders
Meeting at which it is discussed, and at any adjournment thereof; provided
however, that Stockholder shall not have to vote in favor of the Merger
Agreement if it has been terminated.
7. COMPANY ACTIONS. If the Stockholder is a director of the Company
or an officer or stockholder of the Company that is a reporting person under
Section 16 of the Exchange Act, the Stockholder agrees to use his best efforts
during the term of this Agreement to prevent the Company, its Board of
Directors, its officers and its subsidiaries from:
(a) issuing additional capital stock except pursuant to existing
option plans or arrangements;
(b) approving a stock split, reverse stock split,
recapitalization, or other similar action which would result in an overall
adjustment of the number of outstanding shares of the Company's Common
Stock;
(c) increasing the dividend on the Company's Common Stock;
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<PAGE>
(d) issuing additional stock options or appreciation rights;
(e) selling any assets, except in the normal course of business
and except for assets presently under contract for sale; and
(f) issuing or incurring additional debt, except in the normal
course of business.
8. HSR FILING. Promptly after the date hereof, and from time to
time thereafter if necessary, the Purchaser and each Stockholder if required
shall file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice all required pre-merger notification and
report forms and other documents and exhibits required to be filed under the HSR
Act to permit the purchase of the Shares subject to the Stock Option.
9. UNITARY TRANSACTION. The parties hereto intend that this
Agreement and the Merger Agreement shall constitute a single unified transaction
for the acquisition of the Company by Purchaser. In accordance with that
intention, Purchaser represents the following:
(a) Purchaser was not an affiliate of and had no affiliation with
the Company at any time prior to the execution of this Agreement and the
Merger Agreement or the prior Agreement and Plan of Merger and prior Stock
Option Agreement both dated September 16, 1995;
(b) Purchaser shall purchase all shares of Common Stock pursuant
to this Agreement and the Merger Agreement at the same price per share;
and
(c) Purchaser shall make no attempt to change the management of,
alter the operation of, or exercise control over the Company prior to the
Effective Time or termination of the Merger Agreement.
10. CERTAIN UNDERTAKINGS.
(a) The Stockholder hereby agrees that, during the term of this
Agreement, at any meeting of the stockholders of the Company, however
called, and in any action by written consent of the stockholders of the
Company, the Stockholder shall (a) vote the Shares in favor of the Merger;
(b) not vote the Shares in favor of any action or agreement which would
result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of the Company under the Merger
Agreement; and (c) vote the Shares against any action or agreement which
would impede, interfere with or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries; (ii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iii) any
change in the management or board of directors of the Company, except as
otherwise agreed to in
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<PAGE>
writing by Purchaser; (iv) any material change in the present
capitalization or dividend policy of the Company; or (v) any other
material change in the Company's corporate structure or business; provided
however, that Stockholder shall not have to take any action specified
above in this Section 10 if the Merger Agreement has been terminated by
Purchaser or Parent.
(b) Each Stockholder shall use its best efforts to cause the
restrictions on transfer and the rights of first refusal applicable to
such Stockholder's Shares under the First Refusal Agreement to terminate,
so as to cause such Stockholder's obligations under this Agreement to
become unconditional and to permit the sale to Purchaser of such
Stockholder's Shares hereunder. The Stockholders shall furnish Purchaser
with copies of all information, correspondence and other documents
furnished to or by Stelco or its counsel by or to the Stockholders, the
Company or their counsel (as the case may be), and shall promptly inform
Purchaser of all actions taken by the Stockholders or Stelco with respect
to compliance with the First Refusal Agreement, including efforts to
dispose of or settle the pending lawsuit No. 95 C 5426 in the U.S.
District Court for the Northern District of Illinois.
11. ADJUSTMENTS. In the event of any increase or decrease or other
change in the Common Stock by reason of stock dividends, split-up,
recapitalizations, combinations, exchanges of shares or the like, the number of
shares of Common Stock subject to the Stock Option and the per Share Purchase
Price shall be equitably adjusted appropriately.
12. LEGEND. As soon as practicable after the execution of this
Agreement, the Stockholder shall cause the following legend to be placed on the
certificates representing the Shares:
"The Shares of common stock represented by this certificate are
subject to an Amended Stock Option Agreement, dated as of October 4,
1995, with B & L Acquisition Corporation and BRW Steel Corporation."
Upon termination of this Agreement Stockholder will remove such legend on
any Shares returned to him; and Purchaser will cooperate therewith.
13. GUARANTEE: Parent hereby fully and unconditionally guarantees
each and every representation, warranty and obligation of the Purchaser
hereunder and of any assignee of the Purchaser.
14. CANCELLATION FEE. (a) If Stelco exercises its rights under the
First Refusal Agreement to purchase the Shares, or (b) if prior to January 15,
1996 the Board of Directors of the Company terminates the Merger Agreement
pursuant to Section 6.1(c)(ii) of the Merger Agreement and a transaction is
subsequently consummated, or (c) if prior to January 15, 1996 a tender or
exchange offer shall have been commenced by any party to acquire twenty percent
-8-
<PAGE>
(20%) or more of the capital stock of the Company at a price in excess of $9.50,
which tender or exchange offer is subsequently consummated, then, upon
consummation of Stelco's purchase with respect to clause (a) above or within
five (5) business days of the consummation of the transaction in the case of
clause (b) or (c) above, the Stockholder shall pay to the Purchaser, a cash
cancellation fee equal to the product of (i) the sum of one million two hundred
fifty thousand dollars ($1,250,000) plus all out of pocket fees and expenses
incurred by Purchaser, Parent or their affiliates or on their behalf in
connection with the Merger and the transactions contemplated hereby (such out of
pocket fees and expenses not to exceed two hundred fifty thousand dollars
($250,000)) and (ii) a fraction, the numerator of which is the number of Shares
and the denominator of which is 774,059.
15. REMEDIES. The parties agree that the Purchaser would be
irreparably damaged if for any reason the Stockholder failed to deliver any of
the Shares upon exercise of the Stock Option or to perform any of its other
obligations under this Agreement, and that the Purchaser would not have an
adequate remedy at law for money damages in such event. Accordingly, the
Purchaser shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance hereof by the Stockholder. This
provision is without prejudice to any other Stockholder. This provision is
without prejudice to any other rights that the Purchaser may have against the
Stockholder for any failure to perform its obligations under this Agreement.
16. ENTIRE AGREEMENT; ASSIGNMENT; AMENDMENT. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, of the parties with respect to such subject matter. Purchaser
may assign any or all of its rights and obligations hereunder to any
wholly-owned affiliate of Purchaser or Parent. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto.
17. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
18. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be furnished by hand
delivery, by telegram or telex or FAX, or by mail (registered or certified,
postage prepaid, return receipt requested) to the parties at the addresses set
forth below or, if to the Escrow Agent, at its address set forth in the Escrow
Agreement. Any such notice shall be deemed duly given upon the date it is
actually received by the party to whom notice is intended to be given or is
actually delivered at its address as shown below or, if to the Escrow Agent, at
its address set forth in the Escrow Agreement:
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<PAGE>
If to the Purchaser or Parent:
B&L Acquisition Corporation
4 Northshore Center
Pittsburgh, PA 15212
Attention: President
With a copy to:
BRW Steel Corporation
c/o Veritas Capital, Inc.
Ten East Fiftieth Street
New York, NY 10022
Attention: Co-Chairman
-and-
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: Robert A. Profusek, Esq.
If to the Stockholder:
At the address set forth for the Stockholder on Schedule B
hereto.
With a copy to the Company at:
Bliss & Laughlin Industries Inc.
281 East 155th Street
Harvey, IL 60426
Attention: President
With copies to:
Company's Counsel
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive, #3000
Chicago, Illinois 60606
Attention: Roger G. Fein
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
19. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without reference
to principles of conflicts of laws.
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<PAGE>
20. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
21. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person or entity any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
22. TIME OF THE ESSENCE. The parties agree that time shall be of the
essence in the performance of obligations hereunder.
23. BROKERS. Each party hereby represents and warrants to the other
that no broker or finder claiming through him is entitled to a fee in connection
with the sale of Shares hereunder, except for The Chicago Corporation whose fee
will be paid by the Company.
24. AGREEMENTS WITH OTHER STOCKHOLDERS. Purchaser agrees that if it
executes a Stock Option Agreement with any other stockholder of the Company
having terms more favorable to such stockholder than the terms of this Agreement
are to Stockholder, it will promptly amend this Agreement to include such more
favorable terms. Stockholder hereby appoints as his lawful attorney-in-fact
Gregory H. Parker to execute any and all notices and other communications under
the First Refusal Agreement as such attorney-in-fact shall execute in his sole
discretion.
25. JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the State
of Illinois located in Chicago, Illinois, or in the United States District Court
in Chicago, Illinois, and, by execution and delivery of this Agreement, each of
the parties to this Agreement accepts the exclusive jurisdiction of such courts,
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. The foregoing consents shall not constitute
general consents to service of process in the State of Illinois for any purpose
except as provided above and shall not be deemed to confer rights to any Person
other than the respective parties to this Agreement.
26. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its duly authorized representative, all as of the day
and year first above written.
