<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File No. 0-13787
INTERMET CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-1563873
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5445 Corporate Drive, Suite 200, Troy, Michigan 48098-2683
(Address of principal executive offices) (Zip code)
(248) 952-2500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None Not applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.10 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 1, 2000 was $302,793,331 based on $11.938 per share, the
closing sale price of the common stock as quoted on the Nasdaq National Market.
For purposes of determining the aggregate market value of the Registrant's
voting stock held by non-affiliates, shares held by all current directors and
executive officers of the Registrant have been excluded. The exclusion of such
shares is not intended to, and shall not, constitute a determination as to which
persons or entities may be "affiliates" of the Registrant as defined by the
Securities and Exchange Commission.
At March 1, 2000 there were 25,363,824 shares of common stock, $0.10 par value,
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's annual report to shareholders for the fiscal year
ended December 31, 1999 are incorporated by reference into Parts I and II.
Portions of the registrant's definitive proxy statement for the 2000 annual
meeting of shareholders to be held April 13, 2000 are incorporated by reference
into Part III.
<PAGE> 2
Part I
ITEM 1. BUSINESS
General
Intermet is one of the largest independent producers of ductile iron castings in
the world. And, with the recent acquisitions of Tool Products, Inc., Ganton
Technologies, Inc. and Diversified Diemakers, Inc., we have become a leading
supplier of cast light-metals automotive components. We specialize in the design
and manufacture of highly engineered, cast metal automotive components for the
global light truck, passenger car and heavy-duty vehicle markets. These products
are used in vehicle axles, chassis, engines and transmissions. In addition, we
provide machining and a range of other products and services to the automotive
and industrial markets.
Intermet's focus is to supply cast products to a broad array of automotive and
industrial customers. These products require advanced technology and
engineering. Original equipment manufacturers ("OEMs") and Tier 1 and Tier 2
suppliers increasingly rely on their suppliers to design and engineer parts
based on specific design parameters, including weight, size, cost and
performance criteria. In addition, OEMs, Tier 1 and Tier 2 suppliers look to
their suppliers to solve problems arising in the design and manufacturing
processes. We believe that we are well positioned to benefit from these trends
by providing a broad range of full-service capabilities, including advanced
design and engineering, casting, machining and sub-assembly.
Our ferrous-metals products include ductile iron and gray iron castings and
their related machining operations. These castings include crankshafts,
camshafts, steering knuckles, wheel spindles, differential cases, brake calipers
and suspension control arms. Our light-metals products include lost foam
aluminum castings and aluminum, magnesium and zinc die-castings and their
related machining operations. These castings include engine covers, fluid
containing covers, brackets, instrument panel frames, connector housings, airbag
controller enclosures and windshield wiper motor enclosures. We provide cast
products used by more than 20 automotive OEMs and their leading suppliers
throughout the world, including DaimlerChrysler, Ford, General Motors, BMW,
Honda, Toyota, Delphi, Dana, TRW, PBR, SMW and ZF.
During 1999, our ferrous-metals segment had a total average casting capacity
available of 651,000 tons, on a straight-time basis. As a result of capital
improvements throughout the year, total ferrous-metals casting capacity at
December 31, 1999 was 696,000 tons, on a straight-time basis. Our light-metals
segment had a total average casting capacity available of 19,000 tons, on a
straight-time basis, during 1999. As a result of year-end acquisitions, total
light-metals casting capacity at December 31, 1999 was 74,000 tons, on a
straight-time basis. Based on production, Intermet's casting facilities operated
at an average annual capacity of 101% in 1999, 94% in 1998 and 87% in 1997.
Excluding Ironton, which is an under-utilized foundry that we will close during
2000 (see Recent Developments), our casting facilities operated at an average
annual capacity of 106% in 1999.
We believe that the market for ferrous-metals and light-metals castings is
highly fragmented, with approximately 3,000 suppliers in the United States
alone. We believe that our leadership in core markets positions us to capitalize
on domestic and international consolidation and OEM outsourcing trends. These
trends are driven, in part, by the OEMs' strategy to lower costs and maintain
quality by selectively awarding contracts to suppliers that have full service
capabilities and a significant global presence.
<PAGE> 3
Our castings are used primarily in light trucks and passenger cars, as well as
in heavy trucks. Our castings also have railroad, municipal, marine and
construction applications. We specialize in safety-related parts, critical to
vehicle control, which meet our customers' exacting metallurgical, dimensional
and quality control standards. Examples of products manufactured for the
automotive, light truck and heavy truck industries include brake and suspension
parts, steering components, differential cases, camshafts, crankshafts, fluid
containing covers and electronic enclosures.
We also manufacture cantilevered cranes, specialty service vehicle truck bodies
and precision-machined components for the automotive and industrial markets.
Recent Developments
On March 5, 2000 an explosion and fire occurred at our New River foundry located
in Radford, Virginia. Ten employees suffered injuries in the blast, three of
which were fatal. The explosion and fire caused extensive damage. All operations
at the foundry have been shut down. The U.S. Bureau of Alcohol, Tobacco and
Firearms ("ATF"), the Virginia Occupational Safety and Health Administration
("VaOSHA"), and local fire and law enforcement officials are investigating the
incident. Intermet is also conducting its own investigation. Although no precise
cause has yet been determined, the ATF has stated publicly that it believes the
cause to be accidental. None of these investigations has been completed and,
until they are completed, the precise cause of the explosion cannot be
predicted. Although local fire officials estimated damage to be approximately
$30-50 million shortly after the blast, we are not able to make any precise
damage estimate at this time, and will be unable to do so until all of the
investigations have been completed. When the investigations are complete, it
is possible that fines, penalties, damages or other sanctions could be sought
against Intermet. Intermet is assisting in the investigations and will take
appropriate legal steps to defend itself and take other appropriate action if
any fines, penalties, damages or other sanctions are sought. Intermet carries
insurance for property, business interruption, general liability, employers
liability and workers' compensation. We have notified our insurance carriers
under all of our applicable insurance policies and we will make claims under
the policies as appropriate. We do not know how much, if any, we will record
during the first quarter of 2000 for charges relating to deductibles under our
property and business interruption insurance policies. Based on the information
currently available to us, we believe that we have adequate insurance coverage
for the losses that have been identified to date. However, we cannot assure
that all of our ultimate losses, costs and expenses resulting from the accident
will be covered by insurance, and any amounts not covered by insurance could
be material to our business or financial condition.
On December 20, 1999 we acquired all of the issued and outstanding stock of
Diversified Diemakers, Inc. and Ganton Technologies, Inc. for a purchase price
of $160.0 million and $110.0 million, respectively. The balance sheets of
Diemakers and Ganton are subject to review, which may result in adjustments to
the purchase prices in fiscal year 2000. We accounted for these transactions
using purchase accounting and, accordingly, the purchase price has been
allocated to the assets purchased and the liabilities assumed based upon the
estimated fair values at the date of acquisitions. The excess of the purchase
price, including acquisition costs of $5.5 million, over the estimated fair
values of net assets acquired was $125.6 million, which has been recorded as
goodwill and is being amortized on a straight-line basis over 40 years. The
results of operations of Ganton and Diemakers from the date of acquisitions to
December 31, 1999 are included in our consolidated results of operations. Ganton
and Diemakers are part of our light-metals group.
2
<PAGE> 4
Ganton is engaged in the manufacture and sale of aluminum die-castings for the
automotive industry. Ganton's products include fluid-containing components such
as oil pans, transmission housings and engine covers, as well as brackets and
structural components. Ganton operates three manufacturing facilities, two
located in Sturtevant, Wisconsin and one located in Pulaksi, Tennessee.
Diemakers is engaged in the manufacture and sale of aluminum, magnesium and zinc
die-cast products for the automotive, commercial and electronics industries.
Diemakers' products include engine covers, brake pedal brackets, instrument
panel frames and multi-slide housings. Diemakers has three production facilities
located in Monroe City, Palmyra and Hannibal, all in Missouri.
In order to finance the acquisitions, we borrowed $200 million in the form of an
eighteen-month term loan with a bank group under an agreement dated December 20,
1999. Interest on outstanding borrowings for the first six months is LIBOR plus
2%. After the first six-month period, interest rates are based on grid pricing.
The term loan requires us to maintain financial ratios and imposes limitations
on specified activities. The remaining $70 million of purchase price was
obtained pursuant to an existing five-year credit agreement dated November 5,
1999, detailed in the following paragraph.
On November 5, 1999, we signed a five-year $300 million unsecured revolving
credit agreement with a bank group. This agreement replaced the $200 million
unsecured revolving credit facility, which was to expire January 1, 2000. Also
on November 5, 1999, we executed a $100 million 364-day unsecured revolving
credit agreement. Standby letters of credit reduce the borrowing limits of these
two agreements. The revolving credit agreement provides us with several interest
rate-pricing mechanisms. We must also pay a fee, at rates of 0.20% per annum and
0.175% per annum, on any unused portion of the $300 million and $100 million
loan commitments, respectively. These revolving credit agreements require us to
maintain financial ratios and impose limitations on specified activities.
On December 7, 1999, we announced plans to permanently close our Ironton Iron,
Inc. foundry. Ironton is included in the ferrous-metals segment. Ironton has had
enduring labor and operational difficulties and, as a result, has incurred
significant operating losses since Intermet purchased it in 1988. Because of
Ironton's continuing difficulties, customers representing a significant portion
of its sales volumes had informed Intermet and Ironton in late 1999 that they
had decided to place their business with alternate sources. The foundry is one
of our oldest facilities and the cost to modernize would further impact already
negative operating results. Ironton had revenues of $57 million, $55 million and
$51 million and net losses of approximately $35 million, $10 million and $7
million for the years ended December 31, 1999, 1998 and 1997, respectively. The
net loss of $35 million for 1999 includes charges of approximately $19 million
for asset impairment and shutdown. We anticipate that the foundry will cease
operations by the end of the first quarter of 2000.
On March 19, 1999, Intermet's board of directors authorized the repurchase of up
to 10% of its 25.8 million outstanding shares of common stock. The repurchase
authority allows us to selectively repurchase our stock in the open market or in
privately negotiated transactions, depending on market price and other factors.
Intermet may repurchase the shares at its discretion and without a target price.
During 1999, we purchased 509,000 shares of our common stock for an aggregate
purchase price of $6.8 million.
Financial Information about Segments
The information contained in note 2 to the consolidated financial statements of
Intermet's 1999 annual report to shareholders, furnished to the SEC as Exhibit
13 to this report, is incorporated by reference into this filing.
3
<PAGE> 5
Products, Markets and Sales
We focus on value-added cast products, which we supply to the automotive and
industrial markets. In 1999, 1998 and 1997 approximately 86.4%, 85.7% and 83.0%
of our sales, respectively, were attributable to the automotive market. Within
the automotive market, our products generally fall into four major categories,
including:
- - - Engine components such as camshafts, crankshafts, bedplates and aluminum
intake manifolds
- - - Transmission components such as differential cases, pump bodies and gear
blanks
- - - Chassis components such as steering knuckles, control arms, steering gear
housings, brake housings and supports, spindle carriers and damper forks
- - - Axle components such as differential cases and carriers, bearing caps,
hubs, drums, spring seats and driveline yokes
Intermet also manufactures a variety of products for the industrial and
appliance markets. In 1999, 1998 and 1997 approximately 13.6%, 14.3% and 17.0%
of our sales, respectively, were attributable to the industrial and appliance
markets.
Reportable segment sales by market for 1999 are as follows:
<TABLE>
<CAPTION>
Market
-----------------------------------------------------
Automotive Industrial Total
---------- ---------- -----
<S> <C> <C> <C>
Reportable segment:
Ferrous-metals segment 78.7% 2.2% 80.9%
Light-metals segment 6.6% 4.0% 10.6%
Other 1.1% 7.4% 8.5%
---------------- -------------- --------------
Total 86.4% 13.6% 100.0%
</TABLE>
Reportable segment sales by market for 1998 are as follows:
<TABLE>
<CAPTION>
Market
-----------------------------------------------------
Automotive Industrial Total
---------- ---------- -----
<S> <C> <C> <C>
Reportable segment:
Ferrous-metals segment 81.2% 2.6% 83.8%
Light-metals segment 1.4% 2.1% 3.5%
Other 3.1% 9.6% 12.7%
---------------- -------------- --------------
Total 85.7% 14.3% 100.0%
</TABLE>
Reportable segment sales by market for 1997 are as follows:
<TABLE>
<CAPTION>
Market
-----------------------------------------------------
Automotive Industrial Total
---------- ---------- -----
<S> <C> <C> <C>
Reportable segment:
Ferrous-metals segment 76.0% 2.5% 78.5%
Light-metals segment 1.3% 2.6% 3.9%
Other 5.7% 11.9% 17.6%
---------------- -------------- --------------
Total 83.0% 17.0% 100.0%
</TABLE>
4
<PAGE> 6
Intermet has a long-standing quality assurance program. With the exception of
VEGU, all of our foundry facilities that supply the automotive industry have
QS-9000 and ISO-9001 or ISO-9002 certification. VEGU has ISO-9002 certification.
In addition, many of our facilities have received quality awards from their
customers during 1999, including:
- - - Toyota Quality Performance for Excellence
- - - TRW Aeronautical Systems Certified Supplier
- - - NADCA - 1999 International Diecasting Competition Award
We primarily market our products through our own sales and customer service
staff. We use independent sales representatives in Europe and, to a limited
degree, in the United States. Intermet's principal sales office is in Michigan.
We produce primarily to customer order and do not maintain any significant
inventory of finished goods not on order.
This sales staff acts as a liaison between our customers and our production
personnel. Through the product engineering group, we offer assistance at the
design stage of major casting programs. We employ quality assurance
representatives and engineers who work with our customers' manufacturing
personnel to detect and avoid potential problems and to develop new product
opportunities for us. In addition to working with our customers' purchasing
personnel, our product engineers frequently work closely with design engineers
and other technical staff.
Intermet supplies cast products to over 20 automotive OEMs, directly or through
Tier 1 and Tier 2 suppliers. Our cast products are included on more than 200
vehicle models. Net sales to customers exceeding 10% of consolidated net sales,
and other major customers, were as follows (as a percentage of consolidated net
sales):
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ----------
<S> <C> <C> <C>
Customer:
DaimlerChrysler 17% 20% 18%
Ford 16% 18% 18%
Delphi 7% 4% 0%
Dana Corporation 6% 7% 5%
TRW 5% 6% 6%
General Motors 2% 2% 8%
</TABLE>
For 1999, Ford sales include sales to Ford Motor Company (8%) and Visteon
Automotive Systems (8%). For 1998, Ford sales include sales to Ford Motor
Company (10%) and Visteon Automotive Systems (8%). These sales are generated by
the ferrous-metals and the light-metals segments. The loss of any of these
customers or a substantial reduction in their purchases would have a material
adverse effect on us. Our six largest customers accounted for approximately 50%,
54% and 58% of consolidated net sales during 1999, 1998 and 1997, respectively.
Net sales by market were as follows (as a percentage of consolidated net sales):
<TABLE>
<CAPTION>
Percentage of Net Sales
--------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
North American passenger
cars and light trucks 72% 70% 66%
North American industrial 14% 14% 17%
European light and heavy duty vehicles
12% 15% 13%
Other 2% 1% 4%
</TABLE>
5
<PAGE> 7
Sales of ferrous-metals castings were 651,000, 576,000 and 536,000 tons in 1999,
1998 and 1997, respectively. The increase in tons sold in 1999 over 1998 and
1998 over 1997 is principally attributable to increased sales from existing
foundries. For the years ended December 31, 1999, 1998 and 1997, sales of
ductile iron castings represented 82%, 90% and 89%, respectively, and sales of
gray iron represented 5%, 7% and 7%, respectively, of our total sales of
castings (in dollars).
Sales of light-metals castings were 15,000, 5,680 and 6,234 tons in 1999, 1998
and 1997, respectively. The increase in tons sold in 1999 over 1998 is
principally attributable to the acquisition of Tool Products in December 1998.
Our aluminum castings were 12%, 3% and 4%, respectively, of our total sales of
castings (in dollars).
The balance of the castings sales in 1999 was compacted graphite, malleable,
magnesium and zinc. The balance of the castings sales in 1998 and 1997 was
compacted graphite, malleable and zinc. Total castings sales as a percentage of
Intermet's total sales were 87% in 1999 and 1998 and 81% in 1997.
Design, Manufacturing and Machining
We have a technical center in Lynchburg, Virginia that provides advanced design
and engineering services to customers. In addition, we provide technical support
to all of our cast metals and machining plants worldwide. We furnish the
customer with design support using their own computer-aided design and computer
aided engineering languages and cast metal process simulation software. Our
design and engineering teams assist the customer, when requested, in the initial
stages of product creation and modification.
Our advanced capabilities include finite element analysis, design optimization,
prototyping, modeling enhancements and testing. We use three-dimensional solid
modeling software in conjunction with rapid prototype development, among other
advanced computer aided design techniques, to assist our customers in the
initial stages of product design and prototype creation. These techniques
greatly enhance our design and flexibility. In addition, we can substantially
reduce the time required to produce sample castings, depending on the complexity
of the products. Intermet's goal is to continually improve product quality and
performance. We also strive to reduce costs by offering new product solutions
that reduce weight, use alternative materials or incorporate more efficient
manufacturing processes. Intermet's product and manufacturing process
development work includes the development of new products and processes that can
broaden our overall product offerings and capabilities. We believe that our
advanced design and engineering capabilities serve as a significant competitive
advantage as our customers continue to outsource these critical activities to
their suppliers.
Our ferrous-metals segment produces ductile iron and gray iron castings. Ductile
iron has greater strength and ductility than gray iron. Ductile iron's use as a
higher strength substitute for gray iron and a lower-cost substitute for steel
has grown steadily. The ferrous-metals cast production process involves melting
steel scrap and pig iron in a cupola or an electric furnace, adding various
alloys and pouring the molten metal into molds made primarily of sand. The
molten metal cools and solidifies in the molds. The molds are then broken apart
and the castings are removed.
6
<PAGE> 8
Our light-metals segment produces lost foam aluminum castings and aluminum,
magnesium and zinc die-castings. Aluminum brings a lower weight alternative. Our
castings range in size from small products weighing less than one pound to those
weighing up to 100 pounds. The lost foam aluminum casting process utilizes exact
polystyrene foam replicas of the desired castings, which are embedded in sand.
The foam is evaporated and displaced by the hot metal and the casting is formed.
Die-casting is a metal component casting process in which molten aluminum,
magnesium or zinc is introduced into metal dies and solidified.
Customers usually specify the properties their castings are to embody, such as
hardness and strength, and we determine how best to meet those specifications.
Constant testing and monitoring of the casting process is necessary to maintain
the quality and performance consistency of the castings. Electronic testing and
monitoring equipment, including x-ray, radioisotopes, ultrasonic,
magnetic-particle and spectroscopy, is used extensively in grading scrap metal,
analyzing molten metal and testing castings. We also use testing equipment and
procedures to provide particular tests for our castings as requested by
customers.
Most castings require machining before they can be put to their ultimate use.
This machining may include drilling, boring, milling, threading or cutting
operations. Most customers provide their own machining for castings or have them
machined by third parties. We operate three facilities that machine castings
produced by us and by others. We also own a precision machining company in Elk
Grove Village, Illinois. In addition, most of our light-metals casting plants
have machining integral in the casting operation. Until March 7, 2000 we had a
35% interest in General Products Delaware Corporation, a machining and assembly
company with a facility in Michigan and a facility in Indiana. We sold our
interest in General Products for $10.0 million. We also contract with other
companies to machine castings that we produce, before the castings are shipped
to customers.
Intermet manufactures cantilevered cranes and specialty service vehicle truck
bodies at a facility in Garner, Iowa.
Raw Materials
Steel scrap is the primary raw material Intermet uses to manufacture
ferrous-metals castings. We purchase steel scrap from numerous sources,
generally regional scrap brokers, using a combination of spot market purchases
and contract commitments. We have no material long-term contractual commitments
with any steel scrap supplier. The cost of steel scrap is subject to
fluctuations and we have contractual arrangements with many of our major
customers. These arrangements allow us to adjust our casting prices to reflect
such fluctuations. In periods of rapidly rising steel scrap prices, these
adjustments will lag the current market price for steel scrap.
In producing light-metals castings, the primary raw material we use is secondary
aluminum ingot. The cost of aluminum ingot is subject to fluctuations and we
have contractual arrangements with many of our major customers. These
arrangements allow us to adjust our casting prices to reflect such fluctuations.
In periods of rapidly rising secondary aluminum prices, these adjustments will
lag the current market price for secondary aluminum.
We have contractual arrangements with some of our suppliers, which expire at
various times through 2002, for the purchase of various materials, other than
steel scrap or secondary aluminum ingot, used in or during the manufacturing
process. These contracts and our overall level of purchases provide some
protection against price increases. In most cases, we do not have specific
arrangements in place to adjust casting prices for fluctuations in the prices of
alloys and other materials.
7
<PAGE> 9
Cyclicality and Seasonality
Although most of our products are generally not affected by year-to-year
automotive style changes, model changes may have a significant impact on sales.
In addition, the inherent cyclicality of the automotive industry has affected
our sales and earnings during periods of slow economic growth or recession. Our
third and fourth quarter sales are usually lower than first and second quarter
sales due to plant closings by automakers for vacations and model changeovers.
Backlog
Most of Intermet's business involves supplying all or a stated portion of the
customer's annual requirements against blanket purchase orders. Customers
typically issue firm releases and shipping schedules on a monthly basis. The
lead-time and cost of commencing production of a particular casting tend to
inhibit transfers of production from one foundry to another. Our backlog at any
given time generally consists only of the orders that have been released for
shipment. Subsidiaries of Intermet that manufacture industrial products other
than castings, had a backlog at December 31, 1999 of $19.0 million in the
aggregate, all of which we expect to ship during 2000.
Competition
Intermet competes with many other foundries, both domestically and
internationally. Some of these foundries are owned by major users of ferrous
castings. For example, the three largest automobile manufacturers in North
America, which are among our largest customers, operate their own foundries and
have greater financial resources. However, they also purchase a significant
amount of castings from Intermet and others, and there is a trend toward
increased outsourcing by the three largest automobile manufacturers in North
America. Our castings also compete, to some degree, with malleable iron
castings, other metal castings and steel forgings.
The machining industry is highly fragmented and competitive. As in the foundry
industry, large purchasers of machined components often have significant
in-house capabilities to perform their own machining work.
Intermet competes primarily on the basis of product quality, engineering,
service and price. We emphasize our ability to produce complex products in order
to compete for value-added castings.
Research and Development
Intermet conducts process and product development programs for both its
ferrous-metals and light-metals segment products, principally at a separate
research and development foundry in Lynchburg, Virginia. Current research and
testing projects encompass both new manufacturing processes and product
development. The research foundry has a self-contained melting and molding
facility with extensive metallurgical, physical and chemical testing
capabilities. The work on new manufacturing processes focuses on ways to lower
costs and improve quality. Product development work includes projects to extend
the performance range for existing iron castings such as austempering, which
enhances the strength and toughness of iron. In addition, we are currently
working to develop new materials, improve product manufacturing processes and
improve characterization of material properties. We directly expensed $1.0
million, $1.0 million and $1.1 million in 1999, 1998 and 1997, respectively, for
research and development.
8
<PAGE> 10
Environmental Matters
Intermet's operations are subject to various federal, state and local laws and
regulations. These laws and regulations govern the management of solid and
hazardous waste, the discharge of pollutants into the air and into surface and
ground waters and the storage and disposal of hazardous and non-hazardous
substances generating by ongoing operations.
Polychlorinated biphenyl ("PCB") contamination has been identified at a property
owned by Ganton, which was purchased by Intermet on December 20, 1999. The
property is located at 217 Fay Avenue in Addison, Illinois. In addition, it has
been determined that a small portion of the surface area of an adjoining
property, which is not owned by or affiliated with Intermet, is also
contaminated with PCBs. Ganton is solely responsible for remediating all PCB
contamination at the site and the adjoining property in accordance with
applicable regulatory standards and threshold levels determined by U.S.
Environmental Protection Agency and/or the Illinois Environmental Protection
Agency. Pursuant to a Settlement Agreement dated as of March 21, 1997 among
Ganton, the former owner of the property and certain environmental remediation
contractors, a settlement trust in the total amount of $5.4 million was
established to fund cleanup of the property. The former owner and the
contractors funded the settlement trust with a cash payment of $3.1 million. The
remaining $2.3 million of the settlement trust is covered by a letter of credit
from the prior owner. Ganton will be permitted to draw on the letter of credit
when the cash in the settlement trust is exhausted. Given the above provisions
of the settlement, we had $3.3 million of restricted cash, which represents the
unused portion of cash received in 1997, and an environmental remediation
reserve for the same amount at December 31, 1999. The current engineering
estimate is that the cost of the remediation will not exceed $5.4 million.
Some of Intermet's other operating units have been identified as potentially
responsible parties in legal proceedings or otherwise notified that they may be
liable for the cleanup of hazardous substances under federal "Superfund" and
other environmental protection legislation. In addition, we are attempting to
resolve known environmental matters with various third parties, including
matters that arise in connection with the sale of businesses and properties by
us or by our present and former subsidiaries.
Although we intend to minimize our exposure by asserting appropriate defenses in
connection with environmental proceedings, based on the advice and assistance of
environmental engineers and consultants, we have reserved $10.2 million at
December 31, 1999 to cover estimated known environmental liabilities. This
reserve includes $3.7 million related to the shutdown of Ironton Iron. Although
we continue to assess our potential liability, the ultimate liability for
environmental matters cannot be predicted with certainty and could exceed
estimates.
We also have recurring costs in the normal course of business that are necessary
to ensure that our facilities are in compliance with applicable environmental
laws and regulations, particularly in the management and disposition of waste
(principally non-hazardous) generated by our ongoing operations. In 1999, 1998
and 1997 these costs totaled approximately $15.1 million, $14.4 million and
$12.3 million, respectively. In addition, a portion of our capital expenditures
is regularly incurred to limit or monitor pollution, principally for ventilation
and dust control equipment. These expenditures were approximately $5.7 million,
$5.2 million and $6.9 million in 1999, 1998 and 1997, respectively. We expect to
spend $4.5 million in capital expenditures related to environmental matters in
2000, although sales volume levels and available engineering resources, among
other factors, will influence the actual amount of capital expenditures.
9
<PAGE> 11
In addition to these recurring and anticipated expenditures, the 1990 amendments
to the federal Clean Air Act are expected to have a major impact on the
compliance costs of many U.S. companies, including foundries of the type we
operate. Until final regulations implementing those amendments are adopted by
the federal and state governments, it is not possible to estimate these costs.
Also, our foundry capacity and any capacity increases are dependent on the
ability to maintain or increase permitted levels for air emissions or water
discharges. In the event we desire to increase our foundry capacity levels in
the future, we cannot be assured that approvals of such increases can be
obtained under the applicable permits.
For additional information related to environmental matters, see Item 3 "Legal
Proceedings" below; and see "Management's Discussion and Analysis of Financial
Condition and Results of Operations", which is incorporated by reference from
Intermet's 1999 annual report to shareholders, which is furnished to the SEC as
Exhibit 13 to this report.
Employees
At March 1, 2000 we employed approximately 8,440 persons, including
approximately 7,530 in North America. Of the persons employed in North America,
approximately 6,020 were hourly manufacturing personnel and the remainder were
clerical, sales and management personnel. We employed approximately 880 persons
in Europe, approximately 750 of whom were hourly manufacturing personnel. We had
approximately 30 employees in Mexico, all but four of whom were hourly
manufacturing personnel.
Foreign and Domestic Operations and Export Sales
Revenues and identifiable assets for Intermet's foreign and domestic operations
for 1999, 1998 and 1997 were as follows (in thousands of dollars):
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Sales to unaffiliated customers in:
North America $836,300 $714,400 $705,100
Europe 115,800 121,500 104,700
Other International 4,700 5,700 3,900
Identifiable assets in:
North America $888,700 $517,500 $453,900
Europe 68,600 66,500 85,500
</TABLE>
Executive Officers of the Registrant
Executive officers are elected by the board of directors annually at its
meeting, which immediately follows the annual meeting of shareholders. An
executive officer holds office until his or her successor is chosen and
qualified, or until his or her death, resignation or removal.
10
<PAGE> 12
The executive officers of Intermet as of March 1, 2000, along with their ages
and principal positions with Intermet, are as follows:
<TABLE>
<CAPTION>
Name (Age) Principal Position(s)
---------- ---------------------
<S> <C>
John Doddridge (59) Chairman of the Board and Chief Executive Officer
James F. Mason (58) Group Vice President
Alan J. Miller (51) Vice President and General Counsel
David L. Neilson (55) Vice President - Sales and Marketing
Donald C. Pyatt (54) Group Vice President
Gary F. Ruff (48) Vice President - Technical Services
Laurence Vine-Chatterton (50) Vice President
</TABLE>
Mr. Doddridge became chairman of the board and chief executive officer of
Intermet in 1994. From November 1992 until November 1994, Mr. Doddridge was vice
chairman and chief executive officer of Magna International, Inc., a supplier of
motor vehicle parts. From 1989 to 1992 he served as president of North American
Operations of Dana Corporation, a motor vehicle parts manufacturer, and prior to
that time he served as president of Hayes-Dana Inc., a subsidiary of Dana
Corporation.
Mr. Mason became group vice president of Intermet in September 1998. Prior to
that, he served as president of Wagner Castings Company, a subsidiary of
Intermet, which was purchased in December 1996. He was with Wagner since 1984
and served in several positions before becoming president in April 1988.
Mr. Miller joined Intermet in July 1998 as corporate general counsel and was
named vice president and general counsel in August 1999. He served as vice
president, general counsel and secretary at Libbey-Owens-Ford Co., an automotive
parts supplier, from February 1987 to July 1998.
Mr. Neilson joined Intermet in January 1997 as vice president - sales and
marketing. He served as vice president of sales for North and South America for
ITT Automotive, an automotive parts supplier, from June 1993 to January 1997.
From September 1992 to June 1993, he was vice president of sales and marketing
at Takata, Inc, an automotive parts supplier. He served as president of sales at
a subsidiary of Automotive Industries, an automotive parts supplier, from
December 1991 to June 1992.
Mr. Pyatt became group vice president of Intermet in December 1999. Prior to
that, he served as president of Tool Products, Inc., a subsidiary of Intermet,
which was purchased in December 1998. He was with Tool Products since 1990,
serving as president.
Mr. Ruff became vice president - technical services of Intermet in June 1999.
Prior to that, he served in a variety of positions at CMI International and its
successor company, Hayes Lemmerz International, Inc., both automotive parts
suppliers. He served as president of North American Aluminum Wheels - Hayes
Lemmerz International and as corporate vice president of Hayes Lemmerz
International, Inc. from February 1999 to May 1999. He was the chief technical
officer, executive vice president and director of CMI International, Inc. from
February 1994 until Hayes-Lemmerz purchased CMI in January 1999.
11
<PAGE> 13
Mr. Vine-Chatterton joined Intermet in January 1999 as a Vice President and
President of Intermet Europe. Before coming to Intermet, he was a divisional
finance director of T&N plc, UK, an automotive parts supplier, from June 1996.
Mr. Vine-Chatterton was a divisional finance director of Caradon plc, UK, an
international supplier to building and home improvement industries, from January
1994 until 1996.
Ms Doretha Christoph, who served as Intermet's Vice President - Finance, Chief
Financial Officer, Treasurer and Secretary, resigned effective February 18,
2000.
ITEM 2. PROPERTIES
At December 31, 1999, Intermet owned, operated or had an ownership interest in
the following:
- - - eight operational ductile iron foundries
- - - two ductile and gray iron foundries
- - - one lost foam aluminum foundry
- - - two aluminum and zinc die-cast foundries
- - - two aluminum die-cast foundries
- - - two magnesium die-cast foundries
- - - two precision-engineered, close tolerance aluminum die-cast foundries
- - - three machining and assembly facilities
- - - one precision machining facility
- - - one cantilevered cranes and specialty service vehicle truck bodies
manufacturing facility
- - - one research foundry
- - - one technical center
Lost foam aluminum castings can only be produced by Intermet at Alexander City
Foundry.
12
<PAGE> 14
The following provides information about Intermet's manufacturing locations and
the types of products produced at each location:
<TABLE>
<CAPTION>
Name Location Type of Products
---- -------- ----------------
<S> <C> <C>
Ferrous-Metals Segment:
Intermet Archer Creek Foundry Lynchburg, Virginia Ductile iron castings
Intermet Columbus Foundry Columbus, Georgia Ductile iron castings
Intermet Columbus Machining Midland, Georgia Machined and assembled components
Intermet Decatur Foundry Decatur, Illinois Ductile iron castings
Intermet Havana Foundry Havana, Illinois Ductile iron castings
Intermet Hibbing Foundry Hibbing, Minnesota Ductile iron castings
Intermet Ironton Foundry Ironton, Ohio Ductile iron castings
Intermet Neunkirchen Foundry Neunkirchen, Germany Ductile iron castings
Intermet New River Foundry Radford, Virginia Ductile iron castings
Intermet Radford Foundry Radford, Virginia Ductile and gray iron castings
Intermet Ueckermunde Ueckermunde, Germany Ductile and gray iron castings
Foundry
Light-Metals Segment:
Intermet Alexander City Foundry Alexander City, Alabama Lost foam aluminum castings
Intermet Hannibal Plant Hannibal, Missouri Magnesium die-castings
Intermet Jackson Plant Jackson, Tennessee Precision engineered, close tolerance aluminum
die-castings
Intermet Minneapolis Minneapolis, Minnesota Precision engineered, close tolerance aluminum
die-castings
Intermet Monroe City Plant Monroe City, Missouri Aluminum and zinc die-castings
Intermet Palmyra Plant Palmyra, Missouri Magnesium die-castings
Intermet Pulaski Plant Pulaksi, Tennessee Aluminum die-castings
Intermet Racine Machining Racine, Wisconsin Machined and assembled components
Intermet Racine Plant Racine, Wisconsin Aluminum die-castings
Intermet Reynosa Machining Reynosa, Mexico Machined and assembled components
Intermet Stevensville Plant Stevensville, Michigan Aluminum and zinc die-castings
Other:
Frisby P.M.C. Elk Grove Village, Precision machined components
Illinois
IMT (Iowa Mold Tooling) Garner, Iowa Metal fabrication of truck mounted cranes and specialty
service vehicle truck bodies
</TABLE>
Intermet continually reviews the operation of its foundries and may occasionally
close one or more on a permanent or temporary basis in response to its
production needs and general business and economic conditions. On December 7,
1999, Intermet announced plans to permanently close its Ironton Iron, Inc.
foundry. Ironton has had enduring labor and operational difficulties and, as a
result, has incurred significant operating losses since Intermet purchased it in
1988. Because of Ironton's continuing difficulties, customers representing a
significant portion of its sales volumes had informed Intermet and Ironton in
late 1999 that they had decided to place their business with alternate sources.
The foundry is one of our oldest facilities and the cost to modernize would
further impact already negative operating results. We anticipate that the
foundry will cease operations by the end of the first quarter of 2000.
See the discussion regarding the New River Foundry explosion, which is included
in Part I, Item 1. BUSINESS - Recent Developments.
13
<PAGE> 15
Intermet owns a research foundry and a technical center, both located in
Lynchburg, Virginia. The technical center provides advanced design and
engineering services to our customers. In addition, we provide technical support
to all of our cast metals and machining plants worldwide. We also have a 50%
equity interest in PortCast-Fundicao Nodular, S.A., an iron castings company in
Porto, Portugal. Until March 7, 2000 we had a 35% interest in General Products
Delaware Corporation, a machining and assembly company with a facility in
Michigan and a facility in Indiana. We sold our interest in General Products for
$10.0 million. In addition, we lease executive, sales and other administrative
offices, located in Troy, Michigan; Columbus, Georgia and Saarbrucken, Germany.
We acquired sales offices in Southfield, Novi and Dearborn, Michigan and
Lexington, Kentucky as part of our purchase of Ganton. We plan to close those
facilities during 2000 and move the employees to our Troy, Michigan sales and
administrative office.
Tool Products has capital leases of approximately $3.3 million at December 31,
1999, which relate to assets with net book values of approximately $3.4 million.
In addition, Columbus Neunkirchen Foundry and Vorpommersche Eisenwerke GmbH
Ueckermunde have bank term notes of approximately $0.9 million in the aggregate.
These notes are secured by property, plant and equipment, located at Columbus
Neunkirchen Foundry, with net book values aggregating approximately $18.4
million at December 31, 1999. For additional information on secured debt, see
note 6 to the consolidated financial statements included in Intermet's 1999
annual report to shareholders, which is furnished to the SEC as Exhibit 13 to
this report, and is incorporated by reference into this filing.
ITEM 3. LEGAL PROCEEDINGS
On March 5, 2000 an explosion and fire occurred at our New River foundry located
in Radford, Virginia. Ten employees suffered injuries in the blast, three of
which were fatal. The explosion and fire caused extensive damage. All operations
at the foundry have been shut down. The U.S. Bureau of Alcohol, Tobacco and
Firearms ("ATF"), the Virginia Occupational Safety and Health Administration
("VaOSHA"), and local fire and law enforcement officials are investigating the
incident. Intermet is also conducting its own investigation. Although no precise
cause has yet been determined, the ATF has stated publicly that it believes the
cause to be accidental. None of these investigations has been completed and,
until they are completed, the precise cause of the explosion cannot be
predicted. Although local fire officials estimated damage to be approximately
$30-50 million shortly after the blast, we are not able to make any precise
damage estimate at this time, and will be unable to do so until all of the
investigations have been completed. When the investigations are complete, it is
possible that fines, penalties, damages or other sanctions could be sought
against Intermet. Intermet is assisting in the investigations and will take
appropriate legal steps to defend itself and take other appropriate action if
any fines, penalties, damages or other sanctions are sought. Intermet carries
insurance for property, business interruption, general liability, employers
liability and workers' compensation. We have notified our insurance carriers
under all of our applicable insurance policies and we will make claims under the
policies as appropriate. We do not know how much, if any, we will record during
the first quarter of 2000 for charges relating to deductibles under our property
and business interruption insurance policies. Based on the information currently
available to us, we believe that we have adequate insurance coverage for the
losses that have been identified to date. However, we cannot assure that all of
our ultimate losses, costs and expenses resulting from the accident will be
covered by insurance, and any amounts not covered by insurance could be material
to our business or financial condition.
Our foundry in Decatur, Illinois received a Notice of Violation dated June 11,
1998 issued by the Illinois Environmental Protection Agency ("IEPA") in
connection with an alleged improper disposal of a hazardous material. We have
met with representatives of IEPA in an attempt to informally resolve the matter
and IEPA has proposed a fine of $115,000. We continue to negotiate with IEPA.
Although we cannot predict the amount of any fines or penalties that may be
ultimately imposed or agreed upon, we do not expect that the amount will be
greater than the proposed $115,000.
14
<PAGE> 16
In a separate matter, on or about March 22, 1999 we voluntarily notified IEPA
that some of the equipment located at our Havana, Illinois and Decatur, Illinois
foundries was being operated without the required air permits. Subsequently,
both facilities were brought into compliance and the required permits were
issued later in 1999. Although no Notice of Violation has been issued with
respect to either case, it is possible that IEPA could pursue fines or penalties
for this violation. While we cannot predict the amount of any potential fines or
penalties, we believe that they would not be material to our business or
financial condition.
In May 1999, we voluntarily notified the Ohio Environmental Protection Agency
("OEPA") of a breakdown in certain pollution control equipment at our Ironton,
Ohio foundry. However, due to an oversight, our notification was not considered
timely under the applicable rules and regulations. The equipment was
subsequently repaired and became operational. Even though no Notice of Violation
has been issued by OEPA with respect to this matter, it is possible that OEPA
may pursue fines or penalties for this violation. Although we cannot predict the
amount of any potential fines or penalties, we believe that they would not be
material to our business or financial condition.
Intermet is also a party to a number of other legal proceedings in the ordinary
course of its business. We do not believe that such other pending or threatened
legal proceedings to which we are a party, or to which any of our property is
subject, that will have a material adverse effect on our consolidated financial
position, results of operations or liquidity, taken as a whole.
See note 8 to the consolidated financial statements included in Intermet's 1999
annual report to shareholders, furnished to the commission as Exhibit 13 to this
report, which is incorporated by reference into this filing, and the discussion
under "Environmental Matters" in Item 1 above.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of Intermet during the
fourth quarter of the fiscal year covered by this report.
Part II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information contained in note 13 to the consolidated financial statements of
Intermet's 1999 annual report to shareholders, furnished to the SEC as Exhibit
13 to this report, is incorporated by reference into this filing.
Intermet's common stock, $0.10 par value, is traded on the Nasdaq National
Market under the symbol "INMT" and had a closing price of $11.938 on March 1,
2000. Also on March 1, 2000, there were approximately 460 holders of record of
Intermet's common stock.
During 1999, 1998 and of 1997, Intermet declared and paid dividends of $4.1
million, $4.1 million and $4.0 million, respectively ($0.04 per share per
quarter). Under some of our loan agreements, we are subject to restrictions on
the payment of dividends. As of December 31, 1999, approximately $158.3 million
of our retained earnings were restricted and unavailable for the payment of
dividends under those agreements. In addition to the dividends, we paid $6.8
million for the acquisition of Intermet's stock pursuant to our stock buyback
program.
Intermet did not sell unregistered securities within the past three years.
15
<PAGE> 17
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data included in Intermet's 1999 annual report to
shareholders, which is furnished to the SEC as Exhibit 13 to this report, in the
section Financial Highlights under the headings "Statement of Operations Data,"
"Share Data" and "Balance Sheet Data," are incorporated by reference into this
filing.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information included under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations" is incorporated by reference
from Intermet's 1999 annual report to shareholders, which is furnished to the
SEC as Exhibit 13 to this report. In addition, the following subsequent event
occurred after we printed our 1999 annual report to shareholders, which may
affect our "Liquidity and Capital Resources".
See the discussion regarding the New River Foundry explosion, which is included
in Part I, Item 1. BUSINESS - Recent Developments.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The information included under the "Quantitative and Qualitative Disclosures
about Market Risks" section of the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" is incorporated by reference from
Intermet's 1999 annual report to shareholders, which is furnished to the SEC as
Exhibit 13 to this report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of Intermet and the report of the
independent auditors included in Intermet's 1999 annual report to shareholders,
which are furnished to the SEC as Exhibit 13 to this report, are incorporated by
reference into this filing. In addition, the following subsequent event occurred
after we printed our 1999 annual report to shareholders:
Subsequent Event
See the discussion regarding the New River Foundry explosion, which is included
in Part I, Item 1. BUSINESS - Recent Developments.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information contained under the headings "Information about Nominees for
Director" in Intermet's definitive proxy statement for its annual meeting of
shareholders to be held April 13, 2000 is incorporated by reference into this
filing. Pursuant to Instruction 3 to Paragraph (b) of Item 401 of Regulation
S-K, information relating to the executive officers of Intermet is included in
Item 1 of this report.
16
<PAGE> 18
Section 16(a) of the Securities Exchange Act of 1934 requires Intermet's
directors, certain of its officers, and persons who own more than 10% of our
common stock to file reports of ownership and changes in ownership with the SEC.
Due to an oversight at Intermet, directors Thomas H. Jeffs II, A. Wayne Hardy
and Byron O. Pond, Jr. were each late in reporting on Form 5 phantom stock units
that have been acquired under Intermet's Director's Deferred Compensation Plan.
Mr. Jeffs has filed a late Form 5 with respect to units acquired in 1997, 1998
and 1999. Messrs. Hardy and Pond have each filed a late Form 5 with respect to
units acquired in 1999.
ITEM 11. EXECUTIVE COMPENSATION
The information contained under the headings "Executive Compensation",
"Compensation of Directors", "Employment Agreements and Change in Control
Arrangements", "Compensation Committee Report on Executive Compensation" and
"Shareholder Return Performance Graph" in Intermet's definitive proxy statement
for its annual meeting of shareholders to be held April 13, 2000 is incorporated
by reference into this filing.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the heading "Voting Securities and Principal
Holders" in Intermet's definitive proxy statement for its annual meeting of
shareholders to be held April 13, 2000 is incorporated by reference into this
filing.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the heading "Certain Transactions" in the
definitive proxy statement for its annual meeting of shareholders to be held
April 13, 2000 is incorporated by reference into this filing.
Part IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following consolidated financial statements of Intermet and its
subsidiaries contained in Intermet's 1999 annual report to shareholders are
incorporated by reference in Item 8 of this report:
- Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997
- Consolidated Statements of Comprehensive Income for the Years Ended
December 31, 1999, 1998 and 1997
- Consolidated Balance Sheets at December 31, 1999 and 1998
- Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997
- Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997
- Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The following consolidated financial statement schedule for Intermet is
included in Item 14(d) of this filing:
- Schedule II - Valuation and Qualifying Accounts
17
<PAGE> 19
3. Exhibits
The following exhibits are filed with this report pursuant to Item 601 of
Regulation S-K:
Exhibit
Number Description of Exhibit
2.1 Agreement and Plan of Merger among Intermet, I M Acquisition
Corp., and Sudbury, Inc. dated November 18, 1996 (included as
Exhibit 4 to Intermet's Form 8-K dated November 18, 1996, File
No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).
2.2 Asset Purchase Agreement Between Intermet Corporation and Quadion
Corporation for the purchase of the assets of Tool Products, Inc.
dated December 2, 1998 (included as Exhibit 2.1 to Intermet's
Form 8-K, having an event date of December 31, 1998, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).
2.3 Stock Purchase and Sale Agreement Between Intermet Corporation,
Gantec II, LLC, JJM, LLC, and Cerberus Institutional Partners,
L.P. for the purchase of the stock of Diversified Diemakers, Inc.
dated November 16, 1999 (included as Exhibit 99.1 to Intermet's
Form 8-K, having an event date of December 20, 1999, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).
2.4 Contents of omitted schedules and exhibits to the Stock Purchase
and Sale Agreement for the purchase of the stock of Diversified
Diemakers, Inc. (included as Exhibit 99.2 to Intermet's Form 8-K,
having an event date of December 20, 1999, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).
2.5 Stock Purchase and Sale Agreement Between Intermet Corporation,
Gantec II, LLC and JJM, LLC for the purchase of the stock of
Ganton Technologies, Inc. dated November 16, 1999 (included as
Exhibit 99.3 to Intermet's Form 8-K, having an event date of
December 20, 1999, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
2.6 Contents of omitted schedules and exhibits to the Stock Purchase
and Sale Agreement for the purchase of the stock of Ganton
Technologies, Inc. (included as Exhibit 99.4 to Intermet's Form
8-K, having an event date of December 20, 1999, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).
3.1 Amended and Restated Articles of Incorporation of Intermet
(included as Exhibit 4.1 to Intermet's Form S-3 Registration
Statement, filed June 3, 1992, File No. 33-48304, previously
filed with the Commission and incorporated by reference into this
filing).
3.2 By-laws of Intermet, as amended through December 2, 1999.
3.3 Amendment to the by-laws of Intermet, adopted by resolution of
the board of directors of Intermet on December 2, 1999.
4.1 Promissory Note of Lynchburg Foundry Company, dated December 1,
1973, payable to Industrial Development Authority of the City of
Lynchburg, Virginia in the original principal amount of
$4,400,000.*
4.2 Guaranty Agreement, dated December 1, 1973, by and between The
Mead Corporation and the Industrial Development Authority of the
City of Lynchburg, Virginia.*
4.3 Trust Indenture, dated December 1, 1973, by and among Industrial
Development Authority of the City of Lynchburg, Virginia,
Lynchburg Foundry Company and United Virginia Bank, as trustee.*
18
<PAGE> 20
4.4 Promissory Notes of Lynchburg Foundry Company, dated June 1,
1976, payable to Industrial Development Authority of the City of
Lynchburg, Virginia, in the original principal amounts of
$2,700,000, $1,000,000, $550,000 and $550,000, respectively.*
4.5 Guaranty Agreement, dated June 1, 1976, of The Mead Corporation
in favor of Industrial Development Authority of the City of
Lynchburg, Virginia.*
4.6 Trust Indenture, dated June 1, 1976, by and among Industrial
Development Authority of the City of Lynchburg, Virginia,
Lynchburg Foundry Company and United Virginia Bank, as trustee,
with respect to Pollution Control Revenue Bonds (Mead-Lynchburg
Foundry Project), Series 1976, Series 1976A, Series 1976B and
Series 1976C.*
4.7 Loan Contract, dated September 28, 1988, by and between Columbus
Neunkirchen Foundry GmbH and Saarlandische
Investitionskreditbank, relating to a loan in the original
principal amount of DM 740,000.*
4.8 Loan Contract, dated March 1, 1989, by and between Columbus
Neunkirchen Foundry GmbH and Saarlandische
Investitionskreditbank, relating to a loan in the principal
amount of DM 2,000,000.*
4.9 Third Amended and Restated Credit Agreement, dated November 14,
1996, by and among Intermet, SunTrust Bank, Atlanta (formerly
known as Trust Company Bank) as lender and agent and the various
lenders named therein (included as Exhibit 4.14 to Intermet's
Form 10-K for the year ended December 31, 1996, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).
4.10 Letter agreement referencing Third Amended and Restated Credit
Agreement, dated January 28, 1999, by and among Intermet,
SunTrust Bank, Atlanta (formerly known as Trust Company Bank) as
lender and agent and the various lenders named therein (included
as Exhibit 4.13 to Intermet's Form 10-K for the year ended
December 31, 1998, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
4.11 Master Assignment and Acceptance Agreement dated December 9,
1996, by and among Intermet and various lenders named therein
(included as Exhibit 4.15 to Intermet's Form 10-K for the year
ended December 31, 1996, File No. 0-13787, previously filed with
the Commission and incorporated by reference into this filing).
4.12 Amended and Restated Note Agreement, dated as of March 21, 1996,
by and between Intermet Corporation and The Prudential Insurance
Company of America, relating to $25,000,000 principal amount of
8.05% Senior Notes due December 11, 2002 and related Promissory
Note (included as Exhibit 4.20 to Intermet's Form 10-K for the
year ended December 31, 1995, File No. 0-13787, previously filed
with the Commission and incorporated by reference into this
filing).
4.13 First Amendment to Amended and Restated Note Agreement, dated as
of January 31, 1997, by and between Intermet and The Prudential
Insurance Company of America, relating to $25,000,000 principal
amount of 8.05% Senior Notes due December 11, 2002 and related
Promissory Note (included as Exhibit 4.17 to Intermet's Form 10-K
for the year ended December 31, 1996, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).
4.14 (a) $300,000,000 Five-Year Credit Agreement, dated November 5,
1999, by and among Intermet, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named therein.
4.14 (b) Contents of Omitted Exhibits and Schedules to the $300,000,000
Five-Year Credit Agreement.
4.15 (a) $100,000,000 364-Day Credit Agreement, dated November 5,
1999, by and among Intermet, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named therein.
4.15 (b) Contents of Omitted Exhibits and Schedules to the $100,000,000
364-Day Credit Agreement.
19
<PAGE> 21
4.16(a) $200,000,000 Term Loan Agreement, dated December 20, 1999, by
and among Intermet, The Bank of Nova Scotia as lender and
administrative agent, and the various lenders named therein.
4.16(b) Contents of Omitted Exhibits and Schedules to the $200,000,000
Term Loan Agreement.
4.17(a) Final Private Placement Memorandum for $35,000,000 Development
Authority of Columbus Georgia Variable Rate Limited Obligation
Revenue Bonds (Columbus Foundry, L.P. Project, Series 1999).*
4.17(b) Master Indenture Trust, dated as of December 1, 1999, by and
between Development Authority of Columbus, Georgia, as issuer,
and Harris Trust and Savings Bank, as trustee.*
4.17(c) Series 1999A Supplement dated as of December 1, 1999 to Master
Indenture Trust, dated December 1, 1999, by and between
Development Authority of Columbus, Georgia, as issuer, and Harris
Trust and Savings Bank, as trustee.*
4.18(a) Shareholder Protection Rights Agreement, dated as of October 6,
1995 between Intermet and Trust Company Bank, as Rights Agent
(included as Exhibit 4 to Intermet's Form 8-K, having an event
date of October 6, 1995, File No. 0-13787, previously filed with
the Commission and incorporated by reference into this filing).
4.18(b) Amendment No. 1, dated October 16, 1997, to the Shareholder
Protection Rights Agreement, dated October 6, 1995, between
Intermet and Trust Company Bank, as Rights Agent (included as
Exhibit 4 to Intermet's Form 8-A12G/A, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).
10.1(a) Intermet Corporation Key Individual Stock Option Plan, adopted
April 25, 1984 (included as Exhibit 10.1 to Intermet's
registration statement on Form S-14, File No. 2-90815, previously
filed with the Commission and incorporated by reference into this
filing).**
10.1(b) Amendment No. 1 to the Intermet Corporation Key Individual Stock
Option Plan, dated as of August 4, 1988 (included as Exhibit 10.2
to Intermet's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, File No. 0-13787, previously filed with
the Commission and incorporated by reference into this filing).**
10.1(c) Amendment No. 2 to the Intermet Corporation Key Individual Stock
Option Plan, dated October 27, 1988 (included as Exhibit 10.3 to
Intermet's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).**
10.2 Intermet Corporation Executive Stock Option and Incentive Award
Plan (included as Exhibit 4 to Intermet's Form S-8, File No.
33-59011, previously filed with the Commission and incorporated
by reference into this filing).**
10.3 Intermet Corporation Deferred Compensation Plan effective
December 1, 1999.
10.4 Form of employment agreement by and between Intermet and the
executive officers of Intermet, other than John Doddridge and
David L. Neilson, effective November 1, 1996 (included as Exhibit
10.21 to Intermet's Form 10-K for the year ended December 31,
1995, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
10.5 Employment Agreement, dated October 26, 1995, by and between
Intermet and John Doddridge (included as Exhibit 10.22 to
Intermet's Form 10-K for the year ended December 31, 1995, File
No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
10.6 Employment Agreement, dated December 27, 1996, by and between
Intermet and David L. Neilson (included as Exhibit 10.24 to
Intermet's Form 10-K for the year ended December 31, 1996, File
No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
20
<PAGE> 22
10.7(a) Intermet Corporation Salaried Employees Severance Plan effective
as of October 1, 1993 (included as Exhibit 10.16(a) to Intermet's
Form 10-K for the year ended December 31, 1993, File No. 0-13787,
previously filed with the Commission and incorporated by
reference into this filing).**
10.7(b) Amendment No. 1 to the Intermet Corporation Salaried Employees
Severance Plan, dated December 20, 1993 (included as Exhibit
10.16(b) to Intermet's Form 10-K for the year ended December 31,
1993, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
10.8 Intermet Salary Continuation Plan (included as Exhibit 10.18 to
Intermet's Form 10-K for the year ended December 31, 1992, File
No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
10.9(a) Form of Intermet Corporation Director's Stock Option Agreement
(included as Exhibit 10.4 to Intermet's Annual Report on Form
10-K for the fiscal year ended December 31, 1988, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).**
10.10(b) Intermet Corporation Director's Stock Option Plan (included as
Exhibit 10.6 to Intermet's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, File No. 0-13787, previously
filed with the Commission and incorporated by reference into this
filing).**
10.10(c) Intermet Corporation 1997 Director's Stock Option Plan (included
as Exhibit A to Intermet's definitive Proxy Statement dated March
4, 1997 for its Annual Meeting of Shareholders held April 10,
1997, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
10.11 1997 Directors' Deferred Compensation Plan (included as Exhibit
10.25 to Intermet's Form 10-K for the year ended December 31,
1996, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).**
13 Intermet's Annual Report to Shareholders. Certain portions of
this Exhibit, which are incorporated by reference into this
report on Form 10-K, are filed herewith.
21 Subsidiaries of Intermet.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
* This instrument defines the rights of holders of long-term
debt of Intermet not being registered and the total amount
of securities authorized under the instrument does not
exceed ten percent of the total assets of Intermet and its
subsidiaries on a consolidated basis. This instrument is
not being filed, but Intermet will furnish a copy of this
instrument to the Commission upon request.
