<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of Earliest Event Reported) -- July 27, 1998
_______________
MTL INC.
(Exact name of registrant as specified in its charter)
FLORIDA 0-24180 59-3239073
---------
(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
3108 Central Drive 33567
Plant City, Florida (Zip Code)
(Address of principal executive offices)
(813) 754-4725
(Registrant's telephone number, including area code)
_______________
NOT APPLICABLE
(Former name or address, if changed since last report)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ITEM 5. OTHER EVENTS.
On July 28, 1998, MTL Inc. (the "Company") announced that Palestra
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the
Company ("Palestra"), had entered into Amendment No. 1 (the "Amendment") to that
-------- ---------
certain Agreement and Plan of Merger ("CLC Merger Agreement"), dated as of June
--------------------
23, 1998, by and among Palestra, Chemical Leaman Corporation, a Pennsylvania
corporation ("CLC"), and the shareholders of CLC (each, a "Shareholder" and,
--- -----------
collectively, the "Shareholders") pursuant to which the Company has agreed,
------------
subject to the satisfaction of certain terms and conditions, to acquire all of
the outstanding shares of common stock, $2.50 par value per share, of CLC ("CLC
---
Common Stock") through the merger (the "CLC Merger") of Palestra with and into
- ------------ ----------
CLC, which thereby will become a wholly-owned subsidiary of the Company.
Under the terms of the Amendment, all shares ("Shares") of CLC Common Stock
------
held by the Shareholders shall, by virtue of the CLC Merger, be converted into
the right to receive an aggregate amount in cash (and Company Common Stock, as
described below) equal to $72.8 million plus shares of new preferred stock
having a stated value equal to $5 million, less Transaction Expenses (as defined
in the CLC Merger Agreement attached as exhibit 2.2 hereto) in excess of
$100,000 (collectively, "Merger Consideration"), subject to certain setoffs as
--------------------
set forth in the Merger Agreement. A portion of the Shares held by certain
Shareholders who are officers of CLC shall not be converted into cash, but in
lieu thereof, shall be converted into shares of Company Common Stock as set
forth in their employment agreements.
On July 28, 1998, the Company also announced that it has commenced a tender
offer and consent solicitation (the "Offer") for the $100 million principal
amount of outstanding 10-3/8% Senior Notes due 2005 of CLC ("Notes"). The
Offer is subject to the completion of the CLC Merger.
The tender offer price is equal to (i) the present value on the payment
date of $1,051.88 per Note (the amount payable on June 15, 2001, which is the
first date on which the Notes are redeemable (the "Earliest Redemption Date"))
and all future interest payments payable up to the Earliest Redemption Date,
determined on the basis of a yield to the Earliest Redemption Date equal to the
sum of (x) the yield on the 5-5/8% U.S. Treasury Note due May 15, 2001, based on
the bid price for such security as of 2:00 p.m. New York City time, on August
19, 1998, the third business day immediately preceding the scheduled expiration
date of the tender offer, plus (y) 75 basis points, less (ii) a consent payment
of $20.0 per $1,000 principal amount of Notes for which a valid consent is
received (the "Consent Payment"). A copy of the press release setting forth
details of the Offer is attached hereto as Exhibit 99.1.
The sources of funds to be used to consummate the CLC Merger and the Offer
are expected to include an additional $235 million to be borrowed under MTL term
loan facilities and approximately $32 million of equity consisting of
approximately $20 million of preferred and $12.0 million of common equity. It is
currently anticipated that subsidiaries of CLC will guarantee the borrowings
under MTL's loan facilities, which
2
<PAGE>
will amount to $435.4 million following consummation of the transactions
contemplated by the Merger. In addition, MTL has flexibility under the term
loan to assign all or a portion of this indebtedness to any of its subsidiaries
at any time in the future.
In light of the foregoing, the Company anticipates that trailing 12-month
adjusted pro-forma earnings before net interest expense, income taxes,
depreciation and other income (expense) ("Adjusted Pro-forma EBITDA") at March
31, 1998 was approximately $88.6 million. Adjusted Pro-forma EBITDA reflects
adjustments of approximately $12.5 million attributable to anticipated merger
synergies and approximately $15.0 million based on the identification of certain
CLC non-recurring or non-cash costs and expenses and certain other adjustments.
At March 31, 1998 pro forma debt (including current portion) was approximately
$435.4 million and the ratio of pro forma debt to Adjusted Pro-forma EBITDA for
the 12 months ended March 31, 1998 was approximately 4.9 to 1.