BRW STEEL CORPORATION
By:
----------------------------
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Title:
----------------------------
B & L ACQUISITION CORPORATION
By:
----------------------------
Title:
----------------------------
STOCKHOLDER
By:
----------------------------
Title:
---------------------------
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<PAGE>
SCHEDULE A
Name of Stockholder Number of Shares
- ------------------- ----------------
Gregory H. Parker......................................................142,380
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Family Trust under Trust Agreement
dated October 31, 1988............................................76,349
F. Elizabeth Parker.....................................................25,450
Anthony J. Romanovich...................................................80,183
Barbara A. Romanovich...................................................26,976
George W. Fleck.........................................................72,222
Joan E. Fleck...........................................................25,450
Gerald E. Brady.........................................................35,773
Carole A. Brady.........................................................22,905
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989.....................33,228
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989.......................25,450
Michael A. DeBias.......................................................58,677
Chester J. Pucilowski...................................................29,665
Geraldine Pucilowski....................................................29,013
Richard M. Bogdon.......................................................21,480
Phyllis Bogdon..........................................................10,180
Carl H. Laib............................................................29,339
Richard W. Ressler......................................................29,339
------
Total............................................................774,059
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<PAGE>
SCHEDULE B
Gregory H. Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
F. Elizabeth Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Trust dated October 31, 1988
225 W. Wacker Drive, #3000
Chicago, IL 60606
Anthony J. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
Barbara A. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
George W. Fleck
1109 Brassie
Flossmoor, IL 60422
Joan E. Fleck
1109 Brassie
Flossmoor, IL 60422
Gerald E. Brady
1745 Winola Court
Naperville, IL 60565
Carole A. Brady
1745 Winola Court
Naperville, IL 60565
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
<PAGE>
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
Michael A. DeBias
7132 West 64th Place
Chicago, IL 60638
Richard M. Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Phyllis Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Carl H. Laib
11588 96th Avenue
St. John, IN 46373
Richard W. Ressler
5156 Andrus Avenue
North Olmsted, OH 44070
Chester J. Pucilowski
860 Smokerise Drive
Medina, OH 44256
Geraldine Pucilowski
860 Smokerise Drive
Medina, OH 44256
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EXHIBIT 99(B)
AMENDED AGREEMENT AND PLAN OF MERGER
THIS AMENDED AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
October 4, 1995, by and among BRW STEEL CORPORATION, a Delaware corporation
("BarCo"), B & L ACQUISITION CORPORATION, a Delaware corporation and a wholly
owned subsidiary of BarCo ("Sub"), and BLISS & LAUGHLIN INDUSTRIES INC., a
Delaware corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, BarCo, Sub and the Company are parties to the Agreement and Plan
of Merger dated September 16, 1995 (the "Existing Merger Agreement") pursuant to
which BarCo has agreed to acquire all of the outstanding shares of the Company's
Common Stock, $.01 par value per share (the "Shares"), at a price of $7.75 per
share; and
WHEREAS, the Board of Directors of BarCo has determined that it is in the
best interests of BarCo and its stockholders for Sub to acquire all of the
outstanding Shares at a revised price of $9.50 per share, net to the
stockholders of the Company in cash, in accordance with the terms and conditions
of this Agreement; and
WHEREAS, the Company, BarCo and Subsidiary have mutually agreed to amend
the Existing Merger Agreement in consideration of the execution and delivery of
this Agreement and the payment by the Company to BarCo of $1,000,000; and
WHEREAS, the Board of Directors of the Company have received the opinion
of The Chicago Corporation that the price per share to be received by
stockholders of the Company in the Merger (as defined in Section 1.2) is fair to
such stockholders from a financial point of view; and
WHEREAS, the Board of Directors of the Company believes that the Merger is
in the best interests of its stockholders; and
WHEREAS, the respective Boards of Directors of BarCo, Sub and the Company
have each determined that it is advisable to merge Sub with and into the Company
pursuant to this Agreement with the result that the Company shall become a
wholly owned subsidiary of BarCo.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants herein contained, BarCo, Sub and the
Company, intending to be legally bound, hereby agree as follows:
<PAGE>
ARTICLE 1
THE MERGER
1.1 COMPANY ACTION.
(a) The Company hereby consents to (i) the Merger, and (ii) at BarCo's
election, a tender offer for any and all Shares at a price per Share of $9.50 or
higher, net to the seller in cash on terms and conditions no less favorable to
tendering stockholders than those terms provided for herein to close the Merger
under this Agreement (the "Tender Offer"). The Company hereby represents that
on October 3, 1995, its board of directors (the "Board of Directors") approved
the Merger and the Tender Offer and approved recommending approval of the Merger
and this Agreement by the Company's stockholders. The Company further
acknowledges and represents that the Board of Directors' approval of the Merger,
the Tender Offer, this Agreement, the transactions contemplated hereby and the
consummation thereof do not and will not fall within paragraph (a) of Article
Ninth of the Company's Certificate of Incorporation or otherwise cause the
stockholder vote required for approval of the Merger and this Agreement and the
transactions contemplated hereby to be greater than the minimum vote required
under Section 251(c) of the Delaware General Corporation Law (the "Delaware
Law") provided that Sub and BarCo have not taken and do not take any action to
make either of them an "Interested Stockholder" as defined in Article Ninth
except pursuant to the Tender Offer.
1.2 THE MERGER.
(a) Subject to the terms and conditions hereof, at the Effective Time
(as such term is defined in Section 1.2(b)), Sub will be merged with and into
the Company (the "Merger") in accordance with Delaware Law, the separate
existence of Sub (except as may be continued by operation of law) shall cease
and the Company shall continue as the surviving corporation in the Merger (the
"Surviving Corporation").
(b) At the Closing, the parties hereto shall cause the Merger to be
consummated by filing with the Secretary of State of Delaware an appropriate
agreement or certificate of merger (the "Merger Document") in such form as is
required by, and executed in accordance with, the relevant provisions of the
Delaware Law and with this Agreement (the date and time of such filing being
referred to herein as the "Effective Time"). The Merger shall have the effects
set forth in Section 259 of the Delaware Law.
A closing of the Merger (the "Closing") shall take place (i) at Veritas
Capital, Inc., Ten East Fiftieth Street, New York, New York, at 12:00 noon,
local time, on the date on which the last of the conditions set forth in Section
5 is fulfilled or waived (subject to applicable law), or (ii) at such other time
and place and on such other date as BarCo and a majority of the directors of the
Company shall agree (the "Closing Date").
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1.3 CONVERSION OF SHARES. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Sub, the Company or the holder of any of the following
securities:
(a) Each Share then issued and outstanding, other than (i) Shares then
held, directly or indirectly, by BarCo, Sub or any direct or indirect subsidiary
of BarCo, or (ii) Shares held in the Company's treasury, or (iii) Dissenting
Shares (as such term is defined in Section 1.4) shall be converted into and
represent the right to receive (as provided in Section 1.5) $9.50 net in cash or
such higher price as may be paid in the Tender Offer, without any interest
thereon (such amount of cash being referred to herein as the "Merger
Consideration");
(b) Each Share then held, directly or indirectly, by BarCo, Sub or any
direct or indirect subsidiary of BarCo shall be canceled and retired without
payment of any consideration therefor;
(c) Each Share held in the Company's treasury shall be canceled and
retired without payment of any consideration therefor;
(d) Each issued and outstanding share of common stock, par value $.01
per share, of Sub shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock of the Surviving Corporation;
(e) Each of the Company's issued and outstanding stock options shall be
converted into the right to receive at Closing cash representing the positive
difference (if any) of $9.50 net in cash or such higher price as may be paid in
the Tender Offer and the exercise price of such option multiplied by the number
of Shares covered by such option; and
(f) Each outstanding stock equivalency account of the Company under the
Directors' Deferred Compensation Plan shall be converted into the right to
receive at Closing cash in the amount of $9.50 for each unit equivalent to one
Share.
1.4 DISSENTING SHARES. Shares held by a stockholder who has not
voted such Shares in favor of the Merger and with respect to which such
stockholder becomes entitled to payment of the fair value of his Shares pursuant
to the provisions of Section 262 of the Delaware Law ("Dissenting Shares"),
shall not be converted into, or represent the right to receive, or be
exchangeable for, the Merger Consideration unless and until such holder shall
have failed to perfect or shall have effectively withdrawn or lost the right to
appraisal and payment of the fair value of such Shares pursuant to the
provisions of such Section 262. If such holder shall have failed to perfect or
shall have effectively withdrawn or lost such right, then, as of the Effective
Time, or the occurrence of the event which causes the failure to perfect or the
effective withdrawal or loss of such right, whichever last occurs, such holder's
Dissenting Shares shall cease to be Dissenting Shares and shall be converted
into and represent the right to receive, and be exchangeable (as provided in
Section 1.5) for, the Merger Consideration.
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1.5 PAYMENT.
(a) Pursuant to an agreement (the "Disbursing Agent Agreement") to be
entered into on or before the Closing Date between BarCo and Sub and a
disbursing agent (the "Disbursing Agent") which shall be a commercial bank with
capital of at least $100,000,000, Sub or the Surviving Corporation shall from
time to time deposit with the Disbursing Agent such cash as the Disbursing Agent
shall require pursuant to this Section 1.5.
(b) As soon as practicable after the Effective Time, the Disbursing
Agent shall send a notice and a transmittal form to each holder of certificates
formerly evidencing Shares (other than certificates formerly representing Shares
to be canceled pursuant to Sections 1.3(b) and 1.3(c)) advising such holder of
the effectiveness of the Merger and the procedure for surrendering to the
Disbursing Agent (who may appoint forwarding agents with the approval of BarCo)
such certificates for exchange into the Merger Consideration. Each holder of
certificates theretofore evidencing Shares, upon proper surrender thereof to the
Disbursing Agent together with and in accordance with such transmittal form,
shall be entitled to receive in exchange therefor the Merger Consideration
deliverable in respect of the Shares theretofore evidenced by the certificates
so surrendered. Upon such proper surrender, the Disbursing Agent shall
promptly, but in any event no later than three (3) business days after such
proper surrender, deliver the Merger Consideration. Until properly surrendered,
certificates formerly evidencing Shares shall be deemed for all purposes to
evidence only the right to receive the Merger Consideration.
(c) If the Merger Consideration (or any portion thereof) is to be
delivered to a person other than the person in whose name the certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of such Merger Consideration that the certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer and that such transfer otherwise be proper. Sub shall
pay to the Disbursing Agent any transfer or other taxes payable by reason of the
foregoing or establish to the satisfaction of the Disbursing Agent that such
taxes have been paid or are not required to be paid. No interest will be paid
or accrued on the Merger Consideration payable on the surrender of any such
certificates.
(d) In the event any certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Surviving Corporation
will, subject to the following sentence, issue in exchange for such lost, stolen
or destroyed certificate the Merger Consideration deliverable in respect thereof
as determined in accordance with this Article 1. Sub may, in its sole
discretion and as a condition precedent to the issuance of the Merger
Consideration in exchange therefor, require the owner of such lost, stolen or
destroyed certificate to give the Surviving Corporation a bond in such sum as it
may reasonably direct as indemnity against any claim that may be made against
the Surviving Corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
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1.6 NO FURTHER RIGHTS. From and after the Effective Time, holders of
certificates formerly evidencing Shares shall cease to have any rights as
stockholders of the Company, except as provided herein or by law.