** Management contract or compensatory plan or arrangement
required to be filed as an exhibit.
(b) Intermet filed a Form 8-K on December 30, 1999, File No. 0-13787, having an
event date of December 20, 1999. Intermet filed a Form 8-K/A on March 6,
2000, File No. 0-13787, having an event date of December 20, 1999.
(c) Intermet has filed as exhibits to this report those exhibits required by
Item 601 of Regulation S-K.
21
<PAGE> 23
(d) Intermet has filed as financial statement schedules to this report those
financial statement schedules required by Regulation S-X, which are
excluded from Intermet's 1999 annual report to shareholders by Rule
14a-3(b).
- Schedule II - Valuation and Qualifying Accounts
The schedules not filed are omitted because the information required to be
contained therein is disclosed elsewhere in the financial statements or the
amounts involved are not sufficient to require submission.
22
<PAGE> 24
Intermet Corporation
(Consolidated)
Schedule II
Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
Additions
---------------------------------
Balance at Charged to Charged to Balance at
Beginning of Costs and Other End of
Description Period Expenses Accounts Deductions Period
- - ----------- ------------ ----------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
(in thousands of dollars)
Year ended December 31, 1999:
Allowance for returns and doubtful
accounts (a) $5,133 $ 2,313 (b) $ - ($ 20) (c) $ 7,426
Inventory reserve (j) 5,839 3,473 - - 9,312
Deferred tax asset valuation allowance 16,240 (4,518)(d) - - 3,728
(4,500)(e) - -
- (3,494)(f) -
Year ended December 31, 1998:
Allowance for returns and doubtful
accounts (a) $4,118 $ 970 (b) $ - $45 (c) $ 5,133
Inventory reserve (j) 5,594 245 - - 5,839
Deferred tax asset valuation allowance 11,722 - - 4,518 (g) 16,240
Year ended December 31, 1997:
Allowance for returns and doubtful
accounts (a) $3,895 $ 300 (b) - ($77)(c) $ 4,118
Inventory reserve (j) 3,529 2,065 - - 5,594
Deferred tax asset valuation allowance 14,819 - - (1,246)(h) 11,722
- - (1,851)(i)
</TABLE>
(a) Reflected as reduction of trade accounts receivable on consolidated balance
sheet
(b) Net effect of amounts charged to expense less actual returns and write-offs
(c) Effect of foreign currency translation
(d) Reversed valuation allowance for net operating loss carryforwards we were
able to utilize due to a change in German tax law
(e) Reversed valuation allowance for foreign tax credits we were able to use
after we recapitalized our international operations
(f) Reduction for expired capital loss carryforwards we were not able to use
(g) Net operating losses related to the acquisition of VEGU
(h) Reversed valuation allowance due to increased viability of anticipated
future income
(i) Decrease in valuation allowance due to reclassification of certain items
(j) Reflected as reduction of inventory on the consolidated balance sheet
<PAGE> 25
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Intermet has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Intermet Corporation
By: /s/ John Doddridge
------------------
John Doddridge
Chairman of the Board of Directors and Chief
Executive Officer
Date: March 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below, as of March 28, 2000, by the following persons on behalf
of Intermet in the capacities indicated.
Signature Capacity
/s/ John Doddridge Chairman of the Board of Directors and
- - --------------------------- Chief Executive Officer
John Doddridge (Principal Executive Officer)
/s/ John P. Crecine Director
- - ---------------------------
John P. Crecine
/s/ Norman F. Ehlers Director
- - ---------------------------
Norman F. Ehlers
/s/ A. Wayne Hardy Director
- - ---------------------------
A. Wayne Hardy
/s/ John R. Horne Director
- - ---------------------------
John R. Horne
Director
- - ---------------------------
Thomas H. Jeffs II
/s/ Harold C. McKenzie, Jr. Director
- - ---------------------------
Harold C. McKenzie, Jr.
/s/ Byron O. Pond, Jr. Director
- - ---------------------------
Byron O. Pond, Jr.
<PAGE> 26
/s/ John H. Reed Director
- - ---------------------------
John H. Reed
Director
- - ---------------------------
Pamela E. Rodgers
/s/ Ronald C. Ryninger Jr. Controller (Principal Financial Officer and
- - --------------------------- Principal Accounting Officer)
Ronald C. Ryninger Jr.
<PAGE> 27
Exhibit Index
Exhibit
Number Description of Exhibit
2.1 Agreement and Plan of Merger among Intermet, I M Acquisition Corp.,
and Sudbury, Inc. dated November 18, 1996 (included as Exhibit 4 to
Intermet's Form 8-K dated November 18, 1996, File No. 0-13787,
previously filed with the Commission and incorporated by reference
into this filing).
2.2 Asset Purchase Agreement Between Intermet Corporation and Quadion
Corporation for the purchase of the assets of Tool Products, Inc.
dated December 2, 1998 (included as Exhibit 2.1 to Intermet's Form
8-K, having an event date of December 31, 1998, File No. 0-13787,
previously filed with the Commission and incorporated by reference
into this filing).
2.3 Stock Purchase and Sale Agreement Between Intermet Corporation, Gantec
II, LLC, JJM, LLC, and Cerberus Institutional Partners, L.P. for the
purchase of the stock of Diversified Diemakers, Inc. dated November
16, 1999 (included as Exhibit 99.1 to Intermet's Form 8-K, having an
event date of December 20, 1999, File No. 0-13787, previously filed
with the Commission and incorporated by reference into this filing).
2.4 Contents of omitted schedules and exhibits to the Stock Purchase and
Sale Agreement for the purchase of the stock of Diversified Diemakers,
Inc. (included as Exhibit 99.2 to Intermet's Form 8-K, having an event
date of December 20, 1999, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
2.5 Stock Purchase and Sale Agreement Between Intermet Corporation, Gantec
II, LLC and JJM, LLC for the purchase of the stock of Ganton
Technologies, Inc. dated November 16, 1999 (included as Exhibit 99.3
to Intermet's Form 8-K, having an event date of December 20, 1999,
File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).
2.6 Contents of omitted schedules and exhibits to the Stock Purchase and
Sale Agreement for the purchase of the stock of Ganton Technologies,
Inc. (included as Exhibit 99.4 to Intermet's Form 8-K, having an event
date of December 20, 1999, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
3.1 Amended and Restated Articles of Incorporation of Intermet (included
as Exhibit 4.1 to Intermet's Form S-3 Registration Statement, filed
June 3, 1992, File No. 33-48304, previously filed with the Commission
and incorporated by reference into this filing).
3.2 By-laws of Intermet, as amended through December 2, 1999.
3.3 Amendment to the by-laws of Intermet, adopted by resolution of the
board of directors of Intermet on December 2, 1999.
4.1 Promissory Note of Lynchburg Foundry Company, dated December 1, 1973,
payable to Industrial Development Authority of the City of Lynchburg,
Virginia in the original principal amount of $4,400,000.*
4.2 Guaranty Agreement, dated December 1, 1973, by and between The Mead
Corporation and the Industrial Development Authority of the City of
Lynchburg, Virginia.*
4.3 Trust Indenture, dated December 1, 1973, by and among Industrial
Development Authority of the City of Lynchburg, Virginia, Lynchburg
Foundry Company and United Virginia Bank, as trustee.*
4.4 Promissory Notes of Lynchburg Foundry Company, dated June 1, 1976,
payable to Industrial Development Authority of the City of Lynchburg,
Virginia, in the original principal amounts of $2,700,000, $1,000,000,
$550,000 and $550,000, respectively.*
<PAGE> 28
4.5 Guaranty Agreement, dated June 1, 1976, of The Mead Corporation in
favor of Industrial Development Authority of the City of Lynchburg,
Virginia.*
4.6 Trust Indenture, dated June 1, 1976, by and among Industrial
Development Authority of the City of Lynchburg, Virginia, Lynchburg
Foundry Company and United Virginia Bank, as trustee, with respect to
Pollution Control Revenue Bonds (Mead-Lynchburg Foundry Project),
Series 1976, Series 1976A, Series 1976B and Series 1976C.*
4.7 Loan Contract, dated September 28, 1988, by and between Columbus
Neunkirchen Foundry GmbH and Saarlandische Investitionskreditbank,
relating to a loan in the original principal amount of DM 740,000.*
4.8 Loan Contract, dated March 1, 1989, by and between Columbus
Neunkirchen Foundry GmbH and Saarlandische Investitionskreditbank,
relating to a loan in the principal amount of DM 2,000,000.*
4.9 Third Amended and Restated Credit Agreement, dated November 14, 1996,
by and among Intermet, SunTrust Bank, Atlanta (formerly known as Trust
Company Bank) as lender and agent and the various lenders named
therein (included as Exhibit 4.14 to Intermet's Form 10-K for the year
ended December 31, 1996, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
4.10 Letter agreement referencing Third Amended and Restated Credit
Agreement, dated January 28, 1999, by and among Intermet, SunTrust
Bank, Atlanta (formerly known as Trust Company Bank) as lender and
agent and the various lenders named therein (included as Exhibit 4.13
to Intermet's Form 10-K for the year ended December 31, 1998, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).
4.11 Master Assignment and Acceptance Agreement dated December 9, 1996, by
and among Intermet and various lenders named therein (included as
Exhibit 4.15 to Intermet's Form 10-K for the year ended December 31,
1996, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).
4.12 Amended and Restated Note Agreement, dated as of March 21, 1996, by
and between Intermet Corporation and The Prudential Insurance Company
of America, relating to $25,000,000 principal amount of 8.05% Senior
Notes due December 11, 2002 and related Promissory Note (included as
Exhibit 4.20 to Intermet's Form 10-K for the year ended December 31,
1995, File No. 0-13787, previously filed with the Commission and
incorporated by reference into this filing).
4.13 First Amendment to Amended and Restated Note Agreement, dated as of
January 31, 1997, by and between Intermet and The Prudential Insurance
Company of America, relating to $25,000,000 principal amount of 8.05%
Senior Notes due December 11, 2002 and related Promissory Note
(included as Exhibit 4.17 to Intermet's Form 10-K for the year ended
December 31, 1996, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
4.14 (a) $300,000,000 Five-Year Credit Agreement, dated November 5, 1999,
by and among Intermet, The Bank of Nova Scotia as lender and
administrative agent, and the various lenders named therein.
4.14 (b) Contents of Omitted Exhibits and Schedules to the $300,000,000
Five-Year Credit Agreement.
4.15 (a) $100,000,000 364-Day Credit Agreement, dated November 5, 1999, by
and among Intermet, The Bank of Nova Scotia as lender and
administrative agent, and the various lenders named therein.
4.15 (b) Contents of Omitted Exhibits and Schedules to the $100,000,000
364-Day Credit Agreement.
4.16 (a) $200,000,000 Term Loan Agreement, dated December 20, 1999, by and
among Intermet, The Bank of Nova Scotia as lender and administrative
agent, and the various lenders named therein.
4.16 (b) Contents of Omitted Exhibits and Schedules to the $200,000,000 Term
Loan Agreement.
<PAGE> 29
4.17 (a) Final Private Placement Memorandum for $35,000,000 Development
Authority of Columbus Georgia Variable Rate Limited Obligation Revenue
Bonds (Columbus Foundry, L.P. Project, Series 1999).*
4.17 (b) Master Indenture Trust, dated as of December 1, 1999, by and between
Development Authority of Columbus, Georgia, as issuer, and Harris
Trust and Savings Bank, as trustee.*
4.17(c) Series 1999A Supplement dated as of December 1, 1999 to Master
Indenture Trust, dated December 1, 1999, by and between Development
Authority of Columbus, Georgia, as issuer, and Harris Trust and
Savings Bank, as trustee.*
4.18 (a) Shareholder Protection Rights Agreement, dated as of October 6,
1995 between Intermet and Trust Company Bank, as Rights Agent
(included as Exhibit 4 to Intermet's Form 8-K, having an event date of
October 6, 1995, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
4.18 (b) Amendment No. 1, dated October 16, 1997, to the Shareholder
Protection Rights Agreement, dated October 6, 1995, between Intermet
and Trust Company Bank, as Rights Agent (included as Exhibit 4 to
Intermet's Form 8-A12G/A, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).
10.1 (a) Intermet Corporation Key Individual Stock Option Plan, adopted
April 25, 1984 (included as Exhibit 10.1 to Intermet's registration
statement on Form S-14, File No. 2-90815, previously filed with the
Commission and incorporated by reference into this filing).**
10.1 (b) Amendment No. 1 to the Intermet Corporation Key Individual Stock
Option Plan, dated as of August 4, 1988 (included as Exhibit 10.2 to
Intermet's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).**
10.1 (c) Amendment No. 2 to the Intermet Corporation Key Individual Stock
Option Plan, dated October 27, 1988 (included as Exhibit 10.3 to
Intermet's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).**
10.2 Intermet Corporation Executive Stock Option and Incentive Award Plan
(included as Exhibit 4 to Intermet's Form S-8, File No. 33-59011,
previously filed with the Commission and incorporated by reference
into this filing).**
10.3 Intermet Corporation Deferred Compensation Plan effective December 1,
1999.
10.4 Form of employment agreement by and between Intermet and the executive
officers of Intermet, other than John Doddridge and David L. Neilson,
effective November 1, 1996 (included as Exhibit 10.21 to Intermet's
Form 10-K for the year ended December 31, 1995, File No. 0-13787,
previously filed with the Commission and incorporated by reference
into this filing).**
10.5 Employment Agreement, dated October 26, 1995, by and between Intermet
and John Doddridge (included as Exhibit 10.22 to Intermet's Form 10-K
for the year ended December 31, 1995, File No. 0-13787, previously
filed with the Commission and incorporated by reference into this
filing).**
10.6 Employment Agreement, dated December 27, 1996, by and between Intermet
and David L. Neilson (included as Exhibit 10.24 to Intermet's Form
10-K for the year ended December 31, 1996, File No. 0-13787,
previously filed with the Commission and incorporated by reference
into this filing).**
10.7(a) Intermet Corporation Salaried Employees Severance Plan effective as of
October 1, 1993 (included as Exhibit 10.16(a) to Intermet's Form 10-K
for the year ended December 31, 1993, File No. 0-13787, previously
filed with the Commission and incorporated by reference into this
filing).**
<PAGE> 30
10.7(b) Amendment No. 1 to the Intermet Corporation Salaried Employees
Severance Plan, dated December 20, 1993 (included as Exhibit 10.16(b)
to Intermet's Form 10-K for the year ended December 31, 1993, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).**
10.8 Intermet Salary Continuation Plan (included as Exhibit 10.18 to
Intermet's Form 10-K for the year ended December 31, 1992, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).**
10.9(a) Form of Intermet Corporation Director's Stock Option Agreement
(included as Exhibit 10.4 to Intermet's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988, File No. 0-13787, previously
filed with the Commission and incorporated by reference into this
filing).**
10.10(b) Intermet Corporation Director's Stock Option Plan (included as Exhibit
10.6 to Intermet's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, File No. 0-13787, previously filed with the
Commission and incorporated by reference into this filing).**
10.10(c) Intermet Corporation 1997 Director's Stock Option Plan (included as
Exhibit A to Intermet's definitive Proxy Statement dated March 4, 1997
for its Annual Meeting of Shareholders held April 10, 1997, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).**
10.11 1997 Directors' Deferred Compensation Plan (included as Exhibit 10.25
to Intermet's Form 10-K for the year ended December 31, 1996, File No.
0-13787, previously filed with the Commission and incorporated by
reference into this filing).**
13 Intermet's Annual Report to Shareholders. Certain portions of this
Exhibit, which are incorporated by reference into this report on Form
10-K, are filed herewith.
21 Subsidiaries of Intermet.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
INTERMET CORPORATION
(As Amended through December 2, 1999)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be in the State
of Georgia, County of Cobb.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Georgia as the board of
directors may from time to time determine and the business of the corporation
may require or make desirable.
ARTICLE II
SHAREHOLDERS MEETINGS
Section 1. Annual Meetings. The annual meeting of the shareholders of the
corporation shall be held at the principal office of the corporation or at such
other place within or without the United States as may be determined by the
board of directors, at 10:00 a.m. on the last business day of the fifth month
following the close of each fiscal year or at such other time and date prior
thereto and following the close of the fiscal year as such is determined by the
board of directors, for the purpose of electing directors and transacting such
other business as may be properly brought before the meeting.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held at the principal office of the corporation or at such other place within or
without the United States as may be designated in the notice of said meetings,
upon call of the chairman of the board of directors or the president and shall
be called by the president or the secretary when so directed by the board of
directors or at the request in writing of shareholders owning at least 50% of
the issued and outstanding capital stock of the corporation entitled to vote
thereat. Any such request shall state the purposes for which the meeting is to
be called.
Section 3. Notice of Meetings. Written notice of every meeting of
shareholders, stating the place, date and hour of the meetings, shall be given
personally or by mail to each shareholder of record entitled to vote at such
meeting not less than 10 nor more than 50 days before the date of the meeting.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail with first class postage (air mail postage if the address is
outside of the United States) thereon prepaid addressed to the shareholder at
his address as it appears on the corporation's record of shareholders.
Attendance of a shareholder at a meeting of shareholders shall constitute a
waiver of notice of such meeting and of all objections to the place or time of
meeting, or the manner in which it has been called or convened, except when a
shareholder attends a meeting solely for the purpose of stating, at the
beginning of the meeting,
<PAGE> 2
any such objection to the transaction of any business. Notice need not be given
to any shareholder who signs a waiver of notice, in person or by proxy, either
before or after the meeting.
Section 4. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum for the transaction of business at all meetings
of the shareholders except as otherwise provided by statute, by the articles of
incorporation, or by these by-laws. If a quorum is not present or represented at
any meeting of the shareholders, a majority of the shareholders entitled to vote
thereat, present in person or represented by proxy, may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than 30 days, or it after the adjournment a new record
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each shareholder of record entitled to vote at the meeting.
Section 5. Order of Business. At the annual meeting of shareholders the
order of business shall be as follows:
1. Calling meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous annual meeting.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Miscellaneous business.
Section 6. Voting. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power, present in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is open upon which by express provision of law or of the
articles of incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of the question. Each
shareholder shall at every meeting of the shareholders be entitled to one vote,
in person or by proxy, for each share of the capital stock having voting power
registered in his name on the books of the corporation, but no proxy shall be
voted or acted upon after 11 months from its date, unless otherwise provided in
the proxy.
Section 7. Consent of Shareholders. Any action required or permitted to be
taken at any meeting of the shareholders may be taken without a meeting if all
of the shareholders consent thereto in writing, setting forth the action so
taken. Such consent shall have the same force and effect as a unanimous vote of
shareholders.
Section 8. List of Shareholders. The corporation shall keep at its
registered office or principal-place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving their names
and addresses and tat number, class and series, if any, of the shares held by
each. The officer who has charge of the stock transfer books of the corporation
shall prepare and make, before every meeting of shareholders or any adjournment
thereof, a complete list of the shareholders entitled to vote at the meeting or
any adjournment thereof, arranged in alphabetical order, with the address of and
the number and class and series, if any, of shares held by each. The list shall
be produced and kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder during the whole time of
<PAGE> 3
the meeting for the purposes thereof. The said list may be the corporation's
regular record of shareholders if it is arranged in alphabetical order or
contains an alphabetical index.
Section 9. Advance Notice of Shareholder Proposals. At any annual or
special meeting of shareholders, proposals by shareholders and persons nominated
for election as directors by shareholders shall be considered only if advance
notice thereof has been timely given as provided herein and such proposals or
nominations are otherwise proper for consideration under applicable law and the
articles of incorporation and by-laws of the corporation. Notice of any proposal
to be presented by any shareholder or of the name of any person to be nominated
by any shareholder for election as a director of the corporation at any meeting
of shareholders shall be delivered to the secretary of the corporation at its
principal executive office not less than 60 nor more than 90 days prior to the
date of the meeting; provided, however, that if the date of the meeting is first
publicly announced or disclosed (in a public filing or otherwise) less than 70
days prior to the date of the meeting, such advance notice shall be given not
more than ten days after such date is first so announced or disclosed. Public
notice shall be deemed to have been given more than 70 days in advance of the
annual meeting if the corporation shall have previously disclosed, in these
by-laws or otherwise, that the annual meeting in each year is to be held on a
determinable date, unless and until the Board determines to hold the meeting on
a different date. Any shareholder who gives notice of any such proposal shall
deliver herewith the text of the proposal to be presented and a brief written
statement of the reasons why such shareholder favors the proposal and setting
forth such shareholder's name and address, the number and class of all shares of
each class of stock of the corporation beneficially owned by such shareholder
and any material interest of such shareholder in the proposal (other than as a
shareholder). Any shareholder desiring to nominate any person for election as a
director of the corporation shall deliver with such notice a statement in
writing setting forth the name of the person to be nominated, the number and
class of all shares of each class of stock of the corporation beneficially owned
by such person, the information regarding such person required by paragraphs
(a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and
Exchange Commission (or the corresponding provisions of any regulation
subsequently adopted by the Securities and Exchange Commission applicable to the
corporation), such person's signed consent to serve as a director of the
corporation if elected, such shareholder's name and address and the number and
class of all shares of each class of stock of the corporation beneficially owned
by such shareholder. As used herein, shares "beneficially owned" shall mean all
shares as to which such person, together with such person's affiliates and
associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
may be deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as well as all shares as to which such person,
together with such person's affiliates and associates, has the right to become
the beneficial owner pursuant to any agreement or understanding, or upon the
exercise of warrants, options or rights to convert or exchange (whether such
rights are exercisable immediately or only after the passage of time or the
occurrence of conditions). The person presiding at the meeting, in addition to
making any other determinations that may be appropriate to the conduct of the
meeting, shall determine whether such notice has been duly given and shall
direct that proposals and nominees not be considered if such notice has not been
given.
ARTICLE III
DIRECTORS
Section 1. Powers. Except as otherwise provided by any legal agreement
among shareholders, the property, affairs and business of the corporation shall
be managed and directed by its board of directors, which may exercise all powers
of the corporation and do all lawful acts and things which are not by law,
<PAGE> 4
by any legal agreement among shareholders, by the articles of incorporation or
by these by-laws directed or required to be exercised or done by the
shareholders.
Section 2. Number, Election and Term. The number of directors which shall
constitute the whole board shall be ten (10) directors. Provided, however, the
number of directors may be increased or decreased from time to time by the board
of directors by amendment of this by-law, but no decrease shall have the effect
of shortening the term of an incumbent director. Except as hereinafter provided,
the directors shall be elected by plurality vote at the annual meeting of
shareholders, and each director elected shall hold office until his successor is
elected and qualified or until his earlier resignation, removal from office or
death. Directors shall be natural persons who have attained the age of 18 years,
but need not be residents of the State of Georgia or shareholders of the
corporation.
Section 3. Vacancies. Vacancies, including vacancies resulting from any
increase in the number of directors, but not including vacancies resulting from
removal from office by the shareholders, may be filled by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director, and a director so chosen shall hold office until the next annual
election and until his successor is duly elected and qualified unless sooner
displaced. If there are no directors in office, then vacancies shall be filled
through election by the shareholders.
Section 4. Meetings and Notice. The board of directors of the corporation
may hold meetings, both regular and special, either within or without the State
of Georgia. Regular meetings of the board of directors may be held without
notice at such time and place as shall from time to time be determined by
resolution of the board. Special meetings of the board may be called by the
chairman of the board or president or by any two directors on one day's oral,
telegraphic or written notice duly given or served on each director personally,
or three days' notice deposited, first class postage (air mail postage if the
address is outside of the United States) prepaid, in the United States mail.
Such notice shall state a reasonable time, date and place of meeting, but the
purpose need not be stated therein. Notice need not be given to any director who
signs a waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of all objections to the place and time of the meeting, or the manner in
which it has been called or convened except when the director states, at the
beginning of the meeting, any such objection or objections to the transaction of
business.
Section 5. Quorum. At all meetings of the board a majority of directors
shall constitute a quorum for the transaction of business, and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board, except as may be otherwise specifically provided
by law, by the articles of incorporation, or by these by-laws. If a quorum shall
not be present at any meeting of the board, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 6. Conference Telephone Meeting. Unless the articles of
incorporation or these by-laws otherwise provide, members of the board of
directors, or any committee designated by the board, may participate in a
meeting of the board or committee by means of conference telephone or similar
communications equipment whereby all persons participating in the meeting can
hear each other. Participation in the meeting shall constitute presence in
person.
Section 7. Consent of Directors. Unless otherwise restricted by the
articles of incorporation or these by-laws, any action required or permitted to
be taken at any meeting of the board of directors or of any
<PAGE> 5
committee thereof may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing, setting forth the
action so taken, and the writing or writings are filed with the minutes of the
proceedings of the board or committee. Such consent shall have the same force
and effect as a unanimous vote of the board.
Section 8. Committees. The board of directors may, by resolution passed by
a majority of the whole board, designate from among its members one or more
committees, each committee to consist of two or more directors. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of such committee. Any such committee,
to the extent provided in the resolution, shall have and may exercise all of the
authority of the board of directors in the management of the business and
affairs of the corporation except that it shall have no authority with respect
to (1) amending the articles of incorporation or these by-laws; (2) adopting a
plan of merger or consolidation; (3) the sale, lease, or exchange or other
disposition of all or substantially all of the property and assets of the
corporation; and (4) a voluntary dissolution of the corporation or a revocation
thereof. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of directors. A
majority of each committee may determine its action and may fix the time and
places of its meetings, unless otherwise provided by the board of directors.
Each committee shall keep regular minutes of its meetings and report the same to
the board of directors when required.
Section 9. Removal of Directors. At any shareholders' meeting with respect
to which notice of such purpose has been given, any director may be removed from
office, with or without cause, by the vote of shareholders representing a
majority of the issued and outstanding capital stock entitled to vote for the
election of directors, and his successor may be elected at the same or any
subsequent meeting of shareholders; provided that to the extent any vacancy
created by such removal is not filled by such an election within 60 days after
such removal, the remaining directors shall, by majority vote, fill any such
vacancy.
Section 10. Compensation of Directors. Directors shall be entitled to such
reasonable compensation for their services as directors or members of any
committee of the board as shall be fixed from time to time by resolution adopted
by the board, and shall also be entitled to reimbursement for any reasonable
expenses incurred in attending any meeting of the board or any such committee.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be chosen by the
board of directors and shall be a chairman of the board, a president, a
secretary and a treasurer. The board of directors may also choose one or more
vice-presidents, assistant secretaries and assistant treasurers. Any number of
offices, except the offices of president and secretary may be held by the same
person. The board of directors may appoint such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the board.
Section 2. Compensation. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors or a committee or officer
appointed by the board.
<PAGE> 6
Section 3. Term of Office. Unless otherwise provided by resolution of the
board of directors, the principal officers shall be chosen annually by the board
at the first meeting of the board following the annual meeting of shareholders
of the corporation, or as soon thereafter as is conveniently possible.
Subordinate officers may be elected from time to time. Each officer shall serve
until his successor shall have been chosen and qualified, or until his death,
resignation or removal.
Section 4. Removal. Any officer may be removed from office at any time,
with or without cause, by the board of directors whenever in its judgment the
best interest of the corporation will be served thereby.
Section 5. Vacancies. Any vacancy in an office resulting from any cause may
be filled by the board of directors.
Section 6. Powers and Duties. Except as hereinafter provided, the officers
of the corporation shall each have such powers and duties as generally pertain
to their respective offices, as well as such powers and duties as from time to
time may be conferred by the board of directors.
(a) Chairman of the Board. The chairman of the board shall be the chief
executive officer of the corporation and shall preside at all meetings of the
shareholders and the board of directors. Except where by law the signature of
the president is required, the chairman shall possess the same power as the
president to sign all certificates representing shares of the capital stock of
the corporation and all bonds, mortgages and Other contracts requiring a seal,
under the seal of the corporation.
(b) Vice Chairman of the Board. The vice chairman of the board shall in the
absence of the chairman of the board preside at all meetings of the shareholders
and the board of directors, and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
(c) President. The president shall be the chief operations officer of the
corporation, and in the absence of the chairman of the board shall preside at
all meetings of the shareholders and the board of directors. The president shall
have general and active management of the business of the corporation and shall
see that all orders and resolutions of the board of directors are carried into
effect. He shall execute bonds, mortgages and other contracts requiring a seal,
under the seal of the corporation, except where required or permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the board of directors to some other
officer or agent of the corporation.
(d) Vice-President. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice presidents in the order designated, or in the
absence of any designation, then in order of their election) shall perform the
duties of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The vice-presidents shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
(e) Secretary. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record of all the proceedings
of the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties four the standing committees
when required. He shall give, or pause to be given, notice of all meetings of
the shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board
<PAGE> 7
of directors or president, under whose supervision he shall be. He shall have
custody of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The board of directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his signature.
(f) Assistant Secretary. The assistant secretary or if there be more than
one, the assistant secretaries in the order determined by the board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the secretary and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
(g) Treasurer. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors. He shall
disburse the funds of the corporation as may be ordered by the board of
directors, taking proper vouchers for such disbursements, and shall render to
the chairman of the board, the president and the board of directors, at its
regular meetings, or when the board of directors so requires, an account of all
his transactions as treasurer and of the financial condition of the corporation.
If required by the board of directors, he shall give the corporation a bond
(which shall be renewed every six years) in such sum and with such surety or
sureties as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
(h) Assistant Treasurer. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 7. Voting Securities of the Corporation. Unless otherwise ordered
by the board of directors, the chairman of the board and the president shall
each have full power and authority on behalf of the corporation to attend and to
act and vote at any meetings of security holders of corporations in which the
corporation may hold securities, and at such meetings shall possess and may
exercise any and all rights and powers incident to the ownership of such
securities which the corporation might have possessed and exercised if it had
been present. The board of directors by resolution from time to time may confer
like powers upon any other person or persons.
ARTICLE V
CERTIFICATE
Section 1. Form of Certificate. Every holder of fully-paid stock in the
corporation shall be entitled to have a certificate in such form as the board of
directors may from time to time prescribe.
<PAGE> 8
Section 2. Lost Certificates. The board of directors may direct that a new
certificate be issued in place of any certificate theretofore issued by the
corporation and alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen or destroyed. When authorizing such issue of a new certificate,
the board of directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 3. Transfers. (a) Transfers of shares of the capital stock of the
corporation shall be made only on the books of the corporation by the registered
holder thereof, or by his duly authorized attorney, or with a transfer clerk or
transfer agent appointed as provided in Section 5 of this Article, and on
surrender of the certificates for such shares properly endorsed and the payment
of all taxes thereon.
(b) The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends, and
to vote as such owner, and for all other purposes, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
<PAGE> 9
(c) Shares of capital stock may be transferred by delivery of the
certificates therefor, accompanied either by an assignment in writing on the
back of the certificates or by separate written power of attorney to sell,
assign and transfer the same, signed by the record holder thereof, or by his
duly authorized attorney-in-fact, but no transfer shall affect the right of the
corporation to pay any dividend upon the stock to the holder of record as the
holder in fact thereof for all purposes, and no transfer shall be valid, except
between the parties thereto, until such transfer shall have been made upon the
books of the corporation as herein provided.
(d) The board may, from time to time, make such additional rules and
regulations as it may deem expedient, not inconsistent with these by-laws or the
articles of incorporation, concerning the issue, transfer and registration of
certificates for shares of the capital stock of the corporation.
Section 4. Record Date. In order that the corporation may determine the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than 50 days and, in case of a meeting of shareholders,
not less than 10 days prior to the date on which the particular action requiring
such determination of stockholders is to be taken. If no record date is fixed
for the determination of shareholders entitled to notice of and to vote at any
meeting of shareholders, the record date shall be at the close of business on
the day next preceding the day on which the notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. If no record date is fixed for other purposes, the record date
shall be at the close of business on the day next preceding the day on which the
board of directors adopts the resolution relating thereto. A determination of
shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of the meeting unless the board of
directors shall fix a new record date for the adjourned meeting.
Section 5. Transfer Agent and Registrar. The board of directors may appoint
one or more transfer agents or one or more transfer clerks and one or more
registrars, and may require all certificates of stock to bear the signature or
signatures of any of them.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the corporation,
subject to the provisions of the articles of incorporation, if any, may be
declared by the board of directors at any regular or special meetings, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock, subject to the provisions of the articles of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
<PAGE> 10
Section 2. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
Section 3. Seal. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal"
and "Georgia". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. In the event it is inconvenient
to use such a seal at any time, the signature of the corporation followed by the
word "Seal" enclosed in parentheses shall be deemed the seal of the corporation.
Section 4. Annual Statements. Not later than four months after the close of
each fiscal year, and in any case prior to the next annual meeting of
shareholders, the corporation shall prepare:
(l) A balance sheet showing in a reasonable detail the financial condition
of the corporation as of the close of its fiscal year, and
(2) A profit and loss statement showing the results of its operations
during its fiscal year. Upon written request, the corporation promptly shall
mail to any shareholder of record a copy of the most recent such balance sheet
and profit and loss statement.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right of Indemnification and Standards of Conduct. Every person
(and the heirs and legal representatives of such person) who is or was a
director or officer of this corporation or any other corporation of which he
served as such at the request of this corporation and of which this corporation
directly or indirectly is a shareholder or creditor, or in which, or in the
stocks, bonds, securities or other obligations of which it is in any way
interested, may in accordance with Section 2 hereof be indemnified for any
liability and expense that may be incurred by him in connection with or
resulting from any threatened, pending or completed action, suit or proceedings,
whether civil, criminal, administrative or investigative (whether brought by or
in the right of this corporation or otherwise), or in connection with any appeal
relating thereto, in which he may become involved, as a party or prospective
party or otherwise, by reason of his being or having been a director of officer
of this corporation or such other corporation, or by reason of any action taken
or not taken in his capacity as such director of officer or as a member of any
committee appointed by the board of directors of this corporation to act for, in
the interest of, or on behalf of this corporation, whether or not he continues
to be such at the time such liability or expense shall have been incurred;
provided such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of this corporation and, in
addition, with respect to any criminal action or proceeding, did not have
reasonable cause to believe that his conduct was unlawful. As used in this
Article, the terms "liability" and "expense" shall include, but shall not be
limited to, counsel fees and disbursements and amounts of judgments, fines or
penalties, and amounts paid in compromise or settlement by a director of
officer. The termination of any claim, action suit or proceeding, by judgment,
order, compromise, settlement (with or without court approval) or conviction or
upon a plea of guilty or of nolo contendere, or its equivalent, shall not create
a presumption that a director or officer did not meet the standards of conduct
set forth in this Section.
<PAGE> 11
Section 2. Determination of Right of Indemnification. Every person (and the
heirs and legal representatives of such person) referred to in Section 1 hereof
who has been wholly successful, on the merits or otherwise, with respect to any
claim, action, suit or proceeding of the character described in Section 1 hereof
shall be entitled to indemnification as of right without any further action or
approval by the board of directors. Except as provided in the immediately
preceding sentence, any indemnification under Section 1 next above shall be made
at the discretion of this corporation, but only if (a) the board of directors,
acting by majority vote of a quorum consisting of directors who were not parties
to such claim, action, suit or proceeding, present or voting, shall find that
the director or officer has met the standard of conduct set forth in Section 1
hereof, or (b) if no such quorum of the board exists, independent legal counsel
selected by any Judge of the United States District Court for the Northern
District of Georgia, at the request of either the corporation or the person
seeking indemnification, shall deliver to the corporation their written opinion
that such director or officer has met such standards, or (c) the holders of a
majority of stock then entitled to vote for the election of directors shall
determine by affirmative vote that such director or officer has met such
standards.
Notwithstanding the foregoing, no officer or director who was or is a party
to any action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was an officer or
director of this or such other corporation shall be determined in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to this
corporation unless and except to the extent that the Court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability and in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
Court shall deem proper.
Section 3. Advance of Expenses. Expenses incurred with respect to any
claim, action, suit or proceeding of the character described in Section 1 of
this Article VII may be advanced by the corporation prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount unless it shall ultimately be determined that he
is entitled to indemnification under this Article.
Section 4. Rights of Indemnification Cumulative. The rights of
indemnification provided in this Article VII shall be in addition to any rights
to which any such director or officer or other person may otherwise be entitled
under any by-law, agreement, vote of shareholders, or otherwise, and shall be in
addition to the power of the corporation to purchase and maintain insurance on
behalf of any such director or officer or other person against any liability
asserted against him and incurred by him in such capacity, or arising out of his
status as such, regardless of whether the corporation would have the power to
indemnify him against such liability under this Article or otherwise.
Section 5. Statement to Stockholders. If any expenses or other amounts are
paid by way of indemnification, otherwise than by court order or action by the
shareholders or by an insurance carrier pursuant to insurance maintained by the
corporation, the corporation shall, not later than the next annual meeting of
shareholders unless such meeting is held within three months from the date of
such payment, and, in any event, within 15 months from the date of such payment,
send by first class mail to its shareholders of record at the time entitled to
vote for the election of directors a statement specifying the person paid, the
amounts paid, and the nature and status at the time of such payment of the
litigation or threatened litigation.
<PAGE> 12
ARTICLE VIII
AMENDMENTS
The board of directors shall have power to alter, amend or repeal the
by-laws or adopt new by-laws by majority vote of all of the directors, but any
by-laws adopted by the board of directors may be altered, amended or repealed
and new by-laws adopted, by the shareholders by majority vote of all of the
shares having voting power.
<PAGE> 1
EXHIBIT 3.3
Intermet Corporation
Amendment to Article III, Section 2, of the By-Laws
Effective December 2, 1999
Pursuant to a resolution of the Board of Directors of Intermet Corporation ("the
Corporation") and adopted on December 2, 1999, the first sentence of Section 2
(Number, Election and Term) of Article III (Directors) of the by-laws of
Intermet Corporation was amended to decrease the number of directors which shall
constitute the whole board from nine (9) to ten (10), and shall be effective
immediately. Article III, Directors, Section 2, Number, Election and Term of the
by-laws of Intermet Corporation was amended to read as follows...
Section 2. Number, Election and Term. The number of directors which
shall constitute the whole board shall be ten (10). Provided, however,
the number of directors may be increased or decreased from time to time
by the board of directors by amendment of this by-law, but no decrease
shall have the effect of shortening the term of an incumbent director.
Except as hereinafter provided, the directors shall be elected by
plurality vote at the annual meeting of shareholders, and each director
elected shall hold office until his successor is elected and qualified
or until his earlier resignation, removal from office or death.
Directors shall be natural persons who have attained the age of 18
years, but need not be residents of the State of Georgia or
shareholders of the corporation.
<PAGE> 1
Exhibit 4.14 (a)
================================================================================
$300,000,000
FIVE-YEAR
CREDIT AGREEMENT
dated as of November 5, 1999
among
INTERMET CORPORATION,
THE LENDERS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
as Administrative Agent
BANK ONE, MICHIGAN
as Syndication Agent
and
SUNTRUST BANK, ATLANTA
as Documentation Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I.
DEFINITIONS; CONSTRUCTION.........................................................................1
Section 1.01. Definitions.............................................................1
Section 1.02. Accounting Terms and Determination.....................................19
Section 1.03. Other Definitional Terms...............................................20
Section 1.04. Exhibits and Schedules.................................................20
ARTICLE II.
SYNDICATED LOANS, SWINGLINE LOANS AND LETTERS OF CREDIT..........................................20
Section 2.01. Commitments; Use of Proceeds...........................................20
Section 2.02. Notes; Repayment of Principal..........................................21
Section 2.03. Voluntary Reduction of Commitments.....................................21
Section 2.04. Letter of Credit Facility..............................................21
Section 2.05. Notice of Issuance of Letter of Credit;
Agreement to Issue.....................................................22
Section 2.06. Payment of Amounts drawn under Letters of Credit.......................23
Section 2.07. Payment by Lenders.....................................................24
Section 2.08. Swingline Loans........................................................24
ARTICLE III.
GENERAL LOAN AND LETTER OF CREDIT TERMS..........................................................26
Section 3.01. Funding Notices........................................................26
Section 3.02. Disbursement of Funds..................................................27
Section 3.03. Interest...............................................................28
Section 3.04. Interest Periods.......................................................29
Section 3.05. Fees...................................................................30
Section 3.06. Voluntary Prepayments of Borrowings....................................31
Section 3.07. Payments, etc..........................................................31
Section 3.08. Interest Rate Not Ascertainable, etc...................................33
Section 3.09. Illegality.............................................................34
Section 3.10. Increased Costs........................................................34
Section 3.11. Lending Offices........................................................36
Section 3.12. Funding Losses.........................................................37
Section 3.13. Assumptions Concerning Funding of Eurodollar
Advances...............................................................37
Section 3.14. Apportionment of Payments..............................................37
Section 3.15. Sharing of Payments, Etc...............................................38
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3.16. Benefits to Guarantors.................................................38
Section 3.17. Limitation on Certain Payment Obligations..............................38
Section 3.18. Letter of Credit Obligations Absolute..................................39
Section 3.19. Failure to Maintain Minimum Required Rating............................40
ARTICLE IV.
CONDITIONS TO BORROWINGS.........................................................................40
Section 4.01. Conditions Precedent to Initial Loans and Letters of
Credit.................................................................40
Section 4.02. Conditions to All Loans and Letters of Credit..........................42
ARTICLE V.
REPRESENTATIONS AND WARRANTIES...................................................................43
Section 5.01. Corporate Existence; Compliance with Law...............................43
Section 5.02. Corporate Power; Authorization.........................................44
Section 5.03. Enforceable Obligations................................................44
Section 5.04. No Legal Bar...........................................................44
Section 5.05. No Material Litigation or Investigations...............................44
Section 5.06. Investment Company Act, Etc............................................44
Section 5.07. Margin Regulations.....................................................45
Section 5.08. Compliance With Environmental Laws.....................................45
Section 5.09. Insurance..............................................................45
Section 5.10. No Default.............................................................46
Section 5.11. No Burdensome Restrictions.............................................46
Section 5.12. Taxes..................................................................46
Section 5.13. Subsidiaries...........................................................46
Section 5.14. Financial Statements...................................................46
Section 5.15. ERISA..................................................................47
Section 5.16. Patents, Trademarks, Licenses, Etc.....................................48
Section 5.17. Ownership of Property..................................................48
Section 5.18. Financial Condition....................................................49
Section 5.19. Labor Matters..........................................................49
Section 5.20. Payment or Dividend Restrictions.......................................49
Section 5.21. Disclosure.............................................................49
Section 5.22. Year 2000 Compliance...................................................50
ARTICLE VI.
AFFIRMATIVE COVENANTS............................................................................50
Section 6.01. Corporate Existence, Etc...............................................50
Section 6.02. Compliance with Laws, Etc..............................................50
Section 6.03. Payment of Taxes and Claims, Etc.......................................51
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 6.04. Keeping of Books.......................................................51
Section 6.05. Visitation, Inspection, Etc............................................51
Section 6.06. Insurance; Maintenance of Properties...................................51
Section 6.07. Reporting Covenants....................................................52
Section 6.08. Financial Covenants....................................................55
Section 6.09. Notices Under Certain Other Indebtedness...............................55
Section 6.10. Additional Credit Parties and Collateral...............................56
Section 6.11. Amendment to Note Purchase Agreement...................................56
ARTICLE VII.
NEGATIVE COVENANT................................................................................56
Section 7.01. Indebtedness...........................................................57
Section 7.02. Liens..................................................................57
Section 7.03. Mergers, Acquisitions, Divestitures....................................58
Section 7.04. Asset Sales............................................................59
Section 7.05. Dividends, Etc.........................................................61
Section 7.06. Investments, Loans, Etc................................................61
Section 7.07. Sale and Leaseback Transactions........................................62
Section 7.08. Transactions with Affiliates...........................................62
Section 7.09. Prepayments of Subordinated Debt in Violation
Thereof................................................................63
Section 7.10. Changes in Business....................................................63
Section 7.11. Limitation on Payment Restrictions Affecting
Consolidated Companies.................................................63
Section 7.12. Actions Under Certain Documents........................................64
ARTICLE VIII.
EVENTS OF DEFAULT...............................................................................64
Section 8.01. Payments...............................................................64
Section 8.02. Covenants Without Notice...............................................64
Section 8.03. Other Covenants........................................................64
Section 8.04. Representations........................................................64
Section 8.05. Non-Payments of Other Indebtedness.....................................65
Section 8.06. Defaults Under Other Agreements........................................65
Section 8.07. Bankruptcy.............................................................65
Section 8.08. ERISA..................................................................66
Section 8.09. Money Judgment.........................................................66
Section 8.10. Ownership of Credit Parties............................................66
Section 8.11. Change in Control of Intermet..........................................67
Section 8.12. Default Under Other Credit Documents...................................67
Section 8.13. Attachments............................................................67
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
Section 8.14. Default under 364-Day Credit Agreement.................................67
ARTICLE IX.
THE ADMINISTRATIVE AGENT..........................................................................68
Section 9.01. Appointment of Administrative Agent....................................68
Section 9.02. Authorization of Administrative Agent with
Respect to the Security Documents......................................69
Section 9.03. Nature of Duties of Administrative Agent...............................69
Section 9.04. Lack of Reliance on the Administrative Agent...........................70
Section 9.05. Certain Rights of the Administrative Agent.............................70
Section 9.06. Reliance by Administrative Agent.......................................70
Section 9.07. Indemnification of Administrative Agent................................71
Section 9.08. The Administrative Agent in its Individual
Capacity...............................................................71
Section 9.09. Holders of Notes.......................................................71
Section 9.10. Successor Administrative Agent.........................................72
Section 9.11. Other Agents...........................................................72
ARTICLE X.
MISCELLANEOUS.....................................................................................72
Section 10.01. Notices...............................................................72
Section 10.02. Amendments, Etc.......................................................73
Section 10.03. No Waiver; Remedies Cumulative........................................73
Section 10.04. Payment of Expenses, Etc..............................................74
Section 10.05. Right of Setoff.......................................................75
Section 10.06. Benefit of Agreement..................................................76
Section 10.07. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial..................................................79
Section 10.08. Independent Nature of Lenders' Rights.................................80
Section 10.09. Counterparts..........................................................80
Section 10.10. Effectiveness; Survival...............................................80
Section 10.11. Severability..........................................................81
Section 10.12. Independence of Covenants.............................................81
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax Laws..............81
Section 10.14. Headings Descriptive; Entire Agreement................................81
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
SCHEDULE 1 Commitments
SCHEDULE 5.01 Organization and Ownership of Subsidiaries
SCHEDULE 5.01(a) Lack of Qualification
SCHEDULE 5.05 Certain Pending and Threatened Litigation
SCHEDULE 5.08 Environmental Matters
SCHEDULE 5.11 Burdensome Restrictions
SCHEDULE 5.12 Tax Filings and Payments
SCHEDULE 5.15 Employee Benefit Matters
SCHEDULE 5.16 Patent, Trademark, License, and Other Intellectual Property Matters
SCHEDULE 5.17 Ownership of Properties
SCHEDULE 5.20 Dividend Restrictions
SCHEDULE 6.08 Financial Covenant Calculations Second Quarter 1999
SCHEDULE 7.01 Existing Indebtedness
SCHEDULE 7.02 Existing Liens
SCHEDULE 7.06 Existing Investments
SCHEDULE 7.07 Permitted Sale and Leaseback Transactions
SCHEDULE 10.01 Notice Information
EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Swingline Note
EXHIBIT C - Form of Letter of Credit Application
EXHIBIT D-1 - Form of Notice of Borrowing
EXHIBIT D-2 - Form of Notice of Conversion/Continuation
EXHIBIT E - Form of Guaranty Agreement
EXHIBIT F - Form of Closing Certificate
EXHIBIT G-1 - Form of Opinion of Dickinson Wright PLLC
EXHIBIT G-2 - Form of Opinion of Kilpatrick Stockton LLP
EXHIBIT G-3 - Form of Opinion of Mayer, Brown & Platt
EXHIBIT H - Form of Assignment and Acceptance
EXHIBIT I - Form of Compliance Certificate
</TABLE>
v
<PAGE> 7
FIVE-YEAR
CREDIT AGREEMENT
THIS FIVE-YEAR CREDIT AGREEMENT made and entered into as of November 5,
1999, by and among INTERMET CORPORATION, a Georgia corporation ("Intermet"), THE
BANK OF NOVA SCOTIA, a Canadian chartered bank ("Scotiabank"), acting through
its Atlanta Agency, the other banks and lending institutions listed on the
signature pages hereof, and any assignees of Scotiabank, or such other banks and
lending institutions which become "Lenders" as provided herein (Scotiabank, and
such other banks, lending institutions, and assignees referred to collectively
herein as the "Lenders"), Scotiabank, in its capacity as administrative agent
for the Lenders and each successor agent for such Lenders as may be appointed
from time to time pursuant to Article IX hereof (the "Administrative Agent") and
BANK ONE, MICHIGAN, as Syndication Agent, SUNTRUST BANK, ATLANTA ("SunTrust"),
as Documentation Agent, COMERICA BANK, as Managing Agent, and THE BANK OF NEW
YORK, HARRIS TRUST AND SAVINGS BANK and PNC BANK, NATIONAL ASSOCIATION, as
Co-Agents (the Administrative Agent, the Syndication Agent, the Documentation
Agent, the Managing Agent and the Co-Agents are herein referred to individually
as an "Agent" and collectively as the "Agents").
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent and the
other Agents and the Lenders have agreed, subject to the terms and conditions of
this Agreement, to make available to Intermet a revolving credit facility with a
letter of credit subfacility and a swingline loan subfacility;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Intermet, the Lenders, the Administrative Agent and
the other Agents agree, upon the terms and subject to the conditions set forth
herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms defined
herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):
"Acquisition" shall mean any transaction, or any series of related
transactions, by which Intermet and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as
<PAGE> 8
the most recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the securities of a Person which have
ordinary voting power for the election of directors or (c) otherwise acquires
control of a 50% or more ownership interest in any such Person.
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
-------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Administrative Agent" shall have the meaning set forth in the
preamble.
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under (i) the Syndicated Loans, which Advances shall be
made or outstanding as Base Rate Advances or Eurodollar Advances, as the case
may be, and (ii) the Swingline Loans, which Advances shall be made or
outstanding as Base Rate Advances.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control with") as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person.
"Agreement" shall mean this Five-Year Credit Agreement, as amended,
modified, restated, or supplemented from time to time.
"Applicable Commitment Fee Percentage" shall mean the percentage
determined from time to time from the chart set forth below based on Intermet's
ratio of Funded Debt to Consolidated EBITDA determined as of the end of each
fiscal quarter, with any change to the Applicable Commitment Fee Percentage to
be immediately effective on the 60th day of the next fiscal quarter thereafter:
2
<PAGE> 9
<TABLE>
<CAPTION>
FUNDED DEBT TO APPLICABLE
CONSOLIDATED COMMITMENT FEE
EBITDA RATIO PERCENTAGE
- - ------------ --------------
<S> <C>
Greater than or Equal to
2.50:1.0 0.375%
Less than 2.50:1.0 and
Greater than or Equal to 0.250%
2.00:1.0
Less than 2.00:1.0 and
Greater than or Equal to
1.50:1.0 0.200%
Less than 1.50:1.0 0.175%
</TABLE>
provided, however, that the Applicable Commitment Fee Percentage shall be no
less than 0.200% until May 31, 2000; and provided, further, that if Intermet
fails to deliver its financial statements for such preceding fiscal quarter
pursuant to Section 6.07 prior to the 60th day of the then-current fiscal
quarter, the Applicable Commitment Fee Percentage shall be 0.375% until such
financial statements are delivered.
"Applicable Margin" shall mean with respect to all outstanding
Eurodollar Advances and Letter of Credit Obligations, the percentage determined
from time to time from the chart set forth below based on Intermet's ratio of
Funded Debt to Consolidated EBITDA determined as of the end of each fiscal
quarter, with any change to the Applicable Margin to be immediately effective on
the 60th day of the next fiscal quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED APPLICABLE
EBITDA RATIO MARGIN
- - ------------ ----------
<S> <C>
Greater than or Equal to
3.00:1.0 1.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 1.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 1.250%
</TABLE>
3
<PAGE> 10
<TABLE>
<S> <C>
Less than 2.00:10 and
Greater than or Equal to
1.50:1.0 1.000%
Less than 1.50:1.0 0.750%
</TABLE>
provided, however, that the Applicable Margin shall be no less than 1.00% until
May 31, 2000; and provided, further, that if Intermet fails to deliver its
financial statements for such preceding fiscal quarter pursuant to Section 6.07
prior to the 60th day of the then-current fiscal quarter, the Applicable Margin
with respect to Eurodollar Advances and Letter of Credit Obligations shall be
1.75% until such financial statements are delivered.
"Asset Sale" shall mean any sale or other disposition (or a series of
related sales or other dispositions), including without limitation, loss,
damage, destruction or taking, by any Consolidated Company to any Person other
than a Consolidated Company, of any property or asset (including capital stock
but excluding the issuance and sale by Intermet of its own capital stock) having
an aggregate Asset Value in excess of $1,000,000, other than sales or other
dispositions made in the ordinary course of business of any Consolidated
Company.
"Asset Value" shall mean, with respect to any property or asset of any
Consolidated Company as of any particular date, an amount equal to the greater
of (i) the then book value of such property or asset as established in
accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by such Consolidated Company.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee in accordance with the terms
of this Agreement and substantially in the form of Exhibit H.
"Bankruptcy Code" shall mean The Federal Bankruptcy Reform Act of 1978,
as amended and in effect from time to time (11 U.S.C. ss. 101 et seq.).
"Base Rate" shall mean the higher of (with any change in the Base Rate
to be effective as of the date of change of either of the following rates):
(a) the rate of interest then most recently established by the
Administrative Agent in New York from time to time to be its base rate for
Dollars loaned in the United States, as in effect from time to time, and
(b) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%) per annum.
4
<PAGE> 11
The Administrative Agent's base rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers; the
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's base rate.
"Base Rate Advance" shall mean an Advance made or outstanding as (i) a
Syndicated Loan or Swingline Loan bearing interest based on the Base Rate, or
(ii) an Advance bearing interest at the rate agreed upon between Intermet and
the Lenders pursuant to Section 3.08, Section 3.09 or Section 3.10.
"Base Rate Margin" shall mean, with respect to all outstanding Base
Rate Advances, the percentage determined from time to time from the chart set
forth below based on Intermet's ratio of Funded Debt to Consolidated EBITDA
determined as of the end of each fiscal quarter, with any change to the Base
Rate Margin to be immediately effective on the 60th day of the next fiscal
quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED BASE RATE
EBITDA RATIO MARGIN
- - ------------ ---------
<S> <C>
Greater than or Equal to
3.00:1.0 0.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 0.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 0.250%
Less than 2.00:1.0 0%
</TABLE>
provided, however, that the Base Rate Margin shall be no less than 0.250% until
May 31, 2000; and provided, further, that if Intermet fails to deliver its
financial statements for any fiscal quarter pursuant to Section 6.07 prior to
the 60th day of the next fiscal quarter, the Base Rate Margin with respect to
Base Rate Advances shall be 0.75% until such financial statements are delivered.
"Borrowing" shall mean the incurrence by Intermet under any Facility of
Advances of one Type concurrently having the same Interest Period or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
5
<PAGE> 12
"Business Day" shall mean:
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are required or authorized to close in Atlanta, Georgia or New
York, New York; and
(b) relative to the making, continuing, prepaying or repaying of any
Eurodollar Advances, any day on which trading is carried on by and between banks
in deposits of Dollars in the London interbank market.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Intermet evidencing debt or a commitment
to extend loans in excess of $5,000,000 which requires, or permits the holder(s)
of such Indebtedness of Intermet to require that such Indebtedness of Intermet
be redeemed, repurchased, defeased, prepaid or repaid, either in whole or in
part, or the maturity of such Indebtedness of Intermet to be accelerated in any
respect, as a result of a change in ownership of the capital stock of Intermet
or voting rights with respect thereto or a change in the composition of the
board of directors of Intermet.