# # #
THE FOREGOING CONTAINS STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO FUTURE
EVENTS. SUCH STATEMENTS ARE PREDICTIONS AND ACTUAL EVENTS OR RESULTS MAY DIFFER
SIGNIFICANTLY.
3
<PAGE>
(b) Exhibits.
2.1 Amendment No. 1, dated July 27, 1998, to the Agreement and Plan of
Merger, dated as of June 23, 1998, by and among Palestra Acquisition
Corp., Chemical Leaman Corporation and the shareholders of Chemical
Leaman Corporation.
99.1 Press Release of MTL Inc., dated July 27, 1998, announcing
commencement of the tender offer for the 10-3/8% Senior Notes due 2005
of Chemical Leaman Corporation.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, MTL
Inc. has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
MTL Inc.
By: /s/ Charles J. O'Brien, Jr.
---------------------------
Date: July 30, 1998
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Amendment No. 1, dated July 27, 1998, to the Agreement and Plan
of Merger dated as of June 23, 1998, by and among Palestra
Acquisition Corp., Chemical Leaman Corporation and the
shareholders of Chemical Leaman Corporation.
99.1 Press Release of MTL Inc., dated July 28, 1998, announcing
commencement of the tender offer for the 10-3/8% Senior Notes
due 2005 of Chemical Leaman Corporation.
</TABLE>
6
<PAGE>
EXHIBIT 2.1
AMENDMENT NO. 1 dated as of July 27, 1998
(this "Amendment") to the AGREEMENT AND PLAN OF
---------
MERGER (the "Original Agreement" and, as amended,
------------------
this "Agreement") dated as of June 23, 1998, by
---------
and among PALESTRA ACQUISITION CORP., a Delaware
corporation ("Purchaser"), CHEMICAL LEAMAN
---------
CORPORATION, a Pennsylvania corporation (the
"Company"), and THE SHAREHOLDERS OF THE COMPANY
--------
NAMED ON SCHEDULE I ATTACHED TO THE ORIGINAL
----------
AGREEMENT (each, a "Shareholder", and
-----------
collectively, the "Shareholders"). Capitalized
------------
term used but not defined herein shall have the
meanings ascribed to them in the Original
Agreement.
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving this Amendment and the transactions to which the Company is a party
contemplated hereby, and has agreed, upon the terms and subject to the
conditions set forth herein, to recommend that the Company's shareholders
approve this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual benefits to
be derived from this Amendment and the representations, warranties, covenants,
agreements and conditions hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
AMENDMENTS
1.1 PURCHASE PRICE; EFFECT ON CAPITAL STOCK.
---------------------------------------
(a) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Merger Consideration" and replacing it with the following:
""Merger Consideration" means the sum of (i) the Aggregate Cash
--------------------
Merger Consideration plus (ii) shares of New Preferred Stock having a
stated value equal to $5 million."
(b) Annex I to the Original Agreement is hereby amended by adding the
following thereto:
""Aggregate Cash Merger Consideration" means $72,800,000.
-----------------------------------
<PAGE>
(c) Annex I to the Original Agreement is hereby amended by adding the
following thereto:
"New Preferred Stock" means shares of the Preferred Stock of MTL,
-------------------
the designations, rights and preferences of which are more
particularly described on Exhibit 2.1(b) hereto.
--------------
(d) Section 2.1(a) of the Original Agreement is hereby amended by
adding the following new sentence to the end thereof:
"Notwithstanding anything to the contrary contained in this
Agreement or in any Employment Agreement, the Purchaser shall be
obligated to pay in cash to the Shareholders an amount equal to but
not more than (i) the Aggregate Cash Merger Consideration, less (ii)
the product of (A) the aggregate number of Merger Shares that are to
be converted into MTL Stock pursuant to Section 2.1(c) and the
applicable Employment Agreements multiplied by (B) a fraction, the
numerator of which shall be the Merger Consideration less the Net
Transaction Expenses, and the denominator of which shall be the Merger
Share Number (the "MTL Stock Amount"), less (iii) the Net Transaction
----------------
Expenses."
(e) Sections 2.1(b)(iii), (iv) and (v) of the Original Agreement are
each hereby deleted in their entirety and shall be collectively replaced with
the following:
"(iii) the Merger Shares held by each Shareholder (other than
the Merger Shares that are to be converted into shares of MTL Stock)
shall, by virtue of the Merger and without any action on the part of
any Shareholder, cease to be outstanding and be converted into the
right to receive, subject to the terms and conditions of this
Agreement, (A) shares of New Preferred Stock having a stated value
equal to the product of such Shareholder's Common Equity Percentage
multiplied by $5 million and (B) cash in an amount equal to such
Shareholder's Cash Merger Consideration.