1.7 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of Shares
shall thereafter be made.
1.8 CERTIFICATE OF INCORPORATION; BYLAWS; DIRECTORS. The Certificate
of Incorporation and Bylaws of the Company in effect immediately prior to the
Effective Time (except as such Certificate of Incorporation may be amended
pursuant to the Merger Document) shall be the Certificate of Incorporation and
Bylaws of the Surviving Corporation until thereafter amended as provided therein
and under the Delaware Law. The directors of the Company immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, in each
case until their successors are duly elected and qualified.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BARCO AND SUB
BarCo and Sub hereby jointly and severally represent and warrant to the
Company that:
2.1 ORGANIZATION. Each of BarCo and Sub is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted.
2.2 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Each of BarCo and Sub
has all requisite corporate power and authority to enter into this Agreement and
to perform its respective obligations hereunder. The execution, delivery and
performance by each of BarCo and Sub of this Agreement and all other agreements
and documents contemplated hereby, and the consummation by each of BarCo and Sub
of the transactions contemplated hereby and thereby, have been duly authorized
by all necessary corporate action on the part of each of BarCo and Sub. This
Agreement and all other agreements and documents contemplated hereby, have been
or will be duly executed and delivered by BarCo and Sub and are and will be
valid and binding obligations of BarCo and Sub enforceable against BarCo and Sub
in accordance with their respective terms.
2.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
Which BarCo or Sub Is Party. Neither the execution and delivery of this
Agreement and all other agreements and documents contemplated hereby, nor the
performance by BarCo or Sub of their respective obligations hereunder will (a)
violate the charter or bylaws of BarCo or Sub; (b) assuming satisfaction of the
requirements set forth in clause (c) below, violate any provision of law
applicable to BarCo or Sub; (c) except for (i) requirements under the Exchange
Act,
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(ii) requirements, if any, arising out of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "Hart-Scott Act"), and (iii) the
filing of the Merger Document in accordance with the Delaware Law, require any
consent, approval, filing or notice under any provision of law applicable to
BarCo or Sub or any of BarCo's other subsidiaries; or (d) require any consent,
approval or notice under, or violate or constitute a default under, or permit
the termination of any provision of, or result in the acceleration of the
maturity or performance of any obligation of, or result in the creation or
imposition of any lien upon any properties, assets or businesses of, BarCo or
Sub or any of BarCo's other subsidiaries under, any note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit, authorization, license,
contract, instrument or other agreement or commitment, or any order, judgment or
decree, to which BarCo or Sub or any of BarCo's other subsidiaries is a party or
by which it or any of its assets or properties is bound or encumbered, which in
any of the foregoing cases would have a material adverse effect on BarCo and its
subsidiaries taken as a whole or would prohibit or interfere with the
consummation of the Merger by BarCo or Sub.
2.4 GUARANTY. BarCo hereby agrees to fully and unconditionally
guarantee the performance by Sub and by any assignee of Sub of all of Sub's
representations, warranties, covenants and undertakings set forth in this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to BarCo and Sub that except as
previously furnished to BarCo in writing:
3.1 ORGANIZATION. The Company and each of its Subsidiaries (as such
term is defined in Section 3.3) is a corporation duly organized, validly
existing and, to the best of the Company's knowledge, in good standing under the
laws of its jurisdiction of incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified will not
have a material adverse effect on the financial condition, results of operations
or business of the Company and its Subsidiaries taken as a whole. The Company
has previously delivered to BarCo true and complete copies of its Certificate of
Incorporation and Bylaws, as amended to the date hereof.
3.2 CAPITALIZATION. The authorized capital stock of the Company
consists of (a) 6,000,000 shares of the Company's Common Stock, $.01 par value
per share ("Company Common Stock"), of which 3,969,518 are issued and
outstanding and (b) 1,500,000 shares of the Company's Preferred Stock, $1.00 par
value per share, none of which are issued and
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outstanding. The Company has reserved (i) 65,000 shares of Company Common Stock
for issuance under its Directors' Stock Option Plan, as amended to date, of
which options to purchase 45,000 shares have been granted, no options have been
exercised, and no options have expired or have been forfeited and (ii) 130,000
shares of Company Common Stock for issuance under its Employee Incentive Stock
Option Plan, as amended to date, of which options to purchase 114,000 shares
have been granted, no options have been exercised and options to purchase 21,500
shares have expired or have been forfeited. Except for the foregoing, and
except for its obligations regarding stock equivalency accounts under the
Directors' Deferred Compensation Plan, there are not now, and at the Closing
Date, the Company will not have, any outstanding options, warrants, convertible
securities, calls, subscriptions or other rights or agreements or commitments of
any character obligating the Company or any of its Subsidiaries to issue,
transfer or sell any shares of capital stock or other securities of the Company
or any of its Subsidiaries. All issued and outstanding shares of Company Common
Stock are validly issued, fully paid, nonassessable and free of preemptive
rights.
3.3 SUBSIDIARIES. As used herein, the term "Subsidiaries" shall mean
Canadian Drawn Steel Company Inc. and Bliss & Laughlin Steel Company. The
Company is, directly or indirectly, the record and beneficial owner of all of
the outstanding shares of capital stock of each of the Subsidiaries, there are
no irrevocable proxies with respect to such shares and no equity securities of
any of the Subsidiaries are or may become required to be issued for any reason
including, without limitation, by reason of any options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for, shares of any
capital stock of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is bound to issue
additional shares of its capital stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by the Company or any
of its Subsidiaries are validly issued, fully paid and nonassessable and, to the
best of the Company's knowledge, are owned by it free and clear of any material
claim, lien, encumbrance or agreement with respect thereto.
3.4 AUTHORIZATION AND VALIDITY OF AGREEMENTS. The Company has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder (subject, in the case of performance of this
Agreement, to obtaining any necessary approval of its stockholders). The
execution, delivery and performance by the Company of this Agreement and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors and no other corporate action on the part
of the Company is necessary to authorize the execution and delivery by the
Company of this Agreement and the consummation by it of the transactions
contemplated hereby (subject to obtaining the necessary approval of its
stockholders). This Agreement has been duly executed and delivered by the
Company and is a valid and binding obligation of the Company.
3.5 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
Which the Company Is Party. Neither the execution and delivery of this
Agreement nor the performance by the Company of its obligations hereunder will
(a) violate the charter documents, bylaws or other organizational documents of
the Company or any of its Subsidiaries;
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(b) assuming satisfaction of the requirements set forth in clause (c) below,
violate any provision of law applicable to the Company or its Subsidiaries; (c)
except for (i) requirements under the Exchange Act, (ii) requirements, if any,
arising out of the Hart-Scott Act, and (iii) the filing of the Merger Document
in accordance with the Delaware Law, require any consent, approval, filing or
notice under any provision of law applicable to the Company or its Subsidiaries;
(d) except as required under any existing bank loan agreement, a copy of which
has been provided to BarCo, require any consent, approval or notice under, or
violate, or be in conflict with or constitute a default under or permit the
termination of any provision of, or result in the acceleration of the maturity
or performance of or result in the creation or imposition of any lien upon any
properties, assets or businesses of the Company or its Subsidiaries under any
note, bond, indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or commitment,
or any order, judgment or decree to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their assets or properties is bound
or encumbered, which in any of the foregoing cases would have a material adverse
effect on the Company and its Subsidiaries taken as a whole or would prohibit or
materially interfere with the consummation of the Merger by the Company.
3.6 LEGAL PROCEEDINGS. Except as set forth in the Company Commission
Filings (as such term is defined in Section 3.7) as of the date hereof and in
the Company's audited consolidated financial statements for the fiscal year
ended September 30, 1994, there is no suit, action, proceeding or investigation
pending or, to the best knowledge of the Company, threatened against or
involving the Company or any of its Subsidiaries, properties or rights, which,
if adversely determined, would have, either individually or in the aggregate, a
material adverse effect on the financial condition, results of operations or
business of the Company and its Subsidiaries taken as a whole, nor is there any
judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against the Company or any of its Subsidiaries having any such effect. Neither
the Company nor any of its Subsidiaries is in violation of any term of any
judgment, decree, injunction, rule or order outstanding against it which would
have, either individually or in the aggregate, a material adverse effect on the
financial condition, results of operations or business of the Company and its
Subsidiaries taken as a whole.
3.7 COMPANY COMMISSION FILINGS; FINANCIAL STATEMENTS. As of the
respective dates of their filing with the Commission, all reports, statements
(including the Proxy Statement), registration statements and other filings
(including all notes, exhibits and schedules thereto and documents incorporated
by reference therein) filed by the Company with the Commission (such reports,
statements, registration statements and other filings, together with any
amendments thereto, being sometimes collectively referred to as the "Company
Commission Filings") and the Company's audited consolidated financial statements
dated September 30, 1994 did not contain, at the time of the filing thereof, any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading, provided that the
Company shall not be responsible and shall have no liability for information
provided to it by BarCo or Sub for inclusion in any Company Commission Filing.
Each of the audited
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consolidated financial statements and unaudited interim financial statements
(including any related notes or schedules) included in the Company Commission
Filings was prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes or schedules thereto) and fairly presented the financial position of the
Company and its consolidated Subsidiaries as at the dates thereof and the
results of their operations and changes in financial position for the periods
then ended, subject, in the case of unaudited interim financial statements, to
normal year-end adjustments. Neither the Company nor any of its Subsidiaries
has any liabilities or obligations on a consolidated basis, either accrued or
contingent (to the extent required to be reflected or disclosed in financial
statements in accordance with generally accepted accounting principles), and
whether due or to become due, which, individually or in the aggregate, (a) have
not been reflected in the audited consolidated balance sheet for the year ended
September 30, 1994 (the "Balance Sheet") or disclosed in the notes to the
audited financial statements relating thereto; or (b) do not consist of
liabilities of the kind specified or referred to in the Company's audited
financial statements for the fiscal year ended September 30, 1994 which have
been incurred by the Company and its Subsidiaries in the ordinary course of
business since the date thereof, except for its liabilities or obligations
undertaken in connection with this Agreement.