"Closing Date" shall mean the date on or before November 30, 1999 on
which the initial Loans are made or deemed to have been made hereunder and the
conditions set forth in Section 4.01 are satisfied or waived in accordance with
Section 10.02.
"Commitment" shall mean, for any Lender at any time, the amount of such
commitment set forth opposite such Lender's name on Schedule 1, as the same may
be increased or decreased from time to time as a result of any reduction thereof
pursuant to Section 2.03, any assignment thereof pursuant to Section 10.06, or
any amendment thereof pursuant to Section 10.02.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of all expenditures of Intermet and its Subsidiaries for fixed
or capital assets made during such period which, in accordance with GAAP, would
be classified as capital expenditures.
"Consolidated Companies" shall mean, collectively, Intermet and all of
its Subsidiaries.
"Consolidated EBIT" shall mean, for any fiscal period of Intermet, an
amount equal to (A) the sum for such fiscal period of Consolidated Net Income
(Loss) and, to the extent deducted in determining such Consolidated Net Income
(Loss), provisions for (i) taxes based on income and (ii) Consolidated Interest
Expense, minus (B) any items of gain (or plus any items of loss) which were
included in determining such Consolidated Net Income (Loss) and were (x) not
realized in the ordinary course of business (whether or not classified as
6
<PAGE> 13
"ordinary" by GAAP), (y) the result of any sale of assets, or (z) resulting from
minority investments, together with, in the case of (x), (y) or (z), any related
provision for taxes included in Consolidated Net Income (Loss) with respect
thereto, plus (C) without duplication, the sum of the following items to the
extent not included in Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which became a Subsidiary during such period (a "New Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units acquired by any
Consolidated Company during such period ("New Assets"); and
(3) the sum of the following items to the extent deducted in
determining net income of any New Subsidiary or derived from any New Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as "ordinary" by
GAAP), (bb) the result of any sale of assets, or (cc) resulting from
minority investments, together in the case of (aa), (bb) or (cc), any
related provision for taxes included in such net income with respect
thereto;
minus (D) the sum of the following items to the extent included in determining
Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which ceased to be a Subsidiary (other than due to merger or consolidated
with another Consolidated Company) during such period (an "Old
Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units sold or otherwise
disposed of by any Consolidated Company during such period ("Old Assets");
and
(3) the sum of the following items to the extent deducted in
determining net income of any Old Subsidiary or derived from any Old Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as "ordinary" by
GAAP), (bb) the result of any sale of assets, or (cc) resulting from
minority investments, together in the case of (aa), (bb) or (cc), any
related provision for taxes included in such net income with respect
thereto.
For purposes of calculating any financial definitions based upon Consolidated
EBIT, the addition or subtraction of any other financial definitions to or from
Consolidated EBIT shall
7
<PAGE> 14
be calculated with appropriate adjustment for New Subsidiaries, New Assets, Old
Subsidiaries and Old Assets as is consistent with this definition.
"Consolidated EBITDA" shall mean for any fiscal period of Intermet, an
amount equal to the sum of Consolidated EBIT plus depreciation and amortization
expense to the extent deducted in determining Consolidated Net Income (Loss),
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any fiscal period of
Intermet, total interest expense of the Consolidated Companies (including
without limitation, interest expense attributable to capitalized leases in
accordance with GAAP, all commissions, discounts and other fees and charges owed
with respect to bankers acceptance financing, and total interest expense
(whether shown as interest expense or as loss and expenses on sale of
receivables) under a receivables purchase facility) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal period of
Intermet, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period (taken as a single accounting period)
determined in conformity with GAAP, but excluding therefrom (to the extent
otherwise included therein) (i) any income or loss of any Person accrued prior
to the date such Person becomes a Subsidiary of Intermet or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company, and (ii) the income of
any Consolidated Company to the extent that the declaration or payment of
dividends or similar distributions by such Consolidated Company of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation.
"Consolidated Net Worth" shall mean, as of any date of determination,
Shareholders' Equity of Intermet.
"Contractual Obligation" of any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.
"Credit Documents" shall mean, collectively, this Agreement, the Notes,
the Letters of Credit, the Fee Letter, the Guaranty Agreements, and all other
Security Documents, if any.
"Credit Parties" shall mean, collectively, each of Intermet, the
Guarantors, and every other Person who from time to time executes a Security
Document with respect to all or any portion of the Obligations.
8
<PAGE> 15
- - --------------------------------------------------------------------------------
"Default" shall mean any condition or event which, with notice or lapse
of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Domestic Subsidiary" shall mean each Consolidated Company that is
organized under the laws of the United States or any political subdivision
thereof.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any political subdivision thereof, having,
total assets in excess of $1,000,000,000 or (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or any political subdivision
of any such country, and having total assets in excess of $1,000,000,000 (or its
equivalent in other currencies), provided that such bank is acting through a
branch or agency located in the United States or the Cayman Islands, (iii) any
Lender, or (iv) any commercial finance or asset based lending Affiliate of any
such commercial bank or Lender described in the foregoing clauses (i) through
(iii), in each case, which has the Minimum Required Rating, unless otherwise
agreed by the Administrative Agent.
"Environmental Laws" shall mean all federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law into the
environment (including without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of any Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage tanks and
related piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation (i) the Clean
Air Act (42 U.S.C. ss. 7401 et seq.), (ii) the Clean Water Act (33 U.S.C. ss.
1251 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C. ss.
6901 et seq.), (iv) the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), (v) the Comprehensive Environmental Response Compensation and Liability
Act, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C.
ss. 9601 et seq.), and (vi) all applicable national and local laws or
regulations with respect to environmental control (including
9
<PAGE> 16
applicable laws of the Federal Republic of Germany or any applicable
international agreements).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
Syndicated Loan bearing interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning provided in Article VIII.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to any Person, the
President, Chief Executive Officer, Vice Presidents, Chief Financial Officer,
Treasurer, Secretary and any other individual holding comparable offices or
duties.
"Facility" or "Facilities" shall mean the Commitments, or the Swingline
Loan subfacility or the Letter of Credit subfacility, as the context may
indicate.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent.
"Fee Letter" shall mean the confidential fee letter, dated as of
September 15, 1999, between Intermet and Scotiabank.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of Intermet, the ratio of (A) Consolidated EBITDA minus
Consolidated Capital Expenditures to (B) the sum of the amounts of (i)
Consolidated Interest Expense, and (ii) principal payments on Indebtedness in
each case, calculated with respect to the immediately preceding four fiscal
quarters ending on such date.
10
<PAGE> 17
"Foreign Plan" shall mean any pension, profit sharing, deferred
compensation, or other employee benefit plan, program or arrangement maintained
by any Foreign Subsidiary which, under applicable local law, is required to be
funded through a trust or other funding vehicle, but shall not include any
benefit provided by a foreign government or its agencies.
"Foreign Subsidiary" shall mean each Consolidated Company that is not a
Domestic Subsidiary.
"Foreign 956 Subsidiary" means each Foreign Subsidiary a guaranty of
the Obligations by which would result in a deemed dividend of its current and
accumulated earnings and profits under section 956 of the Tax Code that would
result in material increased tax liabilities for the Consolidated Companies,
taken as a whole.
"Funded Debt" shall mean all Indebtedness for money borrowed,
Indebtedness evidenced or secured by purchase money Liens, capitalized leases,
conditional sales contracts and similar title retention debt instruments,
whether designated as long term or current debt under GAAP and all synthetic
leases even if not treated as Indebtedness under GAAP. The calculation of Funded
Debt shall include (i) all Funded Debt of the Consolidated Companies, plus (ii)
all Funded Debt of other Persons to the extent guaranteed by a Consolidated
Company, to the extent supported by a letter of credit issued for the account of
a Consolidated Company, or as to which and to the extent which a Consolidated
Company or its assets otherwise have become liable for payment thereof, plus
(iii) the redemption amount with respect to the stock of any Consolidated
Company required to be redeemed during the next succeeding twelve months.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantors" shall mean, collectively, each Domestic Subsidiary other
than those which are designated on Schedule 5.01 as "inactive" and each Foreign
Subsidiary that is not a Foreign 956 Subsidiary.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security
11
<PAGE> 18
therefor, or an agreement to provide funds for the payment or discharge thereof
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or other
financial condition, or to make any payment other than for value received. The
amount of any Guaranty shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which guaranty is
made or, if not so stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Guaranty Agreement" shall mean the Guaranty Agreement, dated as of
even date herewith, executed by each of the Guarantors in favor of the Lenders
and the Administrative Agent, substantially in the form of Exhibit E as the same
may be amended, restated or supplemented from time to time.
"Hazardous Substances" shall mean (a) any "hazardous substance," as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss.9601 et. seq., and any amendments thereto or
regulations promulgated thereunder from time to time, (b) any "hazardous waste,"
as defined in the Resource Conversation and Recovery Act, 42 U.S.C. ss.6901 et.
seq. and any amendments thereto or regulations promulgated thereunder from time
to time, and (c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) as defined in
any other Environmental Laws.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person which in accordance with GAAP would be shown on the
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (ii) all rental obligations under leases required to be
capitalized under GAAP; (iii) all Guaranties of such Person (including
contingent reimbursement obligations under undrawn letters of credit); (iv)
Indebtedness of others secured by any Lien upon property owned by such Person,
whether or not assumed; (v) obligations or other liabilities under currency
contracts, interest rate hedging contracts, or similar agreements or
combinations thereof to the extent required to be disclosed in accordance with
GAAP; and (vi) all synthetic leases, even if not required to be disclosed in
accordance with GAAP.
"Interest Period" shall mean the interest period selected by Intermet
pursuant to Section 3.04(a) hereof.
"Intermet" shall mean Intermet Corporation, a Georgia corporation, its
successors and permitted assigns.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in
12
<PAGE> 19
the ordinary course of business) or capital contribution by such Person (by
means of transfers of property to others or payments for property or services
for the account or use of others, or otherwise) to any Person, or any direct or
indirect purchase or other acquisition by such Person of, or of a beneficial
interest in, capital stock, partnership interests, bonds, notes, debentures or
other securities issued by any other Person, in each case, other than an
Acquisition. Each Investment shall be valued as of the date made; provided that
any Investment or portion of an Investment consisting of Debt shall be valued at
the outstanding principal balance thereof as of the date of determination.
"Issuer" shall mean Scotiabank, in its individual capacity hereunder
(and not in its capacity as the Administrative Agent) and for Letters of Credit
outstanding under the Prior Credit Agreement on the Closing Date (but not with
respect to any extensions or renewals thereof) shall mean SunTrust, in its
individual capacity hereunder. At the request of Scotiabank, another Lender
consented to by Intermet (such consent not to be unreasonably withheld) may
become a successor Issuer.
"Lender" or "Lenders" shall mean Scotiabank, the other banks and
lending institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender the office such Lender may
designate in writing from time to time to Intermet and the Administrative Agent
with respect to each Type of Loan.
"Letter of Credit Commitment" shall mean the lesser of $100,000,000 and
the sum of the Commitments.
"Letter of Credit Fee" shall have the meaning set forth in Section
3.05(b).
"Letter of Credit Obligations" shall mean, with respect to Letters of
Credit, as at any date of determination, the sum of (a) the maximum aggregate
amount which at such date of determination is available to be drawn by the
beneficiaries thereof (assuming the conditions for drawing thereunder have been
met) under all Letters of Credit then outstanding, plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuer not theretofore
reimbursed by Intermet.
"Letters of Credit" shall mean the financial and commercial/trade
letters of credit issued pursuant to Article II hereof by the Issuer for the
account of Intermet pursuant to the Commitments.
"LIBOR" shall mean, for any Interest Period, with respect to Eurodollar
Advances under the Commitments, the offered rate for deposits in Dollars, for a
period comparable to the Interest Period and in an amount comparable to the
Administrative Agent's portion of such Advances, appearing on Telerate Page 3750
as of 11:00 AM (London,
13
<PAGE> 20
England time) on the day that is two Business Days prior to the first day of the
Interest Period. If two or more of such rates appear on such Telerate Page, the
rate shall be the arithmetic mean of such rates. If the foregoing rate is
unavailable from Telerate for any reason, then such rate shall be determined by
the Administrative Agent from the Reuters Screen LIBO Page or, if such rate is
also unavailable on such service, then on any other interest rate reporting
service of recognized standing designated in writing by the Administrative Agent
to Intermet and the Lenders; in any such case rounded, if necessary, to the next
higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Syndicated Loans and the
Swingline Loans.
"Margin Regulations" shall mean Regulation T, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System, as the
same may be in effect from time to time.
"Margin Stock" shall have the meaning set forth in the Margin
Regulations.
"Materially Adverse Effect" shall mean any materially adverse change in
(i) the business, results of operations, financial condition, assets or
prospects of the Consolidated Companies, taken as a whole, (ii) the ability of
Intermet to perform its obligations under this Agreement, (iii) the ability of
the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents, or (iv) the perfection or priority of
the Liens granted in favor of the Administrative Agent pursuant to the Security
Documents.
"Maturity Date" shall mean the earlier of (i) November 5, 2004, and
(ii) the date on which all amounts outstanding under this Agreement have been
declared or have automatically become due and payable pursuant to the provisions
of Article VIII.
"Minimum Required Rating" shall mean (i) from Moody's, a long-term
deposit rating of A1 or higher (or comparable rating in the event Moody's
hereafter modifies its rating system for long-term deposits of commercial
banks), and (ii) from S&P, a long-term deposit ratings of A+ or higher (or
comparable rating in the event S&P hereafter modifies its rating system for
long-term deposits of commercial banks).
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors and assigns.
14
<PAGE> 21
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Fixed Assets" shall mean, as of any date of determination, the net
property, plant and equipment of the Consolidated Companies determined in
accordance with GAAP and as reflected on the balance sheet of Intermet.
"Note Purchase Agreement" shall mean that certain Amended and Restated
Note Purchase Agreement dated as of March 21, 1996, by and between Intermet and
Prudential, as amended, modified or supplemented.
"Notes" shall mean, collectively, the Revolving Credit Notes and the
Swingline Note.
"Notice of Borrowing" shall mean a notification of Borrowing by
Intermet pursuant to Section 2.08 or 3.01 substantially in the form of Exhibit
D-1.
"Notice of Conversion/Continuation" shall mean a notification of
continuation or conversion of a Borrowing by Intermet pursuant to Section 3.01
substantially in the form of Exhibit D-2.
"Obligations" shall mean all amounts owing to the Administrative Agent
or any Lender pursuant to the terms of this Agreement or any other Credit
Document, including without limitation, all Loans (including all principal and
interest payments due thereunder), all Letter of Credit Obligations, fees,
expenses, indemnification and reimbursement payments, indebtedness, liabilities,
and obligations of the Credit Parties, direct or indirect, absolute or
contingent, liquidated or unliquidated, now existing or hereafter arising,
together with all renewals, extensions, modifications or refinancings thereof.
"Payment Office" shall mean the office specified as the "Payment
Office" for the Administrative Agent on Schedule 10.01, or such other location
as to which the Administrative Agent shall have given written notice to Intermet
and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by Section
7.02.
"Permitted Receivables" means all obligations of any obligor (whether
now existing or hereafter arising) under a contract for sale of goods or
services by Intermet or any of its Subsidiaries, which shall include any
obligation of such obligor (whether now existing or hereafter arising) to pay
interest, finance charges or amounts with respect thereto, and, with respect to
any of the foregoing receivables or obligations, (a) all of the interest of
Intermet or any of its Subsidiaries in the goods (including returned goods) the
sale of which gave rise to
15
<PAGE> 22
such receivable or obligation after the passage of title thereto to any obligor,
(b) all other Liens and property subject thereto from time to time purporting to
secure payment of such receivables or obligations, and (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
receivables or obligations.
"Permitted Receivables Purchase Facility" means any agreement of
Intermet or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to be sales (and considered
sales under GAAP) that do not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables (or against any of such
seller's Affiliates) by way of a guaranty or any other support arrangement, with
respect to the amount of such Permitted Receivables (based on the financial
condition or circumstances of the obligor thereunder), other than such limited
recourse as is reasonable given market standards for transactions of a similar
type, taking into account such factors as historical bad debt loss experience
and obligor concentration levels.
"Person" shall mean any individual, limited liability company,
partnership, firm, corporation, association, joint venture, trust or other
entity, or any government or political subdivision or agency, department or
instrumentality thereof.
"Plan" shall mean any "employee benefit plan" (as defined in Section
3(3) of ERISA), including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits, but shall exclude any Foreign Plan.
"Prior Credit Agreement" shall mean the Third Amended and Restated
Credit Agreement dated as of November 14, 1996, as amended, modified and
supplemented, among Intermet, the financial institutions party thereto, SunTrust
Bank, Atlanta, as agent, and NBD Bank and First Union National Bank, as
co-agents and in effect on the Closing Date.
"Pro Rata Share" shall mean, with respect to Commitments, each
Syndicated Loan, each Swingline Loan and all Letters of Credit to be made by and
each payment (including, without limitation, any payment of principal, interest
or fees) to be made to each Lender, the percentage designated as such Lender's
Pro Rata Share of such Commitments, set forth under the name of such Lender on
Schedule 1, as such percentage may change based upon amendments and assignments
hereunder.
"Prudential" shall mean, The Prudential Insurance Company of America.
"Rating Agencies" shall mean, collectively, Moody's and S&P.
16
<PAGE> 23
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time.
"Required Lenders" shall mean at any time prior to the termination of
the Commitments, Lenders holding at least 51% of the then aggregate amount of
the Commitments, or, following the termination of the Commitments hereunder,
Lenders holding at least 51% of the sum of the aggregate outstanding Loans and
Letter of Credit Obligations.
"Requirement of Law" for any Person shall mean the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuters Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Revolving Credit Notes" shall mean, collectively, the promissory notes
evidencing the Syndicated Loans in the form attached hereto as Exhibit A, either
as originally executed or as hereafter amended, modified or substituted.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Scotiabank" shall have the meaning set forth in the preamble.
"Security Documents" shall mean, collectively, the Guaranty Agreement
and each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations, as the same may be amended, restated, or supplemented
from time to time.
"Shareholders' Equity" shall mean, with respect to any Person as at any
date of determination, shareholders' equity of such Person determined on a
consolidated basis in conformity with GAAP.
"Solvent" shall mean, as to Intermet or any Guarantor at any time, that
(i) each of the fair value and the present fair saleable value of such Person's
assets (including any rights of subrogation or contribution to which such Person
is entitled, under any of the Loan Documents or otherwise) is greater than such
Person's debts and other liabilities (including contingent, unmatured and
unliquidated debts and liabilities) and the maximum estimated amount required to
pay such debts and liabilities as such debts and liabilities mature or otherwise
become payable; (ii) such Person is able and expects to be able to pay its debts
and
17
<PAGE> 24
other liabilities (including, without limitation, contingent, unmatured and
unliquidated debts and liabilities) as they mature; and (iii) such Person does
not have unreasonably small capital to carry on its business as conducted and as
proposed to be conducted.
"Subordinated Debt" shall mean other Indebtedness of Intermet
subordinated to all obligations of Intermet or any other Credit Party arising
under this Agreement, the Notes, and the Guaranty Agreements on terms and
conditions satisfactory in all respects to the Administrative Agent and the
Required Lenders, including without limitation, with respect to interest rates,
payment terms, maturities, amortization schedules, covenants, defaults,
remedies, and subordination provisions, evidenced by the written approval of the
Administrative Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation, partnerships, limited liability
companies, joint ventures, and associations) regardless of its jurisdiction of
organization or formation, at least a majority of the total combined voting
power of all classes of voting stock or other ownership interests of which
shall, at the time as of which any determination is being made, be owned by such
Person, either directly or indirectly through one or more other Subsidiaries.
"SunTrust" shall have the meaning set forth in the preamble.
"Swingline Commitment" shall mean the lesser of $10,000,000 and the sum
of the Commitments.
"Swingline Lender" means Scotiabank, in its individual capacity
hereunder (and not in its capacity as the Administrative Agent). At the request
of Scotiabank another Lender consented to by Intermet (such consent not to be
unreasonably withheld) may become a successor Swingline Lender.
"Swingline Loan" shall mean an Advance made by the Swingline Lender to
Intermet pursuant to Section 2.08.
"Swingline Note" shall mean a promissory note of Intermet payable to
the order of the Swingline Lender, in substantially the form of Exhibit B
hereto, evidencing the maximum aggregate principal indebtedness of Intermet to
the Swingline Lender with respect to outstanding Swingline Loans made by the
Swingline Lender pursuant to this Agreement, either as originally executed or as
it may be from time to time supplemented, modified, amended, renewed or
extended.
"Syndicated Loans" shall mean, collectively, all outstanding Loans made
to Intermet by the Lenders pursuant to Section 2.01 hereof.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended and
in effect from time to time.
18
<PAGE> 25
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated page
and LIBOR, the display page so designated on the Dow Jones Telerate Service (or
such other page as may replace that pace on that service for the purpose of
displaying rates comparable to LIBOR).
"364-Day Credit Agreement" shall mean the 364-Day Credit Agreement,
dated as of the date hereof (as amended, modified, restated, or supplemented
from time to time), among Intermet, the various financial institutions that are
or may become parties thereto and Scotiabank, as administrative agent.
"Total Assets" shall mean the total assets of the Consolidated
Companies, determined in accordance with GAAP.
"Total Sales" shall mean, for any period of determination, the total
revenues of the Consolidated Companies, determined in accordance with GAAP.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
Advances or Eurodollar Advances.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP, except that financial records of
Foreign Subsidiaries may be maintained in accordance with generally accepted
accounting principles in effect from time to time in the jurisdiction of
organization of such Foreign Subsidiary; provided, however, that compliance with
the financial covenants and calculations set forth in Section 6.08, Article VII,
and elsewhere herein, and in the definitions used in such covenants and
calculations, shall be calculated, made and applied in accordance with GAAP and
such generally accepted accounting principles in such foreign jurisdictions, as
the case may be, as in effect on the date of this Agreement applied on a basis
consistent with the preparation of the financial statements referred to in
Section 5.14 unless and until Intermet and the Required Lenders enter into an
agreement with respect thereto in accordance with Section 10.13.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this
19
<PAGE> 26
Agreement as a whole and not to any particular provision of this Agreement, and
Article, Section, Schedule, Exhibit and like references are to this Agreement
unless otherwise specified. Any of the terms defined in Section 1.01 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
ARTICLE II.
SYNDICATED LOANS, SWINGLINE LOANS AND LETTERS OF CREDIT
SECTION 2.01. COMMITMENTS; USE OF PROCEEDS.
(a) Subject to and upon the terms and conditions herein set forth,
each Lender severally agrees to make to Intermet from time to time on and after
the Closing Date, but prior to the Maturity Date, Syndicated Loans in an
aggregate amount outstanding at any time not to exceed such Lender's Commitment
minus such Lender's Pro Rata Share of the Swingline Loans minus such Lender's
Pro Rata Share of the Letter of Credit Obligations, subject, however, to the
conditions that (i) at no time shall the sum of the (x) the outstanding
principal amount of all Syndicated Loans, plus (y) the outstanding principal
amount of all Swingline Loans, plus (z) the outstanding Letter of Credit
Obligations, exceed the sum of the Commitments, and (ii) at all times shall the
outstanding principal amount of the Syndicated Loans of each Lender equal the
product of each Lender's Pro Rata Share of the Commitments multiplied by the
aggregate outstanding amount of the Syndicated Loans. Intermet shall be entitled
to repay and reborrow Syndicated Loans in accordance with the provisions hereof.
(b) Each Syndicated Loan shall, at the option of Intermet, be made or
continued as, or converted into, part of one or more Borrowings that shall
consist entirely of Base Rate Advances or Eurodollar Advances. The aggregate
principal amount of each Borrowing of Syndicated Loans shall be not less than
$5,000,000 or a greater integral multiple of $1,000,000, provided that each
Borrowing of Syndicated Loans comprised of Base Rate Advances shall be not less
than $1,000,000 or a greater integral multiple of $100,000. At no time shall the
number of outstanding Borrowings comprised of Eurodollar Advances exceed twelve.
(c) The proceeds of Loans shall be used solely as working capital and
for other general corporate purposes, including Acquisitions, Investments, the
repayment of Indebtedness (including Indebtedness under the Prior Credit
Agreement) and the funding of capital expenditures of the Consolidated
Companies.
SECTION 2.02. NOTES; REPAYMENT OF PRINCIPAL.
20
<PAGE> 27
(a) Intermet's obligations to pay the principal of, and interest on,
the Syndicated Loans to each Lender shall be evidenced by the records of the
Administrative Agent and such Lender and by the Revolving Credit Note payable to
such Lender (or the assignor of such Lender) completed in conformity with this
Agreement.
(b) All outstanding principal amounts under the Commitments shall be
due and payable in full on the Maturity Date.
SECTION 2.03. VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three
(3) Business Days' prior telephonic notice (promptly confirmed in writing) to
the Administrative Agent, Intermet shall have the right, without premium or
penalty, to terminate the unutilized Commitments, in part or in whole, provided,
that (i) any such termination shall apply to proportionately and permanently
reduce the Commitments of each of the Lenders, and (ii) any partial termination
pursuant to this Section 2.03 shall be in an amount of at least $5,000,000 and
integral multiples of $1,000,000.
SECTION 2.04. LETTER OF CREDIT FACILITY. Subject to, and upon the terms
and conditions set forth herein, Intermet may request, in accordance with the
provisions of this Section 2.04 and Section 2.05 and the other terms of this
Agreement, that on and after the Closing Date but prior to the Maturity Date,
the Issuer issue a Letter or Letters of Credit for the account of Intermet;
provided that the application for such Letters of Credit issued by the Issuer
shall be in the form substantially identical to Exhibit C attached hereto,
provided further that (i) no Letter of Credit shall have an expiration date that
is later than one year after the date of issuance thereof (provided that a
Letter of Credit may provide that it is extendible for consecutive one year
periods); (ii) in no event shall any Letter of Credit issued by the Issuer have
an expiration date (or be extended so that it will expire) later than the
Maturity Date; and (iii) Intermet shall not request that the Issuer issue any
Letter of Credit, if, after giving effect to such issuance, (a) the sum of the
aggregate Letter of Credit Obligations plus the aggregate outstanding principal
amount of the Syndicated Loans plus the aggregate outstanding principal amount
of the Swingline Loans would exceed the Commitments, or (b) the sum of the
aggregate Letter of Credit Obligations would exceed the Letter of Credit
Commitment.
SECTION 2.05. NOTICE OF ISSUANCE OF LETTER OF CREDIT; AGREEMENT TO
ISSUE.
(a) Whenever Intermet desires the issuance of a Letter of Credit, it
shall, in addition to any application and documentation procedures required by
the Issuer for the issuance of such Letter of Credit, deliver to the
Administrative Agent and the Issuer a written notice no later than 11:00 AM
(local time for the Administrative Agent) at least five (5) days in advance of
the proposed date of issuance and the Administrative Agent shall promptly
forward a copy of such notice to each of the Lenders. Each such notice shall
specify (i) the proposed date of issuance (which shall be a Business Day); (ii)
the face amount of the Letter of Credit (which shall be denominated in Dollars);
(iii) the expiration date of the Letter of Credit; and (iv) the name and address
of the beneficiary with respect to such Letter of Credit
21
<PAGE> 28
and shall attach a precise description of the documentation and a verbatim text
of any certificate to be presented by the beneficiary of such Letter of Credit
which would require the Issuer to make payment under the Letter of Credit,
provided that the Issuer may require changes in any such documents and
certificates in accordance with its customary letter of credit practices, and
provided further, that no Letter of Credit shall require payment against a
conforming draft to be made thereunder on the same Business Day that such draft
is presented if such presentation is made after 11:00 AM (Atlanta, Georgia
time). In determining whether to pay any draft under any Letter of Credit, the
Issuer shall be responsible only to determine that the documents and certificate
required to be delivered under its Letter of Credit have been delivered, and
that they comply on their face with the requirements of the Letter of Credit.
The Issuer shall promptly notify the Administrative Agent upon the issuance of a
Letter of Credit. Promptly after receiving the notice of issuance of a Letter of
Credit, the Administrative Agent shall notify each Lender of such Lender's
respective participation therein, determined in accordance with its respective
Pro Rata Share of the Commitments.
(b) The Issuer agrees, subject to the terms and conditions set forth
in this Agreement, to issue for the account of Intermet a Letter of Credit in a
face amount equal to the face amount requested under paragraph (a) above,
following its receipt of a notice required by Section 2.05(a). Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuer a participation in
such Letter of Credit and any drawing thereunder in an amount equal to such
Lender's Pro Rata Share of the Commitments multiplied by the face amount of such
Letter of Credit. Upon issuance and amendment or extension of any Letter of
Credit the Issuer shall provide to the Administrative Agent, and the
Administrative Agent shall, if requested by any Lender, then provide to each
such Lender, a copy of each such Letter of Credit issued, amended or extended
hereunder.
(c) As of the Closing Date, each of the Letters of Credit set forth
on Schedule 7.01 shall be deemed to have been issued by SunTrust as Issuer in
accordance with the terms hereof, each of the Lenders shall be deemed to have
purchased a participation in such Letters of Credit in an amount equal to such
Lender's Pro Rata Share of the Commitments multiplied by the face amount
thereof, and such Letters of Credit shall be governed by the terms hereof;
provided that SunTrust shall not be permitted to extend or renew any such Letter
of Credit.
SECTION 2.06. PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(a) In the event of any request for a drawing under any Letter of
Credit by the beneficiary thereof, the Issuer shall notify Intermet, the
Administrative Agent and the Lenders on or before the date on which the Issuer
intends to honor such drawing, and Intermet shall reimburse the Issuer on the
day on which such drawing is honored in an amount, in same day funds, equal to
the amount of such drawing.
22
<PAGE> 29
(b) Notwithstanding any provision of this Agreement to the contrary,
to the extent that any Letter of Credit or portion thereof remains outstanding
on the Maturity Date, for any reason whatsoever, the parties hereto hereby agree
that the beneficiary or beneficiaries thereof shall be deemed to have made a
drawing of all available amounts pursuant to such Letters of Credit on the
Maturity Date which amount shall be paid by Intermet to and held by the Issuer
as cash collateral for its remaining obligations pursuant to such Letters of
Credit.
(c) As between Intermet and the Issuer, Intermet assumes all risk of
the acts and omissions of, or misuse of, the Letters of Credit issued by the
Issuer, by the respective beneficiaries of such Letters of Credit, other than
losses resulting from the gross negligence and willful misconduct of the Issuer.
In furtherance and not in limitation of the foregoing but subject to the
exception for the Issuer's gross negligence or willful misconduct set forth
above, the Issuer shall not be responsible (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects
insufficient, inaccurate, fraudulent or forged or otherwise invalid; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof in whole or in part which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with the conditions required in
order to draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, telecopy or otherwise; (v) for good faith errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit; and (viii) for
any consequences arising from causes beyond the control of the Issuer.
SECTION 2.07. PAYMENT BY LENDERS. In the event that Intermet shall fail
to reimburse the Issuer as provided in Section 2.06, the Issuer shall promptly
notify each Lender of the unreimbursed amount of such drawing and of such
Lender's respective participation therein. Each Lender shall make available to
the Issuer an amount equal to its respective participation, in Dollars and in
immediately available funds, at the office of the Issuer specified in such
notice not later than 1:00 PM (Atlanta, Georgia time) on the Business Day after
the date notified by the Issuer and such amount shall be deemed to be
outstanding hereunder as a Base Rate Loan. Each Lender shall be obligated to
make such Base Rate Loan hereunder regardless of whether the conditions
precedent in Article IV are satisfied and regardless of whether such Base Rate
Loan complies with the minimum borrowing requirements hereunder. In the event
that any such Lender fails to make available to the Issuer the amount of such
Lender's participation in such Letter of Credit, the Issuer shall be entitled to
recover such amount on demand from such Lender together with interest as
provided for in Section 3.02. The Issuer shall distribute to each Lender which
has paid all amounts payable under this Section with respect to any Letter of
Credit, such Lender's Pro
23
<PAGE> 30
Rata Share of all payments received by the Issuer from Intermet in reimbursement
of drawings honored by the Issuer under such Letter of Credit when such payments
are received.
SECTION 2.08. SWINGLINE LOANS.
(a) Subject to the terms and conditions hereof, Intermet may request,
and the Swingline Lender agrees to make to Intermet from time to time on and
after the Closing Date, but prior to the Maturity Date, Swingline Loans in
accordance with the following procedure; provided, that (i) at no time shall the
sum of the aggregate principal amount of the Swingline Loans exceed the
Swingline Commitment, (ii) at no time shall the sum of the outstanding principal
amount of the Loans plus the Letter of Credit Obligations exceed the sum of the
Commitments, and (iii) each Swingline Loan shall consist entirely of Base Rate
Loans. Intermet shall be entitled to repay and reborrow Swingline Loans in
accordance with the provisions hereof.
(b) In order to request a Swingline Loan, Intermet shall telecopy to
the Administrative Agent a duly completed Notice of Borrowing in the form of
Exhibit D-1 attached hereto, to be received by the Administrative Agent not
later than 11:00 AM (local time for the Administrative Agent) time, on the
Business Day of the proposed Swingline Loan; provided that, such Notice of
Borrowing shall not be deemed to have been received by the Administrative Agent
in a timely manner unless Intermet shall also have notified the Administrative
Agent by telephone (excluding voice mail notification) of such Notice of
Borrowing by the time specified above. A Notice of Borrowing that does not
conform substantially to the format of Exhibit D-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
notify Intermet of such rejection by telecopy not later than 12:00 noon
(Atlanta, Georgia time) on the date of receipt. Each Notice of Borrowing shall
be irrevocable and shall specify (i) the date of such Borrowing or Borrowings
(which shall be a Business Day) and (ii) the aggregate principal amount thereof,
which shall be in a minimum principal amount of $1,000,000 and in an integral
multiple of $100,000.
(c) The Swingline Lender shall make its Swingline Loan available to
the Administrative Agent on the date specified in the Notice of Borrowing at the
time and in the manner and subject to the provisions specified in Section 3.02.
(d) If the outstanding principal amount of any Swingline Loan is not
repaid when due pursuant to the terms of this Agreement, each Lender (other than
the Swingline Lender) irrevocably agrees that it will, upon receipt of a notice
from the Swingline Lender, promptly (and in any event not later than 1:00 PM
Atlanta, Georgia time) on the Business Day after the date notified by the
Swingline Lender) transfer to the Swingline Lender, in immediately available
funds, an amount equal to such Lender's Pro Rata Share of the then aggregate
outstanding amount of all Swingline Loans, and thereafter such Lender's Pro Rata
Share of such Swingline Loans shall constitute a Syndicated Loan (which shall be
a Base Rate Advance) made by such Lender hereunder. Each Lender shall be
obligated to make such Base Rate Advance hereunder regardless of whether the
conditions precedent in Article IV are
24
<PAGE> 31
then satisfied and regardless of whether such Base Rate Advance complies with
the minimum borrowing requirements hereunder. In the event that any such Lender
fails to make available to the Swingline Lender such Lender's Pro Rata Share of
the Swingline Loans, the Swingline Lender shall be entitled to recover such
amount on demand from such Lender together with interest as provided for in
Section 3.02. The Swingline Lender shall distribute to each Lender which has
paid all amounts payable under this Section with respect to any Swingline Loans
such Lender's Pro Rata Share of all payments received by the Swingline Lender
with respect to Swingline Loans.
(e) The Swingline Loans of the Swingline Lender shall be evidenced by
its Swingline Note and each Swingline Loan, unless sooner accelerated pursuant
to Article VIII hereof, shall be due and payable in full on the earliest of (i)
four Business Days after such Swingline Loan is made, (ii) the next date on
which Syndicated Loans are made and (iii) the Maturity Date.
ARTICLE III.
GENERAL LOAN AND LETTER OF CREDIT TERMS
SECTION 3.01. FUNDING NOTICES.
(a) (i) Whenever Intermet desires to obtain a Syndicated Loan with
respect to the Commitments (other than one resulting from a conversion or
continuation pursuant to Section 3.01(b)), it shall give the Administrative
Agent a duly completed Notice of Borrowing in the form of Exhibit D-1 attached
hereto, such Notice of Borrowing to be given prior to 11:00 AM (local time for
the Administrative Agent) at its Payment Office (x) three Business Days prior to
the requested date of such Borrowing in the case of Eurodollar Advances, and (y)
on the date of such Borrowing (which shall be a Business Day) in the case of a
Borrowing consisting of Base Rate Advances. Notices received after 11:00 AM
(local time for the Administrative Agent) shall be deemed received on the next
Business Day. A Notice of Borrowing that does not conform substantially to the
format of Exhibit D-1 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall notify Intermet of such rejection
by telecopy not later than 12:00 noon (Atlanta, Georgia time) on the date of
receipt. Each Notice of Borrowing shall be irrevocable and shall specify the
aggregate principal amount of the Borrowing, the date of Borrowing (which shall
be a Business Day), and whether the Borrowing is to consist of Base Rate
Advances or Eurodollar Advances and (in the case of Eurodollar Advances) the
Interest Period to be applicable thereto.
(ii) Whenever Intermet desires to obtain a Swingline Loan, it
shall notify the Administrative Agent in accordance with the procedure set forth
in Section 2.08 hereof.
25
<PAGE> 32
(b) Whenever Intermet desires to convert all or a portion of an
outstanding Borrowing, which Borrowing consists of Base Rate Advances or
Eurodollar Advances (in the case of Syndicated Loans), into one or more
Borrowings consisting of Advances of another Type, or to continue outstanding a
Borrowing consisting of Eurodollar Advances for a new Interest Period, it shall
give the Administrative Agent a duly completed Notice of Conversion/Continuation
in the form of Exhibit D-2 attached hereto, such Notice of
Conversion/Continuation to be given at least three Business Days prior to each
such Borrowing to be converted into or continued as Eurodollar Advances. Such
Notice of Conversion/Continuation shall be given prior to 11:00 AM (local time
for the Administrative Agent) on the date specified at the Payment Office of the
Administrative Agent. Notices received after 11:00 AM (local time for the
Administrative Agent) shall be deemed received on the next Business Day. A
Notice of Conversion/Continuation that does not conform substantially to the
format of Exhibit D-2 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall notify Intermet of such rejection
by telecopy not later than 12:00 noon (Atlanta, Georgia time) on the date of
receipt. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation, whether the Advances are
being converted into or continued Eurodollar Advances and, if so, the Interest
Period applicable thereto. If, upon the expiration of any Interest Period in
respect of any Borrowing, Intermet shall have failed to deliver the Notice of
Conversion/Continuation, Intermet shall be deemed to have elected to convert or
continue such Borrowing to a Borrowing consisting of Base Rate Advances. So long
as any Executive Officer of Intermet has knowledge that any Default or Event of
Default shall have occurred and be continuing, no Borrowing may be converted
into or continued as (upon expiration of the current Interest Period) Eurodollar
Advances unless the Administrative Agent and each of the Lenders shall have
otherwise consented in writing. No conversion of any Borrowing of Eurodollar
Advances shall be permitted except on the last day of the Interest Period in
respect thereof.
(c) Without in any way limiting Intermet's obligation to confirm in
writing any telephonic notice, the Administrative Agent may act without
liability upon the basis of telephonic notice believed by the Administrative
Agent in good faith to be from Intermet prior to receipt of written
confirmation. In each such case, Intermet hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice.
(d) The Administrative Agent shall promptly give each Lender notice
by telephone (confirmed in writing) or by telex, telecopy or facsimile
transmission of the matters covered by the notices given to the Administrative
Agent pursuant to this Section 3.01 with respect to the Commitments.
SECTION 3.02. DISBURSEMENT OF FUNDS.
(a) No later than 2:00 PM (local time for the Administrative Agent)
on the date of each Syndicated Loan pursuant to the Commitments (other than one
resulting from a conversion or continuation pursuant to Section 3.01(b)), each
Lender will make available its
26
<PAGE> 33
Pro Rata Share of such Syndicated Loan in immediately available funds at the
Payment Office of the Administrative Agent. The Administrative Agent will make
available to Intermet the aggregate of the amounts (if any) so made available by
the Lenders to the Administrative Agent in a timely manner by crediting such
amounts to Intermet's demand deposit account maintained with the Administrative
Agent or at Intermet's option, effecting a wire transfer of such amounts to an
account specified by Intermet, by the close of business on such Business Day. In
the event that the Lenders do not make such amounts available to the
Administrative Agent by the time prescribed above, but such amount is received
later that day, such amount may be credited to Intermet in the manner described
in the preceding sentence on the next Business Day (with interest on such amount
to begin accruing hereunder on such next Business Day).
(b) No later than 3:00 PM (local time for the Administrative Agent)
on the date of each Swingline Loan, the Swingline Lender will make available the
amount of its Swingline Loan in immediately available funds at the Payment
Office of the Administrative Agent on the date of such Swingline Loan.
(c) Unless the Administrative Agent shall have been notified by any
Lender prior to the date of a Borrowing (or, with respect to a Borrowing
consisting of Base Rate Advances, prior to 12:00 Noon on the date of such
Borrowing) that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of the Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date and the Administrative Agent
may make available to Intermet a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
on the date of Borrowing, the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with interest at
the Federal Funds Rate. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify Intermet, and Intermet shall immediately pay such
corresponding amount to the Administrative Agent together with interest at the
rate specified for the Borrowing. Nothing in this subsection shall be deemed to
relieve any Lender from its obligation to fund its Commitment or Swingline Loans
hereunder or to prejudice any rights which Intermet may have against any Lender
as a result of any default by such Lender hereunder.
(d) All Syndicated Loans under the Commitments shall be loaned by the
Lenders on the basis of their Pro Rata Share of the Commitments. All Swingline
Loans shall be loaned by the Swingline Lender. No Lender shall be responsible
for any default by any other Lender in its obligations hereunder, and each
Lender shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fund its Commitments or
Swingline Loans hereunder.
27
<PAGE> 34
SECTION 3.03. INTEREST.
(a) Intermet agrees to pay interest in respect of all unpaid
principal amounts of Loans from the respective dates such principal amounts were
advanced to maturity (whether by acceleration, notice of prepayment or
otherwise) at rates per annum equal to the applicable rates indicated below:
(i) For Base Rate Advances--The relevant Base Rate in effect
from time to time plus the Base Rate Margin; or
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate
plus the Applicable Margin.
(b) Overdue principal and, to the extent not prohibited by applicable
law, overdue interest, in respect of the Loans, and all other overdue amounts
owing hereunder, shall bear interest from each date that such amounts are
overdue:
(i) in the case of overdue principal and interest with respect
to all Loans outstanding as Eurodollar Advances, at the rate otherwise
applicable for the then-current Interest Period plus an additional two
percent (2.0%) per annum; thereafter at the rate in effect for Base Rate
Advances plus an additional two percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest with respect
to all other Loans outstanding as Base Rate Advances, and all other
Obligations hereunder (other than Loans), at a rate in effect for Base Rate
Advances plus an additional two percent (2.0%) per annum;
(c) Interest on each Loan shall accrue from and including the date of
such Loan to but excluding the date of any repayment thereof; provided that, if
a Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all Base Rate Advances shall be payable monthly in arrears on
the last calendar day of each calendar month. Interest on all outstanding
Eurodollar Advances shall be payable on the last day of each Interest Period
applicable thereto, and, in the case of Interest Periods in excess of three
months (in the case of Eurodollar Advances), on each day which occurs every 3
months, as the case may be, after the initial date of such Interest Period.
Interest on all Loans shall be payable on any conversion of any Advances
comprising such Loans into Advances of another type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of prepayment or
otherwise) and, after maturity, on demand; and
(d) The Administrative Agent, upon determining the Adjusted LIBO Rate
for any Interest Period, shall promptly notify by telephone (confirmed in
writing) or in writing Intermet and the other Lenders. Any such determination
shall, absent manifest error, be final, conclusive and binding for all purposes.
28
<PAGE> 35
SECTION 3.04. INTEREST PERIODS.
(a) In connection with the making or continuation of, or conversion
into, each Borrowing of Eurodollar Advances, Intermet shall select an Interest
Period to be applicable to such Eurodollar Advances, which Interest Period shall
be either a 1, 2, 3 or 6 month period.
(b) Notwithstanding paragraph (a) above:
(i) The initial Interest Period for any Borrowing of Eurodollar
Advances shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing consisting of Advances of another Type)
and each Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period
expires;
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period in respect of
Eurodollar Advances would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall, subject to part
(iv) below, expire on the last Business Day of such calendar month; and
(iv) No Interest Period with respect to the Loans shall extend
beyond the Maturity Date.
SECTION 3.05. FEES.
(a) Intermet shall pay to the Administrative Agent, for the account
of and distribution of the respective Pro Rata Share to each Lender (subject to
the last sentence hereof), a commitment fee (the "Commitment Fee") for the
period commencing on the Closing Date to and including the Maturity Date,
computed at a rate equal to the Applicable Commitment Fee Percentage per annum
multiplied by the average daily unused portion of the Commitments of the
Lenders, such fee being payable quarterly in arrears on or before the date which
is five days following the last day of each fiscal quarter of Intermet and on
the Maturity Date. For purposes of calculating the Commitment Fee, Swingline
Loans shall not be considered a usage of the Commitments. Outstanding Letter of
Credit Obligations shall be considered a usage of the Commitments.
29
<PAGE> 36
(b) Intermet agrees to pay to the Administrative Agent, for the
account of the Lenders, a letter of credit fee equal to the Applicable Margin
applicable to Eurodollar Advances multiplied by the daily average amount of
Letter of Credit Obligations (the "Letter of Credit Fee"). The Letter of Credit
Fee shall be payable by Intermet quarterly, in arrears, on or before the date
which is five days following the last day of each fiscal quarter of Intermet,
and on the Maturity Date. Intermet also shall pay to the Issuer with respect to
each Letter of Credit a fronting fee as described in the Fee Letter and other
customary administrative, issuance, amendment, payment and negotiation fees.
(c) Intermet shall pay to the Administrative Agent, for its own
account, such fees for its administrative services in the amounts and on the
dates set forth in the Fee Letter.
SECTION 3.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) Intermet may, at its option, prepay Borrowings consisting of Base
Rate Advances at any time in whole, or from time to time in part, in amounts
aggregating $100,000 or any greater integral multiple of $100,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Those Borrowings consisting of Eurodollar Advances
may be prepaid, at Intermet's option, in whole, or from time to time in part, in
amounts aggregating $1,000,000 or any greater integral multiple of $100,000, by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments pursuant
to Section 3.12 if such prepayment is made on a date other than the last day of
an Interest Period applicable thereto. Each such optional prepayment shall be
applied in accordance with Section 3.06(c) below.
(b) Intermet shall give written notice (or telephonic notice
confirmed in writing) to the Administrative Agent of any intended prepayment of
the Loans (i) prior to 12:00 noon (local time for the Administrative Agent), on
the date of any prepayment of Base Rate Advances and (ii) not less than three
Business Days prior to any prepayment of Eurodollar Advances. Such notice, once
given, shall be irrevocable. Upon receipt of such notice of prepayment, the
Administrative Agent shall promptly notify each Lender of the contents of such
notice and of such Lender's share of such prepayment (provided that notices of
prepayments of Swingline Loans shall only be given to the Swingline Lender).
(c) Intermet, when providing notice of prepayment pursuant to Section
3.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid provided that each prepayment made pursuant
to a single Borrowing shall be applied pro rata among the Advances comprising
such Borrowing. In the absence of a designation by Intermet, the Administrative
Agent shall, subject to the foregoing, make such designation in its sole
discretion. All voluntary prepayments shall be applied to the payment of
interest on the Borrowings prepaid before application to principal.
30
<PAGE> 37
SECTION 3.07. PAYMENTS, ETC.
(a) Except as otherwise specifically provided herein, all payments
under this Agreement and the other Credit Documents shall be made without
defense, set-off or counterclaim to the Administrative Agent not later than 1:00
PM (local time for the Administrative Agent) on the date when due and shall be
made in Dollars in immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of and without
set-off, deduction or withholding for any Taxes in respect of this Agreement,
the Notes or other Credit Documents, or any payments of principal, interest,
fees or other amounts payable hereunder or thereunder (but excluding, except as
provided in paragraph (iii) hereof, any Taxes imposed on the overall net income
of any Lender pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Taxes are so levied or imposed, Intermet agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other Credit
Documents, after withholding or deduction for or on account of any such Taxes
(including additional sums payable under this Section 3.07), will not be less
than the full amount provided for herein had no such deduction or withholding
been required, (B) to make such withholding or deduction and (C) to pay the full
amount deducted to the relevant authority in accordance with applicable law.
Intermet will furnish to the Administrative Agent and each Lender, within 30
days after the date the payment of any Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by Intermet. Intermet
will indemnify and hold harmless the Administrative Agent, the Issuer and each
Lender and reimburse the Administrative Agent, the Issuer and each Lender upon
written request for the amount of any Taxes so levied or imposed and paid by the
Administrative Agent, the Issuer or such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or illegally asserted. A certificate as
to the amount of such payment by such Lender, the Issuer or the Administrative
Agent, absent manifest error, shall be final, conclusive and binding for all
purposes.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to Intermet and the
Administrative Agent, prior to the time it becomes a Lender hereunder, two
copies of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 or any successor forms thereto (wherein such Lender
claims entitlement to complete exemption from or reduced rate of U.S. Federal
withholding tax on interest paid by Intermet hereunder) and to provide to
Intermet and the Administrative Agent a new Form 4224 or Form 1001 or any
successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form; provided, however, that no Lender shall be required
to furnish a form under this paragraph (ii) if it is not entitled to claim an
exemption from or a reduced rate of withholding under applicable law. A Lender
that is not
31
<PAGE> 38
entitled to claim an exemption from or a reduced rate of withholding under
applicable law, promptly upon written request of Intermet, shall so inform
Intermet in writing.
(iii) Intermet shall also reimburse the Administrative Agent, the
Issuer and each Lender, upon written request, for any Taxes imposed (including,
without limitation, Taxes imposed on the overall net income of the
Administrative Agent, the Issuer or such Lender or its applicable Lending Office
pursuant to the laws of the jurisdiction in which the principal executive office
or the applicable Lending Office of the Administrative Agent, the Issuer or such
Lender is located) as the Administrative Agent, the Issuer or such Lender shall
determine are payable by the Administrative Agent, the Issuer or such Lender in
respect of amounts paid by or on behalf of Intermet to or on behalf of the
Administrative Agent, the Issuer or such Lender pursuant to paragraph (i)
hereof.
(c) Subject to Section 3.04(b)(ii), whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis
of a year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed), except that
interest on Base Rate Advances shall be computed on the basis of a year of
365/366 days for the actual number of days. Interest on Base Rate Advances shall
be calculated based on the Base Rate from and including the date of such Loan to
but excluding the date of the repayment or conversion thereof. Interest on
Eurodollar Advances shall be calculated as to each Interest Period from and
including the first day thereof to but excluding the last day thereof. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be made in good faith and, except for manifest error, shall be final,
conclusive and binding for all purposes.
(e) Payment by Intermet to the Administrative Agent in accordance
with the terms of this Agreement shall, as to Intermet, constitute payment to
the Lenders under this Agreement.
SECTION 3.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that
the Administrative Agent shall have determined (which determination shall be
made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all parties) that on any date for determining the Adjusted LIBO
Rate for any Interest Period, by reason of any changes arising after the date of
this Agreement affecting the London interbank market, or the Administrative
Agent's position in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Adjusted LIBO Rate then, and in any such event, the Administrative
Agent shall forthwith give notice (by telephone confirmed in writing) to
Intermet and to the Lenders, of such determination and
32
<PAGE> 39
a summary of the basis for such determination. Until the Administrative Agent
notifies Intermet that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Lenders to make or permit
portions of the Loans to remain outstanding past the last day of the then
current Interest Periods as Eurodollar Advances shall be suspended, and such
affected Advances shall bear interest at the Base Rate (or at such other rate of
interest per annum as Intermet and each of the Administrative Agent and the
Lenders shall have agreed to in writing).
SECTION 3.09. ILLEGALITY.
(a) In the event that any Lender shall have determined (which
determination shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Intermet
and to the Administrative Agent of such determination and a summary of the basis
for such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) Upon the giving of the notice to Intermet referred to in
subsection (a) above, (i) Intermet's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and such
Lender shall make an Advance as part of the requested Borrowing of Eurodollar
Advances, bearing interest at the Base Rate plus the applicable Base Rate Margin
(or at such other rate of interest per annum as Intermet and each of the
Administrative Agent and such Lender shall have agreed to in writing), which
Base Rate Advance shall, for all other purposes, be considered part of such
Borrowing, and (ii) if the affected Eurodollar Advance or Advances are then
outstanding, each such Advance shall be automatically converted into a Base Rate
Advance, provided that if more than one Lender is affected at any time, then all
affected Lenders must be treated the same pursuant to this Section 3.09(b).
(c) Notwithstanding any other provision contained in this Agreement,
the Issuer shall not be obligated to issue any Letter of Credit, nor shall any
Lender be obligated to purchase its participation in any Letter of Credit to be
issued hereunder, if the issuance of such Letter of Credit or purchase of such
participation shall have become unlawful or prohibited by compliance by the
Issuer or such Lender in good faith with any law, governmental rule, guideline,
request, order, injunction, judgment or decree (whether or not having the force
of law); provided that in the case of the obligation of a Lender to purchase
such participation, such Lender shall have notified the Issuer to such effect at
least three (3) Business Days' prior to the issuance thereof by the Issuer,
which notice shall relieve the Issuer of its obligation to issue such Letter of
Credit pursuant to Section 2.04 and Section 2.05 hereof.
33
<PAGE> 40
SECTION 3.10. INCREASED COSTS.
(a) (i) If, by reason of (x) after the date hereof, the introduction
of or any change (including, without limitation, any change by way of imposition
or increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally (whether or not having
the force of law):
(1) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its Eurodollar
Advances, Letter of Credit Obligations or its obligation to make Eurodollar
Advances or to issue or participate in Letters of Credit, or the basis of
taxation of payments to any Lender of the principal of or interest on its
Eurodollar Advances or its obligation to make Eurodollar Advances or to
issue or participate in Letters of Credit shall have changed (except for
changes in the tax on the overall net income of such Lender or its
applicable Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or applicable Lending Office is
located); or
(2) any reserve (including, without limitation, any imposed by
the Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender's applicable Lending Office shall be
imposed or deemed applicable or any other condition affecting its
Eurodollar Advances, Letter of Credit Obligations or its obligation to make
or participate in Eurodollar Advances or Letters of Credit shall be imposed
on any Lender or its applicable Lending Office or the London interbank
market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding, participating in or maintaining
Eurodollar Advances or Letters of Credit (except to the extent already included
in the determination of the applicable Adjusted LIBO Rate), or there shall be a
reduction in the amount received or receivable by such Lender or its applicable
Lending Office, or
(ii) in the event that any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy not currently in effect or fully applicable as
of the Closing Date, or any change therein or in the interpretation or
application thereof after the Closing Date, or compliance by such Lender with
any request or directive regarding capital adequacy not currently in effect or
fully applicable as of the Closing Date (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from a central
bank or governmental authority or body having jurisdiction, does or shall have
the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below
34
<PAGE> 41
that which such Lender could have achieved but for such law, treaty, rule,
regulation, guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then, in the case of (i) or (ii)
above, upon written notice from and demand by such Lender on Intermet (with a
copy of such notice and demand to the Administrative Agent), Intermet shall from
time to time (subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b)) pay to the Administrative Agent for the account
of such Lender within five Business Days after the date of such notice and
demand, additional amounts sufficient to indemnify such Lender against such
increased cost or reduced yield. A certificate as to the amount of such
increased cost or reduced yield submitted to Intermet and the Administrative
Agent by such Lender in good faith and accompanied by a statement prepared by
such Lender describing in reasonable detail the basis for and calculation of
such increased cost, shall, except for manifest error, be final, conclusive and
binding for all purposes.