For purposes of the foregoing, "Cash Merger Consideration" means the
-------------------------
following:
(i) in respect of each Shareholder other than David R. Hamilton
and David M. Boucher, an amount equal to (A) the product of such
Shareholder's Common Equity Percentage multiplied by the Aggregate
Cash Merger Consideration, less (B) the product of the Hamilton
Special Merger Consideration multiplied by such Shareholder's Post
Hamilton Percentage, less (C) the product of the Boucher Special
Merger Consideration multiplied by such Shareholder's Post Boucher
Percentage, less (D) the product of such Shareholder's Percentage of
Merger Consideration multiplied by the Net Transaction Expenses;
(ii) in respect of David R. Hamilton, an amount equal to (A) the
product of Mr. Hamilton's Common Equity Percentage multiplied by the
Aggregate Cash Merger Consideration, plus (B) the Hamilton Special
Merger Consideration, less (C) the product of the Boucher Special
Merger Consideration multiplied by Mr. Hamilton's Post Boucher
Percentage, less (D) the product of
2
<PAGE>
Mr. Hamilton's Percentage of Merger Consideration multiplied by the
Net Transaction Expenses; and
(iii) in respect of David M. Boucher, an amount equal to (A) the
product of Mr. Boucher's Common Equity Percentage multiplied by the
Aggregate Cash Merger Consideration, plus (B) Boucher Special Merger
Consideration, less (C) the product of the Hamilton Special Merger
Consideration multiplied by Mr. Boucher's Post Hamilton Percentage,
less (D) the product of Mr. Boucher's Percentage of Merger
Consideration multiplied by the Net Transaction Expenses.
For purposes of the foregoing, the "Post Boucher Percentage" means in
-----------------------
respect of any Shareholder, the total number of Merger Shares held by such
Shareholder divided by the total number of Merger Shares held by all
Shareholders other than Mr. Boucher."
For purposes of the foregoing, the "Post Hamilton Percentage" means in
------------------------
respect of any Shareholder, the total number of Merger Shares held by such
Shareholder divided by the total number of Merger Shares held by all
Shareholders other than Mr. Hamilton."
1.2 DELIVERY OF FUNDS AND CERTIFICATES; SURRENDER OF CERTIFICATES.
-------------------------------------------------------------
(a) Section 2.2(a) of the Original Agreement is hereby amended by
deleting the words the "the funds necessary to pay the Merger Consideration
(taking into account the MTL Stock and subject to any setoffs as set forth in
Section 7.3(g) or Section 7.3(h))" contained therein and replacing such words
with the words "the funds necessary to pay the Aggregate Cash Merger
Consideration, less the Net Transaction Expenses, less the MTL Stock Amount and
less the aggregate amount of all setoffs pursuant to Section 7.3(g) and Section
7.3(h))."
(b) Section 2.2(b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"Each holder of an outstanding certificate or certificates which prior
thereto represented Merger Shares, upon surrender at, or as soon as
practicable after, the Effective Time of the Merger (as the case may
be) to the Transfer Agent of such certificate or certificates
(together with a letter of transmittal signed by such holder in
substantially the form of EXHIBIT A attached hereto), shall be
---------
entitled to the Cash Merger Consideration (subject to any setoffs as
set forth in Section 7.3(g) or Section 7.3(h)) and the shares of New
Preferred Stock into which such Merger Shares previously represented
by such certificate or certificates surrendered shall have been
converted pursuant to this Agreement. The Transfer Agent shall accept
such certificates and such letter of transmittal upon compliance with
such reasonable terms and conditions as the Transfer Agent may impose
to effect an orderly exchange thereof in accordance with normal
practices. After the Effective Time of the Merger, there shall be no
further transfer on the records of the Company or its transfer agent
of certificates representing Merger Shares which have been converted,
in whole or in part, pursuant to this Agreement, into the right to
receive cash, MTL Stock or New
3
<PAGE>
Preferred Stock, and if such certificates are presented to the Company
for transfer, they shall be canceled against delivery of such
consideration. If cash or a certificate representing shares of MTL
Stock or New Preferred Stock is to be remitted to a name other than
that in which the certificate for Merger Shares surrendered for
exchange is registered, it shall be a condition of such exchange that
the certificate so surrendered shall be properly endorsed, with
signature guaranteed or otherwise in proper form for transfer. Until
surrendered as contemplated by this Section 2.2(b), each certificate
for Merger Shares shall be deemed at any time after the Effective Time
of the Merger to represent only the right to receive, subject to any
setoffs pursuant to Section 7.3(g) or Section 7.3(h), for each Merger
Share represented thereby upon such surrender, cash, shares of New
Preferred Stock and/or shares of MTL Stock, in the amount determined
pursuant to Section 2.1(b) or the applicable Employment Agreement, as
the case may be."