3.8 CONDUCT OF BUSINESS IN THE ORDINARY COURSE; ABSENCE OF CERTAIN
Changes and Events. Except as disclosed in the Company Commission Filings
filed as of the date hereof and the Company's audited consolidated financial
statements for the fiscal year ended September 30, 1994 previously delivered to
BarCo and except for changes affecting the steel bar industry or the economy
generally, since September 30, 1994, there has not been, occurred or arisen,
whether or not in the ordinary course of business:
(a) any material adverse change in the financial condition, results of
operations or business of the Company and its Subsidiaries taken as a whole; or
(b) any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, materially and adversely affecting any property or
business of the Company or its Subsidiaries taken as a whole; or
(c) any declaration, setting aside or payment of a dividend (whether in
cash, stock or property) in respect of the capital stock of the Company or any
of its Subsidiaries (other than a wholly owned Subsidiary); or
(d) any actual or, to the knowledge of the Company, threatened strike
(whether asserted or unasserted) or other labor trouble or dispute involving
employees of the Company or its Subsidiaries which materially and adversely
affects the financial condition, results of operations or business of the
Company and its Subsidiaries taken as a whole; or
(e) any borrowing or lending of money or guarantee of any obligation by
the Company or any of its Subsidiaries, except in the ordinary course of
business; or
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(f) any application, amendment, termination, renewal based on false and
misleading disclosures or failure to renew with respect to, any agreement or
insurance policy which has a material adverse effect on the financial condition,
results of operations or business of the Company and its Subsidiaries taken as a
whole; or
(g) any disposition of any material (on a consolidated basis) properties
or assets used in the business of the Company or its Subsidiaries, except sales
from inventory made in the ordinary course of business; or
(h) to the best of the Company's knowledge, any violation of or conflict
with any applicable laws, statutes, orders, rules and regulations promulgated or
judgment entered by any federal, state, county, local or foreign court or
governmental authority which, individually or in the aggregate, materially and
adversely affects the financial condition, results of operations or business of
the Company and its Subsidiaries taken as a whole; or
(i) except as previously disclosed in writing to BarCo, any notice of
any violation, inquiry or investigation by any governmental authority that
materially and adversely affects the financial condition, results of operations
or business of the Company and its Subsidiaries taken as a whole.
3.9 PATENTS, TRADEMARKS, ETC. To the best of the Company's
knowledge, the Company or its Subsidiaries have sufficient right, title and
interest in all Intangible Property Rights necessary for the business of the
Company and its Subsidiaries as now conducted, or the Company is able to obtain
such rights on terms which will not adversely affect its business. When used in
this Agreement, the term "Intangible Property Rights" means all United States
and foreign letters patent and pending applications, patent and "know-how"
licenses (or similar agreements), trade name and trademark registrations and
pending applications, service mark registrations and pending applications and
copyright registrations, those trade names and common law trademarks which are
currently in use by the Company or any of its Subsidiaries, and unregistered
copyrights directed to publications in current circulation by the Company or any
of its Subsidiaries now owned in whole or in part by the Company or any of its
Subsidiaries or under which the Company or any of its Subsidiaries is licensed
and the trade secrets and other proprietary information of the Company and its
Subsidiaries.
3.10 TAX MATTERS. Except where the failure of one or more of the
following representations would not have a material adverse effect on the
financial condition, results of operations or business of the Company and its
Subsidiaries taken as a whole: (a) all returns, reports and declarations for
franchise or income taxes required to be filed by the Company and its
Subsidiaries with the Internal Revenue Service and each applicable State have
been so filed; (b) all sales, use or value added taxes or assessments (including
interest and penalties) have been fully paid or adequately provided for in the
audited financial statements for the fiscal year ended September 30, 1994,
except where the failure to have so paid or provided for such taxes or
assessments or any other irregularities with respect to such taxes or
assessments would not result in a monetary obligation of the Company or its
Subsidiaries in excess of $25,000 in the
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aggregate; (c) for tax periods not closed by the applicable statute of
limitations, no issues have been asserted against the Company or its
Subsidiaries in a revenue agent's report or other written document by the
Internal Revenue Service or by any taxing authority in any State in connection
with any of the returns, reports and declarations filed with the Internal
Revenue Service or appropriate governmental agencies in such State; (d) no
waivers of statutes of limitation are currently outstanding nor are any requests
for such waivers pending with respect to the Company or its Subsidiaries; (e)
all required payroll and employment taxes and withholding of income, employment
and payroll taxes attributable to employees of the Company and its Subsidiaries
have been properly determined, withheld and paid on a timely basis to the
appropriate federal, state or local governmental agency or adequately provided
for in the audited financial statement for the fiscal year ended September 30,
1994; (f) the United States federal income tax returns in respect to the Company
and its Subsidiaries for the fiscal year ended September 30, 1991 and thereafter
have not been examined by the Internal Revenue Service; nor is any such
examination pending; and (g) neither the Company nor its Subsidiaries has filed
any consent or agreement under section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code") (or corresponding provisions of any applicable
foreign, state, county or local law).
3.11 INSURANCE. The Company maintains insurance policies for the
assets and operations of the Company and its Subsidiaries in amounts deemed
adequate by the Company, in each case issued by insurers of recognized national
standing. True and correct copies of the foregoing policies will be delivered
to BarCo within five (5) business days of the date hereof.
3.12 EMPLOYMENT RELATIONS. There (a) is no unfair labor practice
complaint against the Company pending before the National Labor Relations Board,
(b) is no labor strike, dispute, slowdown or stoppage pending or, to the best
knowledge of the Company, threatened against or involving the employees of the
Company, (c) except as set forth on Schedule 3.12, is no labor union that claims
to represent the employees of the Company, (d) is pending no grievance that
might have a material adverse effect upon the Company and its Subsidiaries
considered as a whole, and no pending arbitration proceeding arising out of or
under any collective bargaining agreement of the Company and no claim therefor
has been asserted which, in either case, might have a material adverse effect
upon the Company and its Subsidiaries considered as whole, (e) except as set
forth on Schedule 3.12, is no collective bargaining agreement that is in effect
or is currently being negotiated (or pending) by the Company with respect to its
employees, and (f) has not been any labor difficulty giving rise to a material
adverse effect experienced by the Company and its Subsidiaries considered as
whole during the last three calendar years. To the best of its knowledge, the
Company has not taken or failed to take any action that could form the basis for
a valid claim or charge of an unfair labor practice or discriminatory employment
practice under any federal, state or local law or regulation relating to
labor-management relations or employment discrimination that could have a
material adverse effect on the Company and its Subsidiaries considered as a
whole.
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3.13 ENVIRONMENTAL MATTERS.
(a) To the best of its knowledge the Company possesses all necessary
permits, licenses and other approvals and authorizations for its operations that
are required under Environmental Laws and that it is in compliance with such
permits, licenses, approvals and authorizations. "ENVIRONMENTAL LAWS" means
all federal, state and local laws, ordinances, rules and regulations relating to
or regulating human health or safety or environmental matters, or protection of
the environment, or pollution or contamination of the air, soil, surface water,
or groundwater. The Company is and since October 30, 1984 has been in
compliance with all applicable Environmental Laws except where non-compliance
would not have a material adverse effect on the financial condition of the
Company and its Subsidiaries considered as a whole.
(b) The Company is not subject to any outstanding order, demand, action
or claim from any person or entity pursuant to, nor has the Company received any
written notice from any person or entity of any violations of or alleged
violations of, any Environmental Law.
(c) Except as disclosed on Schedule 3.13(c), since October 30, 1984, the
Company has not owned or leased storage tanks (whether above ground or
underground).
(d) Since October 30, 1984, the Company has not caused or permitted the
Release of any Hazardous Substance onto and is unaware of any Hazardous
Substance present on the properties owned, operated or leased by the Company.
"HAZARDOUS SUBSTANCE" means those substances as defined by Section 101(14) of
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), 42 U.S.C. Section 9601(14), and its implementing any other
applicable Environmental Law. "RELEASE" means any spilling, leaking, pumping,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment of hazardous substances into or through soil,
air, surface water or groundwater that is required to be reported pursuant to
Section 103(a) of CERCLA, 42 U.S.C. Section 9603(a), and its implementing
regulations or any other applicable Environmental Law.
(e) There are no disposal sites for Hazardous Wastes under any
Environmental Law located on the real estate now or previously owned, occupied
or leased by the Company. "HAZARDOUS WASTE" means any waste as defined by
Section 1004(5) of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6903(5), and its implementing regulations. To the best of its knowledge, and
except as disclosed on Schedule 3.13(e) the Company is not liable or a
responsible party or potentially liable or responsible party at any Superfund
site.
3.14 OPINION OF FINANCIAL ADVISOR The Company has received the
opinion of The Chicago Corporation to the effect that, as of the date hereof,
the consideration to be received by the holders of the Shares in the Merger is
fair to such holders from a financial point of view.
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ARTICLE 4
COVENANTS
4.1 PROXY STATEMENT. The Company shall file, no later than ten
business days after the date of this Agreement (and shall use its best efforts
to file sooner, if practicable), with the Commission under the Exchange Act, and
shall use its best efforts to have cleared by the Commission, and no later than
five business days after such clearance shall mail to its stockholders, a proxy
statement or information statement, as appropriate, and all amendments and
supplements thereto required by law (the "Proxy Statement"), with respect to the
Special Meeting (as such term is defined in Section 4.2). Each of BarCo, Sub
and the Company represent that the information supplied or to be supplied for
inclusion by BarCo, Sub or the Company in the Proxy Statement, as the case may
be, will not, at the time the Proxy Statement is filed with the Commission, at
the time it is mailed to stockholders of the Company or at the time of the
Special Meeting be false or misleading with respect to any material fact, or
omit to state any material fact necessary in order to make the statements
therein not misleading. The Proxy Statement shall contain the recommendation of
the Board of Directors that stockholders approve the Merger; provided, however,
that nothing in this Section 4.1 shall require the Board of Directors to act or
refrain from acting in any manner which the Board of Directors in good faith
determines could violate its fiduciary duties under applicable law, subject,
however, to the provisions of Sections 4.3 and 6.1(c)(ii) hereof.