(b) If any Lender shall advise the Administrative Agent that at any
time, because of the circumstances described in clauses (x) or (y) in Section
3.10(a) or any other circumstances beyond such Lender's reasonable control
arising after the date of this Agreement affecting such Lender or the London
interbank market or such Lender's position in such markets, the Adjusted LIBO
Rate as determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Lender of funding its Eurodollar Advances, then, and in
any such event:
(i) the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to Intermet and to the other Lenders of
such advice;
(ii) Intermet's right to request and such Lender's obligation to
make or permit portions of the Loans to remain outstanding past the last
day of the then current Interest Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make an Advance as part of the requested
Borrowing of Eurodollar Advances, as the case may be, bearing interest at
the Base Rate plus the applicable Base Rate Margin (or at such other rate
of interest per annum as Intermet and each of the Administrative Agent and
such Lender shall have agreed to in writing), which Base Rate Advance
shall, for all other purposes, be considered part of such Borrowing.
SECTION 3.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by Intermet, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08, 3.09 or 3.10 to reduce the liability of
35
<PAGE> 42
Intermet or avoid the results provided thereunder, so long as such designation
is not disadvantageous to such Lender as determined by such Lender, which
determination if made in good faith, shall be conclusive and binding on all
parties hereto. Nothing in this Section 3.11 shall affect or postpone any of the
obligations of Intermet or any right of any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) issues a public announcement with respect
to the closing of its lending offices in the United States such that any
withholdings or deductions and additional payments with respect to Taxes may be
required to be made by Intermet thereafter pursuant to Section 3.07(b), such
Lender shall use reasonable efforts to furnish Intermet notice thereof as soon
as practicable thereafter; provided, however, that no delay or failure to
furnish such notice shall in any event release or discharge Intermet from its
obligations to such Lender pursuant to Section 3.07(b) or otherwise result in
any liability of such Lender.
SECTION 3.12. FUNDING LOSSES. Intermet shall compensate each Lender,
upon its written request to Intermet (which request shall set forth the basis
for requesting such amounts in reasonable detail and which request shall be made
in good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances, in either case to
the extent not recovered by such Lender in connection with the re-employment of
such funds and including loss of anticipated profits), which the Lender may
sustain: (i) if for any reason (other than a default by such Lender) a borrowing
of, or conversion to or continuation of, Eurodollar Advances to Intermet does
not occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and conversions pursuant to Section 3.09(b)) of
any Eurodollar Advances by Intermet occurs on a date which is not the last day
of an Interest Period applicable thereto, or (iii) if, for any reason, Intermet
defaults in its obligation to repay its Eurodollar Advances when required by the
terms of this Agreement.
SECTION 3.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR ADVANCES.
Calculation of all amounts payable to a Lender under this Article III shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar Advances from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided however, that each Lender may fund each of its
Eurodollar Advances in any manner it sees fit and the foregoing assumption shall
be used only for calculation of amounts payable under this Article III.
36
<PAGE> 43
SECTION 3.14. APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments in respect of Loans and payments in respect of Letter of
Credit Fees and Commitment Fees shall be apportioned among all outstanding
Commitments, Letter of Credit Obligations and Loans to which such payments
relate, proportionately to the Lenders' respective pro rata portions of such
Commitments and outstanding Loans and Letter of Credit Obligations. The
Administrative Agent shall promptly distribute to each Lender at its Payment
Office set forth beside its name on Schedule 10.01 or such other address as any
Lender may request its share of all such payments received by the Administrative
Agent.
SECTION 3.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its pro rata portion of
payments or reductions on account of such obligations obtained by all the
Lenders (other than, prior to the termination of the Commitments, payments of
principal, interest and fees with respect to the Swingline Loans which are
payable solely to the Swingline Lender), such Lender shall forthwith (i) notify
each of the other Lenders and Administrative Agent of such receipt, and (ii)
purchase from the other Lenders such participations in the affected obligations
as shall be necessary to cause such purchasing Lender to share the excess
payment or reduction, net of costs incurred in connection therewith, ratably
with each of them, provided that if all or any portion of such excess payment or
reduction is thereafter recovered from such purchasing Lender or additional
costs are incurred, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery or such additional costs, but without
interest unless the Lender obligated to return such funds is required to pay
interest on such funds. Intermet agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 3.15 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Intermet in the amount of such participation.
SECTION 3.16. BENEFITS TO GUARANTORS. In consideration of the execution
and delivery by the Guarantors of the Guaranty Agreement, Intermet agrees,
subject to the terms hereof, to make extensions of credit hereunder available to
the Guarantors.
SECTION 3.17. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.07 no later
than 90 days after the earlier of (i) the date on which such Lender or
Administrative Agent makes payment of such Taxes, and (ii) the date on which the
relevant taxing authority or other governmental authority makes written demand
upon such Lender or Administrative Agent for payment of such Taxes.
37
<PAGE> 44
(b) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.12 no later
than 90 days after the event giving rise to the claim for indemnification or
compensation occurs.
(c) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.10 no later
than 90 days after such Lender or Administrative Agent receives actual notice or
obtains actual knowledge of the promulgation of a law, rule, order or
interpretation or occurrence of another event giving rise to a claim pursuant to
such sections.
(d) In the event that the Lenders or Administrative Agent fail to
give Intermet notice within the time limitations prescribed in (a) or (b) above,
Intermet shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Administrative Agent fails to
give Intermet notice within the time limitation prescribed in (c) above,
Intermet shall not have any obligation to pay any amount with respect to claims
accruing prior to the ninetieth day preceding such written demand.
SECTION 3.18. LETTER OF CREDIT OBLIGATIONS ABSOLUTE. The obligation of
Intermet to reimburse the Issuer for drawings made under Letters of Credit
issued for the account of Intermet and the Lenders' obligation to honor their
participations purchased therein shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including without limitation, the following circumstances:
(a) Any lack of validity or enforceability of any Letter of Credit;
(b) The existence of any claim, set-off, defense or other right which
Intermet or any Subsidiary or Affiliate of Intermet may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), any Lender
or any other Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including without limitation
any underlying transaction between Intermet or any of its Subsidiaries and
Affiliates and the beneficiary for which such Letter of Credit was procured);
provided that nothing in this Section shall affect the right of Intermet to seek
relief against any beneficiary, transferee, Lender or any other Person in any
action or proceeding or to bring a counterclaim in any suit involving such
Persons;
(c) Any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect;
(d) Payment by the Issuer under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
38
<PAGE> 45
(e) Any other circumstance or happening whatsoever which is similar
to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall have
occurred and be continuing.
Nothing in this Section 3.18 shall prevent an action against the Issuer for its
gross negligence or willful misconduct in honoring drafts under the Letters of
Credit.
SECTION 3.19. FAILURE TO MAINTAIN MINIMUM REQUIRED RATING. If any
Lender has either (a) had its long-term deposit rating reduced below the Minimum
Required Rating by either Rating Agency, or (b) in the case of a Lender that is
a party to this Agreement on the Closing Date and has, on such date, a long-term
deposit rating from the Rating Agencies below the applicable Minimum Required
Rating, such Lender has received from either Rating Agency a reduction in its
long-term deposit rating from the rating in effect on the Closing Date, such
Lender, will, upon the request of the Administrative Agent, assign at par its
Commitment and all of its right, title and interest in and to any Letters of
Credit or Loans outstanding thereunder, to an Eligible Assignee designated by
the Administrative Agent and acceptable to Intermet in accordance with the terms
of this Agreement.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to issue or participate in Letters of
Credit or make Advances to Intermet and the obligation of the Issuer to issue
Letters of Credit for the account of Intermet hereunder is subject to the
satisfaction of the following conditions:
SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF
CREDIT. On the Closing Date, all obligations of Intermet hereunder incurred
prior to such date (including, without limitation, Intermet's obligations to
reimburse the reasonable fees and expenses of counsel to the Administrative
Agent and any fees and expenses payable to the Administrative Agent, the Lenders
and their Affiliates pursuant to the Fee Letter or as otherwise previously
agreed with Intermet), shall have been paid in full, and the Administrative
Agent shall have received the following, in form and substance reasonably
satisfactory in all respects to the Administrative Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly executed Revolving Credit Notes evidencing the
Commitments and the duly executed Swingline Note;
39
<PAGE> 46
(c) the duly executed Guaranty Agreement;
(d) certificate of Intermet in substantially the form of Exhibit F
attached hereto and appropriately completed:
(e) certificates of the Secretary or Assistant Secretary of each of
the Credit Parties (or, in the case of any Foreign Subsidiary, a comparable
company officer) attaching and certifying copies of the resolutions of the
boards of directors (or, in the case of any Foreign Subsidiary, the comparable
governing body of such entity) of the Credit Parties, authorizing as applicable
the execution, delivery and performance of the Credit Documents;
(f) certificates of the Secretary or an Assistant Secretary of each
of the Credit Parties (or, in the case of any Foreign Subsidiary, a comparable
company officer) certifying (i) the name, title and true signature of each
officer of such entities executing the Credit Documents, and (ii) the bylaws or
comparable governing documents of such entities;
(g) certified copies of the certificate or articles of incorporation
of each Credit Party (or comparable organizational document) certified by the
Secretary of State or the Secretary or Assistant Secretary of such Credit Party,
together with certificates of good standing or existence, as may be available
from the Secretary of State (or comparable office or registry for each Foreign
Subsidiary) of the jurisdiction of incorporation or organization of such Credit
Party;
(h) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
or by any material Contractual Obligation of the Credit Parties, in connection
with the execution, delivery, performance, validity and enforceability of the
Credit Documents and the other documents to be executed and delivered hereunder,
and such consents, authorizations, filings and orders shall be in full force and
effect and all applicable waiting periods shall have expired;
(i) an internally prepared draft of Intermet's consolidated financial
statements for the fiscal period ending June 30, 1999, certified by the chief
financial officer of Intermet;
(j) evidence that the Prior Credit Agreement has been terminated and
all amounts repaid thereunder;
(k) certificates, reports and other information as the Administrative
Agent may reasonably request from any Consolidated Company in order to satisfy
the Lenders as to the absence of any material liabilities or obligations arising
from matters relating to employees of the Consolidated Companies, including
employee relations, collective bargaining agreements, Plans, Foreign Plans, and
other compensation and employee benefit plans;
40
<PAGE> 47
(l) certificates, reports, environmental audits and investigations,
and other information as the Administrative Agent may reasonably request from
any Consolidated Company in order to satisfy the Lenders as to the absence of
any material liabilities or obligations arising from environmental and employee
health and safety exposures to which the Consolidated Companies may be subject,
and the plans of the Consolidated Companies with respect thereto;
(m) certificates, reports and other information as the Administrative
Agent may reasonably request from any Consolidated Company in order to satisfy
the Lenders as to the absence of any material liabilities or obligations arising
from litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated Companies;
(n) a summary, set forth in format and detail reasonably acceptable
to the Administrative Agent, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies;
(o) (i) the favorable opinion of Dickinson Wright PLLC, counsel to
the Credit Parties, substantially in the form of Exhibit G-1, addressed to the
Administrative Agent and each of the Lenders, (ii) the favorable opinion of
Kilpatrick Stockton LLP, special Georgia counsel to the Credit Parties,
substantially in the form of Exhibit G-2, addressed to the Administrative Agent
and each of the Lenders and (iii) the favorable opinion of Mayer, Brown & Platt,
special New York counsel to the Administrative Agent, substantially in the form
of Exhibit G-3, addressed to the Administrative Agent and each of the Lenders;
(p) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and enforceability of the
Credit Documents shall be reasonably satisfactory in form and substance to the
Required Lenders; and
(q) the duly executed counterparts of the 364-Day Credit Agreement
and the satisfaction of all conditions to effectiveness thereunder.
SECTION 4.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. At the
time of the making of all Loans and the issuance of any Letter of Credit (before
as well as after giving effect to such Loans or Letters of Credit and to the
proposed use of the proceeds thereof), the following conditions shall have been
satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Intermet contained herein
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the date
of such Loans or such issuance date;
41
<PAGE> 48
(c) since the date of the most recent financial statements of the
Consolidated Companies described in Section 5.14, there shall have been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect (whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 6.07);
(d) there shall be no action or proceeding instituted or pending
before any court or other governmental authority or, to the knowledge of
Intermet, threatened (i) which reasonably could be expected to have a Materially
Adverse Effect, or (ii) seeking to prohibit or restrict one or more Credit
Party's ownership or operation of any portion of its business or assets, or to
compel one or more Credit Party to dispose of or hold separate all or any
portion of its businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material portion of the
total businesses or assets of the Consolidated Companies; and
(e) the Loans to be made and the use of proceeds thereof or the
Letters of Credit to be issued, as the case may be, shall not contravene,
violate or conflict with, or involve the Administrative Agent or any Lender in a
violation of, any law, rule, injunction, or regulation, or determination of any
court of law or other governmental authority applicable to Intermet.
Each request for a Borrowing and the acceptance by Intermet of the
proceeds thereof and each request for the issuance or extension of a Letter of
Credit shall constitute a representation and warranty by Intermet, as of the
date of the Loans comprising such Borrowing or the date of the issuance or
extension of such Letter of Credit, that the applicable conditions specified in
Sections 4.01 and 4.02 have been satisfied or waived in writing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Intermet (as to itself and all other Consolidated Companies) represents
and warrants as follows:
SECTION 5.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Except as set
forth on Schedule 5.01(a), each of the Consolidated Companies (other than the
German Subsidiaries set forth in the next sentence) is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. Each of Columbus Neunkirchen Foundry GmbH,
Intermet Machining GmbH and Intermet Holding Deutschland GmbH is a German
company with limited liability duly organized, validly existing and in good
standing under the laws of Germany. Each of the Consolidated Companies (i) has
the corporate power and authority and the legal right to own and operate its
property and to conduct its business, (ii) is duly qualified as a foreign
corporation and in good
42
<PAGE> 49
standing under the laws of each jurisdiction where its ownership of property or
the conduct of its business requires such qualification, and (iii) is in
compliance with all Requirements of Law, except where the failure to duly
qualify or to comply with applicable Requirements of Law would not have a
Materially Adverse Effect. The jurisdiction of incorporation or organization,
and the ownership of all issued and outstanding capital stock and other equity
interests, for each Subsidiary as of the date of this Agreement is accurately
described on Schedule 5.01.
SECTION 5.02. CORPORATE POWER; AUTHORIZATION. Each of the Credit
Parties has the corporate power and authority to make, deliver and perform the
Credit Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of such Credit
Documents. Except for the amendment required by Section 6.11, no consent or
authorization of, or filing with, any Person (including, without limitation, any
governmental authority), is required in connection with the execution, delivery
or performance by any Credit Party, or the validity or enforceability against
any Credit Party, of the Credit Documents, other than such consents,
authorizations or filings which have been made or obtained (other than routine
filings with the Securities and Exchange Commission).
SECTION 5.03. ENFORCEABLE OBLIGATIONS. This Agreement has been duly
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties, and this Agreement constitutes, and
each other Credit Document when executed and delivered will constitute, legal,
valid and binding obligations of the Credit Parties, respectively, enforceable
against the Credit Parties in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
SECTION 5.04. NO LEGAL BAR. Except for the amendment required by
Section 6.11, the execution, delivery and performance by the Credit Parties of
the Credit Documents will not violate any Requirement of Law or cause a breach
or default under any of their respective Contractual Obligations.
SECTION 5.05. NO MATERIAL LITIGATION OR INVESTIGATIONS. Except as set
forth on Schedule 5.05 or in any notice furnished to the Lenders pursuant to
Section 6.07(g) at or prior to the respective times the representations and
warranties set forth in this Section 5.05 are made or deemed to be made
hereunder, no litigation, investigations or proceedings of or before any courts,
tribunals, arbitrators or governmental authorities are pending or, to the
knowledge of Intermet, threatened by or against any of the Consolidated
Companies, or against any of their respective properties or revenues, existing
or future (a) with respect to any Credit Document, or any of the transactions
contemplated hereby or thereby, or (b) which, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
SECTION 5.06. INVESTMENT COMPANY ACT, ETC. None of the Consolidated
Companies is an "investment company" or a company "controlled" by an "investment
43
<PAGE> 50
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Consolidated Companies is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
SECTION 5.07. MARGIN REGULATIONS. No part of the proceeds of any of the
Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 5.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth on Schedule 5.08 attached hereto, the
Consolidated Companies have received no notices of claims or potential liability
under, and are in compliance with, all applicable Environmental Laws, where such
claims and liabilities under, and failures to comply with, such statutes,
regulations, rules, ordinances, laws or licenses, would reasonably be expected
to have a Materially Adverse Effect.
(b) Except as set forth on Schedule 5.08 attached hereto, none of the
Consolidated Companies has received any notice of violation, or notice of any
action, either judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or alleged violation
of any Environmental Law, including, without limitation, any notice of any
actual or alleged spill, leak, or other release of any Hazardous Substance,
waste or hazardous waste by any Consolidated Company or its employees or agents,
or as to the existence of any contamination on any properties owned by any
Consolidated Company, where any such violation, spill, leak, release or
contamination would reasonably be expected to have a Materially Adverse Effect.
(c) Except as set forth on Schedule 5.08 attached hereto, the
Consolidated Companies have obtained all necessary governmental permits,
licenses and approvals which are material to the operations conducted on their
respective properties, including without limitation, all required material
permits, licenses and approvals for (i) the emission of air pollutants or
contaminants, (ii) the treatment or pretreatment and discharge of waste water or
storm water, (iii) the treatment, storage, disposal or generation of hazardous
wastes, (iv) the withdrawal and usage of ground water or surface water, and (v)
the disposal of solid wastes.
SECTION 5.09. INSURANCE. The Consolidated Companies currently maintain
insurance with respect to their respective properties and businesses, with
financially sound and reputable insurers, having coverages against losses or
damages of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance being in amounts no less than those
amounts which are customary for such companies under similar circumstances. The
Consolidated Companies have paid all material amounts of
44
<PAGE> 51
insurance premiums now due and owing with respect to such insurance policies and
coverages, and such policies and coverages are in full force and effect.
SECTION 5.10. NO DEFAULT. Except for the amendment required by Section
6.11, none of the Consolidated Companies is in default under or with respect to
any Contractual Obligation in any respect which is having or is reasonably
expected to have a Materially Adverse Effect.
SECTION 5.11. NO BURDENSOME RESTRICTIONS. Except as set forth on
Schedule 5.11 or for the amendment required by Section 6.11 or in any notice
furnished to the Lenders pursuant to Section 6.07 at or prior to the respective
times the representations and warranties set forth in this Section 5.11 are made
or deemed to be made hereunder, none of the Consolidated Companies is a party to
or bound by any Contractual Obligation or Requirement of Law which has had or
would reasonably be expected to have a Materially Adverse Effect.
SECTION 5.12. TAXES. Except as set forth on Schedule 5.12, each of the
Consolidated Companies has filed or caused to be filed all declarations, reports
and tax returns which are required to have been filed, and has paid all taxes,
custom duties, levies, charges and similar contributions ("taxes" in this
Section 5.12) shown to be due and payable on said returns or on any assessments
made against it or its properties, and all other taxes, fees or other charges
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Intermet, no claims are being asserted with respect to any such
taxes, fees or other charges.
SECTION 5.13. SUBSIDIARIES. Except as disclosed on Schedule 5.01 or in
any notice given to the Lenders pursuant to Section 6.07 at or prior to the
respective times this representation and warranty is made or deemed to be made
hereunder, Intermet has no Subsidiaries and neither Intermet nor any Subsidiary
is a joint venture partner, partner in any partnership or member of a limited
liability company.
SECTION 5.14. FINANCIAL STATEMENTS. Intermet has furnished to the
Administrative Agent and the Lenders (i) the audited consolidated balance sheet
as of December 31, 1998 of Intermet and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year then ended,
including in each case the related schedules and notes, (ii) the unaudited
balance sheet of Intermet presented on a consolidated basis as at the end of the
second fiscal quarter of 1999, and the related unaudited consolidated statements
of income, shareholders' equity and cash flows presented on a consolidated basis
for the year-to-date period then ended, setting forth in each case in
comparative form the figures for the corresponding quarter of Intermet's
previous fiscal year. The foregoing financial statements fairly present in all
material respects the consolidated financial condition of Intermet as at the
dates thereof and results of operations for such periods in conformity with GAAP
consistently applied (subject, in the case of the quarterly
45
<PAGE> 52
financial statements, to normal year-end audit adjustments and the absence of
certain footnotes). The Consolidated Companies taken as a whole do not have any
material contingent obligations, contingent liabilities, or material liabilities
for known taxes, long-term leases or unusual forward or long-term commitments
not reflected in the foregoing financial statements or the notes thereto. Since
December 31, 1998, there have been no changes with respect to the Consolidated
Companies which has had or would reasonably be expected to have a Materially
Adverse Effect.
SECTION 5.15. ERISA. Except as disclosed on Schedule 5.15 or in any
notice furnished to the Lenders pursuant to Section 6.07 at or prior to the
respective times the representations and warranties set forth in this Section
5.15 are made or deemed to be made hereunder:
(a) (1) Identification of Plans. (A) None of the Consolidated
Companies nor any of their respective ERISA Affiliates maintains or contributes
to, or has during the past two years maintained or contributed to, any Plan that
is subject to Title IV of ERISA, and (B) none of the Consolidated Companies
maintains or contributes to any Foreign Plan;
(2) Compliance. Each Plan and each Foreign Plan maintained by the
Consolidated Companies have at all times been maintained, by their terms and in
operation, in compliance with all applicable laws, and the Consolidated
Companies are subject to no tax or penalty with respect to any Plan of such
Consolidated Company or any ERISA Affiliate thereof, including without
limitation, any tax or penalty under Title I or Title IV of ERISA or under
Chapter 43 of the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 404, or 419 of the Tax Code, where the failure to
comply with such laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would in the
aggregate have a Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies are subject to no
liabilities (including withdrawal liabilities) with respect to any Plans or
Foreign Plans of such Consolidated Companies or any of their ERISA Affiliates,
including without limitation, any liabilities arising from Titles I or IV of
ERISA, other than obligations to fund benefits under an ongoing Plan and to pay
current contributions, expenses and premiums with respect to such Plans or
Foreign Plans, where such liabilities, together with all other liabilities
referred to in this Section 5.15 (taken as a whole), would in the aggregate have
a Materially Adverse Effect;
(4) Funding. The Consolidated Companies and, with respect to any Plan
which is subject to Title IV of ERISA, each of their respective ERISA
Affiliates, have made full and timely payment of all amounts (A) required to be
contributed under the terms of each Plan and applicable law, and (b) required to
be paid as expenses (including PBGC or other premiums) of each Plan, where the
failure to pay such amounts (when taken as a whole, including any penalties
attributable to such amounts) would have a Materially Adverse Effect. No Plan
subject to Title IV of ERISA has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA, determined as if such Plan terminated
on any date
46
<PAGE> 53
on which this representation and warranty is deemed made, in any amount which,
together with all other liabilities referred to in this Section 5.15 (taken as a
whole), would have a Materially Adverse Effect if such amount were then due and
payable. The Consolidated Companies are subject to no liabilities with respect
to post-retirement medical benefits in any amounts which, together with all
other liabilities referred to in this Section 5.15 (taken as a whole), would
have a Materially Adverse Effect if such amounts were then due and payable.
(b) With respect to any Foreign Plan, reasonable reserves have been
established in accordance with prudent business practice or where required by
generally accepted accounting practices in the jurisdiction where the Foreign
Subsidiary maintains its principal place of business or in which the Foreign
Plan is maintained. The aggregate unfunded liabilities, after giving effect to
any reserves for such liabilities, with respect to such Foreign Plans, together
with all other liabilities referred to in this Section 5.15 (taken as a whole),
would not have a Materially Adverse Effect.
SECTION 5.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as set forth
on Schedule 5.16 or in any notice furnished to the Lenders pursuant to Section
6.07 at or prior to the respective times the representations and warranties set
forth in this Section 5.16 are made or deemed to be made hereunder, (i) the
Consolidated Companies have obtained and hold in full force and effect all
material patents, trademarks, service marks, trade names, copyrights, licenses
and other such rights, free from burdensome restrictions, which are necessary
for the operation of their respective businesses as presently conducted, and
(ii) to the best of Intermet's knowledge, no product, process, method, service
or other item presently sold by or employed by any Consolidated Company in
connection with such business infringes any patents, trademark, service mark,
trade name, copyright, license or other right owned by any other person and
there is not presently pending, or to the knowledge of Intermet, threatened, any
claim or litigation against or affecting any Consolidated Company contesting
such Person's right to sell or use any such product, process, method, substance
or other item where the result of such failure to obtain and hold such benefits
or such infringement would have a Materially Adverse Effect.
SECTION 5.17. OWNERSHIP OF PROPERTY. Except as set forth on Schedule
5.17, (i) each Consolidated Company that is not a Foreign Subsidiary has good
and marketable fee simple title to or a valid leasehold interest in all of its
real property and good title to, or a valid leasehold interest in, all of its
other property and (ii) each Foreign Subsidiary owns or has a valid leasehold
interest in all of its real property and owns or has a valid leasehold interest
in, all of its other properties, in the case of clauses (i) and (ii) as such
properties are reflected in the consolidated balance sheet of the Consolidated
Companies as of December 31, 1998 referred to in Section 5.14, other than
properties disposed of in the ordinary course of business since such date or as
otherwise permitted by the terms of this Agreement, subject to no Lien or title
defect of any kind, except Liens permitted hereby and title defects not
constituting material impairments in the intended use for such properties. The
Consolidated Companies enjoy peaceful and undisturbed possession under all of
their respective leases.
47
<PAGE> 54
SECTION 5.18. FINANCIAL CONDITION. On the Closing Date and after giving
effect to the transactions contemplated by this Agreement and the other Credit
Documents, including without limitation, the use of the proceeds of the Loans as
provided in Section 2.01, each of the Credit Parties is Solvent.
SECTION 5.19. LABOR MATTERS. Since December 31, 1998, the Consolidated
Companies have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of
Intermet, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company which if they occurred, would
reasonably be expected to have a Materially Adverse Effect. Since December 31,
1998, the hours worked and payment made to employees of the Consolidated
Companies have not been in violation in any material respect of the Fair Labor
Standards Act (in the case of Consolidated Companies that are not Foreign
Subsidiaries) or any other applicable law dealing with such matters. All
payments due from the Consolidated Companies, or for which any claim may be made
against the Consolidated Companies, on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as liabilities on
the books of the Consolidated Companies in all jurisdictions where the failure
to pay or accrue such liabilities would reasonably be expected to have a
Materially Adverse Effect.
SECTION 5.20. PAYMENT OR DIVIDEND RESTRICTIONS. Except as set forth in
Section 7.05 or described on Schedule 5.20 or as expressly permitted by the
terms of this Agreement, none of the Consolidated Companies is party to or
subject to any agreement or understanding restricting or limiting the payment of
any dividends or other distributions by any such Consolidated Company.
SECTION 5.21. DISCLOSURE. None of the factual information heretofore or
contemporaneously furnished in writing to any Lender or Agent by or on behalf of
any Credit Party in connection with any Credit Document or any transaction
contemplated hereby contains any untrue statement of a material fact, or omits
to state any material fact necessary to make any information not misleading, and
no other factual information hereafter furnished in connection with any Credit
Document by or on behalf of any Credit Party to any Lender or Agent will contain
any untrue statement of a material fact or will omit to state any material fact
necessary to make any information not misleading on the date as of which such
information is dated or certified. Except as may be set forth herein (including
the Schedules attached hereto) or in any notice furnished to the Lenders
pursuant to Section 6.07 at or prior to the respective times the representations
and warranties set forth in this Section 5.21 are made or deemed to be made
hereunder, there is no fact known to Intermet which is having, or is reasonably
expected to have, a Materially Adverse Effect.
SECTION 5.22. YEAR 2000 COMPLIANCE. The Consolidated Companies have
developed and budgeted for a comprehensive program to address the "Year 2000
problem" (that is, the inability of computers, as well as embedded microchips in
non-computing devices,
48
<PAGE> 55
to perform properly date-sensitive functions with respect to certain dates prior
to and after December 31, 1999). The Consolidated Companies have implemented
that program substantially in accordance with its timetable and budget and will
substantially avoid the Year 2000 problem as to all computers, as well as
embedded microchips in non-computing devices, that are material to the
Consolidated Companies' business, properties or operations. The Consolidated
Companies have developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000 problem,
including those of vendors, customers, and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or other
Obligation shall remain unpaid or any Letter of Credit shall remain outstanding,
Intermet will (unless waived in writing by the Required Lenders):
SECTION 6.01. CORPORATE EXISTENCE, ETC. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its corporate existence
(except for mergers, divestitures and consolidations permitted pursuant to
Section 7.03), its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, service marks and other intellectual property rights, necessary or
desirable in the normal conduct of its business, and its qualification to do
business as a foreign corporation in all jurisdictions where it conducts
business or other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a Materially
Adverse Effect.
SECTION 6.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
SECTION 6.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and cause each of
its Subsidiaries to pay, (i) all taxes, duties, levies, assessments and
governmental charges imposed upon it or upon its property, and (ii) all claims
(including, without limitation, claims for labor, materials, supplies or
services) which might, if unpaid, become a Lien upon its property, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and adequate reserves are maintained in its books with
respect thereto in accordance with GAAP.
49
<PAGE> 56
SECTION 6.04. KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account in accordance with
GAAP, containing complete and accurate entries of all their respective financial
and business transactions.
SECTION 6.05. VISITATION, INSPECTION, ETC. Permit, and cause each of
its Subsidiaries to permit, any representative of the Administrative Agent or
any Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable times
and as often as the Administrative Agent or such Lender may reasonably request
after reasonable prior notice to Intermet; provided, however, that at any time
following the occurrence and during the continuance of a Default or an Event of
Default, no prior notice to Intermet shall be required.
SECTION 6.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its properties and business, and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts as are
customary for such companies under similar circumstances; provided, however,
that in any event Intermet shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not materially less
favorable to any Consolidated Company as in effect on the date of this
Agreement, except where the costs of maintaining such insurance would, in the
judgment of both Intermet and the Administrative Agent, be excessive.
(b) Cause, and cause each of the Consolidated Companies to cause, all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, settlements and improvements thereof, all as in the judgment of
Intermet may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 6.06 shall prevent Intermet from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of Intermet, desirable in the conduct of its
business or the business of any Consolidated Company.
SECTION 6.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in any
event within 90 days after the end of each fiscal year of Intermet, balance
sheets of the Consolidated Companies as at the end of such year, presented on a
consolidated basis, and the related statements of income, and cash flows of the
Consolidated Companies for such fiscal year, presented on a consolidated basis,
setting forth in each case in comparative form the
50
<PAGE> 57
figures for the previous fiscal year, all in reasonable detail and accompanied
by a report thereon of Ernst & Young, LLP or other independent public
accountants of comparable recognized national standing, which such report shall
be unqualified as to going concern and scope of audit and shall state that such
financial statements present fairly in all material respects the financial
condition as at the end of such fiscal year on a consolidated basis, and the
results of operations and statements of cash flows of the Consolidated Companies
for such fiscal year in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in any
event within 60 days after the end of each fiscal quarter of Intermet (other
than the fourth fiscal quarter), balance sheets of the Consolidated Companies as
at the end of such quarter presented on a consolidated basis and the related
statements of income, shareholders' equity, and cash flows of the Consolidated
Companies for such fiscal quarter and for the portion of Intermet's fiscal year
ended at the end of such quarter, presented on a consolidated basis setting
forth in each case in comparative form the figures for the corresponding quarter
and the corresponding portion of Intermet's previous fiscal year, all in
reasonable detail and certified by the chief financial officer or principal
accounting officer of Intermet that such financial statements fairly present in
all material respects the financial condition of the Consolidated Companies as
at the end of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal quarter and such portion of Intermet's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
statements required pursuant to subsection (b) above, and also within 60 days
after the end of each fiscal year of Intermet, a certificate substantially in
the form of Exhibit I attached hereto of the president, chief executive officer,
chief financial officer or principal accounting officer of Intermet (i) to the
effect that, based upon a review of the activities of the Consolidated Companies
and such financial statements during the period covered thereby, there exists no
Event of Default and no Default under this Agreement, or if there exists an
Event of Default or a Default hereunder, specifying the nature thereof and the
proposed response thereto, and (ii) demonstrating in reasonable detail
compliance as at the end of such fiscal year or such fiscal quarter with Section
6.08 and Sections 7.01 through 7.06;
(d) Auditor's No Default Certificate. Together with the financial
statements required pursuant to subsection (a) above, a certificate of the
accountants who prepared the report referred to therein, to the effect that,
based upon their audit, there exists no Default or Event of Default under this
Agreement, or if there exists a Default or Event of Default hereunder,
specifying the nature thereof;
(e) [reserved];
51
<PAGE> 58
(f) Notice of Default. Promptly after any Executive Officer of
Intermet has notice or knowledge of the occurrence of an Event of Default or a
Default, a certificate of the chief financial officer or principal accounting
officer of Intermet specifying the nature thereof and the proposed response
thereto;
(g) Litigation and Investigations. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse development in any
material action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company, or
any material property of any thereof, or (ii) actual knowledge thereof, notice
of the threat of any such action, suit, proceeding, investigation or
arbitration;
(h) Environmental Notices. Promptly after receipt thereof, notice of
any actual or alleged violation, or notice of any action, claim or request for
information, either judicial or administrative, from any governmental authority
relating to any actual or alleged claim, notice of potential responsibility
under or violation of any Environmental Law, or any actual or alleged spill,
leak, disposal or other release of any waste, petroleum product, or hazardous
waste or Hazardous Substance by any Consolidated Company which could result in
penalties, fines, claims or other liabilities to any Consolidated Company in
amounts in excess of $5,000,000;
(i) ERISA. (A)(i) Promptly after the occurrence thereof with respect
to any Plan of any Consolidated Company or any ERISA Affiliate thereof, or any
trust established thereunder, notice of (A) a "reportable event" described in
Section 4043 of ERISA and the regulations issued from time to time thereunder
(other than a "reportable event" not subject to the provisions for 30-day notice
to the PBGC under such regulations), or (B) any other event which could subject
any Consolidated Company to any tax, penalty or liability under Title I or Title
IV of ERISA or Chapter 43 of the Tax Code, or any tax or penalty resulting from
a loss of deduction under Sections 404 or 419 of the Tax Code, or any tax,
penalty or liability under any Requirement of Law applicable to any Foreign
Plan, where any such taxes, penalties or liabilities exceed or could exceed
$5,000,000 in the aggregate;
(ii) Promptly after such notice must be provided to
the PBGC, or to a Plan participant, beneficiary or alternative payee, any notice
required under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
4041(c)(1)(A) of ERISA or under Section 401(a)(29) or 412 of the Tax Code with
respect to any Plan of any Consolidated Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by
any Consolidated Company or any ERISA Affiliate thereof concerning the intent of
the PBGC or any other governmental authority to terminate a Plan of such Company
or ERISA Affiliate thereof which is subject to Title IV of ERISA, to impose any
liability on such Company or ERISA Affiliate under Title IV of ERISA or Chapter
43 of the Tax Code;
52
<PAGE> 59
(iv) Upon the request of the Administrative Agent,
promptly upon the filing thereof with the Internal Revenue Service ("IRS") or
the Department of Labor ("DOL"), a copy of IRS Form 5500 or annual report for
each Plan of any Consolidated Company or ERISA Affiliate thereof which is
subject to Title IV of ERISA;
(v) Upon the request of the Administrative Agent, (A)
true and complete copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any Consolidated
Company from the IRS, PBGC or DOL, (B) any reports filed with the IRS, PBGC or
DOL with respect to a Plan of the Consolidated Companies or any ERISA Affiliate
thereof, or (C) a current statement of withdrawal liability for each
Multiemployer Plan of any Consolidated Company or any ERISA Affiliate thereof;
(B) Promptly upon any Consolidated Company
becoming aware thereof, notice that (i) any material contributions to any
Foreign Plan have not been made by the required due date for such contribution
and such default cannot immediately be remedied, (ii) any Foreign Plan is not
funded to the extent required by the law of the jurisdiction whose law governs
such Foreign Plan based on the actuarial assumptions reasonably used at any
time, or (iii) a material change is anticipated to any Foreign Plan that may
have a Materially Adverse Effect.
(j) Liens. Promptly upon any Consolidated Company becoming aware
thereof, notice of the filing of any federal statutory Lien, tax or other state
or local government Lien or any other Lien affecting their respective
properties, other than those Liens expressly permitted by Section 7.02;
(k) Public Filings, Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements, annual,
quarterly and special reports, proxy statements and notices sent or made
available generally by Intermet to its public security holders, of all regular
and periodic reports and all registration statements and prospectuses, if any,
filed by any of them with any securities exchange, and of all press releases and
other statements made available generally to the public containing material
developments in the business or financial condition of Intermet and the other
Consolidated Companies;
(l) Burdensome Restrictions, Etc. Promptly upon the existence or
occurrence thereof, notice of the existence or occurrence of (i) any Contractual
Obligation or Requirement of Law described in Section 5.11, (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks, patents, trade names, copyrights, licenses and similar rights
necessary in the normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section 5.19;
(m) New Subsidiaries. Within 30 days after the formation or
acquisition of any Subsidiary, or any other event resulting in the creation of a
new Subsidiary, or the
53
<PAGE> 60
domestication of any Foreign Subsidiary, notice of the formation or acquisition
of such Subsidiary or such occurrence, including a description of the assets of
such entity, the activities in which it will be engaged, and such other
information as the Administrative Agent may request; and
(n) Other Information. With reasonable promptness, any other
information provided under the Note Purchase Agreement and such other
information about the Consolidated Companies as the Administrative Agent or any
Lender may reasonably request from time to time.
SECTION 6.08. FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Maintain as of the last day of each
fiscal quarter, a Fixed Charge Coverage Ratio equal to or greater than 1.50:1.0.
(b) Consolidated EBITDA to Consolidated Interest Expense. Maintain as
of the last day of each fiscal quarter, a minimum ratio of Consolidated EBITDA
to Consolidated Interest Expense, calculated for the immediately preceding four
fiscal quarters, of equal to or greater than 3.50:1.0.
(c) Funded Debt to Consolidated EBITDA. Maintain as of the last day
of each fiscal quarter, a maximum ratio of Funded Debt to Consolidated EBITDA,
calculated for the immediately preceding four fiscal quarters, of less than or
equal to 3.50:1.0.
(d) Second Fiscal Quarter 1999 Calculations. Schedule 6.08 sets forth
the calculation of the financial covenant amounts, ratios, and percentages
required by paragraphs (a) through (c) of this Section 6.08 calculated as of
June 30, 1999.
SECTION 6.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS. Immediately
upon its receipt thereof, Intermet shall furnish the Administrative Agent a copy
of any notice received by it or any other Consolidated Company from the
holder(s) of Indebtedness of the Consolidated Companies (or from any trustee,
agent, attorney, or other party acting on behalf of such holder(s)) in an amount
which, in the aggregate, exceeds $5,000,000, where such notice states or claims
(i) the existence or occurrence of any default or event of default with respect
to such Indebtedness under the terms of any indenture, loan or credit agreement,
debenture, note, or other document evidencing or governing such Indebtedness, or
(ii) the existence or occurrence of any event or condition which requires or
permits holder(s) of any Indebtedness to exercise rights under any Change in
Control Provision.
SECTION 6.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL.
(a) Unless the Required Lenders otherwise agree, promptly after (i)
the formation or acquisition (provided that nothing in this Section shall be
deemed to authorize the acquisition of any entity not otherwise permitted
hereunder) of any Subsidiary not listed
54
<PAGE> 61
on Schedule 5.01 (unless such Subsidiary holds no assets and conducts no
business), (ii) the domestication of any Foreign Subsidiary, (iii) the
occurrence of any other event creating a new Subsidiary, or (iv) Intermet
desires that an existing Subsidiary which is designated as "inactive" on
Schedule 5.01 be designated as "active", Intermet shall cause to be executed and
delivered a counterpart to the Guaranty Agreement from each such Subsidiary that
is not a Foreign 956 Subsidiary, together with related documents with respect to
such Subsidiary of the kind described in Section 4.01(e), (f), (g), (h) and (o),
all in form and substance satisfactory to the Administrative Agent and the
Required Lenders.
(b) In the event that any Foreign Subsidiary ceases to be a Foreign
956 Subsidiary, Intermet shall cause to be executed and delivered a counterpart
to the Guaranty Agreement from such Foreign Subsidiary.
SECTION 6.11. AMENDMENT TO NOTE PURCHASE AGREEMENT. Promptly, and in
any event within sixty (60) days after the Closing Date, deliver or cause to be
delivered to the Administrative Agent in form and substance satisfactory to the
Administrative Agent and the Required Lenders an amendment to the Note Purchase
Agreement permitting the Credit Parties to enter into the Credit Documents and
incur the Obligations.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or
other Obligation shall remain unpaid or any Letter of Credit Obligation shall
remain outstanding, Intermet will not and will not permit any Subsidiary to
(unless waived in writing by the Required Lenders):
SECTION 7.01. INDEBTEDNESS. Create, incur, assume or suffer to exist
any Indebtedness, other than:
(a) Indebtedness under this Agreement or otherwise outstanding on the
Closing Date as set forth on Schedule 7.01 attached hereto;
(b) unsecured current liabilities (other than liabilities for
borrowed money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business;
(c) Indebtedness of Intermet pursuant to the Note Purchase Agreement;
(d) Investments in the form of intercompany loans permitted by
Section 7.06(a) hereof;
55
<PAGE> 62
(e) Subordinated Debt which is unsecured and approved as to terms and
conditions by the Administrative Agent and the Required Lenders;
(f) Indebtedness of a Person which is acquired by or consolidated
with a Consolidated Company as long as such Indebtedness is not obtained in
contemplation of such acquisition;
(g) purchase money Indebtedness to the extent secured by a Lien
permitted pursuant to Section 7.02(h); and
(h) additional Indebtedness of Intermet which is pari passu in all
material respects with the Obligations, without limiting the foregoing, such
Indebtedness will not have the benefit of any security or guaranties not
benefitting the Obligations and will have representations and warranties,
covenants, events of default and conditions to borrowing which are not more
restrictive than the provisions of this Agreement.
SECTION 7.02. LIENS. Create, incur, assume or suffer to exist any Lien
on any of its property now owned or hereafter acquired other than:
(a) Liens existing on the Closing Date and disclosed on Schedule 7.02
and Liens in favor of the Administrative Agent and/or the Lenders to secure the
Obligations;
(b) Liens for taxes not yet due, and Liens for taxes or Liens imposed
by ERISA which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in its books in
accordance with GAAP;
(c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained in its books in accordance with GAAP;
(d) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(e) Liens securing Indebtedness permitted by Section 7.01(h);
(f) to the extent that, on any date of determination, the value of
Margin Stock of Intermet and its Subsidiaries, whether now owned or hereafter
acquired, in the aggregate exceeds twenty-five percent (25%) of the value of the
total assets of Intermet and
56
<PAGE> 63
its Subsidiaries on such date which assets are subject to the restrictions of
this Section 7.2, Liens encumbering such excess Margin Stock;
(g) Liens arising in connection with any Permitted Receivables
Purchase Facility; and
(h) Liens (other than those permitted by paragraphs (a) through (g)
of this Section 7.02) encumbering assets having an Asset Value not greater than
twenty percent (20%) of Consolidated Net Worth of Intermet in the aggregate at
any one time.
SECTION 7.03. MERGERS, ACQUISITIONS, DIVESTITURES.
(a) Merge or consolidate with any other Person, except that the
foregoing restrictions shall not be applicable to:
(i) mergers or consolidations of (x) any Subsidiary with and
into any other Subsidiary which is a Guarantor or (y) any Subsidiary with
and into Intermet; or
(ii) mergers or consolidations which result in Acquisitions of
Persons engaged in businesses in which Intermet is engaged on the Closing
Date or substantially related thereto and as otherwise permitted by Section
7.10 of this Agreement where the surviving corporation is a wholly-owned
Subsidiary of Intermet (or will become a wholly-owned Subsidiary within six
(6) months of such Acquisition) and such Acquisition is in compliance with
subsection (c) hereof;
provided that before and after giving effect to any such mergers or
consolidations, (w) Intermet is in compliance with Section 6.08 hereof (as
demonstrated by delivery of pro forma financial covenants calculations prepared
in compliance with clause (c) hereof); (x) no other Default or Event of Default
exists hereunder; (y) in the event of such merger or consolidation, the
surviving Person is a Consolidated Company and complies with Section 6.10
hereof, if applicable, and (z) Intermet is the surviving corporation in
connection with any merger or consolidation to which it is a party;
(b) Sell or otherwise dispose of the capital stock of a Subsidiary of
Intermet except as permitted pursuant to Section 7.04(c); or
(c) make or permit any Acquisition other than an Acquisition of
Persons engaged in businesses in which Intermet is engaged on the Closing Date
or substantially related thereto and as otherwise permitted pursuant to Section
7.10 of this Agreement; provided that:
(i) after giving effect to such Acquisition, assets comprising
such Acquisition are owned by Intermet or a wholly-owned Subsidiary of
Intermet, or, in
57
<PAGE> 64
the case of a stock purchase, such Person is a wholly-owned Subsidiary of
Intermet or is merged into Intermet or a wholly-owned Subsidiary of
Intermet;
(ii) prior to the consummation of such Acquisition, Intermet
provides to the Lenders calculations evidencing Intermet's compliance on a
pro forma basis with the financial covenants set forth in Section 6.08
hereof on the last day of the immediately preceding fiscal quarter of
Intermet, calculated with respect to the immediately preceding four fiscal
quarters of Intermet as if the Acquisition had been consummated on the
first day of such period;
(iii) such Acquisition shall have been approved in advance by a
majority of the board of directors of the seller; and
(iv) no Default or Event of Default shall exist hereunder or
shall result therefrom and Intermet shall comply with the provisions of
Section 6.10 hereof.
SECTION 7.04. ASSET SALES.
Sell, lease or otherwise dispose of its accounts, property, stock of
its Subsidiaries or other assets; provided, however, that the foregoing
restrictions on Asset Sales shall not be applicable to:
(a) sales of inventory in the ordinary course of business;
(b) sales of equipment or other personal property being replaced by
other equipment or other personal property purchased as a capital expenditure
item; or
(c) Asset Sales comprised of stock of Subsidiaries or all or
substantially all of the assets of any Subsidiary where, on the date of
execution of a binding obligation to make such Asset Sale (provided that if the
Asset Sale is not consummated within six (6) months of such execution, then on
the date of consummation of such Asset Sale rather than on the date of execution
of such binding obligation):
(x) at least 30 days (but not more than 60 days) prior to the
date of execution of such binding obligation (or, if the Asset Sale is
not consummated within six months of such execution, the date of
consummation of such Asset Sale), Intermet shall have delivered to the
Administrative Agent a notice of such Asset Sale (i) stating the
nature and terms of such Asset Sale (including, without limitation, a
description of the consideration payable by the purchaser) and the
nature and use of the proceeds of the transaction and (ii) including
calculations of the pro forma financial tests contained in clauses (y)
and (z) below; and
58
<PAGE> 65
(y) on a pro forma basis, after giving effect to such Asset
Sale and the use of proceeds thereof as if such Asset Sale and use of
proceeds had occurred on the first day of the applicable period, the
calculations of the financial covenant ratios described in paragraphs
(a), (b) and (c) of Section 6.08 as of the last day of the fiscal
quarter most recently ended are in compliance with the requirements of
such paragraphs; or
(d) Other Asset Sales (other than sales of capital stock of
Subsidiaries or all or substantially all of the assets of any Subsidiary)
including, without limitation, dispositions of Permitted Receivables pursuant to
Permitted Receivables Purchase Facilities; or
(e) to the extent that, on any date of determination, the value of
Margin Stock of Intermet and its Subsidiaries, whether now owned or hereafter
acquired, in the aggregate exceeds twenty-five percent (25%) of the total assets
of Intermet and its Subsidiaries on such date which assets are subject to the
restriction of this Section 7.04, sales of such excess Margin Stock for fair
value where the proceeds of such sale are held by a Consolidated Company as cash
or invested in cash equivalents such as certificates of deposit, U.S. government
securities, commercial paper with a term of 90 days or less which is rated
A-1/P-1 or other money market instruments;
provided that notwithstanding the foregoing, no transaction pursuant to clauses
(c) or (d) above shall be permitted if (i) any Default or Event of Default
exists at the time of such transaction or would exist as a result of such
transaction or (ii) on the date of execution of a binding obligation to make
such Asset Sale (provided that if the Asset Sale is not consummated within six
(6) months of such execution, then on the date of consummation of such Asset
Sale rather than on the date of execution of such binding obligation), after
giving effect to the proposed Asset Sale, the aggregate Asset Value of all Asset
Sales made pursuant to clauses (c) or (d) by the Consolidated Companies since
the Closing Date would not exceed twenty-five percent (25%) of Intermet's Net
Fixed Assets as of the last day of the most recently ended fiscal quarter of
Intermet.
SECTION 7.05. DIVIDENDS, ETC. Declare or pay any dividend or other
distribution on any class of its stock, or make any payment to purchase, redeem,
retire or acquire any Subordinated Debt or stock or any option, warrant, or
other right to acquire such Subordinated Debt or stock (each, a "Restricted
Payment"), other than:
(i) dividends payable solely in shares of any class of its
stock;
(ii) cash dividends by wholly-owned direct or indirect
Subsidiaries of Intermet; and
(iii) other cash dividends declared and paid, and all other
Restricted Payments made, after the Closing Date in an aggregate amount not
to exceed the sum of (x) $25,000,000, plus (y) fifty percent (50%) of
Consolidated Net Income earned
59
<PAGE> 66
during the period commencing on September 30, 1999 and ending on the last
day of the most recently ended fiscal quarter of Intermet (such period to
be treated as one accounting period taking into account 100% of
Consolidated Net Losses during such period);
provided, however, no such dividend or other Restricted Payment may be declared
or paid pursuant to clause (ii) above unless no Default or Event of Default
exists at the time of such declaration or Restricted Payment, or would exist as
a result of such declaration or Restricted Payment.
SECTION 7.06. INVESTMENTS, LOANS, ETC. Make, permit or hold any
Investments other than:
(a) Investments in Subsidiaries which are Guarantors under this
Agreement, whether such Subsidiaries are Guarantors on the Closing Date or
become Guarantors in accordance with Section 6.10 after the Closing Date;
provided, however, nothing in this Section 7.06 shall be deemed to authorize an
Investment pursuant to this subsection (a) in any Person that is not a Guarantor
prior to such Investment;
(b) Investments in the following securities:
(i) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case supported by the full faith and credit of the United
States and maturing within one year from the date of creation thereof;
(ii) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(iii) time deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by, any
office located in the United States of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000,
including without limitation, any such deposits in Eurodollars issued by a
foreign branch of any such bank or trust company;
(iv) mid-term notes of corporations existing under the laws of
the United States rated in the highest grade by a nationally recognized
credit rating agency;
(v) municipal "lower floater" bonds rated A or better (or backed
by a letter of credit rated A or better) by a nationally recognized credit
rating agency;
60
<PAGE> 67
(c) Investments made by Plans and Foreign Plans;
(d) Investments outstanding on the Closing Date and listed on
Schedule 7.06 hereto;
(e) Investments (other than those permitted by paragraphs (a) through
(d) above), including loans to employees, officers and other Persons (other than
Subsidiaries), in an aggregate amount not to exceed ten percent (10%) of
Consolidated Net Worth at any one time outstanding; and
(f) Investments after the Closing Date in Domestic Subsidiaries that
are not Guarantors in an aggregate amount not to exceed Five Million Dollars
($5,000,000).
SECTION 7.07. SALE AND LEASEBACK TRANSACTIONS. Sell or transfer any
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except as set forth on Schedule 7.07.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or not in the
ordinary course of business, with any Affiliate of any Consolidated Company (but
excluding any Affiliate which is also a Consolidated Company), other than on
terms and conditions substantially as favorable to such Consolidated Company as
would be obtained by such Consolidated Company at the time in a comparable
arm's-length transaction with a Person other than an Affiliate; and
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default exists or would
exist as a result of such conveyance or transfer.
SECTION 7.09. PREPAYMENTS OF SUBORDINATED DEBT IN VIOLATION THEREOF.
Directly or indirectly, prepay, purchase, redeem, retire, defease or otherwise
acquire, or make any optional payment on account of any principal of, interest
on, or premium payable in connection with any of its Subordinated Debt, in each
case, which is a violation of the subordination provisions of such Subordinated
Debt or a violation of Section 7.05.
SECTION 7.10. CHANGES IN BUSINESS. Enter into any business which is
substantially different from that presently conducted by the Consolidated
Companies taken as a whole (which includes iron and aluminum foundry operations
and machining); provided
61
<PAGE> 68
that, Intermet and the Consolidated Companies may make Acquisitions of, and
Investments in (to the extent permitted by this Agreement), Persons engaged in
an unrelated business as long as the total revenues of such Persons resulting
from unrelated businesses (or total revenues generated by such assets used in
unrelated businesses in the case of a purchase of assets), as determined for the
most recently ended four fiscal quarters of such Person in accordance with GAAP,
do not exceed twenty percent (20%) of Total Sales of the Consolidated Companies
for the most recently ended four fiscal quarters of Intermet.
SECTION 7.11. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING CONSOLIDATED
COMPANIES. Create or otherwise cause or suffer to exist or become effective, any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay dividends or make any other distributions on such Consolidated
Company's stock, or (ii) pay any indebtedness owed to Intermet or any other
Consolidated Company, or (iii) transfer any of its property or assets to
Intermet or any other Consolidated Company or (iv) grant a Lien in favor of the
Lenders securing the Obligations, except any consensual encumbrance or
restriction existing under the Credit Documents or as set forth on Schedule
5.20.
SECTION 7.12. ACTIONS UNDER CERTAIN DOCUMENTS.
(a) Without the prior written consent of the Administrative Agent and
the Required Lenders, modify, amend or supplement the Note Purchase Agreement to
(i) increase the principal amount of the indebtedness thereunder, (ii) increase
the interest rate thereunder, (iii) modify any requirement of prepayment or
repayment thereunder which would shorten the final maturity or average life of
the indebtedness outstanding thereunder or make the requirement of prepayment
more onerous, or (iv) make any more onerous any other provision thereof.