(c) Section 2.2(d) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"(d) All consideration (whether in the form of cash, New Preferred
Stock, MTL Stock or setoff pursuant to Section 7.3(g) or Section 7.3(h))
paid upon surrender of certificates representing Shares in accordance with
the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares so exchanged that were
previously represented by such certificates."
1.3 SETOFFS.
-------
Sections 7.3(g) and (h) of the Original Agreement are each hereby amended
by deleting the words "any Merger Consideration or other payments" in each such
Section and replacing it in each such Section with the words "Cash Merger
Consideration or other cash payments."
1.4 CONDITIONS.
----------
Section 7.3(p) of the Original Agreement is hereby amended by deleting
"$4,000,000; provided that, in the Shareholder Representative's sole discretion,
--------
such amount may be increased, at any time prior to two days after Purchaser
delivers a notice that it intends to terminate this Agreement pursuant to
Section 9.1 based upon the condition set forth in this Section 7.3(p) not being
satisfied, to an amount not to exceed $5,000,000 (such excess amount over
$4,000,000, the "Indemnity Cap Adjustment Amount"); it being understood that if
-------------------------------
such amount exceeds $5,000,000, Purchaser shall be under no obligation to effect
the Merger" and replacing it with "$6,500,000."
1.5 INDEMNIFICATION.
---------------
(a) Section 8.6(b) of the Original Agreement is hereby deleted in
its entirety and replaced with the following:
"(b) Indemnity Limitations for the Shareholders. Except as
------------------------------------------
provided herein, the sum of all Losses pursuant to which
indemnification is payable by the
4
<PAGE>
Shareholders in the aggregate pursuant to Section 8.1(a)(i) and
Section 8.1(a)(iv) shall not exceed the sum of (i) $8,250,000 (the
"Cap"), plus (ii) an amount equal to the Indemnity Cap Adjustment
--- ----
Amount (as adjusted, the "Adjusted Cap"), and no Shareholder shall be
------------
liable to Purchaser for any amount in excess of the sum of (x) the
Cash Merger Consideration received by such Shareholder (which shall
include for these purposes shares of MTL Stock), plus (y) the stated
value of all shares of New Preferred Stock received by such
Shareholder in connection with the consummation of the Merger (which
shall not include, for purposes hereof, shares issued as a payment-in-
kind dividend); provided, however, that in no event shall the
-------- -------
limitations set forth in this Section 8.6(b) apply with respect to the
representations and warranties set forth in the Subject R&W or any
claim arising as a result of fraud. Notwithstanding anything else
provided herein or in the Original Agreement, any setoff or reduction
made in respect of the stated value of the New Preferred Stock or any
dividends thereunder shall be included in any calculation of amounts
paid by the shareholders for the purpose of determining the Cap, the
Adjusted Cap and the L/C Cap."
(b) Section 8.7 of the Original Agreement is hereby amended by (i)
deleting the words "Adjusted Cap" each time it appears therein and replacing it
with the words "L/C Cap" and (ii) adding a new sentence to the end thereof which
shall read as follows:
"Notwithstanding anything to the contrary contained herein, Purchaser
agrees not to draw on any Qualified Letter of Credit (i) prior to the
twenty-fourth month immediately following the Closing Date, unless at such
time all dividends on the shares of the New Preferred Stock have either (i)
been paid in cash or (ii) paid as a payment-in-kind dividend )("PIK
Shares"), the stated value of which has been reduced to zero, and (iii)
after the twenty fourth month immediately following the Closing Date, until
such time as the stated value of the outstanding PIK Shares has been
reduced to zero and the stated value of the outstanding shares of New
Preferred Stock that are issued at the Effective Time in connection with
the Merger has been reduced to $2.5 million."