4.2 MEETING OF STOCKHOLDERS OF THE COMPANY. As soon as practicable,
the Company shall take all action necessary, in accordance with Delaware Law and
its Certificate of Incorporation and Bylaws, to convene a meeting of its
stockholders (the "Special Meeting") as promptly as practicable to consider and
vote on the Merger and to vote on this Agreement. The stockholder vote or
consent required for approval of the Merger and this Agreement shall be no
greater than that provided for by Delaware Law, the Company's Certificate of
Incorporation or its Bylaws. The Company shall use its best efforts to solicit
from stockholders of the Company proxies in favor of the approval of this
Agreement and to take all other action necessary or, in the reasonable judgment
of BarCo, helpful to secure a vote of stockholders in favor of the Merger and to
approve this Agreement; provided, however, that nothing in this Section 4.2
shall require the Board of Directors to act or refrain from acting in any manner
which the Board of Directors in good faith determines could violate its
fiduciary duties under applicable law, subject, however, to the provisions of
Sections 4.3 and 6.1(c)(ii) hereof. At the Special Meeting, BarCo and each
subsidiary of BarCo shall vote, or cause to be voted, all of the Shares then
owned by BarCo or such affiliate in favor of the Merger and this Agreement. The
Company will notify BarCo both orally and in writing at least 24 hours prior to
the mailing of the Proxy Statement to the stockholders of the Company of its
intent to mail the Proxy Statement. Anything to the contrary contained herein
notwithstanding, the Company shall not include in the Proxy Statement any
information with respect to BarCo or its affiliates or associates, the form and
content of which information shall not have been approved by BarCo prior to such
inclusion, subject to requirements of applicable law (but in any event only
after the Company has consulted with BarCo in advance). If required by
applicable law, BarCo and the
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Company shall file with the Commission and make available to the Company's
stockholders, as required by applicable law, a joint Schedule 13E-3 (the
"Schedule 13E-3") with respect to the Special Meeting and the Merger. Each of
BarCo, Sub and the Company represent that information supplied or to be supplied
for inclusion by BarCo, Sub or the Company, as the case may be, in any Proxy
Statement and the Schedule 13E-3 will not, at the time of the filing thereof
with the Commission and at the time of the mailing thereof to stockholders and
at the date of the Special Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading and BarCo, Sub and the Company agree promptly
to correct any such information provided by them for use in a Proxy Statement
and/or a Schedule 13E-3 which shall have become false or misleading in any
material respect and take all steps necessary to cause such documents as so
corrected to be filed with the Commission and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable law. The
Company agrees that any Proxy Statement filed by it, and the Company and BarCo
agree that any Schedule 13E-3 filed by them, shall comply as to form in all
material respects with the provisions of applicable law.
4.3 ACQUISITION PROPOSALS. Between the date of this Agreement and
the Effective Time:
(a) neither the Company nor any of the Subsidiaries may, directly or
indirectly, and each will instruct and otherwise cause the officers, directors,
employees, agents or advisors or other representatives or consultants of the
Company, including without limitation, The Chicago Corporation, not to,
encourage, solicit, initiate, engage or participate in discussions or
negotiations with, or provide information to, any person or entity (other than
BarCo or Sub or subsidiaries, affiliates or representatives of any of the
foregoing) in connection with any tender offer, exchange offer, merger,
consolidation, business combination, sale of substantial assets, sale of
securities, liquidation, dissolution or similar transaction involving the
Company or any of the Subsidiaries (any such proposal, offer or other
transaction being hereinafter referred to as an "Alternative Proposal"), and
(b) the Company will notify BarCo immediately if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with, it;
PROVIDED, HOWEVER, that nothing contained in this Section 4.3 shall require
the Board of Directors of the Company to act, or refrain from acting in
connection with (i) taking and disclosing to the Company's stockholders a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act, or (ii) taking any action or non-action prohibited by clause (a) above, or
from furnishing information and access to any person or entity the Board of
Directors determines in good faith may become a Qualified Bidder (as hereinafter
defined) making an unsolicited request therefor, or engaging in and
participating in discussions and negotiations with any such person or entity, if
the Company's Board of Directors determines in its good faith judgment that the
failure to so act or refrain from acting could violate its fiduciary duties
under applicable law. Any termination by the Company of this Agreement or entry
by
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the Company into any agreement with respect to an Alternative Proposal in
connection with this Section 4.3 shall be governed by Section 6.1(c)(ii) of this
Agreement. "Qualified Bidder" shall mean a person or entity (a) whose
Alternative Proposal is only subject to ordinary and customary conditions for
consummation and is not subject to any condition as to financing and (b) who
submits an Alternative Proposal in writing no later than 30 days from the date
of this Agreement.
4.4 INTERIM OPERATIONS. During the period from the date of this
Agreement to the Effective Time, except as specifically contemplated by this
Agreement or otherwise as consented to or approved in writing by BarCo:
(a) The business of the Company and each of its Subsidiaries shall be
conducted only in the ordinary and usual course of business and consistent with
past practice;
(b) The Company shall use reasonable efforts to preserve intact the
business organization of the Company and each of its Subsidiaries, to keep
available the services of its and their present officers and key employees in
good standing, and to preserve the goodwill of those having business
relationships with it and its Subsidiaries;
(c) Neither the Company nor any Subsidiary shall amend its charter
documents or similar governing documents;
(d) Except for Shares issuable upon exercise of currently outstanding
stock options under the Company's Directors' Stock Option Plan and Employees'
Incentive Stock Option Plan or issuable pursuant to the Company's Directors'
Deferred Compensation Plan, neither the Company nor any Subsidiary shall
authorize for issuance, issue or deliver any additional debt or equity
securities or any class or series thereof or any securities convertible into the
same or issue or grant any right, option or other commitment for the issuance of
any of the foregoing securities;
(e) Neither the Company nor any Subsidiary shall split, combine,
reclassify or otherwise modify the terms and provisions of any of its debt or
equity securities or declare, set aside or pay any dividend (whether in cash,
stock or property) in respect of its debt or equity securities or redeem or
otherwise acquire any of its debt or equity securities except as contemplated
hereby;
(f) Neither the Company nor any Subsidiary shall dispose of or acquire
any material properties or assets except in the ordinary course of business;
(g) Neither the Company nor any Subsidiary shall enter into or amend any
consulting agreements or other agreements with employees, increase the
compensation payable or to become payable by it to any of its officers,
employees or agents over the amount payable as of the date of this Agreement,
adopt or amend any employee benefit plan or arrangement, or make any advances to
employees (other than advances for reimbursable expenses) except with respect
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to any of the above, such as are generally consistent with the Company's
existing guidelines and are made in the ordinary course of business; provided,
however, the Company shall be authorized to negotiate and execute the renewal of
the union contract or contracts at its Harvey, Illinois facility with such terms
as the Company, using its commercially reasonable judgment, may determine;
(h) Neither the Company nor any Subsidiary shall borrow or enter into
any agreements to borrow money or guarantee or agree to guarantee the
obligations of others, excluding (i) any amounts borrowed, net of any
repayments, in the ordinary course of business pursuant to and in accordance
with the terms and conditions of its existing lines of credit as the same may be
reasonably amended, modified or extended hereafter by the Company using its
commercially reasonable judgment and (ii) guarantees, net of the extinguishment
of any existing guarantees, of the debt of the Subsidiaries of the Company;
(i) Except as contemplated hereby, neither the Company nor any
Subsidiary shall directly or indirectly redeem, purchase or otherwise acquire,
commit to acquire or change the terms of any of its debt or equity securities or
any class or series thereof or any securities convertible into the same or
directly or indirectly terminate or reduce or commit to terminate or reduce any
bank line of credit or the availability of any funds under any other loan or
financing agreement; provided, however, that the Company or any Subsidiary may
exercise any option or right to repurchase securities issued pursuant to a
Company or Subsidiary benefit plan at a price at or below the Merger
Consideration for Shares; and provided, further, that the Company may borrow
under existing credit facilities under the terms existing as of the date hereof
as the same may be reasonably amended, modified or extended hereafter by the
Company using its commercially reasonable judgment;
(j) Neither the Company nor any Subsidiary shall fail to pay or
otherwise satisfy its monetary obligations as they become due, except where the
consequences of failure to pay are not material to the Company and its
Subsidiaries considered as a whole;
(k) Neither the Company nor any Subsidiary shall cancel, materially
amend or fail to renew any insurance policy; and
(l) Neither the Company nor any Subsidiary shall agree in writing or
otherwise to take any of the foregoing actions set forth in clauses (b) through
(k) above or take any actions which would make any representation or warranty in
this Agreement untrue or incorrect in any material respect.
4.5 ACCESS AND INFORMATION.
(a) Subject to and in accordance with the terms of those certain letters
dated July 24, 1995 and July 28, 1995 between BarCo and the Company (the
"Confidentiality Agreement"), relating to the exchange of information between
the parties and certain other matters, the Company has previously afforded (and
will afford prior to the termination of this Agreement)
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to BarCo and to BarCo's accountants, counsel and other representatives full
access in a reasonable manner throughout the period prior to the Effective Time
to all of its properties, books, contracts, commitments and records, and has
furnished (and will furnish) to BarCo and BarCo's accountants, counsel and other
representatives all information concerning its business, properties and
personnel, including certain proprietary and confidential information of the
disclosing party, as BarCo has requested (or may reasonably request). The
Company shall furnish BarCo with drafts of any proposed filings with the
Commission as the same are distributed internally within the Company as well as
copies of such reports and documents concurrently upon their filing with the
Commission.
(b) Any furnishing of information pursuant hereto or any investigation
by either party shall not affect that party's right to rely on the
representations and warranties made by the other party in this Agreement.
Except as otherwise provided by law, BarCo, the Company and Sub each agrees to
maintain all information received pursuant to the terms of this Agreement and
the Confidentiality Agreement in accordance with the terms and conditions of the
Confidentiality Agreement.
(c) In the event that between the date hereof and the Effective Date any
federal, state, local or foreign governmental authority shall commence any
examination, review, investigation, action, suit or proceeding against the
Company or BarCo with respect to the Merger, the party as to which such
examination, review, investigation, action, suit or proceeding is commenced
shall give prompt notice thereof to the other party, shall keep the other party
informed as to the status thereof and have access to and be consulted in
connection with any document filed or provided to such governmental authority in
connection with such examination, review, investigation, action, suit or
proceeding.