(b) Without the prior written consent of the Administrative Agent and
the Required Lenders, modify, amend or supplement any agreement governing
Subordinated Debt to (i) increase the principal amount of the indebtedness
thereunder, (ii) increase the interest rate thereunder, (iii) modify any
requirement of prepayment or repayment thereunder which would shorten the final
maturity or average life of the indebtedness outstanding thereunder or make the
requirement of prepayment more onerous, (iv) make any more onerous any other
provision thereof, or (v) amend or modify the subordination provisions thereof.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
62
<PAGE> 69
SECTION 8.01. PAYMENTS. Intermet shall fail to make promptly when due
(including, without limitation, by mandatory prepayment) any principal payment
with respect to the Loans, or Intermet shall fail to make within five (5) days
after the due date thereof any payment of interest, fee or other amount payable
hereunder or any of the Obligations;
SECTION 8.02. COVENANTS WITHOUT NOTICE. Intermet shall fail to observe
or perform any covenant or agreement contained in Sections 6.07(f), 6.08, 6.11,
7.01 through 7.07, 7.09 through 7.12;
SECTION 8.03. OTHER COVENANTS. Intermet shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Sections 8.01 and 8.02, and, if capable of being remedied, such
failure shall remain unremedied for thirty (30) days after the earlier of (i)
Intermet's obtaining knowledge thereof, or (ii) written notice thereof shall
have been given to Intermet by the Administrative Agent or any Lender;
SECTION 8.04. REPRESENTATIONS. Any representation or warranty made or
deemed to be made by Intermet or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Administrative Agent or the Lenders by any such Person pursuant to the terms
of this Agreement or any other Credit Document, shall be incorrect in any
material respect when made or deemed to be made or submitted;
SECTION 8.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Consolidated
Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations) exceeding $5,000,000 in the aggregate;
SECTION 8.06. DEFAULTS UNDER OTHER AGREEMENTS. Any Consolidated Company
shall fail to observe or perform within any applicable grace period any
covenants or agreements contained in any agreements or instruments relating to
any of its Indebtedness exceeding $5,000,000 in the aggregate, or any other
event shall occur if the effect of such failure or other event is to accelerate,
or to permit the holder of such Indebtedness or any other Person to accelerate,
the maturity of such Indebtedness; or any such Indebtedness shall be required to
be prepaid (other than by a regularly scheduled required prepayment) in whole or
in part prior to its stated maturity; or there occurs any termination,
liquidation, unwind or similar event or circumstance under any Permitted
Receivables Purchase Facility, which permits any purchaser of receivables
thereunder to cease purchasing such receivables or to apply all collections on
previously purchased receivables thereunder to the repayment of such purchaser's
interest in such previously purchased receivables other than any such event or
circumstance that arises solely as a result of a down-grading of the credit
rating of any bank or financial institution not affiliated with Intermet that
provides liquidity, credit or other support in connection with such facility;
63
<PAGE> 70
SECTION 8.07. BANKRUPTCY. Intermet or any other Consolidated Company
shall commence a voluntary case concerning itself under the Bankruptcy Code or
applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is
commenced against any Consolidated Company and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) or similar official
under applicable foreign bankruptcy laws is appointed for, or takes charge of,
all or any substantial part of the property of any Consolidated Company; or any
Consolidated Company commences proceedings of its own bankruptcy or to be
granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to any Consolidated Company or there is commenced
against any Consolidated Company any such proceeding which remains undismissed
for a period of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Consolidated Company suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or any
Consolidated Company shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or any Consolidated Company
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Consolidated Company for the purpose of effecting any of the foregoing;
SECTION 8.08. ERISA. A Plan or Foreign Plan of a Consolidated Company
or a Plan subject to Title IV of ERISA of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of such Plan or
Foreign Plan, Section 412 of the Tax Code or Section 302 of ERISA for any
plan year or a waiver of such standard is sought or granted with respect to
such Plan or Foreign Plan under applicable law, the terms of such Plan or
Foreign Plan or Section 412 of the Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such Plan or
Foreign Plan; or
(iii) shall require a Consolidated Company to provide security
under applicable law, the terms of such Plan or Foreign Plan, Section 401
or 412 of the Tax Code or Section 306 or 307 of ERISA; or
64
<PAGE> 71
(iv) results for any reason, in a liability (including without
limitation, withdrawal liability) to a Consolidated Company under
applicable law, the terms of such Plan or Foreign Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC (or any similar Person with respect to any Foreign
Plan), a Plan or any other Person that would have a Materially Adverse Effect;
SECTION 8.09. MONEY JUDGMENT. A judgment or order for the payment of
money in excess of $5,000,000 or otherwise having a Materially Adverse Effect
shall be rendered against Intermet or any other Consolidated Company and such
judgment or order shall continue unsatisfied (in the case of a money judgment)
and in effect for a period of 30 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement or
otherwise);
SECTION 8.10. OWNERSHIP OF CREDIT PARTIES. If Intermet shall at any
time fail to own and control one hundred percent (100%) of the voting stock of
any Credit Party, either directly or indirectly through a wholly-owned
Subsidiary of Intermet, except for (x) as a result of any Asset Sale permitted
pursuant to Section 7.04(c) hereof, and (y) with respect to any Credit Party or
Foreign Subsidiary whose stock is acquired by one of the Consolidated Companies
after the Closing Date where Intermet shall, directly or indirectly, maintain
ownership and control of the percentage of voting stock owned and controlled as
of the date such Person became a Credit Party hereunder or a Foreign Subsidiary
or such greater percentage as shall thereafter be obtained, directly or
indirectly by Intermet;
SECTION 8.11. CHANGE IN CONTROL OF INTERMET. (i) Any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
shall become the "beneficial owner(s)" (as defined in said Rule 13d-3) of more
than fifty percent (50%) of the shares of the outstanding capital stock of
Intermet entitled to vote for members of Intermet's board of directors on a
fully diluted basis, (ii) the individuals who are members of the board of
directors of the Company on the Closing Date (together with any new or
replacement directors whose initial nomination for election was approved by a
majority of the directors who were either directors on the Closing Date or
previously so approved) shall cease to constitute a majority of the board of
directors of the Company, or (iii) any event or condition shall occur or exist
which, pursuant to the terms of any Change in Control Provision, requires or
permits the holder(s) of Indebtedness of any Consolidated Company to require
that such Indebtedness be redeemed, repurchased, defeased, prepaid or repaid, in
whole or in part, or the maturity of such Indebtedness to be accelerated in any
respect;
SECTION 8.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There shall exist
or occur any "Event of Default" as provided under the terms of any other Credit
Document, or any Credit Document ceases to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of Intermet or
any other Credit Party, or at any time it is or becomes unlawful for Intermet or
any other Credit Party to perform or comply with its
65
<PAGE> 72
obligations under any Credit Document, or the obligations of Intermet or any
other Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Intermet or any such Credit Party;
SECTION 8.13. ATTACHMENTS. An attachment or similar action shall be
made on or taken against any of the assets of any Consolidated Company with an
Asset Value exceeding $5,000,000 in aggregate and is not removed, suspended or
enjoined within 30 days of the same being made or any suspension or injunction
being lifted; or
SECTION 8.14. DEFAULT UNDER 364-DAY CREDIT AGREEMENT. There shall exist
or occur an "Event of Default" as defined in the 364-Day Credit Agreement;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Administrative Agent may, with the consent of the
Required Lenders, and upon the written (including telecopied) or telex request
of the Required Lenders, shall, by written notice to Intermet take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against
Intermet or any other Credit Party: (i) declare all Commitments terminated,
whereupon the pro rata Commitments of each Lender shall terminate immediately
and any commitment fee shall forthwith become due and payable without any other
notice of any kind; and (ii) declare the principal of and any accrued interest
on the Loans, and all other Obligations owing hereunder, including without
limitation, an amount equal to the maximum amount which would be available at
any time to be drawn under all Letters of Credit then outstanding (whether or
not any beneficiary under any Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents required to draw
under such Letter of Credit), to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by Intermet; provided, that, if an Event of
Default specified in Section 8.07 shall occur, the result which would occur upon
the giving of written notice by the Administrative Agent to any Credit Party, as
specified in clauses (i) and (ii) above, shall occur automatically without the
giving of any such notice; and (iii) exercise any rights or remedies under the
Security Documents. As long as any Letter of Credit shall remain outstanding,
any amounts described in clause (ii) above with respect to Letters of Credit,
when received by the Issuer, shall be deposited in a cash collateral account as
cash collateral for the obligations of Intermet under Article II of this
Agreement in the event of any drawing under a Letter of Credit, and upon drawing
under any outstanding Letter of Credit in respect of which the Issuer has
deposited in the cash collateral account any amounts described in clause (ii)
above, the Issuer shall pay such amounts to itself to reimburse itself for the
amount of such drawing.
66
<PAGE> 73
ARTICLE IX.
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT OF ADMINISTRATIVE AGENT. Each Lender hereby
designates Scotiabank as Administrative Agent to administer all matters
concerning the Loans and Letters of Credit and to act as herein specified. Each
Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize the Administrative
Agent to take such actions on its behalf under the provisions of this Agreement,
the other Credit Documents, and all other instruments and agreements referred to
herein or therein, and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Administrative Agent may perform any of
its duties hereunder by or through their agents or employees.
SECTION 9.02. AUTHORIZATION OF ADMINISTRATIVE AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS.
(a) Each Lender hereby authorizes the Administrative Agent to enter
into each of the Security Documents substantially in the form attached hereto,
and to take all action contemplated thereby. All rights and remedies under the
Security Documents may be exercised by the Administrative Agent for the benefit
of the Administrative Agent and the Lenders and the other beneficiaries thereof
upon the terms thereof. The Lenders further agree that the Administrative Agent
may assign its rights and obligations under any of the Security Documents to any
affiliate of the Administrative Agent or to any trustee, if necessary or
appropriate under applicable law, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Administrative Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Administrative Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Administrative Agent under such Security Document, the Administrative Agent
shall act in respect of such consent, exercise of remedies, determination or
action, as the case may be, with the consent of and at the direction of the
Required Lenders; provided, however, that no such consent of the Required
Lenders shall be required with respect to any consent, determination or other
matter that is, in the Administrative Agent's judgment, ministerial or
administrative in nature. In each circumstance where any consent of or direction
from the Required Lenders is required, the Administrative Agent shall send to
the Lenders a notice setting forth a description in reasonable detail of the
matter as to which consent or direction is requested and the Administrative
Agent's proposed course of action with respect thereto. The Lenders shall
endeavor to respond promptly to such request but in the event the Administrative
Agent shall
67
<PAGE> 74
not have received a response from any Lender within five (5) Business Days after
such Lender's receipt of such notice, such Lender shall be deemed not to have
agreed to the course of action proposed by the Administrative Agent.
SECTION 9.03. NATURE OF DUTIES OF ADMINISTRATIVE AGENT. The
Administrative Agent shall have no duties or except those expressly set forth in
this Agreement and the other Credit Documents. None of the Administrative Agent
nor any of its respective officers, directors, employees or agents shall be
liable for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Administrative Agent shall be ministerial and administrative
in nature; the Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
express or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or the
other Credit Documents except as expressly set forth herein.
SECTION 9.04. LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT.
(a) Independently and without reliance upon the Administrative Agent,
each Lender, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Credit Parties in connection with the taking or not taking of any
action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly provided in
this Agreement, the Administrative Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter.
(b) The Administrative Agent shall not be responsible to any Lender
for any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement, the
Notes, the Guaranty Agreement or any other documents contemplated hereby or
thereby, or the financial condition of the Credit Parties, or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Notes, the Guaranty
Agreement, or the other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default; provided, however, to the extent
that the Administrative Agent has been advised that a Lender has not received
any information formally delivered to the Administrative Agent pursuant to
Section 6.07, the Administrative Agent shall deliver or cause to be delivered
such information to such Lender.
SECTION 9.05. CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any
68
<PAGE> 75
action or actions (including the failure to act) in connection with this
Agreement, the Administrative Agent shall be entitled to refrain from such act
or taking such act, unless and until the Administrative Agent shall have
received instructions from the Required Lenders; and the Administrative Agent
shall not incur liability in any Person by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent acting
or refraining from acting hereunder in accordance with the instructions of the
Required Lenders.
SECTION 9.06. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for any Credit Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 9.07. INDEMNIFICATION OF ADMINISTRATIVE AGENT. To the extent
the Administrative Agent is not reimbursed and indemnified by the Credit
Parties, each Lender will reimburse and indemnify the Administrative Agent,
ratably according to the respective amounts of the Loans outstanding under all
Facilities (or if no amounts are outstanding, ratably in accordance with the
aggregate Commitments), in either case, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in performing its duties hereunder, in any way relating
to or arising out of this Agreement or the other Credit Documents; provided that
no Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
SECTION 9.08. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise the
same as though it were not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Consolidated Companies or any affiliate of
the Consolidated Companies as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Consolidated
Companies for services in
69
<PAGE> 76
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
SECTION 9.09. HOLDERS OF NOTES. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
SECTION 9.10. SUCCESSOR ADMINISTRATIVE AGENT.
(a) The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and Intermet and may be removed with or without
cause by the Required Lenders; provided, however, the Administrative Agent may
not resign or be removed until a successor Administrative Agent has been
appointed and shall have accepted such appointment. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent subject to Intermet's prior written approval. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent subject to Intermet's prior written approval, which shall
be a bank which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any State thereof,
or any Affiliate of such bank, having a combined capital and surplus of at least
$100,000,000.
(b) Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Administrative Agent under this Agreement.
SECTION 9.11. OTHER AGENTS. Each Lender hereby designates Bank One,
Michigan as Syndication Agent, SunTrust as Documentation Agent, Comerica Bank,
as Managing Agent, and The Bank of New York, Harris Trust and Savings Bank and
PNC Bank, National Association, as Co-Agents. The Syndication Agent, the
Documentation Agent, the Managing Agent and the Co-Agents, in such capacities,
shall have no duties or obligations whatsoever under this Agreement or any other
Credit Document.
70
<PAGE> 77
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex, telecopy
or similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on Schedule 10.01, or
such other address or applicable teletransmission number as such party may
hereafter specify by notice to the Administrative Agent and Intermet. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this Section and
the appropriate answerback is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, (iii) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and the appropriate
confirmation is received, or (iv) if given by any other means (including,
without limitation, by air courier), when delivered or received at the address
specified in this Section; provided that notices to the Administrative Agent
shall not be effective until received.
SECTION 10.02. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Intermet and the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by Intermet and all the Lenders do
any of the following: (i) waive any of the conditions specified in Section 4.01
or 4.02, (ii) increase the Commitments or other contractual obligations to
Intermet under this Agreement, (iii) reduce the principal of, or interest on,
the Notes or any fees hereunder, (iv) postpone any date fixed for the payment in
respect of principal of, or interest on, the Notes or any fees hereunder, (v)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number or identity of Lenders which shall be
required for the Lenders or any of them to take any action hereunder, (vi) agree
to release any Guarantor from its obligations under the Guaranty Agreement or
release any collateral with respect to a Guarantor, except in connection with an
Asset Sale permitted pursuant to Section 7.04(c) above where no consent of the
Lenders shall be required for such release, (vii) modify the definition of
"Required Lenders," or (viii) modify this Section 10.02. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by Intermet and the Administrative Agent, the Issuer or the Swingline Lender in
addition to the Lenders required hereinabove to take such action, affect the
rights or duties of the Administrative Agent, the Issuer or the Swingline
Lender, respectively under this Agreement or under any other Credit Document.
71
<PAGE> 78
SECTION 10.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Administrative Agent, any Lender or any holder of a Note in
exercising any right or remedy hereunder or under any other Credit Document, and
no course of dealing between any Credit Party and the Administrative Agent, any
Lender or the holder of any Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right or remedy hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent, any Lender or the holder of
any Note would otherwise have. No notice to or demand on any Credit Party not
required hereunder or under any other Credit Document in any case shall entitle
any Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent,
the Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
SECTION 10.04. PAYMENT OF EXPENSES, ETC. Intermet shall:
(i) pay all reasonable, out-of-pocket costs and expenses of the
Administrative Agent in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred
relating to advice of counsel as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default or Event of Default,
refinancing, renegotiation or restructuring of, this Agreement and the
other Credit Documents and the documents and instruments referred to
therein, and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees actually incurred and disbursements
of counsel for the Administrative Agent), and in the case of enforcement of
this Agreement or any Credit Document after an Event of Default, all such
reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b), pay and hold each Agent and the Lenders
harmless from and against any and all present and future stamp,
documentary, and other similar Taxes with respect to this Agreement, the
Notes and any other Credit Documents, any collateral described therein, or
any payments due thereunder, and save each of the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay
or omission to pay such Taxes;
(iii) indemnify each Agent and each Lender, and their respective
officers, directors, employees, representatives and agents from, and hold
each of them harmless against, any and all costs, losses, liabilities,
claims, damages or expenses incurred by any of them (whether or not any of
them is designated a party thereto) (an
72
<PAGE> 79
"Indemnitee") arising out of or by reason of any investigation, litigation
or other proceeding related to any actual or proposed use of the proceeds
of any of the Loans or any Credit Party's entering into and performing of
the Agreement, the Notes, or the other Credit Documents, including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel (including foreign counsel) incurred in connection with any such
investigation, litigation or other proceeding; provided, however, Intermet
shall not be obligated to indemnify any Indemnitee for any of the foregoing
arising out of such Indemnitee's gross negligence or willful misconduct;
(iv) In addition to amounts payable elsewhere provided in this
Agreement, without duplication, indemnify, pay and save the Issuer harmless
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and reasonable expenses (including reasonable attorney's
fees and disbursements) which the Issuer may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of
Credit for the account of Intermet, other than as a result of the gross
negligence or willful misconduct of the Issuer; (ii) the failure of the
Issuer to honor a drawing under any Letter of Credit due to any act or
omission (whether rightful or wrongful) of any present or future de jure or
de facto government or governmental authority; or (iii) any confirmation of
any Letter of Credit obtained by the Issuer with the consent of Intermet;
and
(v) without limiting the indemnities set forth above, indemnify
each Indemnitee for any and all expenses and costs (including without
limitation, remedial, removal, response, abatement, cleanup, investigative,
closure and monitoring costs), losses, claims (including claims for
contribution or indemnity and including the cost of investigating or
defending any claim and whether or not such claim is ultimately defeated,
and whether such claim arose before, during or after any Credit Party's
ownership, operation, possession or control of its business, property or
facilities or before, on or after the date hereof, and including also any
amounts paid incidental to any compromise or settlement by the Indemnitee
or Indemnitees to the holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements, encumbrances, liens,
damages (including without limitation damages for contamination or
destruction of natural resources), penalties and fines of any kind or
nature whatsoever (including without limitation in all cases the reasonable
fees actually incurred, other charges and disbursements of counsel in
connection therewith) incurred, suffered or sustained by that Indemnitee
based upon, arising under or relating to Environmental Laws based on,
arising out of or relating to in whole or in part, the existence or
exercise of any rights or remedies by any Indemnitee under this Agreement,
any other Credit Document or any related documents.
If and to the extent that the obligations of Intermet under this Section 10.04
are unenforceable for any reason, Intermet hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
73
<PAGE> 80
SECTION 10.05. RIGHT OF SETOFF. In addition to and not in limitation of
all rights of offset that any Lender or other holder of a Note may have under
applicable law, each Lender or other holder of a Note shall, upon the occurrence
of any Event of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations are matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Credit Documents, and Intermet, on behalf of each Credit
Party, hereby grants to each Lender and other Holder of a Note a continuing
security interest in, all deposits of any Credit Party (general or special, time
or demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by such Lender or other holder
to any Credit Party, whether or not related to this Agreement or any transaction
hereunder. Each Lender shall promptly notify Intermet of any offset hereunder.
SECTION 10.06. BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto, provided that Intermet may not assign or transfer any of its interest
hereunder without the prior written consent of each Lender.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may assign all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of any of its
Commitments, Letter of Credit Obligations and the Loans at the time owing to it
and the Notes held by it) to any Eligible Assignee; provided, however, that (i)
the Administrative Agent and Intermet must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld or delayed)
unless such assignment is to another Lender or an Affiliate of a Lender or, in
the case of Intermet, unless an Event of Default has occurred and is continuing,
(ii) the amount of the Commitments or Loans or Letter of Credit Obligations, of
the assigning Lender subject to each assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000, (iii) the parties to
each such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a Note or Notes subject to such
assignment and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $3,000, (iv) the assignee must execute and
deliver a confirmation of its acceptance of the terms and conditions of the
Intercreditor Agreement to the other parties to the Intercreditor Agreement in
accordance with Section 10(g) thereof and (v) each such assignment shall be made
simultaneously with a ratable assignment under the 364-Day Credit Agreement (if
still in effect). Intermet shall not be responsible for such processing and
recordation fee or any costs or expenses incurred by any Lender or the
Administrative Agent in connection with such assignment. From and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after
74
<PAGE> 81
the execution thereof, the assignee thereunder shall be a party hereto and to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement. Notwithstanding the
foregoing, the assigning Lender must retain after the consummation of such
Assignment and Acceptance, a minimum aggregate amount of Commitments, the Loans
and the Letter of Credit Obligations, as the case may be, of $7,500,000 (unless
the Lender is assigning its entire Commitment); provided, however, no such
minimum amount shall be required with respect to any such assignment made at any
time there exists an Event of Default hereunder. Within five (5) Business Days
after receipt of the notice and the Assignment and Acceptance, Intermet, at its
own expense, shall execute and deliver to the Administrative Agent, in exchange
for the surrendered Note or Notes, a new Note or Notes to the order of such
assignee in a principal amount equal to the applicable Commitments assumed by it
pursuant to such Assignment and Acceptance and new Note or Notes to the
assigning Lender in the amount of its retained Commitment or Commitments. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
date of the surrendered Note or Notes which they replace, and shall otherwise be
in substantially the form attached hereto. Notwithstanding any other term of
this Section, the agreement of the Swingline Lender to provide the Swingline
Loans shall not impair or otherwise restrict in any manner the ability of the
Swingline Lender to make any assignment of its Loans or commitments, it being
understood and agreed that the Swingline Lender may terminate its Swingline
Commitment, either in whole or in part, in connection with the making of any
assignment.
(d) Each Lender may, without the consent of Intermet or the
Administrative Agent, sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments, the Letter of Credit Obligations
and the Loans owing to it and the Notes held by it); provided however, that (i)
no Lender may sell a participation in its aggregate Commitments (after giving
effect to any permitted assignment hereof) in an amount in excess of fifty
percent (50%) of such aggregate Commitments; provided, however, sales of
participations to an Affiliate of such Lender shall not be included in such
calculation; provided, however, no such maximum amount shall be applicable to
any such participation sold at any time there exists an Event of Default
hereunder, (ii) such Lender's obligations under this Agreement shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iv) the
participating bank or other entity shall be entitled to all of the benefits of
Article III and Sections 6.07 and 10.05 of this Agreement as if it were a
Lender, (v) Intermet and the Administrative Agent and other Lenders shall
continue to deal solely and directly with each Lender in connection with such
Lender's rights and obligations under this Agreement and the other Credit
Documents, and (vi) such Lender shall retain the sole right to enforce the
obligations of Intermet relating to the Loans and to approve any amendment,
modification or waiver of any provisions of this Agreement except that such
Lender may agree with any participating bank or other entity that it will not,
without such participating bank's or other entity's consent, take any actions of
the types described in clauses (ii), (iii), (iv), (v) or (viii) of Section
10.02. Any Lender selling a
75
<PAGE> 82
participation hereunder shall provide prompt written notice to Intermet of the
name of such participant.
(e) Any Lender or participant may, in connection with the assignment
or participation or proposed assignment or participation, pursuant to this
Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Intermet or the other Consolidated
Companies furnished to such Lender by or on behalf of Intermet or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the purpose of making any necessary credit
judgments with respect to this credit facility and not to use the information in
any manner prohibited by any law, including without limitation, the securities
laws of the United States. The proposed participant or assignee shall agree not
to disclose any of such information except (i) to directors, employees, auditors
or counsel to whom it is necessary to show such information, each of whom shall
be informed of the confidential nature of the information, (ii) in any statement
or testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Intermet and the Administrative Agent
unless otherwise prohibited by the subpoena, order or law), and (iii) upon the
request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Lender, the Administrative Agent or Intermet relating to such confidential
information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its
rights in this Agreement and the Notes issued to it to a Federal Reserve Bank;
provided that no such assignment shall release the Lender from any of its
obligations hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have been levied
or imposed so as to require withholdings or deductions by Intermet and payment
by Intermet of additional amounts to any Lender as a result thereof, (ii) any
Lender shall make demand for payment of increased costs or reduced rate of
return pursuant to Section 3.10 or any Lender determines that LIBOR is
unascertainable or illegal pursuant to Section 3.08 or Section 3.09, or any
Lender makes a claim for increased costs or determines that its participation in
any Letter of Credit is illegal pursuant to Section 3.09, or (iii) any Lender
shall decline to consent to a modification or waiver of the terms of this
Agreement or the other Credit Documents requested by Intermet, then and in such
event, upon request from Intermet delivered to such Lender and the
Administrative Agent, such Lender shall assign, in accordance with the
provisions of Section 10.06(c), all of its rights and obligations under this
Agreement and the other Credit Documents to another Lender or an Eligible
Assignee selected by Intermet, in consideration for the payment by such assignee
to the Lender of the principal of, and interest on, the outstanding Loans
accrued to the date of such assignment, and the assumption of such Lender's
Commitment hereunder, together with any and all other amounts owing to such
Lender under any provisions of this Agreement or the other Credit Documents
accrued to the
76
<PAGE> 83
date of such assignment; provided, however, that if Intermet shall exercise its
rights under this Section 10.06 with respect to any Lender, it shall exercise in
a substantially identical manner such rights as to all similarly affected
Lenders.
SECTION 10.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) EACH CREDIT DOCUMENT (OTHER THAN THE LETTERS OF CREDIT, TO THE
EXTENT SPECIFIED BELOW AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A CREDIT
DOCUMENT) WILL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH
LETTER OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE
DESIGNATED, THE INTERNATIONAL STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF
COMMERCE PUBLICATION NUMBER 590 (THE "ISP RULES")) AND, AS TO MATTERS NOT
GOVERNED BY THE ISP RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT,
THE NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, INTERMET HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE TRIAL BY JURY, AND INTERMET HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. TO
THE EXTENT THAT INTERMET HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, INTERMET HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THE CREDIT DOCUMENTS. INTERMET ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER CREDIT
77
<PAGE> 84
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH LENDER, THE SWINGLINE LENDER AND
THE ISSUER ENTERING INTO THE CREDIT DOCUMENTS.
(c) INTERMET HEREBY IRREVOCABLY DESIGNATES THE PRENTICE-HALL
CORPORATION SYSTEM, INC., AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE,
FOR AND ON BEHALF OF INTERMET, SERVICE OF PROCESS IN SUCH RESPECTIVE
JURISDICTIONS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR THE NOTES OR ANY DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF
SUCH PROCESS SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL
AGENT AND BY THE SERVER OF SUCH PROCESS BY MAIL TO INTERMET AT ITS ADDRESS SET
FORTH IN SCHEDULE 10.01, BUT THE FAILURE OF INTERMET TO RECEIVE SUCH COPY SHALL
NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. INTERMET FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO INTERMET AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Administrative
Agent, any Lender, any holder of a Note or any Credit Party to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against Intermet in any other jurisdiction.
SECTION 10.08. INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts
payable at any time hereunder to each Lender shall be a separate and independent
debt, and each Lender shall be entitled to protect and enforce its rights
pursuant to this Agreement and its Notes, and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date (the "Effective
Date") on which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to the
Administrative Agent pursuant to
78
<PAGE> 85
Section 10.01 or, in the case of the Lenders, shall have given to the
Administrative Agent written or telex notice (actually received) that the same
has been signed and mailed to them.
(b) The obligations of Intermet under Sections 3.07(b), 3.10, 3.12,
3.13, 10.04 and 10.05 hereof shall survive the payment in full of the Notes and
all other Obligations after the Maturity Date. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the other Credit Documents, and such other
agreements and documents, the making of the Loans hereunder, and the execution
and delivery of the Notes.
SECTION 10.11. SEVERABILITY. In case any provision in or obligation
under this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
SECTION 10.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR OR TAX
LAWS. If (i) any preparation of the financial statements referred to in Section
6.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) (other than changes mandated by FASB
106) result in a material change in the method of calculation of financial
covenants, standards or terms found in this Agreement, (ii) there is any change
in Intermet's fiscal quarter or fiscal year, or (iii) there is a material change
in federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement or any such event referred to in clause (i) through (iii) above no
longer makes such financial covenants, standards or terms comparable to those
existing on the Effective Date, Intermet and the Required Lenders agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after such changes
as if such changes had not been made. Unless and until such provisions have been
so amended, the provisions of this Agreement shall govern.
SECTION 10.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The headings of
the several sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
79
<PAGE> 86
This Agreement, the other Credit Documents, and the agreements and documents
required to be delivered pursuant to the terms of this Agreement constitute the
entire agreement among the parties hereto and thereto regarding the subject
matters hereof and thereof and supersede all prior agreements, representations
and understandings related to such subject matters.
80
<PAGE> 87
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and to be delivered in New York, New York, by their duly
authorized officers as of the day and year first above written.
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
---------------------------------
Name: Doretha J. Christoph
-------------------------------
Title: V.P. Finance
------------------------------
S-1
<PAGE> 88
THE BANK OF NOVA SCOTIA,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By: /s/ F.C.H. Ashby
------------------------------------
Name: F.C.H. Ashby
----------------------------------
Title: Senior Manager Loan Operations
---------------------------------
S-2
<PAGE> 89
BANK ONE, MICHIGAN,
INDIVIDUALLY AND AS SYNDICATION AGENT
By: /s/ Paul Flynn
------------------------------------
Name: Paul Flynn
----------------------------------
Title: Vice President
---------------------------------
S-3
<PAGE> 90
SUNTRUST BANK, ATLANTA,
INDIVIDUALLY AND AS DOCUMENTATION AGENT
By: /s/ William C. Humphries
-----------------------------------
Name: William C. Humphries
---------------------------------
Title: Vice President
--------------------------------
S-4
<PAGE> 91
COMERICA BANK,
INDIVIDUALLY AND AS MANAGING AGENT
By: /s/ Mark A. Reifel
---------------------------------
Name: Mark A. Reifel
-------------------------------
Title: Vice President
------------------------------
S-5
<PAGE> 92
THE BANK OF NEW YORK,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Joshua M. Feldman
---------------------------------
Name: Joshua M. Feldman
-------------------------------
Title: Assistant Vice President
------------------------------
S-6
<PAGE> 93
HARRIS TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Kirby M. Law
---------------------------------
Name: Kirby M. Law
-------------------------------
Title: Vice President
------------------------------
S-7
<PAGE> 94
PNC BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Peter F. Stack
--------------------------------
Name: Peter F. Stack
------------------------------
Title: Vice President
-----------------------------
S-8
<PAGE> 95
THE BANK OF TOKYO - MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ Hisashi Miyashiro
--------------------------------
Name: Hisashi Miyashiro
------------------------------
Title: Deputy General Manager
-----------------------------
S-9
<PAGE> 96
BANKERS TRUST COMPANY
By: /s/ Robert R. Telesca
---------------------------------
Name: Robert R. Telesca
-------------------------------
Title: Assistant Vice President
------------------------------
S-10
<PAGE> 97
FLEET NATIONAL BANK
By: /s/ David M. Harnisch
---------------------------------
Name: David M. Harnisch
---------------------------------
Title: Vice President
---------------------------------
S-11
<PAGE> 98
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
--------------------------------------
Name: Peter L. Chinnici
-------------------------------------
Title: Senior Vice President & Group Head
------------------------------------
S-12
<PAGE> 99
KEYBANK NATIONAL ASSOCIATION
By: /s/ J.T. Taylor
---------------------------------
Name: J.T. Taylor
--------------------------------
Title: Vice President
-------------------------------
S-13
<PAGE> 100
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ Nobuyasu Fukatsu
---------------------------------
Name: Nobuyasu Fukatsu
-------------------------------
Title: General Manager
------------------------------
S-14
<PAGE> 101
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By: /s/ Stephen A. Santora
---------------------------------
Name: Stephen A. Santora
-------------------------------
Title: Vice President
------------------------------
By: /s/ Richard W. Wilbert
---------------------------------
Name: Richard W. Wilbert
-------------------------------
Title: Vice President
------------------------------
S-15
<PAGE> 102
MICHIGAN NATIONAL BANK
By: /s/ John M. Bebb
---------------------------------
Name: John M. Bebb
-------------------------------
Title: Vice President
------------------------------
S-16
<PAGE> 103
NATIONAL CITY BANK
By: /s/ Carolann Morykwas
---------------------------------
Name: Carolann Morykwas
-------------------------------
Title: Vice President
------------------------------
S-17
<PAGE> 104
LANDESBANK SAAR GIROZENTRALE
By: /s/ Dr. Georg Grasel
---------------------------------
Name: Dr. Georg Grasel
-------------------------------
Title: Member of the Board
------------------------------
By: /s/ Manfred Thinnes
---------------------------------
Name: Manfred Thinnes
-------------------------------
Title: Senior Vice President
------------------------------
S-18
<PAGE> 1
EXHIBIT 4.14(b)
Contents of Omitted Exhibits and Schedules to the $300,000,000 Five-Year Credit
Agreement
(We will furnish a copy of any of the omitted schedules and exhibits to the
Commission upon request)
<TABLE>
<S> <C>
Schedule 5.01 Organization and Ownership of Subsidiaries
Schedule 5.01 (a) Lack of Qualification
Schedule 5.05 Certain Pending and Threatened Litigation
Schedule 5.08 Environmental Matters
Schedule 5.11 Burdensome Restrictions
Schedule 5.12 Tax Filings and Payments
Schedule 5.15 Employee Benefit Matters
Schedule 5.16 Patent, Trademark, License and Other Intellectual Property Matters
Schedule 5.17 Ownership of Properties
Schedule 5.20 Dividend Restrictions
Schedule 6.08 Financial Covenant Calculations
Schedule 7.01 Existing Indebtedness
Schedule 7.02 Existing Liens
Schedule 7.06 Existing Investments
Schedule 7.07 Permitted Sale and Leaseback Transactions
Schedule 10.01 Notice Information
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Swingline Note
Exhibit C Form of Letter of Credit Application
Exhibit D-1 Form of Notice of Borrowing
Exhibit D-2 Form of Notice of Continuation/Conversion
Exhibit E Form of Guaranty Agreement
Exhibit F Form of Closing Certificate
Exhibit G-1 Form of Opinion of Dickinson Wright PLLC
Exhibit G-2 Form of Opinion of Kilpatrick Stockton LLP
Exhibit G-3 Form of Opinion of Mayer, Brown & Platt
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Compliance Certificate
</TABLE>
<PAGE> 1
EXHIBIT 4.15 (a)
================================================================================
$100,000,000
364-DAY
CREDIT AGREEMENT
dated as of November 5, 1999
among
INTERMET CORPORATION,
THE LENDERS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
as Administrative Agent
BANK ONE, MICHIGAN
as Syndication Agent
and
SUNTRUST BANK, ATLANTA
as Documentation Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I.
DEFINITIONS; CONSTRUCTION........................................................................1
Section 1.01. Definitions.............................................................1
Section 1.02. Accounting Terms and Determination.....................................19
Section 1.03. Other Definitional Terms...............................................19
Section 1.04. Exhibits and Schedules.................................................19
ARTICLE II.
SYNDICATED LOANS AND TERM LOAN.................................................................19
Section 2.01. Commitments; Use of Proceeds...........................................19
Section 2.02. Notes; Repayment of Principal..........................................20
Section 2.03. Voluntary Reduction of Commitments.....................................20
Section 2.04. Extension of Revolving Termination Date and
Conversion of Syndicated Loans.......................................21
ARTICLE III.
GENERAL LOAN TERMS.............................................................................22
Section 3.01. Funding Notices........................................................22
Section 3.02. Disbursement of Funds..................................................24
Section 3.03. Interest...............................................................25
Section 3.04. Interest Periods.......................................................26
Section 3.05. Fees...................................................................27
Section 3.06. Voluntary Prepayments of Borrowings....................................27
Section 3.07. Payments, etc..........................................................28
Section 3.08. Interest Rate Not Ascertainable, etc...................................29
Section 3.09. Illegality.............................................................30
Section 3.10. Increased Costs........................................................30
Section 3.11. Lending Offices........................................................32
Section 3.12. Funding Losses.........................................................33
Section 3.13. Assumptions Concerning Funding of
Eurodollar Advances..................................................33
Section 3.14. Apportionment of Payments..............................................33
Section 3.15. Sharing of Payments, Etc...............................................34
Section 3.16. Benefits to Guarantors.................................................34
Section 3.17. Limitation on Certain Payment Obligations..............................34
Section 3.18. [Reserved].............................................................35
Section 3.19. Failure to Maintain Minimum Required Rating............................35
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE IV.
CONDITIONS TO BORROWINGS........................................................................35
Section 4.01. Conditions Precedent to Initial Loans..................................35
Section 4.02. Conditions to All Loans................................................37
ARTICLE V.
REPRESENTATIONS AND WARRANTIES..................................................................37
Section 5.01. Corporate Existence; Compliance with Law...............................37
Section 5.02. Corporate Power; Authorization.........................................38
Section 5.03. Enforceable Obligations................................................38
Section 5.04. No Legal Bar...........................................................38
Section 5.05. No Material Litigation or Investigations...............................38
Section 5.06. Investment Company Act, Etc............................................39
Section 5.07. Margin Regulations.....................................................39
Section 5.08. Compliance With Environmental Laws.....................................39
Section 5.09. Insurance..............................................................39
Section 5.10. No Default.............................................................40
Section 5.11. No Burdensome Restrictions.............................................40
Section 5.12. Taxes..................................................................40
Section 5.13. Subsidiaries...........................................................40
Section 5.14. Financial Statements...................................................40
Section 5.15. ERISA..................................................................41
Section 5.16. Patents, Trademarks, Licenses, Etc.....................................42
Section 5.17. Ownership of Property..................................................42
Section 5.18. Financial Condition....................................................43
Section 5.19. Labor Matters..........................................................43
Section 5.20. Payment or Dividend Restrictions.......................................43
Section 5.21. Disclosure.............................................................43
Section 5.22. Year 2000 Compliance...................................................44
ARTICLE VI.
AFFIRMATIVE COVENANTS...........................................................................44
Section 6.01. Corporate Existence, Etc...............................................44
Section 6.02. Compliance with Laws, Etc..............................................44
Section 6.03. Payment of Taxes and Claims, Etc.......................................44
Section 6.04. Keeping of Books.......................................................45
Section 6.05. Visitation, Inspection, Etc............................................45
Section 6.06. Insurance; Maintenance of Properties...................................45
Section 6.07. Reporting Covenants....................................................45
Section 6.08. Financial Covenants....................................................49
Section 6.09. Notices Under Certain Other Indebtedness...............................49
Section 6.10. Additional Credit Parties and Collateral...............................50
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 6.11. Amendment to Note Purchase Agreement...................................50
ARTICLE VII.
NEGATIVE COVENANT...............................................................................50
Section 7.01. Indebtedness...........................................................50
Section 7.02. Liens..................................................................51
Section 7.03. Mergers, Acquisitions, Divestitures....................................52
Section 7.04. Asset Sales............................................................53
Section 7.05. Dividends, Etc.........................................................54
Section 7.06. Investments, Loans, Etc................................................55
Section 7.07. Sale and Leaseback Transactions........................................56
Section 7.08. Transactions with Affiliates...........................................56
Section 7.09. Prepayments of Subordinated Debt in Violation
Thereof..............................................................56
Section 7.10. Changes in Business....................................................56
Section 7.11. Limitation on Payment Restrictions Affecting
Consolidated Companies...............................................57
Section 7.12. Actions Under Certain Documents........................................57
ARTICLE VIII.
EVENTS OF DEFAULT...............................................................................57
Section 8.01. Payments...............................................................58
Section 8.02. Covenants Without Notice...............................................58
Section 8.03. Other Covenants........................................................58
Section 8.04. Representations........................................................58
Section 8.05. Non-Payments of Other Indebtedness.....................................58
Section 8.06. Defaults Under Other Agreements........................................58
Section 8.07. Bankruptcy.............................................................59
Section 8.08. ERISA..................................................................59
Section 8.09. Money Judgment.........................................................60
Section 8.10. Ownership of Credit Parties............................................61
Section 8.11. Change in Control of Intermet..........................................61
Section 8.12. Default Under Other Credit Documents...................................61
Section 8.13. Attachments............................................................61
Section 8.14. Default Under Five-Year Credit Agreement...............................61
ARTICLE IX.
THE ADMINISTRATIVE AGENT........................................................................61
Section 9.01. Appointment of Administrative Agent....................................62
Section 9.02. Authorization of Administrative Agent with Respect
to the Security Documents..............................................63
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 9.03. Nature of Duties of Administrative Agent...............................64
Section 9.04. Lack of Reliance on the Administrative Agent...........................64
Section 9.05. Certain Rights of the Administrative Agent.............................65
Section 9.06. Reliance by Administrative Agent.......................................65
Section 9.07. Indemnification of Administrative Agent................................65
Section 9.08. The Administrative Agent in its Individual Capacity....................65
Section 9.09. Holders of Notes.......................................................66
Section 9.10. Successor Administrative Agent.........................................66
Section 9.11. Other Agents. ........................................................67
ARTICLE X.
MISCELLANEOUS..................................................................................67
Section 10.01. Notices...............................................................67
Section 10.02. Amendments, Etc.......................................................67
Section 10.03. No Waiver; Remedies Cumulative........................................68
Section 10.04. Payment of Expenses, Etc..............................................68
Section 10.05. Right of Setoff.......................................................69
Section 10.06. Benefit of Agreement..................................................70
Section 10.07. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial................................................72
Section 10.08. Independent Nature of Lenders' Rights.................................74
Section 10.09. Counterparts..........................................................74
Section 10.10. Effectiveness; Survival...............................................74
Section 10.11. Severability..........................................................74
Section 10.12. Independence of Covenants.............................................74
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax Laws..............75
Section 10.14. Headings Descriptive; Entire Agreement................................75
</TABLE>
iv
<PAGE> 6
364-DAY
CREDIT AGREEMENT
THIS 364-DAY CREDIT AGREEMENT made and entered into as of November 5, 1999,
by and among INTERMET CORPORATION, a Georgia corporation ("Intermet"), THE BANK
OF NOVA SCOTIA, a Canadian chartered bank ("Scotiabank"), acting through its
Atlanta Agency, the other banks and lending institutions listed on the signature
pages hereof, and any assignees of Scotiabank, or such other banks and lending
institutions which become "Lenders" as provided herein (Scotiabank, and such
other banks, lending institutions, and assignees referred to collectively herein
as the "Lenders"), Scotiabank, in its capacity as administrative agent for the
Lenders and each successor agent for such Lenders as may be appointed from time
to time pursuant to Article IX hereof (the "Administrative Agent") and BANK ONE,
MICHIGAN, as Syndication Agent, SUNTRUST BANK, ATLANTA ("SunTrust"), as
Documentation Agent, COMERICA BANK, as Managing Agent, and THE BANK OF NEW YORK,
HARRIS TRUST AND SAVINGS BANK and PNC BANK, NATIONAL ASSOCIATION, as Co-Agents
(the Administrative Agent, the Syndication Agent, the Documentation Agent, the
Managing Agent and the Co-Agents are herein referred to individually as an
"Agent" and collectively as the "Agents").
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent and the
other Agents and the Lenders have agreed, subject to the terms and conditions of
this Agreement, to make available to Intermet a revolving credit facility;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Intermet, the Lenders, the Administrative Agent and
the other Agents agree, upon the terms and subject to the conditions set forth
herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms defined
herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):
"Acquisition" shall mean any transaction, or any series of related
transactions, by which Intermet and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of a Person which have ordinary
<PAGE> 7
voting power for the election of directors or (c) otherwise acquires control of
a 50% or more ownership interest in any such Person.
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Administrative Agent" shall have the meaning set forth in the
preamble.
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under the Syndicated Loans or the Term Loans (the Term
Loans being made only pursuant to Section 2.01(b)), which Advances shall be made
or outstanding as Base Rate Advances or Eurodollar Advances, as the case may be.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person, whether
through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control with") as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person.
"Agreement" shall mean this 364-Day Credit Agreement, as amended,
modified, restated, or supplemented from time to time.
"Applicable Commitment Fee Percentage" shall mean the percentage
determined from time to time from the chart set forth below based on Intermet's
ratio of Funded Debt to Consolidated EBITDA determined as of the end of each
fiscal quarter, with any change to the Applicable Commitment Fee Percentage to
be immediately effective on the 60th day of the next fiscal quarter thereafter:
2
<PAGE> 8
<TABLE>
<CAPTION>
FUNDED DEBT TO APPLICABLE
CONSOLIDATED COMMITMENT FEE
EBITDA RATIO PERCENTAGE
<S> <C>
Greater than or Equal to
2.50:1.0 0.350%
Less than 2.50:1.0 and
Greater than or Equal to 0.225%
2.00:1.0
Less than 2.00:1.0 and
Greater than or Equal to
1.50:1.0 0.175%
Less than 1.50:1.0 0.150%
</TABLE>
provided, however, that the Applicable Commitment Fee Percentage shall be no
less than 0.175% until May 31, 2000; and provided, further, that if Intermet
fails to deliver its financial statements for such preceding fiscal quarter
pursuant to Section 6.07 prior to the 60th day of the then-current fiscal
quarter, the Applicable Commitment Fee Percentage shall be 0.350% until such
financial statements are delivered.
"Applicable Margin" shall mean, with respect to all outstanding
Eurodollar Advances, the percentage determined from time to time from the chart
set forth below based on Intermet's ratio of Funded Debt to Consolidated EBITDA
determined as of the end of each fiscal quarter, with any change to the
Applicable Margin to be immediately effective on the 60th day of the next fiscal
quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED APPLICABLE
EBITDA RATIO MARGIN
<S> <C>
Greater than or Equal to
3.00:1.0 1.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 1.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 1.250%
</TABLE>
3
<PAGE> 9
<TABLE>
<S> <C>
Less than 2.00:10 and
Greater than or Equal to
1.50:1.0 1.000%
Less than 1.50:1.0 0.750%
</TABLE>
provided, however, that the Applicable Margin shall be no less than 1.00% until
May 31, 2000; and provided, further, that if Intermet fails to deliver its
financial statements for such preceding fiscal quarter pursuant to Section 6.07
prior to the 60th day of the then-current fiscal quarter, the Applicable Margin
with respect to Eurodollar Advances shall be 1.75% until such financial
statements are delivered.
"Asset Sale" shall mean any sale or other disposition (or a series of
related sales or other dispositions), including without limitation, loss,
damage, destruction or taking, by any Consolidated Company to any Person other
than a Consolidated Company, of any property or asset (including capital stock
but excluding the issuance and sale by Intermet of its own capital stock) having
an aggregate Asset Value in excess of $1,000,000, other than sales or other
dispositions made in the ordinary course of business of any Consolidated
Company.
"Asset Value" shall mean, with respect to any property or asset of any
Consolidated Company as of any particular date, an amount equal to the greater
of (i) the then book value of such property or asset as established in
accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by such Consolidated Company.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee in accordance with the terms
of this Agreement and substantially in the form of Exhibit H.
"Bankruptcy Code" shall mean The Federal Bankruptcy Reform Act of 1978,
as amended and in effect from time to time (11 U.S.C. ss. 101 et seq.).
"Base Rate" shall mean the higher of (with any change in the Base Rate
to be effective as of the date of change of either of the following rates):
(a) the rate of interest then most recently established by the
Administrative Agent in New York from time to time to be its base rate
for Dollars loaned in the United States, as in effect from time to
time, and
(b) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%) per annum.
4
<PAGE> 10
The Administrative Agent's base rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers; the
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's base rate.
"Base Rate Advance" shall mean an Advance made or outstanding as (i) a
Syndicated Loan or Term Loan bearing interest based on the Base Rate, or (ii) an
Advance bearing interest at the rate agreed upon between Intermet and the
Lenders pursuant to Section 3.08, Section 3.09 or Section 3.10.
"Base Rate Margin" shall mean, with respect to all outstanding Base
Rate Advances, the percentage determined from time to time from the chart set
forth below based on Intermet's ratio of Funded Debt to Consolidated EBITDA
determined as of the end of each fiscal quarter, with any change to the Base
Rate Margin to be immediately effective on the 60th day of the next fiscal
quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED BASE RATE
EBITDA RATIO MARGIN
- - ------------ ------
<S> <C>
Greater than or Equal to
3.00:1.0 0.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 0.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 0.250%
Less than 2.00:1.0 0%
</TABLE>
provided, however, that the Base Rate Margin shall be no less than 0.250% until
May 31, 2000; and provided, further, that if Intermet fails to deliver its
financial statements for any fiscal quarter pursuant to Section 6.07 prior to
the 60th day of the next fiscal quarter, the Base Rate Margin with respect to
Base Rate Advances shall be 0.75% until such financial statements are delivered.
"Borrowing" shall mean the incurrence by Intermet under any Facility of
Advances of one Type concurrently having the same Interest Period or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
5
<PAGE> 11
"Business Day" shall mean:
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are required or authorized to close in Atlanta, Georgia or New
York, New York; and
(b) relative to the making, continuing, prepaying or repaying of any
Eurodollar Advances, any day on which trading is carried on by and between banks
in deposits of Dollars in the London interbank market.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Intermet evidencing debt or a commitment
to extend loans in excess of $5,000,000 which requires, or permits the holder(s)
of such Indebtedness of Intermet to require that such Indebtedness of Intermet
be redeemed, repurchased, defeased, prepaid or repaid, either in whole or in
part, or the maturity of such Indebtedness of Intermet to be accelerated in any
respect, as a result of a change in ownership of the capital stock of Intermet
or voting rights with respect thereto or a change in the composition of the
board of directors of Intermet.
"Closing Date" shall mean the date on or before November 30, 1999 on
which the initial Loans are made or deemed to have been made hereunder and the
conditions set forth in Section 4.01 are satisfied or waived in accordance with
Section 10.02.
"Commitment" shall mean, for any Lender at any time, the amount of such
commitment set forth opposite such Lender's name on Schedule 1, as the same may
be increased or decreased from time to time as a result of any reduction thereof
pursuant to Section 2.03, any assignment thereof pursuant to Section 10.06, or
any amendment thereof pursuant to Section 10.02.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of all expenditures of Intermet and its Subsidiaries for fixed
or capital assets made during such period which, in accordance with GAAP, would
be classified as capital expenditures.
"Consolidated Companies" shall mean, collectively, Intermet and all of
its Subsidiaries.
"Consolidated EBIT" shall mean, for any fiscal period of Intermet, an
amount equal to (A) the sum for such fiscal period of Consolidated Net Income
(Loss) and, to the extent deducted in determining such Consolidated Net Income
(Loss), provisions for (i) taxes based on income and (ii) Consolidated Interest
Expense, minus (B) any items of gain (or plus any items of loss) which were
included in determining such Consolidated Net Income (Loss) and were (x) not
realized in the ordinary course of business (whether or not classified as
6
<PAGE> 12
"ordinary" by GAAP), (y) the result of any sale of assets, or (z) resulting from
minority investments, together with, in the case of (x), (y) or (z), any related
provision for taxes included in Consolidated Net Income (Loss) with respect
thereto, plus (C) without duplication, the sum of the following items to the
extent not included in Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which became a Subsidiary during such period (a "New Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units acquired by any
Consolidated Company during such period ("New Assets"); and
(3) the sum of the following items to the extent deducted in
determining net income of any New Subsidiary or derived from any New Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as "ordinary" by
GAAP),(bb) the result of any sale of assets, or (cc) resulting from
minority investments, together in the case of (aa), (bb) or (cc), any
related provision for taxes included in such net income with respect
thereto;
minus (D) the sum of the following items to the extent included in determining
Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which ceased to be a Subsidiary (other than due to merger or consolidated
with another Consolidated Company) during such period
(an "Old Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units sold or otherwise
disposed of by any Consolidated Company during such period ("Old Assets");
and
(3) the sum of the following items to the extent deducted in
determining net income of any Old Subsidiary or derived from any Old Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as "ordinary" by
GAAP),(bb) the result of any sale of assets, or (cc) resulting from
minority investments, together in the case of (aa), (bb) or (cc), any
related provision for taxes included in such net income with respect
thereto.
For purposes of calculating any financial definitions based upon Consolidated
EBIT, the addition or subtraction of any other financial definitions to or from
Consolidated EBIT shall
7
<PAGE> 13
be calculated with appropriate adjustment for New Subsidiaries, New Assets, Old
Subsidiaries and Old Assets as is consistent with this definition.
"Consolidated EBITDA" shall mean for any fiscal period of Intermet, an
amount equal to the sum of Consolidated EBIT plus depreciation and amortization
expense to the extent deducted in determining Consolidated Net Income (Loss),
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any fiscal period of
Intermet, total interest expense of the Consolidated Companies (including
without limitation, interest expense attributable to capitalized leases in
accordance with GAAP, all commissions, discounts and other fees and charges owed
with respect to bankers acceptance financing, and total interest expense
(whether shown as interest expense or as loss and expenses on sale of
receivables) under a receivables purchase facility) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal period of
Intermet, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period (taken as a single accounting period)
determined in conformity with GAAP, but excluding therefrom (to the extent
otherwise included therein) (i) any income or loss of any Person accrued prior
to the date such Person becomes a Subsidiary of Intermet or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company, and (ii) the income of
any Consolidated Company to the extent that the declaration or payment of
dividends or similar distributions by such Consolidated Company of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation.
"Consolidated Net Worth" shall mean, as of any date of determination,
Shareholders' Equity of Intermet.
"Contractual Obligation" of any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.
"Credit Documents" shall mean, collectively, this Agreement, the Notes,
the Fee Letter, the Guaranty Agreements, and all other Security Documents, if
any.
"Credit Parties" shall mean, collectively, each of Intermet, the
Guarantors, and every other Person who from time to time executes a Security
Document with respect to all or any portion of the Obligations.
"Default" shall mean any condition or event which, with notice or lapse
of time or both, would constitute an Event of Default.
8
<PAGE> 14
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Domestic Subsidiary" shall mean each Consolidated Company that is
organized under the laws of the United States or any political subdivision
thereof.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any political subdivision thereof, having,
total assets in excess of $1,000,000,000 or (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or any political subdivision
of any such country, and having total assets in excess of $1,000,000,000 (or its
equivalent in other currencies), provided that such bank is acting through a
branch or agency located in the United States or the Cayman Islands, (iii) any
Lender, or (iv) any commercial finance or asset based lending Affiliate of any
such commercial bank or Lender described in the foregoing clauses (i) through
(iii), in each case, which has the Minimum Required Rating, unless otherwise
agreed by the Administrative Agent.
"Environmental Laws" shall mean all federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law into the
environment (including without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of any Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage tanks and
related piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation (i) the Clean
Air Act (42 U.S.C. ss. 7401 et seq.), (ii) the Clean Water Act (33 U.S.C. ss.
1251 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C. ss.
6901 et seq.), (iv) the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), (v) the Comprehensive Environmental Response Compensation and Liability
Act, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C.
ss. 9601 et seq.), and (vi) all applicable national and local laws or
regulations with respect to environmental control (including applicable laws of
the Federal Republic of Germany or any applicable international agreements).
9
<PAGE> 15
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
Syndicated Loan or Term Loan bearing interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning provided in Article VIII.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to any Person, the
President, Chief Executive Officer, Vice Presidents, Chief Financial Officer,
Treasurer, Secretary and any other individual holding comparable offices or
duties.
"Extension Request" shall mean an extension request by Intermet
pursuant to Section 2.04(a) substantially in the form of Exhibit B.
"Facility" shall mean the Commitments.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent.
"Fee Letter" shall mean the confidential fee letter, dated as of
September 15, 1999, between Intermet and Scotiabank.
"Five-Year Credit Agreement" shall mean the Five-Year Credit Agreement,
dated as of the date hereof (as amended, modified, restated, or supplemented
from time to time), among Intermet, the various financial institutions that are
or may become parties thereto and Scotiabank, as administrative agent.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of Intermet, the ratio of (A) Consolidated EBITDA minus
Consolidated Capital
10
<PAGE> 16
Expenditures to (B) the sum of the amounts of (i) Consolidated Interest Expense,
and (ii) principal payments on Indebtedness in each case, calculated with
respect to the immediately preceding four fiscal quarters ending on such date.
"Foreign Plan" shall mean any pension, profit sharing, deferred
compensation, or other employee benefit plan, program or arrangement maintained
by any Foreign Subsidiary which, under applicable local law, is required to be
funded through a trust or other funding vehicle, but shall not include any
benefit provided by a foreign government or its agencies.
"Foreign Subsidiary" shall mean each Consolidated Company that is not a
Domestic Subsidiary.
"Foreign 956 Subsidiary" means each Foreign Subsidiary a guaranty of
the Obligations by which would result in a deemed dividend of its current and
accumulated earnings and profits under section 956 of the Tax Code that would
result in material increased tax liabilities for the Consolidated Companies,
taken as a whole.