(c) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Indemnity Cap Adjustment Amount" and replacing it with the
following:
""Indemnity Cap Adjustment Amount" means an amount, not to exceed $2.5
-------------------------------
million, equal to the excess of (i) (a) the sum of any EHS Damages which in
the written opinion of Purchaser's consultant (which shall be one or more
of the consultants listed on Schedule 7.3(p)(1)) are reasonably expected to
-------------------
be required to be incurred pursuant to EHS Requirements of Law due to
conditions other than those identified on Schedule 7.3(p)(2) discovered by
------------------
the Purchaser after the date hereof and prior to the Closing in the course
of Purchaser's due diligence or due to any new Proceeding or Order or any
new claim or amended claim arising in connection with any existing
Proceeding, Order or condition, plus (b) the reasonably expected costs
based on the Purchaser's consultant's evaluation in writing, for full
compliance and remediation required pursuant to any EHS Requirement of Law
(including pursuant to ISRA and the Connecticut Transfer Act) resulting
from the announcement or consummation of the transactions contemplated by
this Agreement over (ii) $4,000,000.
5
<PAGE>
(d) Annex I to the Original Agreement is hereby further amended by
adding the following thereto:
""L/C Cap" means, at any time, (i) the Cap, plus (ii) the Indemnity
------- ----
Cap Adjustment Amount, less (iii) the aggregate Preferred Stock Adjustment
----
Amount in effect at such time.
"Preferred Stock Adjustment Amount" means the sum of (i) the stated
---------------------------------
value of all outstanding PIK Shares that are issued or are required to be
issued pursuant to the terms of the New Preferred Stock as a payment-in-
kind dividend on shares of New Preferred Stock that are issued at the
Effective Time in connection with the Merger ("Initial PIK Shares"), plus
------------------
(ii) after the end of the twenty-fourth month immediately following the
Closing Date, if all shares of New Preferred Stock including all PIK Shares
have not been redeemed, $2.5 million, plus (iii) at Purchaser's option
(exercised by delivery of an irrevocable notice to the Shareholders
Representative), additional shares of New Preferred Stock that are issued
at the Effective Time in connection with the Merger having a stated value
equal to up to $2.5 million.
1.6 FINANCING.
---------
EXHIBIT E is hereby deleted in its entirety and replaced with EXHIBIT E
--------- ---------
hereto.
1.7 NOTES.
-----
(a) Purchaser covenants and agrees to use its commercially reasonable
best efforts to cause MTL Inc. to commence an offer to purchase up to all of the
outstanding Notes within five business days after the date hereof and to
complete such offer substantially in accordance with the terms and subject to
the conditions described in the draft of such offer to purchase which has been
previously provided to the Company. It is understood that any delay in
commencing such offer to purchase in connection with either (i) any act or
failure to act by the Company or any third party or (ii) Purchaser's compliance
with applicable law shall not constitute a breach of this Agreement.
(b) The Company agrees to use its commercially reasonable best efforts
(without incurring any costs) to cooperate with the Purchaser and the holders of
its Notes in connection with the offer to purchase set forth in Section 1.7(a).
(c) Annex I to the Original Agreement is hereby amended by deleting
the definition of "Transaction Expenses" contained therein and replacing it with
the following:
"Transaction Expenses" means all fees and expenses that are
--------------------
incurred by or on behalf of the Company or any Shareholder (whether
incurred prior to, at or after the Closing) in connection with the
preparation for, and consummation of, the transactions contemplated
hereby, by the other agreements referred to herein or otherwise in
connection with a sale of the Company, including any payments to
terminate or purchase options to purchase equity interests of any
Subsidiary (including payments to Robert Johnson and William Kannehan)
(it being understood that Transaction Expenses shall not include
either (a) the $4,000,000
6
<PAGE>
cost to obtain the requisite consent of the holders of Notes to an
amendment to the terms of the Indenture, or the fees and expenses
incurred by the Company in connection with such solicitation of
consents all as set forth in Section 6.12 or (b) any costs incurred by
the Purchaser, MTL Inc. or Apollo Management, L.P., in connection with
any offer to purchase the Notes commenced by MTL Inc.).
(d) Sections 6.12 and 7.3(m) of the Original Agreement are hereby
deleted in their entirety.
1.8 CLOSING.
-------
Each party hereto agrees to use its commercially reasonable efforts to
consummate the Merger on or prior to August 31, 1998.
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 AGREEMENT.
---------
Except as modified by this Amendment, the Original Agreement shall remain
in full force and effect, enforceable in accordance with its terms.
2.2 COUNTERPARTS.
------------
This Amendment may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
2.3 GOVERNING LAW.
-------------
THIS AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL
LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION
OF THIS AMENDMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT
OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY
RELATED DOCUMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
EXECUTION AND DELIVERY OF THIS AMENDMENT, EACH PARTY HERETO HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF OR HIMSELF AND IN RESPECT OF ITS OR HIS PROPERTY AND ASSETS,
7
<PAGE>
GENERALLY AND UNCONDITIONALLY THE JURISDICTION OF THE AFORESAID COURTS.