4.6 CERTAIN ACTIONS, FILINGS AND CONSENTS. Subject to the terms and
conditions hereof, each of the parties hereto agrees to use all reasonable
efforts promptly to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts promptly to obtain all necessary waivers, consents and
approvals and effect all necessary registrations and filings, including, but not
limited to, (a) filings under the Hart-Scott Act, including responses to
requests for additional information, and (b) submissions of information
requested by government authorities. Each of the parties hereto shall cooperate
with one another in determining whether any filings are required to be made or
consents, approvals, permits or authorizations are required to be obtained under
any other federal, state or foreign law or regulation or any consents, approvals
or waivers are required to be obtained from other parties to loan agreements or
other contracts material to the Company's business in connection with the
consummation of the Merger and in making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such consents, permits, authorizations, approvals or waivers. Provided,
however, that nothing in this Section 4.6 shall require the Board of Directors
to act or refrain from acting in any manner which the Board of Directors in good
faith determines could violate its fiduciary duties under applicable law,
subject, however, to the provisions of Sections 4.3 and 6.1(c)(ii) hereof.
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4.7 EXPENSES. Except as set forth in Section 6.2, whether or not the
transactions contemplated by this Agreement are consummated and made effective,
all expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
4.8 OPINION OF COUNSEL. Two (2) business days prior to the Effective
Date, BarCo and Sub shall have received from Wildman, Harrold, Allen & Dixon,
counsel to the Company, an opinion, dated the date of delivery, reasonably
satisfactory to BarCo and Sub, substantially to the effect of Section 3.2.
4.9 DIRECTORS, AND OFFICERS, INSURANCE AND INDEMNIFICATION. (a) With
respect to all losses, claims, damages or liabilities arising out of actions or
omissions occurring at or prior to the Effective Time (collectively "Losses")
arising under Environmental Laws, until the death of all indemnified Parties (as
defined below), and (b) with respect to all other Losses, until the later of (i)
five (5) years after the Effective Time or (ii) the final resolution of all
Losses and payment of all expenses described below, BarCo shall, and shall cause
the Sub, the Company and the Surviving Corporation to, jointly and severally,
indemnify, defend and hold harmless the present and former officers and
directors of the Company and present and former officers and directors of the
Subsidiaries who presently would be indemnified under the Bylaws of the Company
or its Subsidiaries or who have indemnity agreements with the Company and the
estates, descendants, heirs and beneficiaries of the estates, of all such
officers and directors (an "Indemnified Party" and collectively the "Indemnified
Parties") against all Losses to the full extent permitted under and in
accordance with Delaware law, or the law of the jurisdictions under which the
Subsidiaries are incorporated, as appropriate, or the Certificate of
Incorporation or Bylaws of the Company or the Subsidiaries, as applicable, or
applicable indemnification agreements in effect at the date hereof (to the
extent consistent with applicable law), including provisions relating to
advances of expenses incurred in the defense of any action or suit. BarCo shall
use its best efforts to include the Indemnified Parties in any directors' and
officers' insurance policy BarCo may obtain, provided the additional cost of
adding the Indemnified Parties does not equal or exceed the cost of such
officers' and directors' insurance policy without the Indemnified Parties.
4.10 RELEASE. As of the execution and delivery of this Agreement,
BarCo and Sub shall execute and deliver an instrument releasing the Company and
the Subsidiaries, and their respective affiliates, successors, assigns,
officers, directors, agents, representatives, advisors, attorneys and employees
from any claims, liabilities, damages and causes of action arising from any
breach or alleged breach of the Existing Merger Agreement, the Stock Option
Agreements each dated as of September 16, 1995, among certain stockholders of
the Company ("Option Stockholders"), BarCo and Sub and the Stockholder Escrow
Agreements dated as of September 19, 1995, among Sub, the Option Stockholders
and LaSalle National Trust, N.A. as escrow agent, in each case based upon acts
or omissions occurring prior to the date of this Agreement.
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4.11 RESALE. Sub agrees that, if prior to the first anniversary of
the date of this Agreement, Sub or any assignee of Sub, the Company or the
Surviving Corporation enters into an agreement to (i) sell or exchange all or
substantially all of the Common Stock of the Company or the Surviving
Corporation to or with, (ii) merge or consolidate the Company or the Surviving
Corporation with, or (iii) sell substantially all the assets of the Company or
the Surviving Corporation to, an unaffiliated third party, Sub or any assignee
of Sub, the Company and the Surviving Corporation will jointly promptly use
their commercially reasonable efforts to jointly promptly pay each stockholder
of the Company whose Shares were converted pursuant to Section 1.3(a) hereof
(including any stockholder that enters into a Stock Option Agreement with BarCo
and Sub as provided in such Stock Option Agreement), each option holder entitled
to payment under Section 1.3(e) hereof and each person entitled to payment under
Section 1.3(f) hereof an amount equal to fifty percent (50%) of the product of
(y) the difference between the Aggregate Transaction Value (as defined below)
for such subsequent transaction and $62,000,000 and (z) a fraction, the
numerator of which is the number equal to the total of (a) the number of Shares
of the stockholder of the Company whose Shares were converted pursuant to
Section 1.3(a) hereof, plus (b) the number of Shares covered by stock options
for which such person (or an option holder not included in (a) of this clause)
was entitled to payment under Section 1.3(e), plus (c) the number of Share
equivalents for which such person (or a participant in the Directors' Deferred
Compensation Plan not included in (a) of this clause) was entitled to payment
under Section 1.3(f) and the denominator of which is the number equal to the
total of (1) the number of Shares issued and outstanding as of the Effective
Time plus (2) the number of Shares underlying stock options for which the option
holder is entitled to payment under Section 1.3(e) hereof plus (3) the number of
Share equivalents for which the participant under the Directors' Deferred
Compensation Plan is entitled to payment under Section 1.3(f) hereof. For the
purposes of this Section 4.11, "Aggregate Transaction Value" shall mean the sum
of the aggregate consideration received by the sellers in the transaction
(reduced by the present value of any future or contingent obligations retained
by the sellers) plus the aggregate liabilities assumed by the acquiring party in
the transaction. If the consideration received by the Sub or any assignee of
the Sub, the Company or the Surviving Corporation is other than cash, the amount
due the stockholder under this Section 4.11 may be paid in like kind
consideration or in cash.
4.12 BEST EFFORTS. Each of BarCo and Sub shall use its best efforts
to consummate the transactions contemplated hereby.
ARTICLE 5
CONDITIONS
5.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The respective
obligations of each party hereto under this Agreement to consummate the Merger
shall be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
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(a) APPROVAL OF STOCKHOLDERS. The approval of the stockholders of
the Company referred to in Section 4.2 shall have been obtained, if required by
applicable law or by the Company's Certificate of Incorporation or Bylaws.
(b) LEGAL PROCEEDINGS. No preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission nor any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority shall be in effect, which would prevent the consummation
of the Merger; provided, however, that the parties shall use their best efforts
to seek to obtain the removal of any such order, decree or ruling.
(c) ANTITRUST. The Hart-Scott Act waiting period has expired.
5.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company under this Agreement to consummate the Merger shall
be subject to the following conditions: (a) the fairness opinion issued by the
Company's investment advisors shall be reconfirmed as of the Effective Time and
(b) the Company shall have received a letter or letters from a valuation firm
acceptable to the Company (which acceptance shall not be unreasonably withheld)
as to the solvency of the Company and its Subsidiaries and the Surviving
Corporation on a consolidated basis after giving effect to BarCo's proposed
Financing and the transactions contemplated by this Agreement.
ARTICLE 6
MISCELLANEOUS
6.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, whether or not it has been approved by the stockholders
of the Company:
(a) By the mutual written consent of a majority of the Board of
Directors of the Company and the Board of Directors of BarCo;
(b) By BarCo:
(i) if the Company shall have (a) withdrawn or modified publicly
its approval or recommendation of this Agreement or the Merger including
by the approval of any offer by any other person or (b) taken any public
position inconsistent with such approval or recommendation or failed to
reconfirm publicly such approval or recommendation within ten (10)
business days of a request for such reconfirmation by BarCo or Sub; or if
the Board of Directors shall have resolved to do any of the foregoing; or
(ii) if any corporation, partnership, person, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act) other than BarCo or
Sub or any of their respective
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subsidiaries shall have become the beneficial owner of forty-five percent
(45%) or more of the Shares; or
(iii) except for the claims alleged as of the date hereof in the
pending lawsuit No. 95 C 5426 in the U.S. District Court for the Northern
District of Illinois, if Stelco Inc. shall have taken any legal action, or
taken any actions or engaged in transactions which have or in the
reasonable judgment of BarCo will have the effect of preventing the Merger
or the transactions contemplated hereby from being consummated on or
before January 15, 1996, other than failing to vote for the transaction;
or
(iv) if a tender or exchange offer shall have been commenced by any
third party to acquire twenty percent (20%) or more of the capital stock
of the Company at a price in excess of $9.50 per share; or
(v) if on the date hereof or at any time prior to the Effective
Date, the representation and warranty of the Company contained in Section
3.13 shall not be true and correct or the Company shall have breached in
any material respect or failed to perform in any material respect any of
its obligations, covenants or agreements under this Agreement or any of
the representations and warranties of the Company set forth in this
Agreement (other than the representation and warranty contained in Section
3.13) shall not be true and correct in any material respect; or
(vi) if in BarCo's reasonable discretion the results of BarCo's
environmental due diligence review of the Company are unsatisfactory and
BarCo has so notified the Company within three (3) weeks from the date
hereof; or
(vii) the conditions to the obligations of BarCo set forth in
Article 5 have not been satisfied by January 15, 1996;
(c) By the Company:
(i) if the Closing shall not have taken place by January 15, 1996;
or
(ii) (a) if (a) a Qualified Bidder makes a bona fide offer on or
before 30 days from the date of this Agreement, (b) the Company's Board of
Directors determines in its good faith judgment and in the exercise of its
fiduciary duties that such offer is more favorable to the Company's
stockholders than the Merger, and (c) the Company gives BarCo at least 5
calendar days prior written notice of its intent to terminate this
Agreement under this Section 6.1(c)(ii); or (b) if the Company elects not
to close due to the non-receipt of the fairness opinion from its
investment advisor referred to in Section 5.2; PROVIDED, HOWEVER, that
the termination right provided in this Section 6.1(c)(ii) is conditioned
upon payment to BarCo of the Cancellation Fee provided in Sections 6.2(a)
upon termination; and provided further that such termination right will
terminate as to such offer referred to in this Section 6.1(c)(ii)(a) if,
within such 5-day
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period, BarCo notifies the Company that it will match, in all material
respects, the terms and provisions of such other offer (whereupon the
parties will execute an appropriate amendment hereto); or
(iii) if the conditions to the obligations of the Company set forth
in Article 5 have not been satisfied by January 15, 1996; or
(iv) if on the date hereof or at any time prior to the consummation
of the Merger or any amendment or extension thereof, the representations
and warranties of BarCo and Sub contained in this Agreement shall not be
true and correct which shall materially impair BarCo's or Sub's ability to
perform this Agreement or BarCo and Sub shall have breached in any
material respect or failed to perform in any material respect any of their
obligations, covenants or agreements under this Agreement which shall
materially impair BarCo's or the Sub's ability to perform this Agreement;
(d) By either BarCo or the Company:
(i) if a court of competent jurisdiction or a governmental,
regulatory or administrative agency or commission shall have issued an
order, decree or ruling or taken any other action, in each case
restraining, enjoining or otherwise prohibiting the Merger which is still
in effect on January 15, 1996; or
(ii) if Stelco Inc. shall have exercised all of its rights of first
refusal under Section 3.3 or matching rights under Section 3.4 of the
Right of First Refusal and Standstill Agreement dated May 11, 1990 with
respect to all shares of common stock of the Company held by the
Management Stockholders as defined in such Agreement.