"Funded Debt" shall mean all Indebtedness for money borrowed,
Indebtedness evidenced or secured by purchase money Liens, capitalized leases,
conditional sales contracts and similar title retention debt instruments,
whether designated as long term or current debt under GAAP and all synthetic
leases even if not treated as Indebtedness under GAAP. The calculation of Funded
Debt shall include (i) all Funded Debt of the Consolidated Companies, plus (ii)
all Funded Debt of other Persons to the extent guaranteed by a Consolidated
Company, to the extent supported by a letter of credit issued for the account of
a Consolidated Company, or as to which and to the extent which a Consolidated
Company or its assets otherwise have become liable for payment thereof, plus
(iii) the redemption amount with respect to the stock of any Consolidated
Company required to be redeemed during the next succeeding twelve months.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantors" shall mean, collectively, each Domestic Subsidiary other
than those which are designated on Schedule 5.01 as "inactive" and each Foreign
Subsidiary that is not a Foreign 956 Subsidiary.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or
11
<PAGE> 17
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including contractual obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor, or an agreement
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make any payment other than for value received. The amount of any Guaranty shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which guaranty is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreement" shall mean the Guaranty Agreement, dated as of
even date herewith, executed by each of the Guarantors in favor of the Lenders
and the Administrative Agent, substantially in the form of Exhibit E as the same
may be amended, restated or supplemented from time to time.
"Hazardous Substances" shall mean (a) any "hazardous substance," as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss.9601 et. seq., and any amendments thereto or
regulations promulgated thereunder from time to time, (b) any "hazardous waste,"
as defined in the Resource Conversation and Recovery Act, 42 U.S.C. ss.6901 et.
seq. and any amendments thereto or regulations promulgated thereunder from time
to time, and (c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) as defined in
any other Environmental Laws.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person which in accordance with GAAP would be shown on the
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (ii) all rental obligations under leases required to be
capitalized under GAAP; (iii) all Guaranties of such Person (including
contingent reimbursement obligations under undrawn letters of credit); (iv)
Indebtedness of others secured by any Lien upon property owned by such Person,
whether or not assumed; (v) obligations or other liabilities under currency
contracts, interest rate hedging contracts, or similar agreements or
combinations thereof to the extent required to be disclosed in accordance with
GAAP; and (vi) all synthetic leases, even if not required to be disclosed in
accordance with GAAP.
"Interest Period" shall mean the interest period selected by Intermet
pursuant to Section 3.04(a) hereof.
12
<PAGE> 18
"Intermet" shall mean Intermet Corporation, a Georgia corporation, its
successors and permitted assigns.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person, in each case, other than an Acquisition. Each Investment shall
be valued as of the date made; provided that any Investment or portion of an
Investment consisting of Debt shall be valued at the outstanding principal
balance thereof as of the date of determination.
"Lender" or "Lenders" shall mean Scotiabank, the other banks and
lending institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender the office such Lender may
designate in writing from time to time to Intermet and the Administrative Agent
with respect to each Type of Loan.
"LIBOR" shall mean, for any Interest Period, with respect to Eurodollar
Advances under the Commitments, the offered rate for deposits in Dollars, for a
period comparable to the Interest Period and in an amount comparable to the
Administrative Agent's portion of such Advances, appearing on Telerate Page 3750
as of 11:00 AM (London, England time) on the day that is two Business Days prior
to the first day of the Interest Period. If two or more of such rates appear on
such Telerate Page, the rate shall be the arithmetic mean of such rates. If the
foregoing rate is unavailable from Telerate for any reason, then such rate shall
be determined by the Administrative Agent from the Reuters Screen LIBO Page or,
if such rate is also unavailable on such service, then on any other interest
rate reporting service of recognized standing designated in writing by the
Administrative Agent to Intermet and the Lenders; in any such case rounded, if
necessary, to the next higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Syndicated Loans and the Term
Loans.
13
<PAGE> 19
"Margin Regulations" shall mean Regulation T, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System, as the
same may be in effect from time to time.
"Margin Stock" shall have the meaning set forth in the Margin
Regulations.
"Materially Adverse Effect" shall mean any materially adverse change in
(i) the business, results of operations, financial condition, assets or
prospects of the Consolidated Companies, taken as a whole, (ii) the ability of
Intermet to perform its obligations under this Agreement, (iii) the ability of
the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents, or (iv) the perfection or priority of
the Liens granted in favor of the Administrative Agent pursuant to the Security
Documents.
"Maturity Date" shall mean the earliest of (i) the day that is
twenty-four (24) calendar months after the Revolving Termination Date, (ii) the
"Maturity Date" as defined in the Five-Year Credit Agreement, and (iii) the date
on which all amounts outstanding under this Agreement have been declared or have
automatically become due and payable pursuant to the provisions of Article VIII.
"Minimum Required Rating" shall mean (i) from Moody's, a long-term
deposit rating of A1 or higher (or comparable rating in the event Moody's
hereafter modifies its rating system for long-term deposits of commercial
banks), and (ii) from S&P, a long-term deposit ratings of A+ or higher (or
comparable rating in the event S&P hereafter modifies its rating system for
long-term deposits of commercial banks).
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors and assigns.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Fixed Assets" shall mean, as of any date of determination, the net
property, plant and equipment of the Consolidated Companies determined in
accordance with GAAP and as reflected on the balance sheet of Intermet.
"Note Purchase Agreement" shall mean that certain Amended and Restated
Note Purchase Agreement dated as of March 21, 1996, by and between Intermet and
Prudential, as amended, modified or supplemented.
"Notes" shall mean, collectively, the Revolving Credit Notes.
"Notice of Borrowing" shall mean a notification of Borrowing by
Intermet pursuant to Section 2.08 or 3.01 substantially in the form of Exhibit
D-1.
14
<PAGE> 20
"Notice of Conversion/Continuation" shall mean a notification of
continuation or conversion of a Borrowing by Intermet pursuant to Section 3.01
substantially in the form of Exhibit D-2.
"Obligations" shall mean all amounts owing to the Administrative Agent
or any Lender pursuant to the terms of this Agreement or any other Credit
Document, including without limitation, all Loans (including all principal and
interest payments due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the Credit
Parties, direct or indirect, absolute or contingent, liquidated or unliquidated,
now existing or hereafter arising, together with all renewals, extensions,
modifications or refinancings thereof.
"Payment Office" shall mean the office specified as the "Payment
Office" for the Administrative Agent on Schedule 10.01, or such other location
as to which the Administrative Agent shall have given written notice to Intermet
and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by Section
7.02.
"Permitted Receivables" means all obligations of any obligor (whether
now existing or hereafter arising) under a contract for sale of goods or
services by Intermet or any of its Subsidiaries, which shall include any
obligation of such obligor (whether now existing or hereafter arising) to pay
interest, finance charges or amounts with respect thereto, and, with respect to
any of the foregoing receivables or obligations, (a) all of the interest of
Intermet or any of its Subsidiaries in the goods (including returned goods) the
sale of which gave rise to such receivable or obligation after the passage of
title thereto to any obligor, (b) all other Liens and property subject thereto
from time to time purporting to secure payment of such receivables or
obligations, and (c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of any such receivables or obligations.
"Permitted Receivables Purchase Facility" means any agreement of
Intermet or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to be sales (and considered
sales under GAAP) that do not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables (or against any of such
seller's Affiliates) by way of a guaranty or any other support arrangement, with
respect to the amount of such Permitted Receivables (based on the financial
condition or circumstances of the obligor thereunder), other than such limited
recourse as is reasonable given market standards for transactions of a similar
type, taking into account such factors as historical bad debt loss experience
and obligor concentration levels.
15
<PAGE> 21
"Person" shall mean any individual, limited liability company, partnership,
firm, corporation, association, joint venture, trust or other entity, or any
government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any "employee benefit plan" (as defined in Section 3(3)
of ERISA), including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits, but shall exclude any Foreign Plan.
"Prior Credit Agreement" shall mean the Third Amended and Restated Credit
Agreement dated as of November 14, 1996, as amended, modified and supplemented,
among Intermet, the financial institutions party thereto, SunTrust Bank,
Atlanta, as agent, and NBD Bank and First Union National Bank, as co-agents and
in effect on the Closing Date.
"Pro Rata Share" shall mean, with respect to Commitments, each Syndicated
Loan and each Term Loan to be made by and each payment (including, without
limitation, any payment of principal, interest or fees) to be made to each
Lender, the percentage designated as such Lender's Pro Rata Share of such
Commitments, set forth under the name of such Lender on Schedule 1, as such
percentage may change pursuant to Section 2.04 or based upon amendments and
assignments hereunder.
"Prudential" shall mean, The Prudential Insurance Company of America.
"Rating Agencies" shall mean, collectively, Moody's and S&P.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time.
"Required Lenders" shall mean at any time prior to the termination of the
Commitments, Lenders holding at least 51% of the then aggregate amount of the
Commitments, or, following the termination of the Commitments hereunder, Lenders
holding at least 51% of the sum of the aggregate outstanding Loans.
"Requirement of Law" for any Person shall mean the articles or certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any designated
page and LIBOR, the display page so designated on the Reuters Monitor Money
Rates Service
16
<PAGE> 22
(or such other page as may replace that page on that service for
the purpose of displaying rates comparable to LIBOR).
"Revolving Credit Notes" shall mean, collectively, the promissory notes
evidencing the Syndicated Loans and the Term Loans in the form attached hereto
as Exhibit A, either as originally executed or as hereafter amended, modified or
substituted.
"Revolving Termination Date" shall mean the earlier of (i) November 3, 2000
(as such date may be extended from time to time pursuant to Section 2.04), and
(ii) the date on which all amounts outstanding under this Agreement have been
declared or have automatically become due and payable pursuant to the provisions
of Article VIII.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Scotiabank" shall have the meaning set forth in the preamble.
"Security Documents" shall mean, collectively, the Guaranty Agreement and
each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations, as the same may be amended, restated, or supplemented
from time to time.
"Shareholders' Equity" shall mean, with respect to any Person as at any
date of determination, shareholders' equity of such Person determined on a
consolidated basis in conformity with GAAP.
"Solvent" shall mean, as to Intermet or any Guarantor at any time, that (i)
each of the fair value and the present fair saleable value of such Person's
assets (including any rights of subrogation or contribution to which such Person
is entitled, under any of the Loan Documents or otherwise) is greater than such
Person's debts and other liabilities (including contingent, unmatured and
unliquidated debts and liabilities) and the maximum estimated amount required to
pay such debts and liabilities as such debts and liabilities mature or otherwise
become payable; (ii) such Person is able and expects to be able to pay its debts
and other liabilities (including, without limitation, contingent, unmatured and
unliquidated debts and liabilities) as they mature; and (iii) such Person does
not have unreasonably small capital to carry on its business as conducted and as
proposed to be conducted.
"Subordinated Debt" shall mean other Indebtedness of Intermet subordinated
to all obligations of Intermet or any other Credit Party arising under this
Agreement, the Notes, and the Guaranty Agreements on terms and conditions
satisfactory in all respects to the Administrative Agent and the Required
Lenders, including without limitation, with respect to interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies, and
subordination provisions, evidenced by the written approval of the
Administrative Agent and Required Lenders.
17
<PAGE> 23
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation, partnerships, limited liability
companies, joint ventures, and associations) regardless of its jurisdiction of
organization or formation, at least a majority of the total combined voting
power of all classes of voting stock or other ownership interests of which
shall, at the time as of which any determination is being made, be owned by such
Person, either directly or indirectly through one or more other Subsidiaries.
"SunTrust" shall have the meaning set forth in the preamble.
"Syndicated Loans" shall mean, collectively, all outstanding Loans made to
Intermet by the Lenders pursuant to Section 2.01(a) hereof.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated page and
LIBOR, the display page so designated on the Dow Jones Telerate Service (or such
other page as may replace that pace on that service for the purpose of
displaying rates comparable to LIBOR).
"Term Loans" shall mean, collectively, all outstanding Loans made to
Intermet by the Lenders pursuant to Section 2.01(b) hereof.
"Total Assets" shall mean the total assets of the Consolidated Companies,
determined in accordance with GAAP.
"Total Sales" shall mean, for any period of determination, the total
revenues of the Consolidated Companies, determined in accordance with GAAP.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate Advances
or Eurodollar Advances.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless otherwise defined
or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with,
18
<PAGE> 24
GAAP, except that financial records of Foreign Subsidiaries may be maintained in
accordance with generally accepted accounting principles in effect from time to
time in the jurisdiction of organization of such Foreign Subsidiary; provided,
however, that compliance with the financial covenants and calculations set forth
in Section 6.08, Article VII, and elsewhere herein, and in the definitions used
in such covenants and calculations, shall be calculated, made and applied in
accordance with GAAP and such generally accepted accounting principles in such
foreign jurisdictions, as the case may be, as in effect on the date of this
Agreement applied on a basis consistent with the preparation of the financial
statements referred to in Section 5.14 unless and until Intermet and the
Required Lenders enter into an agreement with respect thereto in accordance with
Section 10.13.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified. Any of the terms defined in Section
1.01 may, unless the context otherwise requires, be used in the singular or the
plural depending on the reference.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
ARTICLE II.
SYNDICATED LOANS AND TERM LOANS
SECTION 2.01. COMMITMENTS; USE OF PROCEEDS.
(a) Subject to and upon the terms and conditions herein set forth, each
Lender severally agrees to make to Intermet from time to time on and after the
Closing Date, but prior to the Revolving Termination Date, Syndicated Loans in
an aggregate amount outstanding at any time not to exceed such Lender's
Commitment, subject, however, to the conditions that (i) at no time shall the
outstanding principal amount of all Syndicated Loans exceed the sum of the
Commitments, and (ii) at all times shall the outstanding principal amount of the
Syndicated Loans of each Lender equal the product of each Lender's Pro Rata
Share of the Commitments multiplied by the aggregate outstanding amount of the
Syndicated Loans. Intermet shall be entitled to repay and reborrow Syndicated
Loans in accordance with the provisions hereof.
(b) Subject to and upon the terms and conditions herein set forth, each
Lender severally agrees to convert all of such Lender's Syndicated Loans which
are outstanding on the Revolving Termination Date into a single Term Loan by
such Lender to Intermet on the Revolving Termination Date. Term Loans which are
repaid or prepaid by Intermet may not be reborrowed.
19
<PAGE> 25
(c) Each Loan shall, at the option of Intermet, be made or continued as, or
converted into, part of one or more Borrowings that shall consist entirely of
Base Rate Advances or Eurodollar Advances. The aggregate principal amount of
each Borrowing of Loans shall be not less than $5,000,000 or a greater integral
multiple of $1,000,000, provided that each Borrowing of Loans comprised of Base
Rate Advances shall be not less than $1,000,000 or a greater integral multiple
of $100,000 and provided, further, that this sentence shall not otherwise apply
to the initial Borrowing of Term Loans to the extent that such initial Borrowing
is comprised of Base Rate Advances. At no time shall the number of outstanding
Borrowings comprised of Eurodollar Advances exceed twelve.
(d) The proceeds of Loans shall be used solely as working capital and for
other general corporate purposes, including Acquisitions, Investments, the
repayment of Indebtedness (including Indebtedness under the Prior Credit
Agreement) and the funding of capital expenditures of the Consolidated
Companies.
SECTION 2.02. NOTES; REPAYMENT OF PRINCIPAL.
(a) Intermet's obligations to pay the principal of, and interest on, the
Loans to each Lender shall be evidenced by the records of the Administrative
Agent and such Lender and by the Revolving Credit Note payable to such Lender
(or the assignor of such Lender) completed in conformity with this Agreement.
(b) Except as provided in Section 2.04(f), all outstanding principal
amounts under the Commitments shall be due and payable in full on the Maturity
Date.
SECTION 2.03. VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three (3)
Business Days' prior telephonic notice (promptly confirmed in writing) to the
Administrative Agent, Intermet shall have the right, without premium or penalty,
to terminate the unutilized Commitments, in part or in whole, provided, that (i)
any such termination shall apply to proportionately and permanently reduce the
Commitments of each of the Lenders, and (ii) any partial termination pursuant to
this Section 2.03 shall be in an amount of at least $5,000,000 and integral
multiples of $1,000,000.
SECTION 2.04. EXTENSION OF REVOLVING TERMINATION DATE AND CONVERSION OF
SYNDICATED LOANS. Each of (i) the Revolving Termination Date and (ii) the
conversion, pursuant to Section 2.01(b), of all Syndicated Loans into Term Loans
on the Revolving Termination Date, shall be subject to extension or
postponement, as the case may be, as set forth in this Section.
(a) Any term or provision of this Agreement to the contrary
notwithstanding, no earlier than 60 days nor later than 45 days prior to the
then Revolving Termination Date (if the Commitments then remain in effect),
Intermet may, by delivery of a duly completed Extension Request to the
Administrative Agent, irrevocably request that each
20
<PAGE> 26
Lender extend for an additional 364-day period (such period to commence on the
day immediately following the day on which the Administrative Agent notifies
Intermet and each Lender of the extension of the Revolving Termination Date),
the Revolving Termination Date relating to such Lender's Commitment; provided,
that the Revolving Termination Date shall not be extended beyond the "Maturity
Date" (as such term is defined in the Five-Year Credit Agreement). The failure
of Intermet to request such an extension hereunder shall automatically terminate
Intermet's rights to request additional such extensions.
(b) The Administrative Agent shall, promptly after receipt of any such
Extension Request pursuant to clause (a), notify each Lender thereof by
providing it a copy of such Extension Request.
(c) Each Lender shall, within 15 days of receipt of the notice described in
clause (a), notify the Administrative Agent whether or not it consents to the
request of Intermet set forth in such Extension Request, such consent to be in
the sole discretion of such Lender. If any Lender does not so notify the
Administrative Agent of its decision within such 15-day period, such Lender
shall be deemed not to have consented to such request of Intermet.
(d) The Administrative Agent shall promptly notify Intermet and each Lender
whether the Lenders have consented to such request. If the Administrative Agent
does not so notify Intermet within 15 days prior to the then existing Revolving
Termination Date, the Administrative Agent shall be deemed to have notified
Intermet that the Lenders have not consented to Intermet's request.
(e) Each Lender that elects not to extend the then effective Revolving
Termination Date relating to such Lender's Commitment or that fails to so notify
the Administrative Agent of such consent (a "Non-Consenting Lender") hereby
agrees that if, on or prior to such then effective Revolving Termination Date,
any other Lender or other Eligible Assignee acceptable to Intermet and the
Administrative Agent offers to purchase such NonConsenting Lender's Commitment
and its Commitment under the Five-Year Credit Agreement for a purchase price
equal to the sum of all amounts then owing with respect to the Syndicated Loans
and the Syndicated Loans under the Five-Year Credit Agreement and all other
amounts accrued for the account of such Non-Consenting Lender, such
Non-Consenting Lender will assign, sell and transfer on such then effective
Revolving Termination Date all of its right, title, interest and obligations
with respect to the foregoing to such other Lender or Eligible Assignee pursuant
to the terms of Section 10.06 and the fee payable pursuant to Section 10.06
shall be payable by such Assignee Lender and pursuant to the corresponding
sections of the Five-Year Credit Agreement.
(f) On the date that would have been the Revolving Termination Date had the
Commitments not been extended pursuant to the terms of this Section, the
Syndicated Loans of any Non-Consenting Lender that were not purchased pursuant
to clause (e) will
21
<PAGE> 27
mature and be due and payable on the then scheduled Revolving Termination Date,
and the Commitment of such Non-Consenting Lender will thereupon terminate.
(g) The Pro Rata Shares of the remaining Lenders which have consented to an
extension of their Commitments hereunder shall be adjusted accordingly by the
Administrative Agent, based on such Lenders' pro rata share of the remaining
Commitments.
Notwithstanding anything to the contrary contained in this Section, the
Revolving Termination Date of those Lenders consenting to such an extension
shall not be extended for an additional 364-day period unless Lenders whose Pro
Rata Shares equal or exceed 75% (after giving effect to the operation of clause
(e)), agree to such an extension.
ARTICLE III.
GENERAL LOAN TERMS
SECTION 3.01. FUNDING NOTICES.
(a) Whenever Intermet desires to obtain a Syndicated Loan with respect to
the Commitments (other than one resulting from a conversion or continuation
pursuant to Section 3.01(b)), it shall give the Administrative Agent a duly
completed Notice of Borrowing in the form of Exhibit D-1 attached hereto, such
Notice of Borrowing to be given prior to 11:00 AM (local time for the
Administrative Agent) at its Payment Office (x) three Business Days prior to the
requested date of such Borrowing in the case of Eurodollar Advances, and (y) on
the date of such Borrowing (which shall be a Business Day) in the case of a
Borrowing consisting of Base Rate Advances. Notices received after 11:00 AM
(local time for the Administrative Agent) shall be deemed received on the next
Business Day. A Notice of Borrowing that does not conform substantially to the
format of Exhibit D-1 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall notify Intermet of such rejection
by telecopy not later than 12:00 noon (Atlanta, Georgia time) on the date of
receipt. Each Notice of Borrowing shall be irrevocable and shall specify the
aggregate principal amount of the Borrowing, the date of Borrowing (which shall
be a Business Day), and whether the Borrowing is to consist of Base Rate
Advances or Eurodollar Advances and (in the case of Eurodollar Advances) the
Interest Period to be applicable thereto.
(b) Whenever Intermet desires to convert all or a portion of an outstanding
Borrowing, which Borrowing consists of Base Rate Advances or Eurodollar
Advances, into one or more Borrowings consisting of Advances of another Type, or
to continue outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, it shall give the Administrative Agent a duly completed Notice
of Conversion/Continuation in the form of Exhibit D-2 attached hereto, such
Notice of Conversion/Continuation to be given at least three Business Days prior
to each such Borrowing to be converted into or continued as Eurodollar
22
<PAGE> 28
Advances. Such Notice of Conversion/Continuation shall be given prior to 11:00
AM (local time for the Administrative Agent) on the date specified at the
Payment Office of the Administrative Agent. Notices received after 11:00 AM
(local time for the Administrative Agent) shall be deemed received on the next
Business Day. A Notice of Conversion/Continuation that does not conform
substantially to the format of Exhibit D-2 may be rejected in the Administrative
Agent's sole discretion, and the Administrative Agent shall notify Intermet of
such rejection by telecopy not later than 12:00 noon (Atlanta, Georgia time) on
the date of receipt. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify the aggregate principal amount of the Advances to
be converted or continued, the date of such conversion or continuation, whether
the Advances are being converted into or continued Eurodollar Advances and, if
so, the Interest Period applicable thereto. If, upon the expiration of any
Interest Period in respect of any Borrowing, Intermet shall have failed to
deliver the Notice of Conversion/Continuation, Intermet shall be deemed to have
elected to convert or continue such Borrowing to a Borrowing consisting of Base
Rate Advances. So long as any Executive Officer of Intermet has knowledge that
any Default or Event of Default shall have occurred and be continuing, no
Borrowing may be converted into or continued as (upon expiration of the current
Interest Period) Eurodollar Advances unless the Administrative Agent and each of
the Lenders shall have otherwise consented in writing. No conversion of any
Borrowing of Eurodollar Advances shall be permitted except on the last day of
the Interest Period in respect thereof.
(c) Without in any way limiting Intermet's obligation to confirm in writing
any telephonic notice, the Administrative Agent may act without liability upon
the basis of telephonic notice believed by the Administrative Agent in good
faith to be from Intermet prior to receipt of written confirmation. In each such
case, Intermet hereby waives the right to dispute the Administrative Agent's
record of the terms of such telephonic notice.
(d) The Administrative Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile transmission
of the matters covered by the notices given to the Administrative Agent pursuant
to this Section 3.01 with respect to the Commitments.
SECTION 3.02. DISBURSEMENT OF FUNDS.
(a) No later than 2:00 PM (local time for the Administrative Agent) on the
date of each Syndicated Loan pursuant to the Commitments (other than one
resulting from a conversion or continuation pursuant to Section 3.01(b)), each
Lender will make available its Pro Rata Share of such Syndicated Loan in
immediately available funds at the Payment Office of the Administrative Agent.
The Administrative Agent will make available to Intermet the aggregate of the
amounts (if any) so made available by the Lenders to the Administrative Agent in
a timely manner by crediting such amounts to Intermet's demand deposit account
maintained with the Administrative Agent or at Intermet's option, effecting a
wire transfer of such amounts to an account specified by Intermet, by the close
of business on such Business Day. In the event that the Lenders do not make such
amounts available to the Administrative
23
<PAGE> 29
Agent by the time prescribed above, but such amount is received later that day,
such amount may be credited to Intermet in the manner described in the preceding
sentence on the next Business Day (with interest on such amount to begin
accruing hereunder on such next Business Day).
(b) [Reserved].
(c) Unless the Administrative Agent shall have been notified by any Lender
prior to the date of a Borrowing (or, with respect to a Borrowing consisting of
Base Rate Advances, prior to 12:00 Noon on the date of such Borrowing) that such
Lender does not intend to make available to the Administrative Agent such
Lender's portion of the Borrowing to be made on such date, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date and the Administrative Agent may make
available to Intermet a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender on the
date of Borrowing, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest at the
Federal Funds Rate. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify Intermet, and Intermet shall immediately pay such
corresponding amount to the Administrative Agent together with interest at the
rate specified for the Borrowing. Nothing in this subsection shall be deemed to
relieve any Lender from its obligation to fund its Commitment hereunder or to
prejudice any rights which Intermet may have against any Lender as a result of
any default by such Lender hereunder.
(d) All Syndicated Loans under the Commitments shall be loaned by the
Lenders on the basis of their Pro Rata Share of the Commitments. No Lender shall
be responsible for any default by any other Lender in its obligations hereunder,
and each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Commitments
hereunder.
SECTION 3.03. INTEREST.
(a) Intermet agrees to pay interest in respect of all unpaid principal
amounts of Loans from the respective dates such principal amounts were advanced
to maturity (whether by acceleration, notice of prepayment or otherwise) at
rates per annum equal to the applicable rates indicated below:
(i) For Base Rate Advances--The relevant Base Rate in effect from time
to time plus the Base Rate Margin; or
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate plus the
Applicable Margin.
24
<PAGE> 30
(b) Overdue principal and, to the extent not prohibited by applicable law,
overdue interest, in respect of the Loans, and all other overdue amounts owing
hereunder, shall bear interest from each date that such amounts are overdue:
(i) in the case of overdue principal and interest with respect to all
Loans outstanding as Eurodollar Advances, at the rate otherwise applicable
for the then-current Interest Period plus an additional two percent (2.0%)
per annum; thereafter at the rate in effect for Base Rate Advances plus an
additional two percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest with respect to all
other Loans outstanding as Base Rate Advances, and all other Obligations
hereunder (other than Loans), at a rate in effect for Base Rate Advances
plus an additional two percent (2.0%) per annum;
(c) Interest on each Loan shall accrue from and including the date of such
Loan to but excluding the date of any repayment thereof; provided that, if a
Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all Base Rate Advances shall be payable monthly in arrears on
the last calendar day of each calendar month. Interest on all outstanding
Eurodollar Advances shall be payable on the last day of each Interest Period
applicable thereto, and, in the case of Interest Periods in excess of three
months (in the case of Eurodollar Advances), on each day which occurs every 3
months, as the case may be, after the initial date of such Interest Period.
Interest on all Loans shall be payable on any conversion of any Advances
comprising such Loans into Advances of another type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of prepayment or
otherwise) and, after maturity, on demand; and
(d) The Administrative Agent, upon determining the Adjusted LIBO Rate for
any Interest Period, shall promptly notify by telephone (confirmed in writing)
or in writing Intermet and the other Lenders. Any such determination shall,
absent manifest error, be final, conclusive and binding for all purposes.
SECTION 3.04. INTEREST PERIODS.
(a) In connection with the making or continuation of, or conversion into,
each Borrowing of Eurodollar Advances, Intermet shall select an Interest Period
to be applicable to such Eurodollar Advances, which Interest Period shall be
either a 1, 2, 3 or 6 month period.
(b) Notwithstanding paragraph (a) above:
(i) The initial Interest Period for any Borrowing of Eurodollar
Advances shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing consisting of Advances of another Type)
and each
25
<PAGE> 31
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period in respect of
Eurodollar Advances would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall, subject to part
(iv) below, expire on the last Business Day of such calendar month; and
(iv) No Interest Period with respect to the Syndicated Loans shall
extend beyond the Revolving Termination Date and no Interest Period with
respect to the Term Loans shall extend beyond the Maturity Date.
SECTION 3.05. FEES.
(a) Intermet shall pay to the Administrative Agent, for the account of and
distribution of the respective Pro Rata Share to each Lender (subject to the
last sentence hereof), a commitment fee (the "Commitment Fee") for the period
commencing on the Closing Date to and including the Revolving Termination Date,
computed at a rate equal to the Applicable Commitment Fee Percentage per annum
multiplied by the average daily unused portion of the Commitments of the
Lenders, such fee being payable quarterly in arrears on or before the date which
is five days following the last day of each fiscal quarter of Intermet and on
the Revolving Termination Date.
(b) Intermet shall pay to the Administrative Agent, for its own account,
such fees for its administrative services in the amounts and on the dates set
forth in the Fee Letter.
SECTION 3.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) Intermet may, at its option, prepay Borrowings consisting of Base Rate
Advances at any time in whole, or from time to time in part, in amounts
aggregating $100,000 or any greater integral multiple of $100,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Those Borrowings consisting of Eurodollar Advances
may be prepaid, at Intermet's option, in whole, or from time to time in part, in
amounts aggregating $1,000,000 or any greater integral multiple of $100,000, by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments
26
<PAGE> 32
pursuant to Section 3.12 if such prepayment is made on a date other than the
last day of an Interest Period applicable thereto. Each such optional prepayment
shall be applied in accordance with Section 3.06(c) below.
(b) Intermet shall give written notice (or telephonic notice confirmed in
writing) to the Administrative Agent of any intended prepayment of the Loans (i)
prior to 12:00 noon (local time for the Administrative Agent), on the date of
any prepayment of Base Rate Advances and (ii) not less than three Business Days
prior to any prepayment of Eurodollar Advances. Such notice, once given, shall
be irrevocable. Upon receipt of such notice of prepayment, the Administrative
Agent shall promptly notify each Lender of the contents of such notice and of
such Lender's share of such prepayment.
(c) Intermet, when providing notice of prepayment pursuant to Section
3.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid provided that each prepayment made pursuant
to a single Borrowing shall be applied pro rata among the Advances comprising
such Borrowing. In the absence of a designation by Intermet, the Administrative
Agent shall, subject to the foregoing, make such designation in its sole
discretion. All voluntary prepayments shall be applied to the payment of
interest on the Borrowings prepaid before application to principal.
SECTION 3.07. PAYMENTS, ETC.
(a) Except as otherwise specifically provided herein, all payments under
this Agreement and the other Credit Documents shall be made without defense,
set-off or counterclaim to the Administrative Agent not later than 1:00 PM
(local time for the Administrative Agent) on the date when due and shall be made
in Dollars in immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of and without
set-off, deduction or withholding for any Taxes in respect of this Agreement,
the Notes or other Credit Documents, or any payments of principal, interest,
fees or other amounts payable hereunder or thereunder (but excluding, except as
provided in paragraph (iii) hereof, any Taxes imposed on the overall net income
of any Lender pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Taxes are so levied or imposed, Intermet agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other Credit
Documents, after withholding or deduction for or on account of any such Taxes
(including additional sums payable under this Section 3.07), will not be less
than the full amount provided for herein had no such deduction or withholding
been required, (B) to make such withholding or deduction and (C) to pay the full
amount deducted to the relevant authority in accordance with applicable law.
Intermet will furnish to the Administrative Agent and each Lender, within 30
days after the date the payment of any Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by Intermet. Intermet
will indemnify and hold
27
<PAGE> 33
harmless the Administrative Agent and each Lender and reimburse the
Administrative Agent and each Lender upon written request for the amount of any
Taxes so levied or imposed and paid by the Administrative Agent or Lender and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or illegally
asserted. A certificate as to the amount of such payment by such Lender or the
Administrative Agent, absent manifest error, shall be final, conclusive and
binding for all purposes.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to Intermet and the
Administrative Agent, prior to the time it becomes a Lender hereunder, two
copies of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 or any successor forms thereto (wherein such Lender
claims entitlement to complete exemption from or reduced rate of U.S. Federal
withholding tax on interest paid by Intermet hereunder) and to provide to
Intermet and the Administrative Agent a new Form 4224 or Form 1001 or any
successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form; provided, however, that no Lender shall be required
to furnish a form under this paragraph (ii) if it is not entitled to claim an
exemption from or a reduced rate of withholding under applicable law. A Lender
that is not entitled to claim an exemption from or a reduced rate of withholding
under applicable law, promptly upon written request of Intermet, shall so inform
Intermet in writing.
(iii) Intermet shall also reimburse the Administrative Agent and
each Lender, upon written request, for any Taxes imposed (including, without
limitation, Taxes imposed on the overall net income of the Administrative Agent
or Lender or its applicable Lending Office pursuant to the laws of the
jurisdiction in which the principal executive office or the applicable Lending
Office of the Administrative Agent or Lender is located) as the Administrative
Agent or Lender shall determine are payable by the Administrative Agent or
Lender in respect of amounts paid by or on behalf of Intermet to or on behalf of
the Administrative Agent or Lender pursuant to paragraph (i) hereof.
(c) Subject to Section 3.04(b)(ii), whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed), except that
interest on Base Rate Advances shall be computed on the basis of a year of
365/366 days for the actual number of days. Interest on Base Rate Advances shall
be calculated based on the Base Rate from and including the date of
28
<PAGE> 34
such Loan to but excluding the date of the repayment or conversion thereof.
Interest on Eurodollar Advances shall be calculated as to each Interest Period
from and including the first day thereof to but excluding the last day thereof.
Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes.
(e) Payment by Intermet to the Administrative Agent in accordance with the
terms of this Agreement shall, as to Intermet, constitute payment to the Lenders
under this Agreement.
SECTION 3.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Administrative Agent shall have determined (which determination shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all parties) that on any date for determining the Adjusted LIBO Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Administrative Agent's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted LIBO Rate then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to Intermet and to the
Lenders, of such determination and a summary of the basis for such
determination. Until the Administrative Agent notifies Intermet that the
circumstances giving rise to the suspension described herein no longer exist,
the obligations of the Lenders to make or permit portions of the Loans to remain
outstanding past the last day of the then current Interest Periods as Eurodollar
Advances shall be suspended, and such affected Advances shall bear interest at
the Base Rate (or at such other rate of interest per annum as Intermet and each
of the Administrative Agent and the Lenders shall have agreed to in writing).
SECTION 3.09. ILLEGALITY.
(a) In the event that any Lender shall have determined (which determination
shall be made in good faith and, absent manifest error, shall be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Intermet
and to the Administrative Agent of such determination and a summary of the basis
for such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) Upon the giving of the notice to Intermet referred to in subsection (a)
above, (i) Intermet's right to request and such Lender's obligation to make
Eurodollar Advances shall be immediately suspended, and such Lender shall make
an Advance as part of the requested Borrowing of Eurodollar Advances, bearing
interest at the Base Rate plus the
29
<PAGE> 35
applicable Base Rate Margin (or at such other rate of interest per annum as
Intermet and each of the Administrative Agent and such Lender shall have agreed
to in writing), which Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing, and (ii) if the affected Eurodollar Advance
or Advances are then outstanding, each such Advance shall be automatically
converted into a Base Rate Advance, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 3.09(b).
SECTION 3.10. INCREASED COSTS.
(a) (i) If, by reason of (x) after the date hereof, the introduction of or
any change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally (whether or not having
the force of law):
(1) any Lender (or its applicable Lending Office) shall be subject
to any tax, duty or other charge with respect to its Eurodollar
Advances or its obligation to make Eurodollar Advances, or the basis of
taxation of payments to any Lender of the principal of or interest on
its Eurodollar Advances or its obligation to make Eurodollar Advances
shall have changed (except for changes in the tax on the overall net
income of such Lender or its applicable Lending Office imposed by the
jurisdiction in which such Lender's principal executive office or
applicable Lending Office is located); or
(2) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender's applicable Lending Office shall
be imposed or deemed applicable or any other condition affecting its
Eurodollar Advances or its obligation to make Eurodollar Advances shall
be imposed on any Lender or its applicable Lending Office or the London
interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate), or there shall be a reduction in the amount received or
receivable by such Lender or its applicable Lending Office; or
(ii) in the event that any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy not currently in effect or fully applicable as
of the Closing Date, or any change therein or in the interpretation or
application thereof after the Closing Date, or compliance by
30
<PAGE> 36
such Lender with any request or directive regarding capital adequacy not
currently in effect or fully applicable as of the Closing Date (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body having
jurisdiction, does or shall have the effect of reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such law, treaty, rule,
regulation, guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material,
then, in the case of (i) or (ii) above, upon written notice from and demand by
such Lender on Intermet (with a copy of such notice and demand to the
Administrative Agent), Intermet shall from time to time (subject, in the case of
certain Taxes, to the applicable provisions of Section 3.07(b)) pay to the
Administrative Agent for the account of such Lender within five Business Days
after the date of such notice and demand, additional amounts sufficient to
indemnify such Lender against such increased cost or reduced yield. A
certificate as to the amount of such increased cost or reduced yield submitted
to Intermet and the Administrative Agent by such Lender in good faith and
accompanied by a statement prepared by such Lender describing in reasonable
detail the basis for and calculation of such increased cost, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Administrative Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 3.10(a)
or any other circumstances beyond such Lender's reasonable control arising after
the date of this Agreement affecting such Lender or the London interbank market
or such Lender's position in such markets, the Adjusted LIBO Rate as determined
by the Administrative Agent, will not adequately and fairly reflect the cost to
such Lender of funding its Eurodollar Advances, then, and in any such event:
(i) the Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to Intermet and to the other Lenders of such advice;
(ii) Intermet's right to request and such Lender's obligation to make
or permit portions of the Loans to remain outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make an Advance as part of the requested
Borrowing of Eurodollar Advances, as the case may be, bearing interest at
the Base Rate plus the applicable Base Rate Margin (or at such other rate
of interest per annum as Intermet and each of the Administrative Agent and
such Lender shall have agreed to in writing), which Base Rate Advance
shall, for all other purposes, be considered part of such Borrowing.
SECTION 3.11. LENDING OFFICES.
31
<PAGE> 37
(a) Each Lender agrees that, if requested by Intermet, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08, 3.09 or 3.10 to reduce the liability of Intermet or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender, which determination if made in good faith,
shall be conclusive and binding on all parties hereto. Nothing in this Section
3.11 shall affect or postpone any of the obligations of Intermet or any right of
any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) issues a public announcement with respect to the closing
of its lending offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be required to be
made by Intermet thereafter pursuant to Section 3.07(b), such Lender shall use
reasonable efforts to furnish Intermet notice thereof as soon as practicable
thereafter; provided, however, that no delay or failure to furnish such notice
shall in any event release or discharge Intermet from its obligations to such
Lender pursuant to Section 3.07(b) or otherwise result in any liability of such
Lender.
SECTION 3.12. FUNDING LOSSES. Intermet shall compensate each Lender, upon
its written request to Intermet (which request shall set forth the basis for
requesting such amounts in reasonable detail and which request shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances, in either case to
the extent not recovered by such Lender in connection with the re-employment of
such funds and including loss of anticipated profits), which the Lender may
sustain: (i) if for any reason (other than a default by such Lender) a borrowing
of, or conversion to or continuation of, Eurodollar Advances to Intermet does
not occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and conversions pursuant to Section 3.09(b)) of
any Eurodollar Advances by Intermet occurs on a date which is not the last day
of an Interest Period applicable thereto, or (iii) if, for any reason, Intermet
defaults in its obligation to repay its Eurodollar Advances when required by the
terms of this Agreement.
SECTION 3.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR ADVANCES.
Calculation of all amounts payable to a Lender under this Article III shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar Advances from an
offshore office of that
32
<PAGE> 38
Lender to a domestic office of that Lender in the United States of America;
provided however, that each Lender may fund each of its Eurodollar Advances in
any manner it sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Article III.
SECTION 3.14. APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments in respect of Loans and payments in respect of Commitment Fees shall be
apportioned among all outstanding Commitments and Loans to which such payments
relate, proportionately to the Lenders' respective pro rata portions of such
Commitments and outstanding Loans. The Administrative Agent shall promptly
distribute to each Lender at its Payment Office set forth beside its name on
Schedule 10.01 or such other address as any Lender may request its share of all
such payments received by the Administrative Agent.
SECTION 3.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its pro rata portion of
payments or reductions on account of such obligations obtained by all the
Lenders, such Lender shall forthwith (i) notify each of the other Lenders and
Administrative Agent of such receipt, and (ii) purchase from the other Lenders
such participations in the affected obligations as shall be necessary to cause
such purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them, provided that if
all or any portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender obligated to
return such funds is required to pay interest on such funds. Intermet agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 3.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Intermet in
the amount of such participation.
SECTION 3.16. BENEFITS TO GUARANTORS. In consideration of the execution and
delivery by the Guarantors of the Guaranty Agreement, Intermet agrees, subject
to the terms hereof, to make extensions of credit hereunder available to the
Guarantors.
SECTION 3.17. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.07 no later
than 90 days after the earlier of (i) the date on which such Lender or
Administrative Agent makes payment of such Taxes, and (ii) the date on which the
relevant taxing authority or other governmental authority makes written demand
upon such Lender or Administrative Agent for payment of such Taxes.
33
<PAGE> 39
(b) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.12 no later
than 90 days after the event giving rise to the claim for indemnification or
compensation occurs.
(c) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.10 no later
than 90 days after such Lender or Administrative Agent receives actual notice or
obtains actual knowledge of the promulgation of a law, rule, order or
interpretation or occurrence of another event giving rise to a claim pursuant to
such sections.
(d) In the event that the Lenders or Administrative Agent fail to give
Intermet notice within the time limitations prescribed in (a) or (b) above,
Intermet shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Administrative Agent fails to
give Intermet notice within the time limitation prescribed in (c) above,
Intermet shall not have any obligation to pay any amount with respect to claims
accruing prior to the ninetieth day preceding such written demand.
SECTION 3.18. [RESERVED].
SECTION 3.19. FAILURE TO MAINTAIN MINIMUM REQUIRED RATING. If any Lender
has either (a) had its long-term deposit rating reduced below the Minimum
Required Rating by either Rating Agency, or (b) in the case of a Lender that is
a party to this Agreement on the Closing Date and has, on such date, a long-term
deposit rating from the Rating Agencies below the applicable Minimum Required
Rating, such Lender has received from either Rating Agency a reduction in its
long-term deposit rating from the rating in effect on the Closing Date, such
Lender, will, upon the request of the Administrative Agent, assign at par its
Commitment and all of its right, title and interest in and to any Loans
outstanding thereunder, to an Eligible Assignee designated by the Administrative
Agent and acceptable to Intermet in accordance with the terms of this Agreement.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Intermet hereunder is
subject to the satisfaction of the following conditions:
SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL LOANS. On the Closing Date,
all obligations of Intermet hereunder incurred prior to such date (including,
without limitation, Intermet's obligations to reimburse the reasonable fees and
expenses of counsel to the Administrative Agent and any fees and expenses
payable to the Administrative Agent, the Lenders and their Affiliates pursuant
to the Fee Letter or as otherwise previously agreed with Intermet), shall have
been paid in full, and the Administrative Agent shall have received the
34
<PAGE> 40
following, in form and substance reasonably satisfactory in all respects to the
Administrative Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly executed Revolving Credit Notes evidencing the Commitments;
(c) the duly executed Guaranty Agreement;
(d) certificate of Intermet in substantially the form of Exhibit F attached
hereto and appropriately completed:
(e) certificates of the Secretary or Assistant Secretary of each of the
Credit Parties (or, in the case of any Foreign Subsidiary, a comparable company
officer) attaching and certifying copies of the resolutions of the boards of
directors (or, in the case of any Foreign Subsidiary, the comparable governing
body of such entity) of the Credit Parties, authorizing as applicable the
execution, delivery and performance of the Credit Documents;
(f) certificates of the Secretary or an Assistant Secretary of each of the
Credit Parties (or, in the case of any Foreign Subsidiary, a comparable company
officer) certifying (i) the name, title and true signature of each officer of
such entities executing the Credit Documents, and (ii) the bylaws or comparable
governing documents of such entities;
(g) certified copies of the certificate or articles of incorporation of
each Credit Party (or comparable organizational document) certified by the
Secretary of State or the Secretary or Assistant Secretary of such Credit Party,
together with certificates of good standing or existence, as may be available
from the Secretary of State (or comparable office or registry for each Foreign
Subsidiary) of the jurisdiction of incorporation or organization of such Credit
Party;
(h) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
or by any material Contractual Obligation of the Credit Parties, in connection
with the execution, delivery, performance, validity and enforceability of the
Credit Documents and the other documents to be executed and delivered hereunder,
and such consents, authorizations, filings and orders shall be in full force and
effect and all applicable waiting periods shall have expired;
(i) an internally prepared draft of Intermet's consolidated financial
statements for the fiscal period ending June 30, 1999, certified by the chief
financial officer of Intermet;
(j) evidence that the Prior Credit Agreement has been terminated and all
amounts repaid thereunder;
35
<PAGE> 41
(k) certificates, reports and other information as the Administrative Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from matters relating to employees of the Consolidated Companies, including
employee relations, collective bargaining agreements, Plans, Foreign Plans, and
other compensation and employee benefit plans;
(l) certificates, reports, environmental audits and investigations, and
other information as the Administrative Agent may reasonably request from any
Consolidated Company in order to satisfy the Lenders as to the absence of any
material liabilities or obligations arising from environmental and employee
health and safety exposures to which the Consolidated Companies may be subject,
and the plans of the Consolidated Companies with respect thereto;
(m) certificates, reports and other information as the Administrative Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated Companies;
(n) a summary, set forth in format and detail reasonably acceptable to the
Administrative Agent, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies;
(o) (i) the favorable opinion of Dickinson Wright PLLC, counsel to the
Credit Parties, substantially in the form of Exhibit G-1, addressed to the
Administrative Agent and each of the Lenders, (ii) the favorable opinion of
Kilpatrick Stockton LLP, special Georgia counsel to the Credit Parties,
substantially in the form of Exhibit G-2, addressed to the Administrative Agent
and each of the Lenders and (iii) the favorable opinion of Mayer, Brown & Platt,
special New York counsel to the Administrative Agent, substantially in the form
of Exhibit G-3, addressed to the Administrative Agent and each of the Lenders;
(p) all corporate proceedings and all other legal matters in connection
with the authorization, legality, validity and enforceability of the Credit
Documents shall be reasonably satisfactory in form and substance to the Required
Lenders; and
(q) the duly executed counterparts of the Five-Year Credit Agreement and
the satisfaction of all conditions to effectiveness thereunder.
SECTION 4.02. CONDITIONS TO ALL LOANS. At the time of the making of all
Loans (before as well as after giving effect to such Loans and to the proposed
use of the proceeds thereof), the following conditions shall have been satisfied
or shall exist:
(a) there shall exist no Default or Event of Default;
36
<PAGE> 42
(b) all representations and warranties by Intermet contained herein shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Loans;
(c) since the date of the most recent financial statements of the
Consolidated Companies described in Section 5.14, there shall have been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect (whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 6.07);
(d) there shall be no action or proceeding instituted or pending before any
court or other governmental authority or, to the knowledge of Intermet,
threatened (i) which reasonably could be expected to have a Materially Adverse
Effect, or (ii) seeking to prohibit or restrict one or more Credit Party's
ownership or operation of any portion of its business or assets, or to compel
one or more Credit Party to dispose of or hold separate all or any portion of
its businesses or assets, where such portion or portions of such business(es) or
assets, as the case may be, constitute a material portion of the total
businesses or assets of the Consolidated Companies; and
(e) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the Administrative Agent or any
Lender in a violation of, any law, rule, injunction, or regulation, or
determination of any court of law or other governmental authority applicable to
Intermet.
Each request for a Borrowing and the acceptance by Intermet of the proceeds
thereof shall constitute a representation and warranty by Intermet, as of the
date of the Loans comprising such Borrowing, that the applicable conditions
specified in Sections 4.01 and 4.02 have been satisfied or waived in writing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Intermet (as to itself and all other Consolidated Companies) represents and
warrants as follows:
SECTION 5.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Except as set forth
on Schedule 5.01(a), each of the Consolidated Companies (other than the German
Subsidiaries set forth in the next sentence) is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Columbus Neunkirchen Foundry GmbH, Intermet Machining
GmbH and Intermet Holding Deutschland GmbH is a German company with limited
liability duly organized, validly
37
<PAGE> 43
existing and in good standing under the laws of Germany. Each of the
Consolidated Companies (i) has the corporate power and authority and the legal
right to own and operate its property and to conduct its business, (ii) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership of property or the conduct of its business
requires such qualification, and (iii) is in compliance with all Requirements of
Law, except where the failure to duly qualify or to comply with applicable
Requirements of Law would not have a Materially Adverse Effect. The jurisdiction
of incorporation or organization, and the ownership of all issued and
outstanding capital stock and other equity interests, for each Subsidiary as of
the date of this Agreement is accurately described on Schedule 5.01.
SECTION 5.02. CORPORATE POWER; AUTHORIZATION. Each of the Credit Parties
has the corporate power and authority to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of such Credit Documents.
Except for the amendment required by Section 6.11, no consent or authorization
of, or filing with, any Person (including, without limitation, any governmental
authority), is required in connection with the execution, delivery or
performance by any Credit Party, or the validity or enforceability against any
Credit Party, of the Credit Documents, other than such consents, authorizations
or filings which have been made or obtained (other than routine filings with the
Securities and Exchange Commission).
SECTION 5.03. ENFORCEABLE OBLIGATIONS. This Agreement has been duly
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties, and this Agreement constitutes, and
each other Credit Document when executed and delivered will constitute, legal,
valid and binding obligations of the Credit Parties, respectively, enforceable
against the Credit Parties in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
SECTION 5.04. NO LEGAL BAR. Except for the amendment required by Section
6.11, the execution, delivery and performance by the Credit Parties of the
Credit Documents will not violate any Requirement of Law or cause a breach or
default under any of their respective Contractual Obligations.
SECTION 5.05. NO MATERIAL LITIGATION OR INVESTIGATIONS. Except as set forth
on Schedule 5.05 or in any notice furnished to the Lenders pursuant to Section
6.07(g) at or prior to the respective times the representations and warranties
set forth in this Section 5.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of
Intermet, threatened by or against any of the Consolidated Companies, or against
any of their respective properties or revenues, existing or future (a) with
respect to any Credit Document, or any of the transactions contemplated hereby
or thereby, or (b) which, if adversely determined, would reasonably be expected
to have a Materially Adverse Effect.
38
<PAGE> 44
SECTION 5.06. INVESTMENT COMPANY ACT, ETC. None of the Consolidated
Companies is an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Consolidated Companies is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
SECTION 5.07. MARGIN REGULATIONS. No part of the proceeds of any of the
Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 5.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth on Schedule 5.08 attached hereto, the Consolidated
Companies have received no notices of claims or potential liability under, and
are in compliance with, all applicable Environmental Laws, where such claims and
liabilities under, and failures to comply with, such statutes, regulations,
rules, ordinances, laws or licenses, would reasonably be expected to have a
Materially Adverse Effect.
(b) Except as set forth on Schedule 5.08 attached hereto, none of the
Consolidated Companies has received any notice of violation, or notice of any
action, either judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or alleged violation
of any Environmental Law, including, without limitation, any notice of any
actual or alleged spill, leak, or other release of any Hazardous Substance,
waste or hazardous waste by any Consolidated Company or its employees or agents,
or as to the existence of any contamination on any properties owned by any
Consolidated Company, where any such violation, spill, leak, release or
contamination would reasonably be expected to have a Materially Adverse Effect.
(c) Except as set forth on Schedule 5.08 attached hereto, the Consolidated
Companies have obtained all necessary governmental permits, licenses and
approvals which are material to the operations conducted on their respective
properties, including without limitation, all required material permits,
licenses and approvals for (i) the emission of air pollutants or contaminants,
(ii) the treatment or pretreatment and discharge of waste water or storm water,
(iii) the treatment, storage, disposal or generation of hazardous wastes, (iv)
the withdrawal and usage of ground water or surface water, and (v) the disposal
of solid wastes.
SECTION 5.09. INSURANCE. The Consolidated Companies currently maintain
insurance with respect to their respective properties and businesses, with
financially sound and reputable insurers, having coverages against losses or
damages of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance
39
<PAGE> 45
being in amounts no less than those amounts which are customary for such
companies under similar circumstances. The Consolidated Companies have paid all
material amounts of insurance premiums now due and owing with respect to such
insurance policies and coverages, and such policies and coverages are in full
force and effect.
SECTION 5.10. NO DEFAULT. Except for the amendment required by Section
6.11, none of the Consolidated Companies is in default under or with respect to
any Contractual Obligation in any respect which is having or is reasonably
expected to have a Materially Adverse Effect.
SECTION 5.11. NO BURDENSOME RESTRICTIONS. Except as set forth on Schedule
5.11 or for the amendment required by Section 6.11 or in any notice furnished to
the Lenders pursuant to Section 6.07 at or prior to the respective times the
representations and warranties set forth in this Section 5.11 are made or deemed
to be made hereunder, none of the Consolidated Companies is a party to or bound
by any Contractual Obligation or Requirement of Law which has had or would
reasonably be expected to have a Materially Adverse Effect.
SECTION 5.12. TAXES. Except as set forth on Schedule 5.12, each of the
Consolidated Companies has filed or caused to be filed all declarations, reports
and tax returns which are required to have been filed, and has paid all taxes,
custom duties, levies, charges and similar contributions ("taxes" in this
Section 5.12) shown to be due and payable on said returns or on any assessments
made against it or its properties, and all other taxes, fees or other charges
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Intermet, no claims are being asserted with respect to any such
taxes, fees or other charges.
SECTION 5.13. SUBSIDIARIES. Except as disclosed on Schedule 5.01 or in any
notice given to the Lenders pursuant to Section 6.07 at or prior to the
respective times this representation and warranty is made or deemed to be made
hereunder, Intermet has no Subsidiaries and neither Intermet nor any Subsidiary
is a joint venture partner, partner in any partnership or member of a limited
liability company.
SECTION 5.14. FINANCIAL STATEMENTS. Intermet has furnished to the
Administrative Agent and the Lenders (i) the audited consolidated balance sheet
as of December 31, 1998 of Intermet and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year then ended,
including in each case the related schedules and notes, (ii) the unaudited
balance sheet of Intermet presented on a consolidated basis as at the end of the
second fiscal quarter of 1999, and the related unaudited consolidated statements
of income, shareholders' equity and cash flows presented on a consolidated basis
for the year-to-date period then ended, setting forth in each case in
comparative form the figures for the corresponding quarter of Intermet's
previous fiscal year. The foregoing financial statements fairly present in all
material respects the consolidated
40
<PAGE> 46
financial condition of Intermet as at the dates thereof and results of
operations for such periods in conformity with GAAP consistently applied
(subject, in the case of the quarterly financial statements, to normal year-end
audit adjustments and the absence of certain footnotes). The Consolidated
Companies taken as a whole do not have any material contingent obligations,
contingent liabilities, or material liabilities for known taxes, long-term
leases or unusual forward or long-term commitments not reflected in the
foregoing financial statements or the notes thereto. Since December 31, 1998,
there have been no changes with respect to the Consolidated Companies which has
had or would reasonably be expected to have a Materially Adverse Effect.