* * *
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
THE PURCHASER:
PALESTRA ACQUISITION CORP.
By:____________________________
Name:
Title:
THE COMPANY:
CHEMICAL LEAMAN CORPORATION
By:____________________________
Name:
Title:
<PAGE>
DAVID R. HAMILTON
CATHARINE C. HAMILTON
CATHARINE ELIZABETH HAMILTON
TENNESSEE ALEXIS HAMILTON
HAMILTON FAMILY TRUST
SAMUEL C. HAMILTON
GEORGE MCFADDEN
JOHN H. MCFADDEN
TRUSTEES U/W/O ALEXANDER B.
MCFADDEN, DECEASED, F/B/O JOHN,
MARY AND GEORGE MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O GEORGE MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN
DECEASED, F/B/O JOHN H. MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O MARY JOSEPHINE
MCFADDEN
LESLEY TAYLOR
TRUSTEES F/B/O ELIZABETH CUTTING
MCFADDEN
EUGENE C. PARKERSON
DAVID M. BOUCHER
PHILIP J. RINGO
REUBEN M. ROSENTHAL
JACK H. ELROD
J. STEPHEN HAMILTON
LEON F. PALMER
DENNIS R. COPELAND
F.C. COLON-OSORIO
G. MICHAEL CRONK
KAREN SZABO LLOYD
FRANK LLOYD
By:____________________________
David R. Hamilton
Attorney-in-Fact
<PAGE>
DAVID R. HAMILTON
CATHARINE C. HAMILTON
CATHARINE ELIZABETH HAMILTON
TENNESSEE ALEXIS HAMILTON
HAMILTON FAMILY TRUST
SAMUEL C. HAMILTON
GEORGE MCFADDEN
JOHN H. MCFADDEN
TRUSTEES U/W/O ALEXANDER B.
MCFADDEN, DECEASED, F/B/O JOHN,
MARY AND GEORGE MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O GEORGE MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN
DECEASED, F/B/O JOHN H. MCFADDEN
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O MARY JOSEPHINE
MCFADDEN
LESLEY TAYLOR
TRUSTEES F/B/O ELIZABETH CUTTING
MCFADDEN
EUGENE C. PARKERSON
DAVID M. BOUCHER
PHILIP J. RINGO
REUBEN M. ROSENTHAL
JACK H. ELROD
J. STEPHEN HAMILTON
LEON F. PALMER
DENNIS R. COPELAND
F.C. COLON-OSORIO
G. MICHAEL CRONK
KAREN SZABO LLOYD
FRANK LLOYD
By:____________________________
George McFadden
Attorney-in-Fact
<PAGE>
The Shareholders:
_______________________________
David R. Hamilton
CATHARINE C. HAMILTON
CATHARINE ELIZABETH HAMILTON
TENNESSEE ALEXIS HAMILTON
By: _______________________________
David R. Hamilton
Attorney-in-Fact
HAMILTON FAMILY TRUST
By: _______________________________
Trustee
__________________________________
Samuel C. Hamilton
__________________________________
George McFadden
__________________________________
John H. McFadden
TRUSTEES U/W/O ALEXANDER B.
MCFADDEN, DECEASED, F/B/O JOHN,
MARY AND GEORGE MCFADDEN
By: _______________________________
George McFadden, Trustee
By: _______________________________
Alexander Cushing, Trustee
<PAGE>
By: _______________________________
Mellon Bank (East), Trustee
TRUSTEE U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O GEORGE MCFADDEN
By: _______________________________
George McFadden, Trustee
By: _______________________________
Alexander Cushing, Trustee
By: _______________________________
Mellon Bank (East), Trustee
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O JOHN H. MCFADDEN
By: _______________________________
George McFadden, Trustee
By: _______________________________
John H. McFadden, Trustee
By: _______________________________
Mellon Bank (East), Trustee
<PAGE>
TRUSTEES U/W/O GEORGE MCFADDEN,
DECEASED, F/B/O MARY JOSEPHINE
MCFADDEN
By: _______________________________
George McFadden, Trustee
By: _______________________________
Mellon Bank (East), Trustee
_______________________________
Lesley Taylor
TRUSTEES F/B/O ELIZABETH CUTTING
MCFADDEN
By: _______________________________
George McFadden, Trustee
By: _______________________________
Lesley Taylor
__________________________________
Eugene C. Parkerson
__________________________________
David M. Boucher
__________________________________
Philip J. Ringo
__________________________________
Reuben M. Rosenthal
<PAGE>
__________________________________
Jack H. Elrod
__________________________________
J. Stephen Hamilton
__________________________________
Leon F. Palmer
__________________________________
Dennis R. Copeland
__________________________________
F.C. Colon-Osorio
__________________________________
G. Michael Cronk
__________________________________
Karen Szabo Lloyd
__________________________________
Frank Lloyd
<PAGE>
Exhibit 2.1(b)
Terms of New Preferred Stock
----------------------------
<TABLE>
<CAPTION>
ISSUER MTL Inc.