In the event of such termination and abandonment, no party to this
Agreement (or any of its directors or officers) shall have any liability or
further obligation to any other party to this Agreement, other than pursuant to
Section 4.5(c) or 6.2 hereof, or in the case of signers thereto, the Stock
Option Agreement and the Confidentiality Agreement, except that nothing herein
will relieve any party from liability for any breach of this Agreement prior to
such termination; PROVIDED, HOWEVER, that (i) following the payment by BarCo
to the Company of the Company Damages Amount pursuant to Section 6.2, or (ii)
following the payment by the Company to BarCo of the Cancellation Fee pursuant
to Section 6.2, the party making such payment and its respective officers,
directors, affiliates and associates shall have no liability or further
obligation to the recipient of such payment, other than pursuant to Section 6.2,
except for any liability or obligation for any intentional breach of this
Agreement; and provided further, however, in the event BarCo does not obtain
financing for any reason, such failure will not be deemed an intentional breach.
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6.2 EXPENSE AND CANCELLATION PAYMENT.
(a) If the Board of Directors of the Company terminates this Agreement
and abandons the Merger pursuant to Section 6.1(c)(ii), or if the Board of
Directors of BarCo or Sub terminates this Agreement and abandons the Merger
pursuant to Section 6.1(b)(iii) or (iv), then BarCo shall receive from the
Company as liquidated damages the sum (the "Cancellation Fee") of (i) $3,000,000
and (ii) the amount, not to exceed $400,000, of all costs and expenses incurred
by BarCo and Sub relating to this Agreement, the transactions contemplated
hereby and the financing therefor, including without limitation, the reasonable
amount of the following: the fees, disbursements and charges of counsel to
BarCo and Sub and any financing source for which BarCo or any of its affiliates
is responsible, financial advisory fees, accounting fees and expenses, due
diligence costs, and all other out-of-pocket fees, costs and expenses.
Notwithstanding any other provision hereof, the Company will not have the right
to terminate this Agreement under Section 6.1(c)(ii) unless the Cancellation Fee
has been paid in full contemporaneously therewith.
(b) Each of the parties acknowledges that the agreement contained in
this Section 6.2 is an integral part of the transactions contemplated in this
Agreement, and that, without such agreement, the Company, BarCo and Sub would
not enter into this Agreement; accordingly, if the Company or Barco or Sub, as
the case may be, fails promptly to pay the amount due pursuant to this Section
6.2, and, in order to obtain such payment, the Company, on the one hand, or
BarCo or Sub, on the other hand, commences a suit against the Company or Barco
or Sub, as the case may be, to collect the fee provided for herein, the Company
shall pay to BarCo or Sub, or BarCo or Sub shall pay to the Company, as the case
may be, its reasonable costs and expenses (including reasonable attorneys' fees)
in connection with such suit, together with interest on the amount of such fee
at the prime rate publicly announced by Bank of America NT & SA on the date such
payment was required to be made, provided that the Company, on the one hand, or
BarCo or Sub, on the other hand, ultimately prevails by final judgment in such
suit.
(c) If the Board of Directors of the Company terminates this Agreement
and abandons the Merger on account of the failure by BarCo to consummate the
Merger by January 15, 1996 and all other conditions set forth in Article 5
hereof are satisfied, then the Company shall receive from BarCo as liquidated
damages the sum (the "Company Damages Amount") of $2,000,000, unless BarCo shall
have previously terminated under Sections 6.1(b) or (d) hereof.
6.3 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party which is, or whose stockholders are, entitled to
the benefits hereof and this Agreement may be amended or supplemented at any
time; provided, however, that, (a) any such waiver, amendment or supplement by
the Company shall be effective as against the Company only if approved by a
majority of the Board of Directors of the Company and (b) after this Agreement
has been adopted by the stockholders of the Company, no such amendment shall
reduce the amount or change the consideration to be paid to the stockholders or
alter or change any of the terms or conditions of this Agreement if such
alteration or change would adversely
-23-
<PAGE>
affect the stockholders of the Company. No such waiver, amendment or supplement
shall be effective unless in writing and signed by the party or parties sought
to be bound thereby.
6.4 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement shall survive the consummation
of the Merger.
6.5 AGREEMENT TO DEFEND. In the event any claim, action, suit,
investigation or any legal, administrative or other proceeding is commenced by
any governmental body or other person which questions the validity or legality
of the transactions contemplated by this Agreement, or seeks to enjoin, restrain
or prohibit such transactions, or seeks damages in connection therewith, whether
before or after the Effective Time, the parties hereto agree as determined by
their respective Boards of Directors in their reasonable discretion, to the
fullest extent permissible by law, to cooperate and use their best efforts to
vigorously defend against and respond thereto.
6.6 BROKERAGE FEES AND COMMISSIONS. Except for The Chicago
Corporation, the Company hereby represents and warrants to BarCo and Sub with
respect to the Company, and BarCo and Sub hereby represent and warrant to the
Company with respect to BarCo and Sub, that no person or entity is entitled to
receive from the Company or BarCo or Sub, respectively, any investment banking,
brokerage or finder's fee or fees for financial consulting or financial advisory
services in connection with this Agreement or the transactions contemplated
hereby.
6.7 PUBLIC ANNOUNCEMENTS. Neither BarCo nor Sub nor the Company will
issue any press release or otherwise make any public statement with respect to
the Merger without the prior approval of the other party (which approval shall
not be unreasonably withheld), except such as may be required by law or by
obligations pursuant to any listing agreement with any national securities
exchange or by NASDAQ (but only after BarCo, Sub or the Company, as the case may
be, shall have consulted with the other party in advance regarding the form and
substance of such press release or statement).
6.8 SECTION HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.9 FIDUCIARY DUTIES. Anything in this Agreement to the contrary
notwithstanding, nothing in this Agreement shall require the Board of Directors
to act, or refrain from acting, in the future in any manner which the Board of
Directors in good faith determines could violate its fiduciary duties under
applicable law, subject, however, to the provisions of Sections 4.3 and
6.1(c)(ii) hereof.
6.10 NOTICES. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or by FAX or sent by registered or certified mail, postage prepaid, with return
receipt requested, addressed as follows and shall be effective only on receipt:
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<PAGE>
If to BarCo or Sub, to: BRW Steel Corporation
c/o Veritas Capital, Inc.
Ten East Fiftieth Street
New York, New York 10022
Attention: Co-Chairman
With copies to: Pillsbury Madison & Sutro
1050 Connecticut Avenue, N.W., #1200
Washington, D.C. 20036
Attention: Ken M. Brown
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
Attention: Robert A. Profusek, Esq.
If to the Company, to: Bliss & Laughlin Industries Inc.
281 East 155th Street
Harvey, Illinois 60426
Attention: President
With copies to: Company's Counsel
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive, #3000
Chicago, Illinois 60606-1229
Attention: Roger G. Fein
6.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
6.12 APPLICABLE LAW. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to the conflict of laws rules
thereof.
6.13 ENTIRE AGREEMENT. This Agreement amends the Agreement and Plan
of Merger dated as of September 16, 1995, by and among BarCo, Sub and the
Company, and constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, of the parties with respect to such
subject matter (other than the Confidentiality Agreement).
6.14 JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the State
of Illinois located in Chicago, Illinois, or in the United
-25-
<PAGE>
States District Courts in Chicago, Illinois, and, by execution and delivery of
this Agreement, each of the parties to this Agreement accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. The foregoing consents
shall not constitute general consents to service of process in the State of
Illinois for any purpose except as provided above and shall not be deemed to
confer rights to any Person other than the respective parties to this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first above
written.
BRW STEEL CORPORATION
By: /s/ Robert B. McKeon
----------------------------------
Co-Chairman
B & L ACQUISITION CORPORATION
By: /s/ Robert B. McKeon
----------------------------------
Its: President
BLISS & LAUGHLIN INDUSTRIES INC.
By: /s/ Gregory H. Packer
----------------------------------
President, Chief Executive Officer and
Chairman of the Board
- 26 -
<PAGE>
EXHIBIT 99(C)
FORM OF
AMENDMENT NO. 1 TO STOCKHOLDER ESCROW AGREEMENT
-----------------------------------------------
This is Amendment No. 1 dated as of October 4, 1995 ("Amendment No. 1") to
the Stockholder Escrow Agreement dated as of September 19, 1995 by and among the
persons listed on Schedule A thereto ("Stockholder"), B & L Acquisition
Corporation ("Purchaser") and LaSalle National Trust, N.A., as escrow agent (the
"Escrow Agent").