SECTION 5.15. ERISA. Except as disclosed on Schedule 5.15 or in any notice
furnished to the Lenders pursuant to Section 6.07 at or prior to the respective
times the representations and warranties set forth in this Section 5.15 are made
or deemed to be made hereunder:
(a) (1) Identification of Plans. (A) None of the Consolidated Companies nor
any of their respective ERISA Affiliates maintains or contributes to, or has
during the past two years maintained or contributed to, any Plan that is subject
to Title IV of ERISA, and (B) none of the Consolidated Companies maintains or
contributes to any Foreign Plan;
(2) Compliance. Each Plan and each Foreign Plan maintained by the
Consolidated Companies have at all times been maintained, by their terms and in
operation, in compliance with all applicable laws, and the Consolidated
Companies are subject to no tax or penalty with respect to any Plan of such
Consolidated Company or any ERISA Affiliate thereof, including without
limitation, any tax or penalty under Title I or Title IV of ERISA or under
Chapter 43 of the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 404, or 419 of the Tax Code, where the failure to
comply with such laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would in the
aggregate have a Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies are subject to no liabilities
(including withdrawal liabilities) with respect to any Plans or Foreign Plans of
such Consolidated Companies or any of their ERISA Affiliates, including without
limitation, any liabilities arising from Titles I or IV of ERISA, other than
obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans or Foreign
Plans, where such liabilities, together with all other liabilities referred to
in this Section 5.15 (taken as a whole), would in the aggregate have a
Materially Adverse Effect;
(4) Funding. The Consolidated Companies and, with respect to any Plan which
is subject to Title IV of ERISA, each of their respective ERISA Affiliates, have
made full and timely payment of all amounts (A) required to be contributed under
the terms of each Plan and applicable law, and (b) required to be paid as
expenses (including PBGC or other premiums) of each Plan, where the failure to
pay such amounts (when taken as a whole, including any penalties attributable to
such amounts) would have a Materially Adverse Effect.
41
<PAGE> 47
No Plan subject to Title IV of ERISA has an "amount of unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA, determined as if such
Plan terminated on any date on which this representation and warranty is deemed
made, in any amount which, together with all other liabilities referred to in
this Section 5.15 (taken as a whole), would have a Materially Adverse Effect if
such amount were then due and payable. The Consolidated Companies are subject to
no liabilities with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this Section 5.15
(taken as a whole), would have a Materially Adverse Effect if such amounts were
then due and payable.
(b) With respect to any Foreign Plan, reasonable reserves have been
established in accordance with prudent business practice or where required by
generally accepted accounting practices in the jurisdiction where the Foreign
Subsidiary maintains its principal place of business or in which the Foreign
Plan is maintained. The aggregate unfunded liabilities, after giving effect to
any reserves for such liabilities, with respect to such Foreign Plans, together
with all other liabilities referred to in this Section 5.15 (taken as a whole),
would not have a Materially Adverse Effect.
SECTION 5.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as set forth on
Schedule 5.16 or in any notice furnished to the Lenders pursuant to Section 6.07
at or prior to the respective times the representations and warranties set forth
in this Section 5.16 are made or deemed to be made hereunder, (i) the
Consolidated Companies have obtained and hold in full force and effect all
material patents, trademarks, service marks, trade names, copyrights, licenses
and other such rights, free from burdensome restrictions, which are necessary
for the operation of their respective businesses as presently conducted, and
(ii) to the best of Intermet's knowledge, no product, process, method, service
or other item presently sold by or employed by any Consolidated Company in
connection with such business infringes any patents, trademark, service mark,
trade name, copyright, license or other right owned by any other person and
there is not presently pending, or to the knowledge of Intermet, threatened, any
claim or litigation against or affecting any Consolidated Company contesting
such Person's right to sell or use any such product, process, method, substance
or other item where the result of such failure to obtain and hold such benefits
or such infringement would have a Materially Adverse Effect.
SECTION 5.17. OWNERSHIP OF PROPERTY. Except as set forth on Schedule 5.17,
(i) each Consolidated Company that is not a Foreign Subsidiary has good and
marketable fee simple title to or a valid leasehold interest in all of its real
property and good title to, or a valid leasehold interest in, all of its other
property and (ii) each Foreign Subsidiary owns or has a valid leasehold interest
in all of its real property and owns or has a valid leasehold interest in, all
of its other properties, in the case of clauses (i) and (ii) as such properties
are reflected in the consolidated balance sheet of the Consolidated Companies as
of December 31, 1998 referred to in Section 5.14, other than properties disposed
of in the ordinary course of business since such date or as otherwise permitted
by the terms of this Agreement, subject to no Lien or title defect of any kind,
except Liens permitted hereby and title defects not
42
<PAGE> 48
constituting material impairments in the intended use for such properties. The
Consolidated Companies enjoy peaceful and undisturbed possession under all of
their respective leases.
SECTION 5.18. FINANCIAL CONDITION. On the Closing Date and after giving
effect to the transactions contemplated by this Agreement and the other Credit
Documents, including without limitation, the use of the proceeds of the Loans as
provided in Section 2.01, each of the Credit Parties is Solvent.
SECTION 5.19. LABOR MATTERS. Since December 31, 1998, the Consolidated
Companies have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of
Intermet, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company which if they occurred, would
reasonably be expected to have a Materially Adverse Effect. Since December 31,
1998, the hours worked and payment made to employees of the Consolidated
Companies have not been in violation in any material respect of the Fair Labor
Standards Act (in the case of Consolidated Companies that are not Foreign
Subsidiaries) or any other applicable law dealing with such matters. All
payments due from the Consolidated Companies, or for which any claim may be made
against the Consolidated Companies, on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as liabilities on
the books of the Consolidated Companies in all jurisdictions where the failure
to pay or accrue such liabilities would reasonably be expected to have a
Materially Adverse Effect.
SECTION 5.20. PAYMENT OR DIVIDEND RESTRICTIONS. Except as set forth in
Section 7.05 or described on Schedule 5.20 or as expressly permitted by the
terms of this Agreement, none of the Consolidated Companies is party to or
subject to any agreement or understanding restricting or limiting the payment of
any dividends or other distributions by any such Consolidated Company.
SECTION 5.21. DISCLOSURE. None of the factual information heretofore or
contemporaneously furnished in writing to any Lender or Agent by or on behalf of
any Credit Party in connection with any Credit Document or any transaction
contemplated hereby contains any untrue statement of a material fact, or omits
to state any material fact necessary to make any information not misleading, and
no other factual information hereafter furnished in connection with any Credit
Document by or on behalf of any Credit Party to any Lender or Agent will contain
any untrue statement of a material fact or will omit to state any material fact
necessary to make any information not misleading on the date as of which such
information is dated or certified. Except as may be set forth herein (including
the Schedules attached hereto) or in any notice furnished to the Lenders
pursuant to Section 6.07 at or prior to the respective times the representations
and warranties set forth in this Section 5.21 are made or deemed to be made
hereunder, there is no fact known to Intermet which is having, or is reasonably
expected to have, a Materially Adverse Effect.
43
<PAGE> 49
SECTION 5.22. YEAR 2000 COMPLIANCE. The Consolidated Companies have
developed and budgeted for a comprehensive program to address the "Year 2000
problem" (that is, the inability of computers, as well as embedded microchips in
non-computing devices, to perform properly date-sensitive functions with respect
to certain dates prior to and after December 31, 1999). The Consolidated
Companies have implemented that program substantially in accordance with its
timetable and budget and will substantially avoid the Year 2000 problem as to
all computers, as well as embedded microchips in non-computing devices, that are
material to the Consolidated Companies' business, properties or operations. The
Consolidated Companies have developed feasible contingency plans adequately to
ensure uninterrupted and unimpaired business operation in the event of failure
of their own or a third party's systems or equipment due to the Year 2000
problem, including those of vendors, customers, and suppliers, as well as a
general failure of or interruption in its communications and delivery
infrastructure.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or other
Obligation shall remain unpaid, Intermet will (unless waived in writing by the
Required Lenders):
SECTION 6.01. CORPORATE EXISTENCE, ETC. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence
(except for mergers, divestitures and consolidations permitted pursuant to
Section 7.03), its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, service marks and other intellectual property rights, necessary or
desirable in the normal conduct of its business, and its qualification to do
business as a foreign corporation in all jurisdictions where it conducts
business or other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a Materially
Adverse Effect.
SECTION 6.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
SECTION 6.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and cause each of its
Subsidiaries to pay, (i) all taxes, duties, levies, assessments and governmental
charges imposed upon it or upon its property, and (ii) all claims (including,
without limitation, claims for labor, materials, supplies or services) which
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith
44
<PAGE> 50
by appropriate proceedings and adequate reserves are maintained in its books
with respect thereto in accordance with GAAP.
SECTION 6.04. KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account in accordance with GAAP, containing
complete and accurate entries of all their respective financial and business
transactions.
SECTION 6.05. VISITATION, INSPECTION, ETC. Permit, and cause each of its
Subsidiaries to permit, any representative of the Administrative Agent or any
Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable times
and as often as the Administrative Agent or such Lender may reasonably request
after reasonable prior notice to Intermet; provided, however, that at any time
following the occurrence and during the continuance of a Default or an Event of
Default, no prior notice to Intermet shall be required.
SECTION 6.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially sound and reputable
insurers, insurance with respect to its properties and business, and the
properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts as are
customary for such companies under similar circumstances; provided, however,
that in any event Intermet shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not materially less
favorable to any Consolidated Company as in effect on the date of this
Agreement, except where the costs of maintaining such insurance would, in the
judgment of both Intermet and the Administrative Agent, be excessive.
(b) Cause, and cause each of the Consolidated Companies to cause, all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, settlements and improvements thereof, all as in the judgment of
Intermet may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 6.06 shall prevent Intermet from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of Intermet, desirable in the conduct of its
business or the business of any Consolidated Company.
SECTION 6.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of Intermet, balance sheets of
the
45
<PAGE> 51
Consolidated Companies as at the end of such year, presented on a consolidated
basis, and the related statements of income, and cash flows of the Consolidated
Companies for such fiscal year, presented on a consolidated basis, setting forth
in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and accompanied by a report thereon of Ernst & Young, LLP
or other independent public accountants of comparable recognized national
standing, which such report shall be unqualified as to going concern and scope
of audit and shall state that such financial statements present fairly in all
material respects the financial condition as at the end of such fiscal year on a
consolidated basis, and the results of operations and statements of cash flows
of the Consolidated Companies for such fiscal year in accordance with GAAP and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(b) Quarterly Financial Statements. As soon as available and in any event
within 60 days after the end of each fiscal quarter of Intermet (other than the
fourth fiscal quarter), balance sheets of the Consolidated Companies as at the
end of such quarter presented on a consolidated basis and the related statements
of income, shareholders' equity, and cash flows of the Consolidated Companies
for such fiscal quarter and for the portion of Intermet's fiscal year ended at
the end of such quarter, presented on a consolidated basis setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of Intermet's previous fiscal year, all in reasonable
detail and certified by the chief financial officer or principal accounting
officer of Intermet that such financial statements fairly present in all
material respects the financial condition of the Consolidated Companies as at
the end of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal quarter and such portion of Intermet's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
statements required pursuant to subsection (b) above, and also within 60 days
after the end of each fiscal year of Intermet, a certificate substantially in
the form of Exhibit I attached hereto of the president, chief executive officer,
chief financial officer or principal accounting officer of Intermet (i) to the
effect that, based upon a review of the activities of the Consolidated Companies
and such financial statements during the period covered thereby, there exists no
Event of Default and no Default under this Agreement, or if there exists an
Event of Default or a Default hereunder, specifying the nature thereof and the
proposed response thereto, and (ii) demonstrating in reasonable detail
compliance as at the end of such fiscal year or such fiscal quarter with Section
6.08 and Sections 7.01 through 7.06;
(d) Auditor's No Default Certificate. Together with the financial
statements required pursuant to subsection (a) above, a certificate of the
accountants who prepared the report referred to therein, to the effect that,
based upon their audit, there exists no Default or Event of Default under this
Agreement, or if there exists a Default or Event of Default hereunder,
specifying the nature thereof;
46
<PAGE> 52
(e) [reserved];
(f) Notice of Default. Promptly after any Executive Officer of Intermet has
notice or knowledge of the occurrence of an Event of Default or a Default, a
certificate of the chief financial officer or principal accounting officer of
Intermet specifying the nature thereof and the proposed response thereto;
(g) Litigation and Investigations. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse development in any
material action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company, or
any material property of any thereof, or (ii) actual knowledge thereof, notice
of the threat of any such action, suit, proceeding, investigation or
arbitration;
(h) Environmental Notices. Promptly after receipt thereof, notice of any
actual or alleged violation, or notice of any action, claim or request for
information, either judicial or administrative, from any governmental authority
relating to any actual or alleged claim, notice of potential responsibility
under or violation of any Environmental Law, or any actual or alleged spill,
leak, disposal or other release of any waste, petroleum product, or hazardous
waste or Hazardous Substance by any Consolidated Company which could result in
penalties, fines, claims or other liabilities to any Consolidated Company in
amounts in excess of $5,000,000;
(i) ERISA. (A)(i) Promptly after the occurrence thereof with respect to any
Plan of any Consolidated Company or any ERISA Affiliate thereof, or any trust
established thereunder, notice of (A) a "reportable event" described in Section
4043 of ERISA and the regulations issued from time to time thereunder (other
than a "reportable event" not subject to the provisions for 30-day notice to the
PBGC under such regulations), or (B) any other event which could subject any
Consolidated Company to any tax, penalty or liability under Title I or Title IV
of ERISA or Chapter 43 of the Tax Code, or any tax or penalty resulting from a
loss of deduction under Sections 404 or 419 of the Tax Code, or any tax, penalty
or liability under any Requirement of Law applicable to any Foreign Plan, where
any such taxes, penalties or liabilities exceed or could exceed $5,000,000 in
the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or to a
Plan participant, beneficiary or alternative payee, any notice required under
Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or
under Section 401(a)(29) or 412 of the Tax Code with respect to any Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by any Consolidated
Company or any ERISA Affiliate thereof concerning the intent of the PBGC or any
other governmental authority to terminate a Plan of such Company or ERISA
Affiliate thereof
47
<PAGE> 53
which is subject to Title IV of ERISA, to impose any liability on such Company
or ERISA Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Upon the request of the Administrative Agent, promptly upon the
filing thereof with the Internal Revenue Service ("IRS") or the Department of
Labor ("DOL"), a copy of IRS Form 5500 or annual report for each Plan of any
Consolidated Company or ERISA Affiliate thereof which is subject to Title IV of
ERISA;
(v) Upon the request of the Administrative Agent, (A) true and
complete copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any Consolidated
Company from the IRS, PBGC or DOL, (B) any reports filed with the IRS, PBGC or
DOL with respect to a Plan of the Consolidated Companies or any ERISA Affiliate
thereof, or (C) a current statement of withdrawal liability for each
Multiemployer Plan of any Consolidated Company or any ERISA Affiliate thereof;
(B) Promptly upon any Consolidated Company becoming aware thereof,
notice that (i) any material contributions to any Foreign Plan have not been
made by the required due date for such contribution and such default cannot
immediately be remedied, (ii) any Foreign Plan is not funded to the extent
required by the law of the jurisdiction whose law governs such Foreign Plan
based on the actuarial assumptions reasonably used at any time, or (iii) a
material change is anticipated to any Foreign Plan that may have a Materially
Adverse Effect.
(j) Liens. Promptly upon any Consolidated Company becoming aware thereof,
notice of the filing of any federal statutory Lien, tax or other state or local
government Lien or any other Lien affecting their respective properties, other
than those Liens expressly permitted by Section 7.02;
(k) Public Filings, Etc. Promptly upon the filing thereof or otherwise
becoming available, copies of all financial statements, annual, quarterly and
special reports, proxy statements and notices sent or made available generally
by Intermet to its public security holders, of all regular and periodic reports
and all registration statements and prospectuses, if any, filed by any of them
with any securities exchange, and of all press releases and other statements
made available generally to the public containing material developments in the
business or financial condition of Intermet and the other Consolidated
Companies;
(l) Burdensome Restrictions, Etc. Promptly upon the existence or occurrence
thereof, notice of the existence or occurrence of (i) any Contractual Obligation
or Requirement of Law described in Section 5.11, (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks, patents, trade names, copyrights, licenses and similar rights
necessary in the normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section 5.19;
48
<PAGE> 54
(m) New Subsidiaries. Within 30 days after the formation or acquisition of
any Subsidiary, or any other event resulting in the creation of a new
Subsidiary, or the domestication of any Foreign Subsidiary, notice of the
formation or acquisition of such Subsidiary or such occurrence, including a
description of the assets of such entity, the activities in which it will be
engaged, and such other information as the Administrative Agent may request; and
(n) Other Information. With reasonable promptness, any other information
provided under the Note Purchase Agreement and such other information about the
Consolidated Companies as the Administrative Agent or any Lender may reasonably
request from time to time.
SECTION 6.08. FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Maintain as of the last day of each fiscal
quarter, a Fixed Charge Coverage Ratio equal to or greater than 1.50:1.0.
(b) Consolidated EBITDA to Consolidated Interest Expense. Maintain as of
the last day of each fiscal quarter, a minimum ratio of Consolidated EBITDA to
Consolidated Interest Expense, calculated for the immediately preceding four
fiscal quarters, of equal to or greater than 3.50:1.0.
(c) Funded Debt to Consolidated EBITDA. Maintain as of the last day of each
fiscal quarter, a maximum ratio of Funded Debt to Consolidated EBITDA,
calculated for the immediately preceding four fiscal quarters, of less than or
equal to 3.50:1.0.
(d) Second Fiscal Quarter 1999 Calculations. Schedule 6.08 sets forth the
calculation of the financial covenant amounts, ratios, and percentages required
by paragraphs (a) through (c) of this Section 6.08 calculated as of June 30,
1999.
SECTION 6.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS. Immediately upon
its receipt thereof, Intermet shall furnish the Administrative Agent a copy of
any notice received by it or any other Consolidated Company from the holder(s)
of Indebtedness of the Consolidated Companies (or from any trustee, agent,
attorney, or other party acting on behalf of such holder(s)) in an amount which,
in the aggregate, exceeds $5,000,000, where such notice states or claims (i) the
existence or occurrence of any default or event of default with respect to such
Indebtedness under the terms of any indenture, loan or credit agreement,
debenture, note, or other document evidencing or governing such Indebtedness, or
(ii) the existence or occurrence of any event or condition which requires or
permits holder(s) of any Indebtedness to exercise rights under any Change in
Control Provision.
SECTION 6.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL.
49
<PAGE> 55
(a) Unless the Required Lenders otherwise agree, promptly after (i) the
formation or acquisition (provided that nothing in this Section shall be deemed
to authorize the acquisition of any entity not otherwise permitted hereunder) of
any Subsidiary not listed on Schedule 5.01 (unless such Subsidiary holds no
assets and conducts no business), (ii) the domestication of any Foreign
Subsidiary, (iii) the occurrence of any other event creating a new Subsidiary,
or (iv) Intermet desires that an existing Subsidiary which is designated as
"inactive" on Schedule 5.01 be designated as "active", Intermet shall cause to
be executed and delivered a counterpart to the Guaranty Agreement from each such
Subsidiary that is not a Foreign 956 Subsidiary, together with related documents
with respect to such Subsidiary of the kind described in Section 4.01(e), (f),
(g), (h) and (o), all in form and substance satisfactory to the Administrative
Agent and the Required Lenders.
(b) In the event that any Foreign Subsidiary ceases to be a Foreign 956
Subsidiary, Intermet shall cause to be executed and delivered a counterpart to
the Guaranty Agreement from such Foreign Subsidiary.
SECTION 6.11. AMENDMENT TO NOTE PURCHASE AGREEMENT. Promptly, and in any
event within sixty (60) days after the Closing Date, deliver or cause to be
delivered to the Administrative Agent in form and substance satisfactory to the
Administrative Agent and the Required Lenders an amendment to the Note Purchase
Agreement permitting the Credit Parties to enter into the Credit Documents and
incur the Obligations.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or other
Obligation shall remain unpaid, Intermet will not and will not permit any
Subsidiary to (unless waived in writing by the Required Lenders):
SECTION 7.01. INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, other than:
(a) Indebtedness under this Agreement or otherwise outstanding on the
Closing Date as set forth on Schedule 7.01 attached hereto;
(b) unsecured current liabilities (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business;
(c) Indebtedness of Intermet pursuant to the Note Purchase Agreement;
(d) Investments in the form of intercompany loans permitted by Section
7.06(a) hereof;
50
<PAGE> 56
(e) Subordinated Debt which is unsecured and approved as to terms and
conditions by the Administrative Agent and the Required Lenders;
(f) Indebtedness of a Person which is acquired by or consolidated with a
Consolidated Company as long as such Indebtedness is not obtained in
contemplation of such acquisition;
(g) purchase money Indebtedness to the extent secured by a Lien permitted
pursuant to Section 7.02(g); and
(h) additional Indebtedness of Intermet which is pari passu in all material
respects with the Obligations, without limiting the foregoing, such Indebtedness
will not have the benefit of any security or guaranties not benefitting the
Obligations and will have representations and warranties, covenants, events of
default and conditions to borrowing which are not more restrictive than the
provisions of this Agreement.
SECTION 7.02. LIENS. Create, incur, assume or suffer to exist any Lien on
any of its property now owned or hereafter acquired other than:
(a) Liens existing on the Closing Date and disclosed on Schedule 7.02 and
Liens in favor of the Administrative Agent and/or the Lenders to secure the
Obligations;
(b) Liens for taxes not yet due, and Liens for taxes or Liens imposed by
ERISA which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in its books in
accordance with GAAP;
(c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves are
being maintained in its books in accordance with GAAP;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(e) Liens securing Indebtedness permitted by Section 7.01(g);
(f) to the extent that, on any date of determination, the value of Margin
Stock of Intermet and its Subsidiaries, whether now owned or hereafter acquired,
in the aggregate exceeds twenty-five percent (25%) of the value of the total
assets of Intermet and
51
<PAGE> 57
its Subsidiaries on such date which assets are subject to the restrictions of
this Section 7.2, Liens encumbering such excess Margin Stock;
(g) Liens arising in connection with any Permitted Receivables Purchase
Facility; and
(h) Liens (other than those permitted by paragraphs (a) through (g) of this
Section 7.02) encumbering assets having an Asset Value not greater than twenty
percent (20%) of Consolidated Net Worth of Intermet in the aggregate at any one
time.
SECTION 7.03. MERGERS, ACQUISITIONS, DIVESTITURES.
(a) Merge or consolidate with any other Person, except that the foregoing
restrictions shall not be applicable to:
(i) mergers or consolidations of (x) any Subsidiary with and into any
other Subsidiary which is a Guarantor or (y) any Subsidiary with and into
Intermet; or
(ii) mergers or consolidations which result in Acquisitions of Persons
engaged in businesses in which Intermet is engaged on the Closing Date or
substantially related thereto and as otherwise permitted by Section 7.10 of
this Agreement where the surviving corporation is a wholly-owned Subsidiary
of Intermet (or will become a wholly-owned Subsidiary within six (6) months
of such Acquisition) and such Acquisition is in compliance with subsection
(c) hereof;
provided that before and after giving effect to any such mergers or
consolidations, (w) Intermet is in compliance with Section 6.08 hereof (as
demonstrated by delivery of pro forma financial covenants calculations prepared
in compliance with clause (c) hereof); (x) no other Default or Event of Default
exists hereunder; (y) in the event of such merger or consolidation, the
surviving Person is a Consolidated Company and complies with Section 6.10
hereof, if applicable, and (z) Intermet is the surviving corporation in
connection with any merger or consolidation to which it is a party;
(b) Sell or otherwise dispose of the capital stock of a Subsidiary of
Intermet except as permitted pursuant to Section 7.04(c); or
(c) make or permit any Acquisition other than an Acquisition of Persons
engaged in businesses in which Intermet is engaged on the Closing Date or
substantially related thereto and as otherwise permitted pursuant to Section
7.10 of this Agreement; provided that:
(i) after giving effect to such Acquisition, assets comprising such
Acquisition are owned by Intermet or a wholly-owned Subsidiary of Intermet,
or, in
52
<PAGE> 58
the case of a stock purchase, such Person is a wholly-owned Subsidiary of
Internet or is merged into Intermet or a wholly-owned Subsidiary of
Intermet;
(ii) prior to the consummation of such Acquisition, Intermet provides
to the Lenders calculations evidencing Intermet's compliance on a pro forma
basis with the financial covenants set forth in Section 6.08 hereof on the
last day of the immediately preceding fiscal quarter of Intermet,
calculated with respect to the immediately preceding four fiscal quarters
of Intermet as if the Acquisition had been consummated on the first day of
such period;
(iii) such Acquisition shall have been approved in advance by a
majority of the board of directors of the seller; and
(iv) no Default or Event of Default shall exist hereunder or shall
result therefrom and Intermet shall comply with the provisions of Section
6.10 hereof.
SECTION 7.04. ASSET SALES.
Sell, lease or otherwise dispose of its accounts, property, stock of its
Subsidiaries or other assets; provided, however, that the foregoing restrictions
on Asset Sales shall not be applicable to:
(a) sales of inventory in the ordinary course of business;
(b) sales of equipment or other personal property being replaced by other
equipment or other personal property purchased as a capital expenditure item; or
(c) Asset Sales comprised of stock of Subsidiaries or all or substantially
all of the assets of any Subsidiary where, on the date of execution of a binding
obligation to make such Asset Sale (provided that if the Asset Sale is not
consummated within six (6) months of such execution, then on the date of
consummation of such Asset Sale rather than on the date of execution of such
binding obligation):
(x) at least 30 days (but not more than 60 days) prior to the date of
execution of such binding obligation (or, if the Asset Sale is not
consummated within six months of such execution, the date of consummation
of such Asset Sale), Intermet shall have delivered to the Administrative
Agent a notice of such Asset Sale (i) stating the nature and terms of such
Asset Sale (including, without limitation, a description of the
consideration payable by the purchaser) and the nature and use of the
proceeds of the transaction and (ii) including calculations of the pro
forma financial tests contained in clauses (y) and (z) below; and
53
<PAGE> 59
(y) on a pro forma basis, after giving effect to such Asset Sale and
the use of proceeds thereof as if such Asset Sale and use of proceeds had
occurred on the first day of the applicable period, the calculations of the
financial covenant ratios described in paragraphs (a), (b) and (c) of
Section 6.08 as of the last day of the fiscal quarter most recently ended
are in compliance with the requirements of such paragraphs; or
(d) Other Asset Sales (other than sales of capital stock of Subsidiaries or
all or substantially all of the assets of any Subsidiary) including, without
limitation, dispositions of Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities; or
(e) to the extent that, on any date of determination, the value of Margin
Stock of Intermet and its Subsidiaries, whether now owned or hereafter acquired,
in the aggregate exceeds twenty-five percent (25%) of the total assets of
Intermet and its Subsidiaries on such date which assets are subject to the
restriction of this Section 7.04, sales of such excess Margin Stock for fair
value where the proceeds of such sale are held by a Consolidated Company as cash
or invested in cash equivalents such as certificates of deposit, U.S. government
securities, commercial paper with a term of 90 days or less which is rated
A-1/P-1 or other money market instruments;
provided that notwithstanding the foregoing, no transaction pursuant to clauses
(c) or (d) above shall be permitted if (i) any Default or Event of Default
exists at the time of such transaction or would exist as a result of such
transaction or (ii) on the date of execution of a binding obligation to make
such Asset Sale (provided that if the Asset Sale is not consummated within six
(6) months of such execution, then on the date of consummation of such Asset
Sale rather than on the date of execution of such binding obligation), after
giving effect to the proposed Asset Sale, the aggregate Asset Value of all Asset
Sales made pursuant to clauses (c) or (d) by the Consolidated Companies since
the Closing Date would not exceed twenty-five percent (25%) of Intermet's Net
Fixed Assets as of the last day of the most recently ended fiscal quarter of
Intermet.
SECTION 7.05. DIVIDENDS, ETC. Declare or pay any dividend or other
distribution on any class of its stock, or make any payment to purchase, redeem,
retire or acquire any Subordinated Debt or stock or any option, warrant, or
other right to acquire such Subordinated Debt or stock (each, a "Restricted
Payment"), other than:
(i) dividends payable solely in shares of any class of its stock; and
(ii) cash dividends by wholly-owned direct or indirect Subsidiaries of
Intermet; and
(iii) other cash dividends declared and paid, and all other Restricted
Payments made, after the Closing Date in an aggregate amount not to exceed the
sum of (x) $25,000,000, plus (y) fifty percent (50%) of Consolidated Net Income
earned
54
<PAGE> 60
during the period commencing on September 30, 1999 and ending on the last
day of the most recently ended fiscal quarter of Intermet (such period to be
treated as one accounting period taking into account 100% of Consolidated Net
Losses during such period);
provided, however, no such dividend or other Restricted Payment may be declared
or paid pursuant to clause (ii) above unless no Default or Event of Default
exists at the time of such declaration or Restricted Payment, or would exist as
a result of such declaration or Restricted Payment.
SECTION 7.06. INVESTMENTS, LOANS, ETC. Make, permit or hold any Investments
other than:
(a) Investments in Subsidiaries which are Guarantors under this Agreement,
whether such Subsidiaries are Guarantors on the Closing Date or become
Guarantors in accordance with Section 6.10 after the Closing Date; provided,
however, nothing in this Section 7.06 shall be deemed to authorize an Investment
pursuant to this subsection (a) in any Person that is not a Guarantor prior to
such Investment;
(b) Investments in the following securities:
(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each
case supported by the full faith and credit of the United States and
maturing within one year from the date of creation thereof;
(ii) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(iii) time deposits maturing within one year from the date of creation
thereof with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000,
including without limitation, any such deposits in Eurodollars issued by a
foreign branch of any such bank or trust company;
(iv) mid-term notes of corporations existing under the laws of the
United States rated in the highest grade by a nationally recognized credit
rating agency;
(v) municipal "lower floater" bonds rated A or better (or backed by a
letter of credit rated A or better) by a nationally recognized credit
rating agency;
<PAGE> 61
(c) Investments made by Plans and Foreign Plans;
(d) Investments outstanding on the Closing Date and listed on Schedule
7.06 hereto;
(e) Investments (other than those permitted by paragraphs (a) through (d)
above), including loans to employees, officers and other Persons (other than
Subsidiaries), in an aggregate amount not to exceed ten percent (10%) of
Consolidated Net Worth at any one time outstanding; and
(f) Investments after the Closing Date in Domestic Subsidiaries that are
not Guarantors in an aggregate amount not to exceed Five Million Dollars
($5,000,000).
SECTION 7.07. SALE AND LEASEBACK TRANSACTIONS. Sell or transfer any
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except as set forth on Schedule 7.07.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of related transactions
which in the aggregate would be material, whether or not in the ordinary course
of business, with any Affiliate of any Consolidated Company (but excluding any
Affiliate which is also a Consolidated Company), other than on terms and
conditions substantially as favorable to such Consolidated Company as would be
obtained by such Consolidated Company at the time in a comparable arm's-length
transaction with a Person other than an Affiliate; and
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default exists or would
exist as a result of such conveyance or transfer.
SECTION 7.09. PREPAYMENTS OF SUBORDINATED DEBT IN VIOLATION THEREOF.
Directly or indirectly, prepay, purchase, redeem, retire, defease or otherwise
acquire, or make any optional payment on account of any principal of, interest
on, or premium payable in connection with any of its Subordinated Debt, in each
case, which is a violation of the subordination provisions of such Subordinated
Debt or a violation of Section 7.05.
SECTION 7.10. CHANGES IN BUSINESS. Enter into any business which is
substantially different from that presently conducted by the Consolidated
Companies taken as a whole (which includes iron and aluminum foundry operations
and machining); provided
56
<PAGE> 62
that, Intermet and the Consolidated Companies may make Acquisitions of, and
Investments in (to the extent permitted by this Agreement), Persons engaged in
an unrelated business as long as the total revenues of such Persons resulting
from unrelated businesses (or total revenues generated by such assets used in
unrelated businesses in the case of a purchase of assets), as determined for the
most recently ended four fiscal quarters of such Person in accordance with GAAP,
do not exceed twenty percent (20%) of Total Sales of the Consolidated Companies
for the most recently ended four fiscal quarters of Intermet.
SECTION 7.11. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING CONSOLIDATED
COMPANIES. Create or otherwise cause or suffer to exist or become effective, any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay dividends or make any other distributions on such Consolidated
Company's stock, or (ii) pay any indebtedness owed to Intermet or any other
Consolidated Company, or (iii) transfer any of its property or assets to
Intermet or any other Consolidated Company or (iv) grant a Lien in favor of the
Lenders securing the obligations, except any consensual encumbrance or
restriction existing under the Credit Documents or as set forth on Schedule
5.20.
SECTION 7.12. ACTIONS UNDER CERTAIN DOCUMENTS.
(a) Without the prior written consent of the Administrative Agent and the
Required Lenders, modify, amend or supplement the Note Purchase Agreement to (i)
increase the principal amount of the indebtedness thereunder, (ii) increase the
interest rate thereunder, (iii) modify any requirement of prepayment or
repayment thereunder which would shorten the final maturity or average life of
the indebtedness outstanding thereunder or make the requirement of prepayment
more onerous, or (iv) make any more onerous any other provision thereof.
(b) Without the prior written consent of the Administrative Agent and the
Required Lenders, modify, amend or supplement any agreement governing
Subordinated Debt to (i) increase the principal amount of the indebtedness
thereunder, (ii) increase the interest rate thereunder, (iii) modify any
requirement of prepayment or repayment thereunder which would shorten the final
maturity or average life of the indebtedness outstanding thereunder or make the
requirement of prepayment more onerous, (iv) make any more onerous any other
provision thereof, or (v) amend or modify the subordination provisions thereof.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
57
<PAGE> 63
SECTION 8.01. PAYMENTS. Intermet shall fail to make promptly when due
(including, without limitation, by mandatory prepayment) any principal payment
with respect to the Loans, or Intermet shall fail to make within five (5) days
after the due date thereof any payment of interest, fee or other amount payable
hereunder or any of the Obligations;
SECTION 8.02. COVENANTS WITHOUT NOTICE. Intermet shall fail to observe or
perform any covenant or agreement contained in Sections 6.07(f), 6.08, 6.11,
7.01 through 7.07, 7.09 through 7.12;
SECTION 8.03. OTHER COVENANTS. Intermet shall fail to observe or perform
any covenant or agreement contained in this Agreement, other than those referred
to in Sections 8.01 and 8.02, and, if capable of being remedied, such failure
shall remain unremedied for thirty (30) days after the earlier of (i) Intermet's
obtaining knowledge thereof, or (ii) written notice thereof shall have been
given to Intermet by the Administrative Agent or any Lender;
SECTION 8.04. REPRESENTATIONS. Any representation or warranty made or
deemed to be made by Intermet or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Administrative Agent or the Lenders by any such Person pursuant to the terms
of this Agreement or any other Credit Document, shall be incorrect in any
material respect when made or deemed to be made or submitted;
SECTION 8.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Consolidated Company
shall fail to make when due (whether at stated maturity, by acceleration, on
demand or otherwise, and after giving effect to any applicable grace period) any
payment of principal of or interest on any Indebtedness (other than the
Obligations) exceeding $5,000,000 in the aggregate;
SECTION 8.06. DEFAULTS UNDER OTHER AGREEMENTS. Any Consolidated Company
shall fail to observe or perform within any applicable grace period any
covenants or agreements contained in any agreements or instruments relating to
any of its Indebtedness exceeding $5,000,000 in the aggregate, or any other
event shall occur if the effect of such failure or other event is to accelerate,
or to permit the holder of such Indebtedness or any other Person to accelerate,
the maturity of such Indebtedness; or any such Indebtedness shall be required to
be prepaid (other than by a regularly scheduled required prepayment) in whole or
in part prior to its stated maturity; or there occurs any termination,
liquidation, unwind or similar event or circumstance under any Permitted
Receivables Purchase Facility, which permits any purchaser of receivables
thereunder to cease purchasing such receivables or to apply all collections on
previously purchased receivables thereunder to the repayment of such purchaser's
interest in such previously purchased receivables other than any such event or
circumstance that arises solely as a result of a down-grading of the credit
rating of any bank or financial institution not affiliated with Intermet that
provides liquidity, credit or other support in connection with such facility;
58
<PAGE> 64
SECTION 8.07. BANKRUPTCY. Intermet or any other Consolidated Company shall
commence a voluntary case concerning itself under the Bankruptcy Code or
applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is
commenced against any Consolidated Company and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) or similar official
under applicable foreign bankruptcy laws is appointed for, or takes charge of,
all or any substantial part of the property of any Consolidated Company; or any
Consolidated Company commences proceedings of its own bankruptcy or to be
granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to any Consolidated Company or there is commenced
against any Consolidated Company any such proceeding which remains undismissed
for a period of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Consolidated Company suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or any
Consolidated Company shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or any Consolidated Company
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Consolidated Company for the purpose of effecting any of the foregoing;
SECTION 8.08. ERISA. A Plan or Foreign Plan of a Consolidated Company or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum
funding standard required by applicable law, the terms of such Plan or
Foreign Plan, Section 412 of the Tax Code or Section 302 of ERISA for
any plan year or a waiver of such standard is sought or granted with
respect to such Plan or Foreign Plan under applicable law, the terms of
such Plan or Foreign Plan or Section 412 of the Tax Code or Section 303
of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such Plan
or Foreign Plan; or
(iii) shall require a Consolidated Company to provide security
under applicable law, the terms of such Plan or Foreign Plan, Section
401 or 412 of the Tax Code or Section 306 or 307 of ERISA; or
59
<PAGE> 65
(iv) results for any reason, in a liability (including without
limitation, withdrawal liability) to a Consolidated Company under
applicable law, the terms of such Plan or Foreign Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC (or any similar Person with respect to any Foreign
Plan), a Plan or any other Person that would have a Materially Adverse Effect;
SECTION 8.09. MONEY JUDGMENT. A judgment or order for the payment of money
in excess of $5,000,000 or otherwise having a Materially Adverse Effect shall be
rendered against Intermet or any other Consolidated Company and such judgment or
order shall continue unsatisfied (in the case of a money judgment) and in effect
for a period of 30 days during which execution shall not be effectively stayed
or deferred (whether by action of a court, by agreement or otherwise);
SECTION 8.10. OWNERSHIP OF CREDIT PARTIES. If Intermet shall at any time
fail to own and control one hundred percent (100%) of the voting stock of any
Credit Party, either directly or indirectly through a wholly-owned Subsidiary of
Intermet, except for (x) as a result of any Asset Sale permitted pursuant to
Section 7.04(c) hereof, and (y) with respect to any Credit Party or Foreign
Subsidiary whose stock is acquired by one of the Consolidated Companies after
the Closing Date where Intermet shall, directly or indirectly, maintain
ownership and control of the percentage of voting stock owned and controlled as
of the date such Person became a Credit Party hereunder or a Foreign Subsidiary
or such greater percentage as shall thereafter be obtained, directly or
indirectly by Intermet;
SECTION 8.11. CHANGE IN CONTROL OF INTERMET. (i) Any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall
become the "beneficial owner(s)" (as defined in said Rule 13d-3) of more than
fifty percent (50%) of the shares of the outstanding capital stock of Intermet
entitled to vote for members of Intermet's board of directors on a fully diluted
basis, (ii) the individuals who are members of the board of directors of the
Company on the Closing Date (together with any new or replacement directors
whose initial nomination for election was approved by a majority of the
directors who were either directors on the Closing Date or previously so
approved) shall cease to constitute a majority of the board of directors of the
Company, or (iii) any event or condition shall occur or exist which, pursuant to
the terms of any Change in Control Provision, requires or permits the holder(s)
of Indebtedness of any Consolidated Company to require that such Indebtedness be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect;
SECTION 8.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There shall exist or
occur any "Event of Default" as provided under the terms of any other Credit
Document, or any Credit Document ceases to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of Intermet or
any other Credit Party, or at any time it is or becomes unlawful for Intermet
or any other Credit Party to perform or comply with its
60
<PAGE> 66
obligations under any Credit Document, or the obligations of Intermet or any
other Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Intermet or any such Credit Party;
SECTION 8.13. ATTACHMENTS. An attachment or similar action shall be made on
or taken against any of the assets of any Consolidated Company with an Asset
Value exceeding $5,000,000 in aggregate and is not removed, suspended or
enjoined within 30 days of the same being made or any suspension or injunction
being lifted; or
SECTION 8.14. DEFAULT UNDER FIVE-YEAR CREDIT AGREEMENT. There shall exist
or occur any "Event of Default" as defined in the Five-Year Credit Agreement;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Administrative Agent may, with the consent of the
Required Lenders, and upon the written (including telecopied) or telex request
of the Required Lenders, shall, by written notice to Intermet take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against
Intermet or any other Credit Party: (i) declare all Commitments terminated,
whereupon the pro rata Commitments of each Lender shall terminate immediately
and any commitment fee shall forthwith become due and payable without any other
notice of any kind; and (ii) declare the principal of and any accrued interest
on the Loans, and all other Obligations owing hereunder, to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by Intermet;
provided, that, if an Event of Default specified in Section 8.07 shall occur,
the result which would occur upon the giving of written notice by the
Administrative Agent to any Credit Party, as specified in clauses (i) and (ii)
above, shall occur automatically without the giving of any such notice; and
(iii) exercise any rights or remedies under the Security Documents.
ARTICLE IX.
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT OF ADMINISTRATIVE AGENT. Each Lender hereby
designates Scotiabank as Administrative Agent to administer all matters
concerning the Loans and to act as herein specified. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of a Note
shall be deemed irrevocably to authorize the Administrative Agent to take such
actions on its behalf under the provisions of this Agreement, the other Credit
Documents, and all other instruments and agreements referred to herein or
therein, and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The
61
<PAGE> 67
Administrative Agent may perform any of its duties hereunder by or through their
agents or employees.
SECTION 9.02. AUTHORIZATION OF ADMINISTRATIVE AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS.
(a) Each Lender hereby authorizes the Administrative Agent to enter into
each of the Security Documents substantially in the form attached hereto, and to
take all action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Administrative Agent for the benefit of the
Administrative Agent and the Lenders and the other beneficiaries thereof upon
the terms thereof. The Lenders further agree that the Administrative Agent may
assign its rights and obligations under any of the Security Documents to any
affiliate of the Administrative Agent or to any trustee, if necessary or
appropriate under applicable law, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Administrative Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Administrative Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Administrative Agent under such Security Document, the Administrative Agent
shall act in respect of such consent, exercise of remedies, determination or
action, as the case may be, with the consent of and at the direction of the
Required Lenders; provided, however, that no such consent of the Required
Lenders shall be required with respect to any consent, determination or other
matter that is, in the Administrative Agent's judgment, ministerial or
administrative in nature. In each circumstance where any consent of or direction
from the Required Lenders is required, the Administrative Agent shall send to
the Lenders a notice setting forth a description in reasonable detail of the
matter as to which consent or direction is requested and the Administrative
Agent's proposed course of action with respect thereto. The Lenders shall
endeavor to respond promptly to such request but in the event the Administrative
Agent shall not have received a response from any Lender within five (5)
Business Days after such Lender's receipt of such notice, such Lender shall be
deemed not to have agreed to the course of action proposed by the Administrative
Agent.
SECTION 9.03. NATURE OF DUTIES OF ADMINISTRATIVE AGENT. The Administrative
Agent shall have no duties or except those expressly set forth in this Agreement
and the other Credit Documents. None of the Administrative Agent nor any of its
respective officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The duties
of the Administrative Agent shall be ministerial and administrative in nature;
the Administrative Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement, express or
implied, is intended to or shall be so construed as to impose upon the
62
<PAGE> 68
Administrative Agent any obligations in respect of this Agreement or the other
Credit Documents except as expressly set forth herein.
SECTION 9.04. LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT.
(a) Independently and without reliance upon the Administrative Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement, the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.
(b) The Administrative Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreement or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Guaranty Agreement, or the other
documents contemplated hereby or thereby, or the financial condition of the
Credit Parties, or the existence or possible existence of any Default or Event
of Default; provided, however, to the extent that the Administrative Agent has
been advised that a Lender has not received any information formally delivered
to the Administrative Agent pursuant to Section 6.07, the Administrative Agent
shall deliver or cause to be delivered such information to such Lender.
SECTION 9.05. CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until the Administrative Agent shall
have received instructions from the Required Lenders; and the Administrative
Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
SECTION 9.06. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The
63
<PAGE> 69
Administrative Agent may consult with legal counsel (including counsel for any
Credit Party), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omittedto be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 9.07. INDEMNIFICATION OF ADMINISTRATIVE AGENT. To the extent the
Administrative Agent is not reimbursed and indemnified by the Credit Parties,
each Lender will reimburse and indemnify the Administrative Agent, ratably
according to the respective amounts of the Loans outstanding under all
Facilities (or if no amounts are outstanding, ratably in accordance with the
aggregate Commitments), in either case, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in performing its duties hereunder, in any way relating
to or arising out of this Agreement or the other Credit Documents; provided that
no Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
SECTION 9.08. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise the
same as though it were not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Consolidated Companies or any affiliate of
the Consolidated Companies as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Consolidated
Companies for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
SECTION 9.09. HOLDERS OF NOTES. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
64
<PAGE> 70
SECTION 9.10. SUCCESSOR ADMINISTRATIVE AGENT.
(a) The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and Intermet and may be removed with or without
cause by the Required Lenders; provided, however, the Administrative Agent may
not resign or be removed until asuccessor Administrative Agent has been
appointed and shall have accepted such appointment. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent subject to Intermet's prior written approval. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent subject to Intermet's prior written approval, which shall
be a bank which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any State thereof,
or any Affiliate of such bank, having a combined capital and surplus of at least
$100,000,000.
(b) Upon the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Administrative Agent under this Agreement.
SECTION 9.11. OTHER AGENTS. Each Lender hereby designates Bank One,
Michigan as Syndication Agent, SunTrust as Documentation Agent, Comerica Bank,
as Managing Agent, and The Bank of New York, Harris Trust and Savings Bank and
PNC Bank, National Association, as Co-Agents. The Syndication Agent, the
Documentation Agent, the Managing Agent and the Co-Agents in such capacities,
shall have no duties or obligations whatsoever under this Agreement or any other
Credit Document.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on Schedule 10.01, or
such other address or applicable teletransmission number as such party may
hereafter specify by notice to the Administrative
65
<PAGE> 71
Agent and Intermet. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, (iii) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section and the appropriate confirmation is received, or (iv) if given
by any other means (including, without limitation, by air courier), when
delivered or received at the address specified in this Section; provided that
notices to the Administrative Agent shall not be effective until received.
SECTION 10.02. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Intermet and the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by Intermet and all the Lenders do
any of the following: (i) waive any of the conditions specified in Section 4.01
or 4.02, (ii) increase the Commitments or other contractual obligations to
Intermet under this Agreement, (iii) reduce the principal of, or interest on,
the Notes or any fees hereunder, (iv) postpone any date fixed for the payment in
respect of principal of, or interest on, the Notes or any fees hereunder, (v)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number or identity of Lenders which shall be
required for the Lenders or any of them to take any action hereunder, (vi) agree
to release any Guarantor from its obligations under the Guaranty Agreement or
release any collateral with respect to a Guarantor, except in connection with an
Asset Sale permitted pursuant to Section 7.04(c) above where no consent of the
Lenders shall be required for such release, (vii) modify the definition of
"Required Lenders," or (viii) modify this Section 10.02.
SECTION 10.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Administrative Agent, any Lender or any holder of a Note in
exercising any right or remedy hereunder or under any other Credit Document, and
no course of dealing between any Credit Party and the Administrative Agent, any
Lender or the holder of any Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right or remedy hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent, any Lender or the holder of
any Note would otherwise have. No notice to or demand on any Credit Party not
required hereunder or under any other Credit Document in any case shall entitle
any Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent,
the Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
66
<PAGE> 72
SECTION 10.04. PAYMENT OF EXPENSES, ETC. Intermet shall:
(i) pay all reasonable, out-of-pocket costs and expenses of the
Administrative Agent in the administration (both before and after the execution
hereof and including reasonable expenses actually incurred relating to advice of
counsel as to the rights and duties of the Administrative Agent and the Lenders
with respect thereto) of, and in connection with the preparation, execution and
delivery of, preservation of rights under, enforcement of, and, after a Default
or Event of Default, refinancing, renegotiation or restructuring of, this
Agreement and the other Credit Documents and the documents and instruments
referred to therein, and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees actually incurred and
disbursements of counsel for the Administrative Agent), and in the case of
enforcement of this Agreement or any Credit Document after an Event of Default,
all such reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and disbursements of counsel),
for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable provisions of
Section 3.07(b), pay and hold each Agent and the Lenders harmless from and
against any and all present and future stamp, documentary, and other similar
Taxes with respect to this Agreement, the Notes and any other Credit Documents,
any collateral described therein, or any payments due thereunder, and save each
of the Lenders harmless from and against any and all liabilities with respect to
or resulting from any delay or omission to pay such Taxes;
(iii) indemnify each Agent and each Lender, and their respective officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any and all costs, losses, liabilities, claims, damages or
expenses incurred by any of them (whether or not any of them is designated a
party thereto) (an "Indemnitee") arising out of or by reason of any
investigation, litigation or other proceeding related to any actual or proposed
use of the proceeds of any of the Loans or any Credit Party's entering into and
performing of the Agreement, the Notes, or the other Credit Documents,
including, without limitation, the reasonable fees actually incurred and
disbursements of counsel (including foreign counsel) incurred in connection with
any such investigation, litigation or other proceeding; provided, however,
Intermet shall not be obligated to indemnify any Indemnitee for any of the
foregoing arising out of such Indemnitee's gross negligence or willful
misconduct; and
(iv) without limiting the indemnities set forth above, indemnify each
Indemnitee for any and all expenses and costs (including without limitation,
remedial, removal, response, abatement, cleanup, investigative, closure and
monitoring costs), losses, claims (including claims for contribution or
indemnity and including the cost of investigating or defending any claim and
whether or not such claim is ultimately defeated, and whether such claim arose
before, during or after any Credit Party's
67
<PAGE> 73
ownership, operation, possession or control of its business, property or
facilities or before, on or after the date hereof, and including also any
amounts paid incidental to any compromise or settlement by the Indemnitee or
Indemnitees to the holders of any such claim), lawsuits, liabilities,
obligations, actions, judgments, suits, disbursements, encumbrances, liens,
damages (including without limitation damages for contamination or
destruction of natural resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the reasonable fees
actually incurred, other charges and disbursements of counsel in connection
therewith) incurred, suffered or sustained by that Indemnitee based upon,
arising under or relating to Environmental Laws based on, arising out of or
relating to in whole or in part, the existence or exercise of any rights or
remedies by any Indemnitee under this Agreement, any other Credit Document
or any related documents.
If and to the extent that the obligations of Intermet under this Section 10.04
are unenforceable for any reason, Intermet hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
SECTION 10.05. RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender or other holder of a Note may have under
applicable law, each Lender or other holder of a Note shall, upon the occurrence
of any Event of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations are matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Credit Documents, and Intermet, on behalf of each Credit
Party, hereby grants to each Lender and other Holder of a Note a continuing
security interest in, all deposits of any Credit Party (general or special, time
or demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by such Lender or other holder
to any Credit Party, whether or not related to this Agreement or any transaction
hereunder. Each Lender shall promptly notify Intermet of any offset hereunder.
SECTION 10.06. BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that Intermet may not assign or transfer any of its interest hereunder
without the prior written consent of each Lender.
(b) Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an Affiliate of such Lender.
(c) Each Lender may assign all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of any of its
Commitments and the Loans at the time owing to it and the Notes held by it) to
any Eligible Assignee; provided, however, that (i) the Administrative Agent and
Intermet must give their prior written consent
68
<PAGE> 74
to such assignment (which consent shall not be unreasonably withheld or delayed)
unless such assignment is to another Lender or an Affiliate of a Lender or, in
the case of Intermet, unless an Event of Default has occurred and is continuing,
(ii) the amount of the Commitments or Loans, of the assigning Lender subject to
each assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 (or, if less, the assigning Lender's entire Commitment
and Loans), (iii) the parties to each such assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a Note
or Notes subject to such assignment and, unless such assignment is to an
Affiliate of such Lender, a processing and recordation fee of $3,000, (iv) the
assignee must execute and deliver a confirmation of its acceptance of the terms
and conditions of the Intercreditor Agreement to the other parties to the
Intercreditor Agreement in accordance with Section 10(g) thereof and (v) each
such assignment shall be made simultaneously with a ratable assignment under the
Five-Year Credit Agreement (if still in effect). Intermet shall not be
responsible for such processing and recordation fee or any costs or expenses
incurred by any Lender or the Administrative Agent in connection with such
assignment. From and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, the assignee thereunder shall be a party hereto and to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement. Notwithstanding the
foregoing, the assigning Lender must retain after the consummation of such
Assignment and Acceptance, a minimum aggregate amount of Commitments and the
Loans, as the case may be, of $2,500,000 (unless the Lender is assigning its
entire Commitment); provided, however, no such minimum amount shall be required
with respect to any such assignment made at any time there exists an Event of
Default hereunder. Within five (5) Business Days after receipt of the notice and
the Assignment and Acceptance, Intermet, at its own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Note or
Notes, a new Note or Notes to the order of such assignee in a principal amount
equal to the applicable Commitments assumed by it pursuant to such Assignment
and Acceptance and new Note or Notes to the assigning Lender in the amount of
its retained Commitment or Commitments. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the date of the surrendered Note or
Notes which they replace, and shall otherwise be in substantially the form
attached hereto.
(d) Each Lender may, without the consent of Intermet or the Administrative
Agent, sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it and the Notes held by it);
provided however, that (i) no Lender may sell a participation in its aggregate
Commitments (after giving effect to any permitted assignment hereof) in an
amount in excess of fifty percent (50%) of such aggregate Commitments; provided,
however, sales of participations to an Affiliate of such Lender shall not be
included in such calculation; provided, however, no such maximum amount shall be
applicable to any such participation sold at any time there exists an Event of
Default hereunder, (ii) such Lender's obligations under this Agreement shall
remain unchanged, (iii) such Lender shall
69
<PAGE> 75
remain solely responsible to the other parties hereto for the performance of
such obligations, and (iv) the participating bank or other entity shall be
entitled to all of the benefits of Article III and Sections 6.07 and 10.05 of
this Agreement as if it were a Lender, (v) Intermet and the Administrative Agent
and other Lenders shall continue to deal solely and directly with each Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Credit Documents, and (vi) such Lender shall retain the sole right to
enforce the obligations of Intermet relating to the Loans and to approve any
amendment, modification or waiver of any provisions of this Agreement except
that such Lender may agree with any participating bank or other entity that it
will not, without such participating bank's or other entity's consent, take any
actions of the types described in clauses (ii), (iii), (iv), (v) or (viii) of
Section 10.02. Any Lender selling a participation hereunder shall provide prompt
written notice to Intermet of the name of such participant.
(e) Any Lender or participant may, in connection with the assignment or
participation or proposed assignment or participation, pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to Intermet or the other Consolidated Companies furnished
to such Lender by or on behalf of Intermet or any other Consolidated Company.
With respect to any disclosure of confidential, non-public, proprietary
information, such proposed assignee or participant shall agree to use the
information only for the purpose of making any necessary credit judgments with
respect to this credit facility and not to use the information in any manner
prohibited by any law, including without limitation, the securities laws of the
United States. The proposed participant or assignee shall agree not to disclose
any of such information except (i) to directors, employees, auditors or counsel
to whom it is necessary to show such information, each of whom shall be informed
of the confidential nature of the information, (ii) in any statement or
testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Intermet and the Administrative Agent
unless otherwise prohibited by the subpoena, order or law), and (iii) upon the
request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Lender, the Administrative Agent or Intermet relating to such confidential
information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its rights in
this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
that no such assignment shall release the Lender from any of its obligations
hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have been levied or
imposed so as to require withholdings or deductions by Intermet and payment by
Intermet of additional amounts to any Lender as a result thereof, (ii) any
Lender shall make demand for payment of increased costs or reduced rate of
return pursuant to Section 3.10 or any Lender determines that LIBOR is
unascertainable or illegal pursuant to Section 3.08 or Section 3.09, or any
Lender makes a claim for increased costs pursuant to Section 3.09, or (iii) any
Lender
70
<PAGE> 76
shall decline to consent to a modification or waiver of the terms of this
Agreement or the other Credit Documents requested by Intermet, then and in such
event, upon request from Intermet delivered to such Lender and the
Administrative Agent, such Lender shall assign, in accordance with the
provisions of Section 10.06(c), all of its rights and obligations under this
Agreement and the other Credit Documents to another Lender or an Eligible
Assignee selected by Intermet, in consideration for the payment by such assignee
to the Lender of the principal of, and interest on, the outstanding Loans
accrued to the date of such assignment, and the assumption of such Lender's
Commitment hereunder, together with any and all other amounts owing to such
Lender under any provisions of this Agreement or the other Credit Documents
accrued to the date of such assignment; provided, however, that if Intermet
shall exercise its rights under this Section 10.06 with respect to any Lender,
it shall exercise in a substantially identical manner such rights as to all
similarly affected Lenders.