- ---------------------------------------------------------------------------------------------------------
<S> <C>
STATED VALUE $5,000,000. The stated value of the outstanding shares of New
Preferred Stock (including Initial PIK Shares but excluding all other
PIK Shares) will be reduced by $1 for each $1 of Purchaser Losses;
provided that the aggregate amount of such reduction will not exceed
the sum of (i) $2.5 million, plus (ii) the stated value of all Initial
PIK Shares. The stated value will be further reduced by the stated
value of all shares of New Preferred Stock that reduce the L/C Cap
pursuant to clause (iii) of the definition of Preferred Stock
Adjustment Amount. Any setoff against Purchaser Losses set forth above
will reduce the L/C Cap.
At any time, the stated value of all PIK Shares other than Initial PIK
Shares will equal (i) the aggregate stated value of all such PIK Shares
multiplied by (ii) a fraction, the numerator of which is the aggregate
reduction of the stated value of the Initial PIK Shares pursuant to the
preceding paragraph and the denominator of which is the aggregate
stated value of all Initial PIK Shares (without giving effect to any
reductions to the stated value thereof); provided that, notwithstanding
the foregoing, if the stated value of the Initial PIK Shares shall be
reduced to zero, then the stated value of all other PIK Shares
automatically be reduced to zero.
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS 8% per annum, payable annually in arrears and payable in kind at
Issuer's option for three years from issuance date. Dividends will be
payable on the stated value on the applicable payment date of all
outstanding shares of New Preferred Stock (including all shares issued
at the Effective Time in connection with the Merger and all PIK Shares
previously issued).
Dividends on shares of common stock will not be paid unless all accrued
dividends on New Preferred Stock have been paid.
- ---------------------------------------------------------------------------------------------------------
MATURITY Ninth anniversary from the Closing Date.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OPTIONAL REDEMPTION Redeemable at any time at Issuer's option at the following prices (plus
accrued and unpaid dividends):
- ---------------------------------------------------------------------------------------------------------
Premium to
Date Stated Value
--------------------------------------------------------- -------------
<S> <C> <C>
Closing Date to 42nd Month 100%
Beg. of 43rd month to end of 54th month 105%
Beg. of 55th month to end of 66th month 110%
Beg. of 67th month to end of 78th month 115%
Thereafter 120%
- ---------------------------------------------------------------------------------------------------------
CHANGE OF CONTROL Upon sale of Issuer to a non-affiliated third party or other change of
control to a non-affiliated third party, shares of New Preferred Stock
would be mandatorily redeemable for the redemption value set forth
above.
- ---------------------------------------------------------------------------------------------------------
IPO Up to 50% of net proceeds of primary offering to be used to redeem
shares of New Preferred Stock for the redemption value set forth above.
- ---------------------------------------------------------------------------------------------------------
LIQUIDATION PREFERENCE Upon liquidation, shares of New Preferred Stock would be senior to
common stock and would be entitled to receive the redemption value set
forth above.
- ---------------------------------------------------------------------------------------------------------
EXCHANGEABILITY Shares of New Preferred Stock can be exchanged at the Issuer's option
for Junior Subordinated Debt of the Issuer, which shall be subject to
the same rights of offset and adjustment. The Junior Subordinated Debt
will contain substantially similar terms and conditions as the terms
and conditions of the New Preferred Stock, including terms and
conditions relating to dividends, maturity, optional redemption, change
of control, IPO, liquidation preference and voting rights.