WHEREAS, Stockholder, Purchaser and Escrow Agent are parties to the
Stockholder Escrow Agreement dated as of September 19, 1995 (the "Escrow
Agent"); and
WHEREAS, Purchaser and Stockholder have entered into Amendment No. 1 dated
as of October 4, 1995 to the Stock Option Agreement dated as of September 16,
1995 and, pursuant thereto, an Amended Stock Option Agreement dated as of
October 4, 1995, and wish to conform the Escrow Agreement thereto;
NOW THEREFORE, the parties hereto agree as follows:
(1) The definition of "Option Agreement" in Recital A to, and throughout,
the Escrow Agreement hereby is amended to refer to the "Amended Stock
Option Agreement dated as of October 4, 1995."
(2) The Escrow Agent acknowledges receipt of 33,328 and 25,450 Shares,
respectively, from William P. Daugherty as Trustee of the William P.
Daugherty Trust dated May 11, 1989 and Ellen L. Daugherty, as Trustee
of the Ellen L. Daugherty Trust dated May 11, 1989 (collectively, the
"Daugherty Shares").
(3) The Escrow Agent acknowledges that prior to October 4, 1995 it
delivered to Mr. Gregory H. Parker his 58,678 Shares placed in escrow
by him pending receipt by the Escrow Agent of the Daugherty Shares.
(4) The Escrow Agent shall re-issue the share certificate of the
Stockholder that it is now holding in escrow pursuant to the Escrow
Agreement (referred to as the "Option Shares Certificate" in the
Escrow Agreement) so as to set forth thereon the legends set forth in
Exhibit 1 hereto.
(5) Except as specificaily provided otherwise in this Amendment No. 1, the
parties hereby confirm all the terms and provisions of the Escrow
Agreement.
(6) This Amendment No 1 may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constite one
and the same agreement.
-1-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Stockholder Escrow Agreement dated as of September 19, 1995 to be executed and
delivered on the date first written above.
B & L ACQUISITION CORPORATION
By
-----------------------------------------------
Title
--------------------------------------------
Name
--------------------------------------------
STOCKHOLDER
By
-----------------------------------------------
ESCROW AGENT
By
-----------------------------------------------
Title
--------------------------------------------
Name
--------------------------------------------
-2-
<PAGE>
EXHIBIT 99(D)
FORM OF
AMENDMENT NO. 1 TO AMENDED STOCK OPTION AGREEMENT
-------------------------------------------------
This is Amendment No. 1 dated as of October 18, 1995 ("Amendment No. 1") to
the Amended Stock Option Agreement dated as of October 4, 1995 (the "Amended
Stock Option Agreement"), by and among B & L Acquisition Corporation (the
"Purchaser"), BRW Steel Corporation ("Parent") and the Management Stockholders
individually named on Schedule A thereto (each an "Option Stockholder" or
collectively, the "Option Stockholders") of Bliss & Laughlin Industries Inc.
(the "Company").
WHEREAS, the Purchaser, Parent and the Company have entered into Amendment
No. 1 dated as of October 18, 1995 to the Amended Agreement and Plan of Merger
dated as of October 4, 1995 (the "Merger Agreement"), to, among other things,
change the date by which certain events need to occur from January 15, 1996 to
January 31, 1996, and in connection therewith the parties hereto have agreed to
amend the Amended Stock Option Agreement to conform it to such changed date.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement and Amendment No. 1
thereto, the parties hereto, intending legally to be bound, do hereby agree as
follows:
1. Sections 2 and 14 of the Amended Stock Option Agreement are
hereby amended by deleting "January 15, 1996" wherever it
appears in those Sections and substituting "January 31,
1996" in lieu thereof.
2. Except as amended by this Amendment No. 1, all the terms and
provisions of the Amended Stock Option Agreement shall
remain in full force and effect.
3. This Amendment No. 1 may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to
the Amended Stock Option Agreement dated as of October 4, 1995 to be executed on
its behalf by its authorized representative, all as of the day and year first
above written.
<TABLE>
<CAPTION>
<S> <C>
BRW STEEL CORPORATION B&L ACQUISITION CORPORATION
By: By:
------------------------------ -------------------------------
Title: Title:
---------------------------- -----------------------------
STOCKHOLDER STOCKHOLDER
By: By:
------------------------------ -------------------------------
Title: Title:
---------------------------- -----------------------------
</TABLE>
<PAGE>
EXHIBIT 99(E)
FORM OF
AMENDMENT NO. 1 TO AMENDED AGREEMENT AND PLAN OF MERGER
This AMENDMENT NO. 1 TO AMENDED AGREEMENT AND PLAN OF MERGER dated as
of October 18, 1995 (this "AMENDMENT") is among BRW STEEL CORPORATION, a
Delaware corporation ("BARCO"), B & L ACQUISITION CORPORATION, a Delaware
corporation and a wholly owned subsidiary of BarCo ("SUB"), and BLISS & LAUGHLIN
INDUSTRIES INC., a Delaware corporation (the "COMPANY");
W I T N E S S E T H:
WHEREAS, BarCo, Sub and the Company are parties to the Amended
Agreement and Plan of Merger dated as of October 4, 1995 (the "MERGER
AGREEMENT") pursuant to which BarCo has agreed to acquire all of the outstanding
shares of the Company's Common Stock, $.01 par value per share, at a price of
$9.50 per share;
WHEREAS, the Merger Agreement provides that the Company shall file, no
later than October 18, 1995, with the Securities and Exchange Commission
("COMMISSION") under the Securities Exchange Act of 1934, a proxy statement or
information statement, as appropriate (the "PROXY STATEMENT");
WHEREAS, BarCo, Sub and the Company have agreed to extend the time by
which the Proxy Statement must be filed with the Commission to October 20, 1995;
WHEREAS, the Merger Agreement provides that BarCo and the Company may
terminate the Merger Agreement if the conditions to the obligations of the
parties have not been satisfied or the Closing shall not have otherwise taken
place by January 15, 1996;
WHEREAS, BarCo, Sub and the Company have agreed to extend the date by
which conditions must be satisfied and the Closing shall have occurred to
January 31, 1996; and
WHEREAS, BarCo, Sub and the Company have agreed to certain other
matters incidental to the consummation of the transactions contemplated by the
Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained and other good and valuable consideration had
and received, the parties to the Merger Agreement hereby agree as follows:
<PAGE>
SECTION 1. DEFINED TERMS. All capitalized terms used and not
otherwise defined herein have the meanings assigned to such terms in the Merger
Agreement.
SECTION 2. AMENDMENTS TO MERGER AGREEMENT. The Merger Agreement
is hereby amended as follows:
2.02. SECTION 4.1 of the Merger Agreement is hereby amended by
amending and restating the first sentence of such section in its entirety as
follows:
"The Company shall file, no later than October 20, 1995, with the
Commission under the Exchange Act, and shall use its best efforts to
have cleared by the Commission, and no later than five business days
after such clearance shall mail to its stockholders, a proxy statement
or information statement, as appropriate, and all amendments and
supplements thereto required by law (the "Proxy Statement"), with
respect to the Special Meeting (as such term is defined in
Section 4.2)."
2.02. SECTION 6.1(b)(vii) of the Merger Agreement is hereby
amended by amending and restating such section in its entirety as follows:
"(vii) the conditions to the obligations of BarCo set forth in
Article 5 have not been satisfied by January 31, 1996;"
2.03. SECTION 6.1(c)(i) of the Merger Agreement is hereby amended
by amending and restating such section in its entirety as follows:
"(i) if the Closing shall not have taken place by January 31, 1996;
or"
2.04. SECTION 6.1(c)(iii) of the Merger Agreement is hereby
amended by amending and restating such section in its entirety as follows:
"(iii) if the conditions to the obligations of the Company set forth
in Article 5 have not been satisfied by January 31, 1996; or"
2.05. SECTION 6.1(d)(i) of the Merger Agreement is hereby amended
by amending and restating such section in its entirety as follows:
"(i) if a court of competent jurisdiction or a governmental,
regulatory or administrative agency or commission shall have issued an
order, decree or ruling or taken any other action, in each case
restraining, enjoining or otherwise prohibiting the Merger which is
still in effect on January 31, 1996; or"
-2-
<PAGE>
2.06. SECTION 6.2(c) of the Merger Agreement is hereby amended by
amending and restating such section in its entirety as follows:
"(c) if the Board of Directors of the Company terminates this
Agreement and abandons the Merger on account of the failure by BarCo
to consummate the Merger by January 31, 1996 and all other conditions
set forth in Article 5 hereof are satisfied, then the Company shall
receive from BarCo as liquidated damages the sum (the "Company Damages
Amount") of $2,000,000, unless BarCo shall have previously terminated
under Sections 6.1(b) or (d) hereof."
SECTION 3. DISBURSING AGENT. BarCo, Sub and the Company hereby
select United States Trust Company of New York as the Disbursing Agent under
Section 1.5 of the Merger Agreement.
SECTION 4. EMPLOYMENT AGREEMENTS. From and after the Effective
Time, the Surviving Corporation shall assume and agree to perform the Employment
Agreements, dated May 11, 1990, between the Company and each of the executives
of the Company who are parties thereto, each as in effect as of October 4, 1995
(the "Employment Agreements") in the same manner and to the same extent that the
Employer (as defined in the Employment Agreements) would be required to perform
if the Merger had not taken place.
SECTION 5. MISCELLANEOUS.
5.01. APPLICABLE LAW. This Amendment and the legal relations
between the parties hereby shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to the conflict of laws rules
thereof.
5.02. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall be deemed to be one and the same instrument.
5.03. SECTION HEADINGS. The descriptive headings contained herein
are for convenience of reference only and shall not effect in any way the
meaning or interpretation of this Amendment.
5.04. RATIFICATION. The Merger Agreement as hereby amended is in
all respects ratified and confirmed, and all of the rights and powers created
thereby or thereunder shall be and remain in full force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first above written.
BRW STEEL CORPORATION
By:
------------------------------------------
Co-Chairman
B & L ACQUISITION CORPORATION
By:
------------------------------------------
President
BLISS & LAUGHLIN INDUSTRIES INC.
By:
------------------------------------------
President, Chief Executive Officer
and Chairman of the Board
-4-