- ---------------------------------------------------------------------------------------------------------
VOTING RIGHTS Holders of shares of New Preferred Stock will be entitled to a separate
class vote for any amendment to the Certificate of Designations in
respect of the New Preferred Stock to the extent that such amendment
adversely affects the holders of the New Preferred Stock.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 99.1
MTL COMMENCES TENDER OFFER AND CONSENT SOLICITATION FOR 10-3/8 PERCENT SENIOR
NOTES OF CHEMICAL LEAMAN
PLANT CITY, Fla.--(BUSINESS WIRE)--July 28, 1998--MTL INC.("MTL" or the
"Company"), today announced that it has commenced a tender offer and consent
solicitation for the outstanding 10-3/8 percent Senior Notes due 2005 ("Notes")
of Chemical Leaman Corp. ("CLC").
The tender offer price is equal to (i) the present value on the payment date of
$1,051.88 per Note (the amount payable on June 15, 2001, which is the first date
on which the Notes are redeemable (the "Earliest Redemption Date")) and all
future interest payments payable up to the Earliest Redemption Date, determined
on the basis of a yield to the Earliest Redemption Date equal to the sum of (x)
the yield on the 5-5/8 percent U.S. Treasury Note due May 15, 2001, based on the
bid price for such security as of 2:00 p.m., New York City time, on Aug. 19,
1998, the third business day immediately preceding the scheduled expiration date
of the tender offer, plus (y) 75 basis points, less (ii) a consent payment of
$20.000 per $1,000 principal amount of Notes for which a valid consent is
received (the "Consent Payment").
In conjunction with the tender offer, MTL is soliciting consents to eliminate
substantially all of the restrictive covenants and certain default provisions in
the indenture under which the Notes were issued, other than the covenants to pay
interest on the Notes and the related default provisions.
The offer is conditioned upon, among other things, the receipt of consents from
the holders of at least a majority in principal amount of the Notes and the
consummation of the previously announced merger of a subsidiary of MTL with and
into the CLC (the "Merger"). Holders who tender their notes in the offer are
required to consent to the proposed amendments to the indenture.
The Consent payment will only be paid to holders of Notes who tender their Notes
and give their consent at or prior to 5:00 p.m., New York City time, on the date
(the "Consent Date") that is one business day following the public announcement
by press release of the date which is the later of Aug. 11, 1998 and the date on
which the requisite consents to the proposed amendments are received.
The offer will expire at 5:00 p.m., New York City time, on Aug. 24, 1998, unless
otherwise extended. If the expiration date of the offer is extended to a date
later than Aug. 27, 1998, the determination date for the yield of the U.S.
Treasury Notes on which the pricing will be based will be extended to a date
that is the third business day immediately preceding such extended expiration
date. Tendered Notes may be withdrawn and related consents may be revoked at any
time on or prior to 5:00 p.m., New York City time, on the Consent Date.
For additional information regarding the pricing, tender and delivery procedures
and conditions to the offer and consent solicitation, reference is made to the
Offer to Purchase and Consent Solicitation Statement, and the related
transmittal documents, copies of which may be obtained from D.F. King & Co.,
Inc., the information agent for the offer and the solicitation, and BT Alex.
Brown Inc. and Credit Suisse First Boston Corp., the dealer managers for the
offer and the solicitation agents for the solicitation.
MTL also announced today that it has entered into an agreement with CLC amending
certain provisions of the Merger and that the source of funds to be used to
consummate the Merger are now expected to include approximately $235 million of
additional MTL senior bank indebtedness and $32 million of preferred and common
equity.
MTL Inc. operates approximately 1,900 tractors and 4,000 tank trailers through
its three principal transportation subsidiaries: Montgomery Tank Lines Inc.,
Quality Carriers Inc. and Levy Transport Ltd.
Headquartered in Exton, Pa., Chemical Leaman Corp. is a holding company with
varied business interests in the bulk transportation services industry,
including: Chemical Leaman Tank Lines Inc., QualaSystems Inc., Fleet Transport
Company Inc., TransPlastics Inc., Leaman Logistics Inc., EnviroPower Inc. and
Power Purchasing Inc.
Both companies are Chemical Manufacturers Association Responsible Care(R)
Partners and serve a wide variety of manufacturing and industrial customers
including a large number of Fortune 500 chemical companies.
This press release contains statements of a forward-looking nature relating to
future events. Shareholders are cautioned that such statements are predictions
and that actual events or results may differ significantly.
This release is available on the KCSA Worldwide Public Relations website at
www.kcsa.com.
- ------------
- -------------------------------
Contact:
MTL Inc., Plant City
Daniel R. Furth, 800/282-2031
or
Chemical Leaman Corp., Exton
Cydney L. Gilbertson, 610/363-4443
or
KCSA, New York
Joseph A. Mansi/Adam I. Friedman
212/682-6300 ext. 205/215