SECTION 10.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) EACH CREDIT DOCUMENT (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A
CREDIT DOCUMENT) WILL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, INTERMET HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE TRIAL BY JURY, AND INTERMET HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. TO
THE EXTENT THAT INTERMET HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, INTERMET HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THE CREDIT DOCUMENTS. INTERMET ACKNOWLEDGES AND AGREES THAT IT
71
<PAGE> 77
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND EACH
LENDER ENTERING INTO THE CREDIT DOCUMENTS.
(c) INTERMET HEREBY IRREVOCABLY DESIGNATES THE PRENTICE-HALL CORPORATION
SYSTEM, INC., AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND ON
BEHALF OF INTERMET, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO INTERMET AT ITS ADDRESS SET FORTH IN SCHEDULE
10.01, BUT THE FAILURE OF INTERMET TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. INTERMET FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO INTERMET AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Administrative Agent, any
Lender, any holder of a Note or any Credit Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Intermet in any other jurisdiction.
SECTION 10.08. INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights pursuant to
this Agreement and its Notes, and it shall not be necessary for any other Lender
to be joined as an additional party in any proceeding for such purpose.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date (the "Effective
Date") on which all of the parties hereto shall have signed a copy hereof
(whether the same or
72
<PAGE> 78
different copies) and shall have delivered the same to the Administrative Agent
pursuant to Section 10.01 or, in the case of the Lenders, shall have given to
the Administrative Agent written or telex notice (actually received) that the
same has been signed and mailed to them.
(b) The obligations of Intermet under Sections 3.07(b), 3.10, 3.12, 3.13,
10.04 and 10.05 hereof shall survive the payment in full of the Notes and all
other Obligations after the Maturity Date. All representations and warranties
made herein, in the certificates, reports, notices, and other documents
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement, the other Credit Documents, and such other agreements and
documents, the making of the Loans hereunder, and the execution and delivery of
the Notes.
SECTION 10.11. SEVERABILITY. In case any provision in or obligation under
this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
SECTION 10.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR OR TAX LAWS. If
(i) any preparation of the financial statements referred to in Section 6.07
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) (other than changes mandated by FASB 106)
result in a material change in the method of calculation of financial covenants,
standards or terms found in this Agreement, (ii) there is any change in
Intermet's fiscal quarter or fiscal year, or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement or any such event referred to in clause (i) through (iii) above no
longer makes such financial covenants, standards or terms comparable to those
existing on the Effective Date, Intermet and the Required Lenders agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after such changes
as if such changes had not been made. Unless and until such provisions have been
so amended, the provisions of this Agreement shall govern.
SECTION 10.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and
73
<PAGE> 79
shall not in any way affect the meaning or construction of any provision of this
Agreement. This Agreement, the other Credit Documents, and the agreements and
documents required to be delivered pursuant to the terms of this Agreement
constitute the entire agreement among the parties hereto and thereto regarding
the subject matters hereof and thereof and supersede all prior agreements,
representations and understandings related to such subject matters.
74
<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and to be delivered in New York, New York, by their duly
authorized officers as of the day and year first above written.
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
------------------------------
Name: Doretha J. Christoph
Title: V.P. Finance
S-1
<PAGE> 81
THE BANK OF NOVA SCOTIA,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By: /s/ F.C.H. Ashby
-------------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
S-2
<PAGE> 82
BANK ONE, MICHIGAN,
INDIVIDUALLY AND AS SYNDICATION AGENT
By: /s/ Paul Flynn
-----------------------------------
Name: Paul Flynn
Title: Vice President
S-3
<PAGE> 83
SUNTRUST BANK, ATLANTA,
INDIVIDUALLY AND AS DOCUMENTATION AGENT
By: /s/ William C. Humphries
------------------------------------
Name: William C. Humphries
Title: Vice President
S-4
<PAGE> 84
COMERICA BANK,
INDIVIDUALLY AND AS MANAGING AGENT
By: /s/ Mark A. Reifel
--------------------------------
Name: Mark A. Reifel
Title: Vice President
S-5
<PAGE> 85
THE BANK OF NEW YORK,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Joshua M. Feldman
----------------------------
Name: Joshua M. Feldman
Title: Assistant Vice President
S-6
<PAGE> 86
HARRIS TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Kirby M. Law
---------------------------
Name: Kirby M. Law
Title: Vice President
S-7
<PAGE> 87
PNC BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS CO-AGENT
By: /s/ Peter F. Stack
-----------------------------
Name: Peter F. Stack
--------------------------
Title: Vice President
--------------------------
S-8
<PAGE> 88
THE BANK OF TOKYO - MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ Hisashi Miyashiro
----------------------------------
Name: Hisashi Miyashiro
-----------------------------
Title: Deputy General Manager
-----------------------------
S-9
<PAGE> 89
BANKERS TRUST COMPANY
By: /s/ Robert R. Telesca
---------------------------------
Name: Robert R. Telesca
-------------------------------
Title: Assistant Vice President
-------------------------------
S-10
<PAGE> 90
FLEET NATIONAL BANK
By: /s/ David M. Harnisch
--------------------------------
Name: David M. Harnisch
-------------------------------
Title: Vice President
------------------------------
S-11
<PAGE> 91
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
---------------------------------------
Name: Peter L. Chinnici
------------------------------------
Title: Senior Vice President & Group Head
-----------------------------------
S-12
<PAGE> 92
KEYBANK NATIONAL ASSOCIATION
By: /s/ J.T. Taylor
---------------------------------------
Name: J.T. Taylor
-------------------------------------
Title: Vice President
------------------------------------
S-13
<PAGE> 93
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ Nobuyasu Fukatsu
---------------------------------------
Name: Nobuyasu Fukatsu
------------------------------------
Title: General Manager
-----------------------------------
S-14
<PAGE> 94
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By: /s/ Richard W. Wilbert
--------------------------------------
Name: Richard W. Wilbert
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ Stephen A. Santora
-------------------------------------
Name: Stephen A. Santora
-----------------------------------
Title: Vice President
----------------------------------
S-15
<PAGE> 95
MICHIGAN NATIONAL BANK
By: /s/ John M. Bebb
--------------------------------------
Name: John M. Bebb
-----------------------------------
Title: Vice President
----------------------------------
S-16
<PAGE> 96
NATIONAL CITY BANK
By: /s/ Carolann Morykwas
------------------------------------
Name: Carolann Morykwas
----------------------------------
Title: Vice President
---------------------------------
S-17
<PAGE> 97
LANDESBANK SAAR GIROZENTRALE
By: /s/ Dr. Georg Grasel
-------------------------------------
Name: Dr. Georg Grasel
----------------------------------
Title: Member of the Board
----------------------------------
By: /s/ Manfred Thinnes
--------------------------------------
Name: Manfred Thinnes
-----------------------------------
Title: Senior Vice President
----------------------------------
S-18
<PAGE> 98
Schedule 1
Commitments
<TABLE>
<CAPTION>
Lender Commitment Pro Rata
- - ------ ---------- --------
Share
-----
<S> <C> <C>
The Bank of Nova Scotia $9,500,000 9.5%
Bank One, Michigan $9,500,000 9.5%
SunTrust Bank, Atlanta $9,500,000 9.5%
Comerica Bank $8,000,000 8.0%
The Bank of New York $7,000,000 7.0%
Harris Trust and Savings Bank $7,000,000 7.0%
PNC Bank, National Association $7,000,000 7.0%
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch $5,000,000 5.0%
Bankers Trust Company $5,000,000 5.0%
Fleet National Bank $5,000,000 5.0%
The Fuji Bank, Limited $5,000,000 5.0%
KeyBank National Association $5,000,000 5.0%
The Dai-Ichi Kangyo Bank, Ltd. $3,750,000 3.75%
DG Bank Deutsche Genossenschaftsbank AG $3,750,000 3.75%
Michigan National Bank $3,750,000 3.75%
National City Bank $3,750,000 3.75%
Landesbank Saar Girozentrale $2,500,000 2.5%
TOTAL $100,000,000 100%
</TABLE>
<PAGE> 1
EXHIBIT 4.15(b)
Contents of Omitted Exhibits and Schedules to the $100,000,000 364-Day Credit
Agreement
(We will furnish a copy of any of the omitted schedules and exhibits to the
Commission upon request)
<TABLE>
<S> <C>
Schedule 5.01 Organization and Ownership of Subsidiaries
Schedule 5.01 (a) Lack of Qualification
Schedule 5.05 Certain Pending and Threatened Litigation
Schedule 5.08 Environmental Matters
Schedule 5.11 Burdensome Restrictions
Schedule 5.12 Tax Filings and Payments
Schedule 5.15 Employee Benefit Matters
Schedule 5.16 Patent, Trademark, License and Other Intellectual Property Matters
Schedule 5.17 Ownership of Properties
Schedule 5.20 Dividend Restrictions
Schedule 6.08 Financial Covenant Calculations
Schedule 7.01 Existing Indebtedness
Schedule 7.02 Existing Liens
Schedule 7.06 Existing Investments
Schedule 7.07 Permitted Sale and Leaseback Transactions
Schedule 10.01 Notice Information
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Extension Request
Exhibit D-1 Form of Notice of Borrowing
Exhibit D-2 Form of Notice of Continuation/Conversion
Exhibit E Form of Guaranty Agreement
Exhibit F Form of Closing Certificate
Exhibit G-1 Form of Opinion of Dickinson Wright PLLC
Exhibit G-2 Form of Opinion of Kilpatrick Stockton LLP
Exhibit G-3 Form of Opinion of Mayer, Brown & Platt
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Compliance Certificate
</TABLE>
<PAGE> 1
EXHIBIT 4.16 (a)
================================================================================
$200,000,000
TERM LOAN AGREEMENT
dated as of December 20, 1999
among
INTERMET CORPORATION,
THE LENDERS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
as Administrative Agent
BANK ONE, MICHIGAN
as Syndication Agent
and
SUNTRUST BANK, ATLANTA
as Documentation Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I. DEFINITIONS; CONSTRUCTION.....................................................................1
Section 1.01. Definitions.............................................................1
Section 1.02. Accounting Terms and Determination.....................................18
Section 1.03. Other Definitional Terms...............................................19
Section 1.04. Exhibits and Schedules.................................................19
ARTICLE II. TERM LOANS...................................................................................19
Section 2.01. Commitments; Use of Proceeds...........................................19
Section 2.02. Notes; Repayment of Principal..........................................20
ARTICLE III. GENERAL LOAN TERMS...........................................................................20
Section 3.01. Funding Notices........................................................20
Section 3.02. Disbursement of Funds..................................................21
Section 3.03. Interest...............................................................22
Section 3.04. Interest Periods.......................................................23
Section 3.05. Fees...................................................................24
Section 3.06. Voluntary Prepayments of Borrowings....................................24
Section 3.07. Payments, etc..........................................................25
Section 3.08. Interest Rate Not Ascertainable, etc...................................27
Section 3.09. Illegality.............................................................27
Section 3.10. Increased Costs........................................................28
Section 3.11. Lending Offices........................................................29
Section 3.12. Funding Losses.........................................................30
Section 3.13. Assumptions Concerning Funding of Eurodollar Advances..................30
Section 3.14. Apportionment of Payments..............................................30
Section 3.15. Sharing of Payments, Etc...............................................31
Section 3.16. Benefits to Guarantors.................................................31
Section 3.17. Limitation on Certain Payment Obligations..............................31
Section 3.18. [Reserved].............................................................32
Section 3.19. Failure to Maintain Minimum Required Rating............................32
ARTICLE IV. CONDITIONS TO BORROWING......................................................................32
Section 4.01. Conditions Precedent to Loans..........................................32
Section 4.02. Additional Conditions to Loans.........................................35
ARTICLE V. REPRESENTATIONS AND WARRANTIES...............................................................36
Section 5.01. Corporate Existence; Compliance with Law...............................36
Section 5.02. Corporate Power; Authorization.........................................37
Section 5.03. Enforceable Obligations................................................37
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
Section 5.04. No Legal Bar...........................................................37
Section 5.05. No Material Litigation or Investigations...............................37
Section 5.06. Investment Company Act, Etc............................................37
Section 5.07. Margin Regulations.....................................................38
Section 5.08. Compliance With Environmental Laws.....................................38
Section 5.09. Insurance..............................................................38
Section 5.10. No Default.............................................................39
Section 5.11. No Burdensome Restrictions.............................................39
Section 5.12. Taxes..................................................................39
Section 5.13. Subsidiaries...........................................................39
Section 5.14. Financial Statements...................................................39
Section 5.15. ERISA..................................................................40
Section 5.16. Patents, Trademarks, Licenses, Etc.....................................42
Section 5.17. Ownership of Property..................................................42
Section 5.18. Financial Condition....................................................42
Section 5.19. Labor Matters..........................................................42
Section 5.20. Payment or Dividend Restrictions.......................................43
Section 5.21. Disclosure.............................................................43
Section 5.22. Year 2000 Compliance...................................................43
Section 5.23. Target Acquisition Documents...........................................44
ARTICLE VI. AFFIRMATIVE COVENANTS........................................................................44
Section 6.01. Corporate Existence, Etc...............................................44
Section 6.02. Compliance with Laws, Etc..............................................44
Section 6.03. Payment of Taxes and Claims, Etc.......................................45
Section 6.04. Keeping of Books.......................................................45
Section 6.05. Visitation, Inspection, Etc............................................45
Section 6.06. Insurance; Maintenance of Properties...................................45
Section 6.07. Reporting Covenants....................................................46
Section 6.08. Financial Covenants....................................................49
Section 6.09. Notices Under Certain Other Indebtedness...............................49
Section 6.10. Additional Credit Parties and Collateral...............................50
Section 6.11. Amendment to Note Purchase Agreement...................................50
ARTICLE VII. NEGATIVE COVENANTS...........................................................................50
Section 7.01. Indebtedness...........................................................51
Section 7.02. Liens..................................................................51
Section 7.03. Mergers, Acquisitions, Divestitures....................................52
Section 7.04. Asset Sales............................................................53
Section 7.05. Dividends, Etc.........................................................55
Section 7.06. Investments, Loans, Etc................................................55
Section 7.07. Sale and Leaseback Transactions........................................56
Section 7.08. Transactions with Affiliates...........................................56
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
Section 7.09. Prepayments of Subordinated Debt in Violation
Thereof..............................................................57
Section 7.10. Changes in Business....................................................57
Section 7.11. Limitation on Payment Restrictions Affecting
Consolidated Companies...............................................57
Section 7.12. Actions Under Certain Documents........................................58
ARTICLE VIII. EVENTS OF DEFAULT............................................................................58
Section 8.01. Payments...............................................................58
Section 8.02. Covenants Without Notice...............................................58
Section 8.03. Other Covenants........................................................58
Section 8.04. Representations........................................................58
Section 8.05. Non-Payments of Other Indebtedness.....................................59
Section 8.06. Defaults Under Other Agreements........................................59
Section 8.07. Bankruptcy.............................................................59
Section 8.08. ERISA..................................................................60
Section 8.09. Money Judgment.........................................................60
Section 8.10. Ownership of Credit Parties............................................60
Section 8.11. Change in Control of Intermet..........................................61
Section 8.12. Default Under Other Credit Documents...................................61
Section 8.13. Attachments............................................................61
Section 8.14. Default Under Other Credit Agreements..................................61
ARTICLE IX. THE ADMINISTRATIVE AGENT.....................................................................62
Section 9.01. Appointment of Administrative Agent....................................62
Section 9.02. Authorization of Administrative Agent with Respect to the
Security Documents...........................................................................62
Section 9.03. Nature of Duties of Administrative Agent...............................63
Section 9.04. Lack of Reliance on the Administrative Agent...........................63
Section 9.05. Certain Rights of the Administrative Agent.............................64
Section 9.06. Reliance by Administrative Agent.......................................64
Section 9.07. Indemnification of Administrative Agent................................64
Section 9.08. The Administrative Agent in its Individual
Capacity.............................................................65
Section 9.09. Holders of Notes.......................................................65
Section 9.10. Successor Administrative Agent.........................................65
Section 9.11. Arrangers and Other Agents. ..........................................66
ARTICLE X. MISCELLANEOUS................................................................................66
Section 10.01. Notices...............................................................66
Section 10.02. Amendments, Etc.......................................................66
Section 10.03. No Waiver; Remedies Cumulative........................................67
Section 10.04. Payment of Expenses, Etc..............................................67
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 10.05. Right of Setoff.......................................................69
Section 10.06. Benefit of Agreement..................................................69
Section 10.07. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial.................................................71
Section 10.08. Independent Nature of Lenders' Rights.................................73
Section 10.09. Counterparts..........................................................73
Section 10.10. Effectiveness; Survival...............................................73
Section 10.11. Severability..........................................................73
Section 10.12. Independence of Covenants.............................................74
Section 10.13. Change in Accounting Principles, Fiscal Year or
Tax Laws.............................................................74
Section 10.14. Headings Descriptive; Entire Agreement................................74
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
SCHEDULES
---------
<S> <C>
SCHEDULE 1 Commitments
SCHEDULE 5.01 Organization and Ownership of Subsidiaries
SCHEDULE 5.01(A) Lack of Qualification
SCHEDULE 5.05 Certain Pending and Threatened Litigation
SCHEDULE 5.08 Environmental Matters
SCHEDULE 5.11 Burdensome Restrictions
SCHEDULE 5.12 Tax Filings and Payments
SCHEDULE 5.15 Employee Benefit Matters
SCHEDULE 5.16 Patent, Trademark, License, and Other Intellectual Property Matters
SCHEDULE 5.17 Ownership of Properties
SCHEDULE 5.20 Dividend Restrictions
SCHEDULE 6.08 Financial Covenant Calculations Second Quarter 1999
SCHEDULE 7.01 Existing Indebtedness
SCHEDULE 7.02 Existing Liens
SCHEDULE 7.06 Existing Investments
SCHEDULE 7.07 Permitted Sale and Leaseback Transactions
SCHEDULE 10.01 Notice Information
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS
--------
<S> <C> <C>
EXHIBIT A - Form of Term Note
EXHIBIT B - [Reserved]
EXHIBIT C - [Reserved]
EXHIBIT D-1 - Form of Notice of Borrowing
EXHIBIT D-2 - Form of Notice of Conversion/Continuation
EXHIBIT E - Form of Guaranty Agreement
EXHIBIT F - Form of Closing Certificate
EXHIBIT G-1 - Form of Opinion of Dickinson Wright PLLC
EXHIBIT G-2 - Form of Opinion of Kilpatrick Stockton LLP
EXHIBIT G-3 - Form of Opinion of Mayer, Brown & Platt
EXHIBIT H - Form of Assignment and Acceptance
EXHIBIT I - Form of Compliance Certificate
</TABLE>
v
<PAGE> 7
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT made and entered into as of December 20, 1999, by
and among INTERMET CORPORATION, a Georgia corporation ("Intermet"), THE BANK OF
NOVA SCOTIA, a Canadian chartered bank ("BNS"), acting through its Atlanta
Agency, the other banks and lending institutions listed on the signature pages
hereof, and any assignees of BNS, or such other banks and lending institutions
which become "Lenders" as provided herein (BNS, and such other banks, lending
institutions, and assignees referred to collectively herein as the "Lenders"),
BNS, in its capacity as administrative agent for the Lenders and each successor
agent for such Lenders as may be appointed from time to time pursuant to Article
IX hereof (the "Administrative Agent"), BANK ONE, MICHIGAN, as Syndication
Agent, and SUNTRUST BANK, ATLANTA, as Documentation Agent, (the Administrative
Agent, the Syndication Agent and the Documentation Agent are herein referred to
individually as an "Agent" and collectively as the "Agents").
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent, the
other Agents, the Arrangers and the Lenders have agreed, subject to the terms
and conditions of this Agreement, to make available to Intermet a term loan
facility to finance in part the Target Acquisition;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Intermet, the Lenders, the Administrative Agent and
the other Agents agree, upon the terms and subject to the conditions set forth
herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"Acquisition" shall mean any transaction, or any series of related
transactions, by which Intermet and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of a Person which have ordinary voting
power for the election of directors or (c) otherwise acquires control of a 50%
or more ownership interest in any such Person.
<PAGE> 8
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Administrative Agent" shall have the meaning set forth in the
preamble.
"Advance" shall mean any principal amount advanced on the Closing Date
and remaining outstanding at any time under the Term Loans, which Advances shall
be made or outstanding as Base Rate Advances or Eurodollar Advances, as the case
may be.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agreement" shall mean this Term Loan Agreement, as amended, modified,
restated, or supplemented from time to time.
"Applicable Margin" shall mean, with respect to all outstanding
Eurodollar Advances, the percentage determined from time to time from the chart
set forth below based on Intermet's ratio of Funded Debt to Consolidated EBITDA
determined as of the end of each fiscal quarter, with any change to the
Applicable Margin to be immediately effective on the 60th day of the next fiscal
quarter thereafter:
2
<PAGE> 9
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED APPLICABLE
EBITDA RATIO MARGIN
- - -------------- ----------
<S> <C>
Greater than or Equal to
3.00:1.0 1.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 1.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 1.250%
Less than 2.00:1.0 and
Greater than or Equal to
1.50:1.0 1.000%
Less than 1.50:1.0 0.750%
</TABLE>
provided, however, that the Applicable Margin shall be no less than 2.00% until
June 20, 2000; and provided, further, that after June 20, 2000, if Intermet
fails to deliver its financial statements for such preceding fiscal quarter
pursuant to Section 6.07 prior to the 60th day of the then-current fiscal
quarter, the Applicable Margin with respect to Eurodollar Advances shall be
1.75% until such financial statements are delivered.
"Arrangers" shall mean BNS; Bank One, Michigan; SunTrust Bank, Atlanta;
Comerica Bank and KeyBank National Association.
"Asset Sale" shall mean any sale or other disposition (or a series of
related sales or other dispositions), including without limitation, loss,
damage, destruction or taking, by any Consolidated Company to any Person other
than a Consolidated Company, of any property or asset (including capital stock
but excluding the issuance and sale by Intermet of its own capital stock) having
an aggregate Asset Value in excess of $1,000,000, other than sales or other
dispositions made in the ordinary course of business of any Consolidated
Company.
"Asset Value" shall mean, with respect to any property or
asset of any Consolidated Company as of any particular date, an amount equal to
the greater of (i) the then book value of such property or asset as established
in accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by such Consolidated Company.
3
<PAGE> 10
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee in accordance with the terms
of this Agreement and substantially in the form of Exhibit H.
"Bankruptcy Code" shall mean The Federal Bankruptcy Reform Act of
1978, as amended and in effect from time to time (11 U.S.C. ss. 101 et seq.).
"Base Rate" shall mean the higher of (with any change in the Base Rate
to be effective as of the date of change of either of the following rates):
(a) the rate of interest then most recently established by the
Administrative Agent in New York from time to time to be its base rate for
Dollars loaned in the United States, as in effect from time to time, and
(b) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%) per annum.
The Administrative Agent's base rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers; the
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent's base rate.
"Base Rate Advance" shall mean an Advance made or outstanding as (i) a
Loan bearing interest based on the Base Rate, or (ii) an Advance bearing
interest at the rate agreed upon between Intermet and the Lenders pursuant to
Section 3.08, Section 3.09 or Section 3.10.
"Base Rate Margin" shall mean, with respect to all outstanding Base
Rate Advances, the percentage determined from time to time from the chart set
forth below based on Intermet's ratio of Funded Debt to Consolidated EBITDA
determined as of the end of each fiscal quarter, with any change to the Base
Rate Margin to be immediately effective on the 60th day of the next fiscal
quarter thereafter:
4
<PAGE> 11
FUNDED DEBT TO
CONSOLIDATED BASE RATE
EBITDA RATIO MARGIN
- - ------------ ---------
Greater than or Equal to
3.00:1.0 0.750%
Less than 3.00:1.0 and
Greater than or Equal to
2.50:1.0 0.500%
Less than 2.50:1.0 and
Greater than or Equal to
2.00:1.0 0.250%
Less than 2.00:1.0 0%
provided, however, that the Base Rate Margin shall be no less than 1.00% until
June 20, 2000; and provided, further, that after June 20, 2000, if Intermet
fails to deliver its financial statements for any fiscal quarter pursuant to
Section 6.07 prior to the 60th day of the next fiscal quarter, the Base Rate
Margin with respect to Base Rate Advances shall be 0.75% until such financial
statements are delivered.
"BNS" shall have the meaning set forth in the preamble.
"Borrowing" shall mean the incurrence by Intermet under the Facility
of Advances of one Type concurrently having the same Interest Period or the
continuation or conversion of an existing Borrowing or Borrowings in whole or in
part.
"Business Day" shall mean:
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are required or authorized to close in Atlanta, Georgia or New
York, New York; and
(b) relative to the making, continuing, prepaying or repaying of any
Eurodollar Advances, any day on which trading is carried on by and between banks
in deposits of Dollars in the London interbank market.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Intermet evidencing debt or a commitment
to extend loans in excess of $5,000,000 which requires, or permits the holder(s)
of such Indebtedness of Intermet to require that such Indebtedness of Intermet
be redeemed, repurchased, defeased, prepaid or repaid, either
5
<PAGE> 12
in whole or in part, or the maturity of such Indebtedness of Intermet to be
accelerated in any respect, as a result of a change in ownership of the capital
stock of Intermet or voting rights with respect thereto or a change in the
composition of the board of directors of Intermet.
"Closing Date" shall mean the date on or before December 30, 1999 on
which the Loans are made hereunder and the conditions set forth in Section 4.01
are satisfied or waived in accordance with Section 10.02.
"Commitment" shall mean, for any Lender at any time, the amount of
such commitment set forth opposite such Lender's name on Schedule 1, as the same
may be increased or decreased from time to time as a result of any assignment
thereof pursuant to Section 10.06 or any amendment thereof pursuant to Section
10.02.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of all expenditures of Intermet and its Subsidiaries for fixed
or capital assets made during such period which, in accordance with GAAP, would
be classified as capital expenditures.
"Consolidated Companies" shall mean, collectively, Intermet and all of
its Subsidiaries (including, without limitation, the Targets).
"Consolidated EBIT" shall mean, for any fiscal period of Intermet, an
amount equal to (A) the sum for such fiscal period of Consolidated Net Income
(Loss) and, to the extent deducted in determining such Consolidated Net Income
(Loss), provisions for (i) taxes based on income and (ii) Consolidated Interest
Expense, minus (B) any items of gain (or plus any items of loss) which were
included in determining such Consolidated Net Income (Loss) and were (x) not
realized in the ordinary course of business (whether or not classified as
"ordinary" by GAAP), (y) the result of any sale of assets, or (z) resulting from
minority investments, together with, in the case of (x), (y) or (z), any related
provision for taxes included in Consolidated Net Income (Loss) with respect
thereto, plus (C) without duplication, the sum of the following items to the
extent not included in Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which became a Subsidiary during such period (a "New Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units acquired by any
Consolidated Company during such period ("New Assets"); and
(3) the sum of the following items to the extent deducted in
determining net income of any New Subsidiary or derived from any New Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as
6
<PAGE> 13
"ordinary" by GAAP), (bb) the result of any sale of assets, or (cc)
resulting from minority investments, together in the case of (aa), (bb) or
(cc), any related provision for taxes included in such net income with
respect thereto;
minus (D) the sum of the following items to the extent included in determining
Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any Person
which ceased to be a Subsidiary (other than due to merger or consolidated
with another Consolidated Company) during such period (an "Old
Subsidiary");
(2) the net income (or net loss) derived during such period from
the assets of any plants, divisions or business units sold or otherwise
disposed of by any Consolidated Company during such period ("Old Assets");
and
(3) the sum of the following items to the extent deducted in
determining net income of any Old Subsidiary or derived from any Old Assets
during such period: (x) taxes based on income, (y) Consolidated Interest
Expense, and (z) any items of gain (or plus any items of loss) which were
included in determining such net income and were (aa) not realized in the
ordinary course of business (whether or not classified as "ordinary" by
GAAP), (bb) the result of any sale of assets, or (cc) resulting from
minority investments, together in the case of (aa), (bb) or (cc), any
related provision for taxes included in such net income with respect
thereto.
For purposes of calculating any financial definitions based upon Consolidated
EBIT, the addition or subtraction of any other financial definitions to or from
Consolidated EBIT shall be calculated with appropriate adjustment for New
Subsidiaries, New Assets, Old Subsidiaries and Old Assets as is consistent with
this definition.
"Consolidated EBITDA" shall mean for any fiscal period of Intermet, an
amount equal to the sum of Consolidated EBIT plus depreciation and amortization
expense to the extent deducted in determining Consolidated Net Income (Loss),
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any fiscal period of
Intermet, total interest expense of the Consolidated Companies (including
without limitation, interest expense attributable to capitalized leases in
accordance with GAAP, all commissions, discounts and other fees and charges owed
with respect to bankers acceptance financing, and total interest expense
(whether shown as interest expense or as loss and expenses on sale of
receivables) under a receivables purchase facility) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal period of
Intermet, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period
7
<PAGE> 14
(taken as a single accounting period) determined in conformity with GAAP, but
excluding therefrom (to the extent otherwise included therein) (i) any income or
loss of any Person accrued prior to the date such Person becomes a Subsidiary of
Intermet or is merged into or consolidated with any Consolidated Company or all
or substantially all of such Person's assets are acquired by any Consolidated
Company, and (ii) the income of any Consolidated Company to the extent that the
declaration or payment of dividends or similar distributions by such
Consolidated Company of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation.
"Consolidated Net Worth" shall mean, as of any date of determination,
Shareholders' Equity of Intermet.
"Contractual Obligation" of any Person shall mean any provision of any
security issued by such Person or of any agreement, instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound, which in the case of Intermet shall include, without limitation,
the Target Acquisition Documents.
"Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Fee Letters, the Guaranty Agreements, and all other Security
Documents, if any.
"Credit Parties" shall mean, collectively, each of Intermet, the
Guarantors, and every other Person who from time to time executes a Security
Document with respect to all or any portion of the Obligations.
"Default" shall mean any condition or event which, with notice or
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Domestic Subsidiary" shall mean each Consolidated Company that is
organized under the laws of the United States or any political subdivision
thereof.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any political subdivision thereof, having,
total assets in excess of $1,000,000,000 or (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or any political subdivision
of any such country, and having total assets in excess of $1,000,000,000 (or its
equivalent in other currencies), provided that such bank is acting through a
branch or agency located in the United States or the Cayman Islands, (iii) any
Lender, or (iv) any commercial finance or asset based lending Affiliate of any
such commercial bank or Lender described in the foregoing clauses (i) through
(iii), in each case, which has the Minimum Required Rating, unless otherwise
agreed by the Administrative Agent.
8
<PAGE> 15
"Environmental Laws" shall mean all federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated, or
approved thereunder, now or hereafter in effect (including, without limitation,
those with respect to asbestos or asbestos containing material or exposure to
asbestos or asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety, relating to (i)
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law into the
environment (including without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of any Hazardous Substance, petroleum including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage tanks and
related piping, and emissions, discharges and releases or threatened releases
therefrom, such Environmental Laws to include, without limitation (i) the Clean
Air Act (42 U.S.C. ss. 7401 et seq.), (ii) the Clean Water Act (33 U.S.C. ss.
1251 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C. ss.
6901 et seq.), (iv) the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), (v) the Comprehensive Environmental Response Compensation and Liability
Act, as amended by the Superfund Amendments and Reauthorization Act (42 U.S.C.
ss. 9601 et seq.), and (vi) all applicable national and local laws or
regulations with respect to environmental control (including applicable laws of
the Federal Republic of Germany or any applicable international agreements).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each trade
or business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Tax Code.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
Term Loan bearing interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning provided in Article VIII.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to any Person, the
President, Chief Executive Officer, Vice Presidents, Chief Financial Officer,
Treasurer, Secretary and any other individual holding comparable offices or
duties.
9
<PAGE> 16
"Facility" shall mean the Commitments.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent.
"Fee Letters" shall mean each of (i) the confidential fee letter,
dated as of November 19, 1999, between Intermet and the Arrangers, and (ii) the
confidential fee letter, dated as of November 19, 1999, between Intermet and
BNS.
"Five-Year Credit Agreement" shall mean the Five-Year Credit
Agreement, dated as of November 5, 1999 (as amended, modified, restated or
supplemented from time to time), among Intermet, the various financial
institutions that are or may become parties thereto and BNS, as administrative
agent.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of Intermet, the ratio of (A) Consolidated EBITDA minus
Consolidated Capital Expenditures to (B) the sum of the amounts of (i)
Consolidated Interest Expense, and (ii) principal payments on Indebtedness in
each case, calculated with respect to the immediately preceding four fiscal
quarters ending on such date.
"Foreign Plan" shall mean any pension, profit sharing, deferred
compensation, or other employee benefit plan, program or arrangement maintained
by any Foreign Subsidiary which, under applicable local law, is required to be
funded through a trust or other funding vehicle, but shall not include any
benefit provided by a foreign government or its agencies.
"Foreign Subsidiary" shall mean each Consolidated Company that is not
a Domestic Subsidiary.
"Foreign 956 Subsidiary" means each Foreign Subsidiary a guaranty of
the Obligations by which would result in a deemed dividend of its current and
accumulated earnings and profits under section 956 of the Tax Code that would
result in material increased tax liabilities for the Consolidated Companies,
taken as a whole.
"Funded Debt" shall mean all Indebtedness for money borrowed,
Indebtedness evidenced or secured by purchase money Liens, capitalized leases,
conditional sales contracts and similar title retention debt instruments,
whether designated as long term or current debt under GAAP and all synthetic
leases even if not treated as Indebtedness under GAAP. The calculation
10
<PAGE> 17
of Funded Debt shall include (i) all Funded Debt of the Consolidated Companies,
plus (ii) all Funded Debt of other Persons to the extent guaranteed by a
Consolidated Company, to the extent supported by a letter of credit issued for
the account of a Consolidated Company, or as to which and to the extent which a
Consolidated Company or its assets otherwise have become liable for payment
thereof, plus (iii) the redemption amount with respect to the stock of any
Consolidated Company required to be redeemed during the next succeeding twelve
months.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantors" shall mean, collectively, each Domestic Subsidiary
(including, without limitation, each Target) other than those which are
designated on Schedule 5.01 as "inactive" and each Foreign Subsidiary that is
not a Foreign 956 Subsidiary.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or an agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreement" shall mean the Guaranty Agreement, dated as of
even date herewith, executed by each of the Guarantors in favor of the Lenders
and the Administrative Agent, substantially in the form of Exhibit E as the same
may be amended, restated or supplemented from time to time.
"Hazardous Substances" shall mean (a) any "hazardous substance," as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss.9601 et. seq., and any amendments thereto or
regulations promulgated thereunder from time to time, (b) any "hazardous waste,"
as defined in the Resource Conversation and Recovery Act, 42 U.S.C. ss.6901 et.
seq. and any amendments thereto or regulations promulgated thereunder
11
<PAGE> 18
from time to time, and (c) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance (including any petroleum product) as
defined in any other Environmental Laws.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person which in accordance with GAAP would be shown on the
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (ii) all rental obligations under leases required to be
capitalized under GAAP; (iii) all Guaranties of such Person (including
contingent reimbursement obligations under undrawn letters of credit); (iv)
Indebtedness of others secured by any Lien upon property owned by such Person,
whether or not assumed; (v) obligations or other liabilities under currency
contracts, interest rate hedging contracts, or similar agreements or
combinations thereof to the extent required to be disclosed in accordance with
GAAP; and (vi) all synthetic leases, even if not required to be disclosed in
accordance with GAAP.
"Interest Period" shall mean the interest period selected by Intermet
pursuant to Section 3.04(a) hereof.
"Intermet" shall mean Intermet Corporation, a Georgia corporation, its
successors and permitted assigns.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person, in each case, other than an Acquisition. Each Investment shall
be valued as of the date made; provided that any Investment or portion of an
Investment consisting of Indebtedness shall be valued at the outstanding
principal balance thereof as of the date of determination.
"Lender" or "Lenders" shall mean BNS, the other banks and lending
institutions listed on the signature pages hereof, and each assignee thereof, if
any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender the office such Lender may
designate in writing from time to time to Intermet and the Administrative Agent
with respect to each Type of Loan.
"LIBOR" shall mean, for any Interest Period, with respect to
Eurodollar Advances under the Commitments, the offered rate for deposits in
Dollars, for a period comparable to the
12
<PAGE> 19
Interest Period and in an amount comparable to the Administrative Agent's
portion of such Advances, appearing on Telerate Page 3750 as of 11:00 AM
(London, England time) on the day that is two Business Days prior to the first
day of the Interest Period. If two or more of such rates appear on such Telerate
Page, the rate shall be the arithmetic mean of such rates. If the foregoing rate
is unavailable from Telerate for any reason, then such rate shall be determined
by the Administrative Agent from the Reuters Screen LIBO Page or, if such rate
is also unavailable on such service, then on any other interest rate reporting
service of recognized standing designated in writing by the Administrative Agent
to Intermet and the Lenders; in any such case rounded, if necessary, to the next
higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean the Term Loans.
"Margin Regulations" shall mean Regulation T, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System, as the
same may be in effect from time to time.
"Margin Stock" shall have the meaning set forth in the Margin
Regulations.
"Materially Adverse Effect" shall mean any materially adverse change
in (i) the business, results of operations, financial condition, assets or
prospects of the Consolidated Companies, taken as a whole, (ii) the ability of
Intermet to perform its obligations under this Agreement, (iii) the ability of
the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents, or (iv) the perfection or priority of
the Liens granted in favor of the Administrative Agent pursuant to the Security
Documents.
"Maturity Date" shall mean the earlier of (i) June 20, 2001, and (ii)
the date on which all amounts outstanding under this Agreement have been
declared or have automatically become due and payable pursuant to the provisions
of Article VIII.
"Minimum Required Rating" shall mean (i) from Moody's, a long-term
deposit rating of A1 or higher (or comparable rating in the event Moody's
hereafter modifies its rating system for long-term deposits of commercial
banks), and (ii) from S&P, a long-term deposit ratings of A+ or higher (or
comparable rating in the event S&P hereafter modifies its rating system for
long-term deposits of commercial banks).
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors and assigns.
13
<PAGE> 20
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Fixed Assets" shall mean, as of any date of determination, the
net property, plant and equipment of the Consolidated Companies determined in
accordance with GAAP and as reflected on the balance sheet of Intermet.
"Note Purchase Agreement" shall mean that certain Amended and Restated
Note Purchase Agreement dated as of March 21, 1996, by and between Intermet and
Prudential, as amended, modified or supplemented.
"Notes" shall mean, collectively, the Term Notes.
"Notice of Borrowing" shall mean a notification of Borrowing by
Intermet pursuant to Section 3.01 substantially in the form of Exhibit D-1.
"Notice of Conversion/Continuation" shall mean a notification of
continuation or conversion of a Borrowing by Intermet pursuant to Section 3.01
substantially in the form of Exhibit D-2.
"Obligations" shall mean all amounts owing to the Administrative Agent
or any Lender pursuant to the terms of this Agreement or any other Credit
Document, including without limitation, all Loans (including all principal and
interest payments due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the Credit
Parties, direct or indirect, absolute or contingent, liquidated or unliquidated,
now existing or hereafter arising, together with all renewals, extensions,
modifications or refinancings thereof.
"Payment Office" shall mean the office specified as the "Payment
Office" for the Administrative Agent on Schedule 10.01, or such other location
as to which the Administrative Agent shall have given written notice to Intermet
and the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
Section 7.02.
"Permitted Receivables" means all obligations of any obligor (whether
now existing or hereafter arising) under a contract for sale of goods or
services by Intermet or any of its Subsidiaries, which shall include any
obligation of such obligor (whether now existing or hereafter arising) to pay
interest, finance charges or amounts with respect thereto, and, with respect to
any of the foregoing receivables or obligations, (a) all of the interest of
Intermet or any of its Subsidiaries in the goods (including returned goods) the
sale of which gave rise to such
14
<PAGE> 21
receivable or obligation after the passage of title thereto to any obligor, (b)
all other Liens and property subject thereto from time to time purporting to
secure payment of such receivables or obligations, and (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
receivables or obligations.
"Permitted Receivables Purchase Facility" means any agreement of
Intermet or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to be sales (and considered
sales under GAAP) that do not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables (or against any of such
seller's Affiliates) by way of a guaranty or any other support arrangement, with
respect to the amount of such Permitted Receivables (based on the financial
condition or circumstances of the obligor thereunder), other than such limited
recourse as is reasonable given market standards for transactions of a similar
type, taking into account such factors as historical bad debt loss experience
and obligor concentration levels.
"Person" shall mean any individual, limited liability company,
partnership, firm, corporation, association, joint venture, trust or other
entity, or any government or political subdivision or agency, department or
instrumentality thereof.
"Plan" shall mean any "employee benefit plan" (as defined in Section
3(3) of ERISA), including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift plan, stock
bonus plan, employee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits, but shall exclude any Foreign Plan.
"Pro Rata Share" shall mean, with respect to Commitments, each Term
Loan to be made by and each payment (including, without limitation, any payment
of principal, interest or fees) to be made to each Lender, the percentage
designated as such Lender's Pro Rata Share of such Commitments, set forth under
the name of such Lender on Schedule 1, as such percentage may change based upon
amendments and assignments hereunder.
"Prudential" shall mean, The Prudential Insurance Company of America.
"Rating Agencies" shall mean, collectively, Moody's and S&P.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to time.
"Required Lenders" shall mean at any time prior to the termination of
the Commitments, Lenders holding at least 51% of the then aggregate amount of
the Commitments,
15
<PAGE> 22
or, following the termination of the Commitments hereunder, Lenders holding at
least 51% of the sum of the aggregate outstanding Loans.
"Requirement of Law" for any Person shall mean the articles or certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reuters Screen" shall mean, when used in connection with any designated
page and LIBOR, the display page so designated on the Reuters Monitor Money
Rates Service (or such other page as may replace that page on that service for
the purpose of displaying rates comparable to LIBOR).
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Security Documents" shall mean, collectively, the Guaranty Agreement and
each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations, as the same may be amended, restated, or supplemented
from time to time.
"Shareholders' Equity" shall mean, with respect to any Person as at any
date of determination, shareholders' equity of such Person determined on a
consolidated basis in conformity with GAAP.
"Solvent" shall mean, as to Intermet or any Guarantor at any time, that (i)
each of the fair value and the present fair saleable value of such Person's
assets (including any rights of subrogation or contribution to which such Person
is entitled, under any of the Loan Documents or otherwise) is greater than such
Person's debts and other liabilities (including contingent, unmatured and
unliquidated debts and liabilities) and the maximum estimated amount required to
pay such debts and liabilities as such debts and liabilities mature or otherwise
become payable; (ii) such Person is able and expects to be able to pay its debts
and other liabilities (including, without limitation, contingent, unmatured and
unliquidated debts and liabilities) as they mature; and (iii) such Person does
not have unreasonably small capital to carry on its business as conducted and as
proposed to be conducted.
"Subordinated Debt" shall mean other Indebtedness of Intermet subordinated
to all obligations of Intermet or any other Credit Party arising under this
Agreement, the Notes, and the Guaranty Agreements on terms and conditions
satisfactory in all respects to the Administrative Agent and the Required
Lenders, including without limitation, with respect to interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies,
16
<PAGE> 23
and subordination provisions, evidenced by the written approval of the
Administrative Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation, partnerships, limited liability
companies, joint ventures, and associations) regardless of its jurisdiction of
organization or formation, at least a majority of the total combined voting
power of all classes of voting stock or other ownership interests of which
shall, at the time as of which any determination is being made, be owned by such
Person, either directly or indirectly through one or more other Subsidiaries.
"Target Acquisition" means the acquisition of all of the outstanding
capital stock of the Targets pursuant to the Target Acquisition Documents, the
payment in full and termination of the Target Existing Indebtedness and the
payment of all of related fees and expenses in connection with either of the
foregoing.
"Target Acquisition Documents" means (i) the Stock Purchase Agreement,
dated as of November 16, 1999, among the Sellers listed on the signature pages
thereto, Ganton Technologies Inc., Intermet, JJM, LLC, Cerberus Partners, L.P.,
and Joyce Johnson-Miller, and the "Sale Documents" (as defined therein) and (ii)
the Stock Purchase Agreement, dated as of November 16, 1999, among the Sellers
listed on the signature pages thereto, Diversified Diemakers, Inc., Intermet,
JJM, LLC, Cerberus Partners, L.P., and Joyce Johnson-Miller, and the "Sale
Documents" (as defined therein).
"Target Existing Indebtedness" means all Indebtedness listed on Schedule
4.05(m) of either of the Stock Purchase Agreements described in the definition
of "Target Acquisition Documents."
"Targets" shall mean Ganton Technologies Inc., an Illinois corporation, and
Diversified Diemakers, Inc., a Delaware corporation.
"Tax Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
fees, assessments, deductions, withholdings or other charges of whatever nature,
including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security and franchise taxes now
or hereafter imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political subdivision
or taxing authority thereof or therein and all interest, penalties, additions to
tax and similar liabilities with respect thereto.
17
<PAGE> 24
"Telerate" shall mean, when used in connection with any designated page and
LIBOR, the display page so designated on the Dow Jones Telerate Service (or such
other page as may replace that pace on that service for the purpose of
displaying rates comparable to LIBOR).
"Term Loans" shall mean, collectively, all outstanding Loans made to
Intermet by the Lenders pursuant to Section 2.01(a) hereof.
"Term Notes" shall mean, collectively, the promissory notes evidencing the
Term Loans in the form attached hereto as Exhibit A, either as originally
executed or as hereafter amended, modified or substituted.
"364-Day Credit Agreement" shall mean the 364-Day Credit Agreement, dated
as of November 5, 1999 (as amended, modified, restated or supplemented from time
to time), among Intermet, the various financial institutions that are or may
become parties thereto, and BNS, as administrative agent.
"Total Assets" shall mean the total assets of the Consolidated Companies,
determined in accordance with GAAP.
"Total Sales" shall mean, for any period of determination, the total
revenues of the Consolidated Companies, determined in accordance with GAAP.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate Advances
or Eurodollar Advances.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless otherwise defined
or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared, and all financial records
shall be maintained in accordance with, GAAP, except that financial records of
Foreign Subsidiaries may be maintained in accordance with generally accepted
accounting principles in effect from time to time in the jurisdiction of
organization of such Foreign Subsidiary; provided, however, that compliance with
the financial covenants and calculations set forth in Section 6.08, Article VII,
and elsewhere herein, and in the definitions used in such covenants and
calculations, shall be calculated, made and applied in accordance with GAAP and
such generally accepted accounting principles in such foreign jurisdictions, as
the case may be, as in effect on the date of this Agreement applied on a basis
consistent with the preparation of the financial statements referred to in
Section 5.14 unless and until Intermet and the Required Lenders enter into an
agreement with respect thereto in accordance with Section 10.13.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article,
18
<PAGE> 25
Section, Schedule, Exhibit and like references are to this Agreement unless
otherwise specified. Any of the terms defined in Section 1.01 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
ARTICLE II.
TERM LOANS
SECTION 2.01. COMMITMENTS; USE OF PROCEEDS.
(a) Subject to and upon the terms and conditions herein set forth, each
Lender severally agrees to make to Intermet on the Closing Date, loans (each
such loan, a "Term Loan") in an aggregate amount not to exceed such Lender's
Commitment, subject, however, to the conditions that (i) at no time shall the
outstanding principal amount of all Term Loans exceed the sum of the
Commitments, and (ii) at all times shall the outstanding principal amount of the
Term Loans of each Lender equal the product of each Lender's Pro Rata Share of
the Commitments multiplied by the aggregate outstanding amount of the Term
Loans. Term Loans which are repaid or prepaid by Intermet may not be reborrowed.
No Loans may be made after the Closing Date.
(b) The initial Borrowing of Term Loans on the Closing Date shall consist
entirely of Base Rate Advances. Each Loan shall, at the option of Intermet, be
continued as, or converted into, part of one or more Borrowings that shall
consist entirely of Base Rate Advances or Eurodollar Advances. The aggregate
principal amount of each Borrowing of Loans shall be not less than $5,000,000 or
a greater integral multiple of $1,000,000, provided that each Borrowing of Loans
comprised of Base Rate Advances shall be not less than $1,000,000 or a greater
integral multiple of $100,000 and provided, further, that this sentence shall
not otherwise apply to the initial Borrowing of Term Loans. At no time shall the
number of outstanding Borrowings comprised of Eurodollar Advances exceed eight
(8).
(c) The proceeds of Loans shall be used solely to finance the Target
Acquisition.
SECTION 2.02. NOTES; REPAYMENT OF PRINCIPAL.
(a) Intermet's obligations to pay the principal of, and interest on, the
Loans to each Lender shall be evidenced by the records of the Administrative
Agent and such Lender and by the Term Note payable to such Lender completed in
conformity with this Agreement.
19
<PAGE> 26
(b) All outstanding principal amounts under the Commitments shall be due
and payable in full on the Maturity Date.
ARTICLE III.
GENERAL LOAN TERMS
SECTION 3.01. FUNDING NOTICES.
(a) Intermet shall give the Administrative Agent a duly completed Notice of
Borrowing in the form of Exhibit D-1 attached hereto prior to 11:00 AM (local
time for the Administrative Agent) at its Payment Office on the Closing Date. If
the Notice of Borrowing does not conform substantially to the format of Exhibit
D-1, it may be rejected in the Administrative Agent's sole discretion, and the
Administrative Agent shall notify Intermet of such rejection by telecopy not
later than 12:00 noon (Atlanta, Georgia time) on the date of receipt. The Notice
of Borrowing shall be irrevocable and shall specify the aggregate principal
amount of the Borrowing, the date of Borrowing (which shall be the Closing
Date), and that the Borrowing is to consist entirely of Base Rate Advances.
(b) Whenever Intermet desires to convert all or a portion of an outstanding
Borrowing, which Borrowing consists of Base Rate Advances or Eurodollar
Advances, into one or more Borrowings consisting of Advances of another Type, or
to continue outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, it shall give the Administrative Agent a duly completed Notice
of Conversion/Continuation in the form of Exhibit D-2 attached hereto, such
Notice of Conversion/Continuation to be given at least three Business Days prior
to each such Borrowing to be converted into or continued as Eurodollar Advances.
Such Notice of Conversion/Continuation shall be given prior to 11:00 AM (local
time for the Administrative Agent) on the date specified at the Payment Office
of the Administrative Agent. Notices received after 11:00 AM (local time for the
Administrative Agent) shall be deemed received on the next Business Day. A
Notice of Conversion/ Continuation that does not conform substantially to the
format of Exhibit D-2 may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall notify Intermet of such rejection
by telecopy not later than 12:00 noon (Atlanta, Georgia time) on the date of
receipt. Each such Notice of Conversion/Continuation shall be irrevocable and
shall specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation, whether the Advances are
being converted into or continued Eurodollar Advances and, if so, the Interest
Period applicable thereto. If, upon the expiration of any Interest Period in
respect of any Borrowing, Intermet shall have failed to deliver the Notice of
Conversion/Continuation, Intermet shall be deemed to have elected to convert or
continue such Borrowing to a Borrowing consisting of Base Rate Advances. So long
as any Executive Officer of Intermet has knowledge that any Default or Event of
Default shall have occurred and be continuing, no Borrowing may be converted
into or continued as (upon expiration of the current Interest Period) Eurodollar
20
<PAGE> 27
Advances unless the Administrative Agent and each of the Lenders shall have
otherwise consented in writing. No conversion of any Borrowing of Eurodollar
Advances shall be permitted except on the last day of the Interest Period in
respect thereof.
(c) Without in any way limiting Intermet's obligation to confirm in writing
any telephonic notice, the Administrative Agent may act without liability upon
the basis of telephonic notice believed by the Administrative Agent in good
faith to be from Intermet prior to receipt of written confirmation. In each such
case, Intermet hereby waives the right to dispute the Administrative Agent's
record of the terms of such telephonic notice.
(d) The Administrative Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile transmission
of the matters covered by the notices given to the Administrative Agent pursuant
to this Section 3.01 with respect to the Commitments.
SECTION 3.02. DISBURSEMENT OF FUNDS.
(a) No later than 2:00 PM (local time for the Administrative Agent) on the
Closing Date, each Lender will make available its Pro Rata Share of the Loans in
immediately available funds at the Payment Office of the Administrative Agent.
The Administrative Agent will make available to Intermet the aggregate of the
amounts (if any) so made available by the Lenders to the Administrative Agent in
a timely manner by crediting such amounts to Intermet's demand deposit account
maintained with the Administrative Agent or at Intermet's option, effecting a
wire transfer of such amounts to an account specified by Intermet, by the close
of business on such Business Day. In the event that the Lenders do not make such
amounts available to the Administrative Agent by the time prescribed above, but
such amount is received later that day, such amount may be credited to Intermet
in the manner described in the preceding sentence on the next Business Day (with
interest on such amount to begin accruing hereunder on such next Business Day).
(b) [Reserved].
(c) Unless the Administrative Agent shall have been notified by any Lender
prior to 12:00 Noon on the Closing Date that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of the Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date and the
Administrative Agent may make available to Intermet a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender on the Closing Date, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify Intermet, and Intermet
shall immediately pay such corresponding amount to the
21
<PAGE> 28
Administrative Agent together with interest at the rate specified for the
Borrowing. Nothing in this subsection shall be deemed to relieve any Lender from
its obligation to fund its Commitment hereunder or to prejudice any rights which
Intermet may have against any Lender as a result of any default by such Lender
hereunder.
(d) All Loans under the Commitments shall be loaned by the Lenders on the
basis of their Pro Rata Share of the Commitments. No Lender shall be responsible
for any default by any other Lender in its obligations hereunder, and each
Lender shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fund its Commitments hereunder.
SECTION 3.03. INTEREST.
(a) Intermet agrees to pay interest in respect of all unpaid principal
amounts of Loans from the respective dates such principal amounts were advanced
to maturity (whether by acceleration, notice of prepayment or otherwise) at
rates per annum equal to the applicable rates indicated below:
(i) For Base Rate Advances--The relevant Base Rate in effect from time
to time plus the Base Rate Margin; or
(ii) For Eurodollar Advances--The relevant Adjusted LIBO Rate plus the
Applicable Margin.
(b) Overdue principal and, to the extent not prohibited by applicable law,
overdue interest, in respect of the Loans, and all other overdue amounts owing
hereunder, shall bear interest from each date that such amounts are overdue:
(i) in the case of overdue principal and interest with respect to all
Loans outstanding as Eurodollar Advances, at the rate otherwise applicable
for the then-current Interest Period plus an additional two percent (2.0%)
per annum; thereafter at the rate in effect for Base Rate Advances plus an
additional two percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest with respect to all
other Loans outstanding as Base Rate Advances, and all other Obligations
hereunder (other than Loans), at a rate in effect for Base Rate Advances
plus an additional two percent (2.0%) per annum;
(c) Interest on each Loan shall accrue from and including the date of such
Loan to but excluding the date of any repayment thereof; provided that, if a
Loan is repaid on the same day made, one day's interest shall be paid on such
Loan. Interest on all Base Rate Advances shall be payable monthly in arrears on
the last calendar day of each calendar month.
22
<PAGE> 29
Interest on all outstanding Eurodollar Advances shall be payable on the last day
of each Interest Period applicable thereto, and, in the case of Interest Periods
in excess of three months, on each day which occurs every 3 months, as the case
may be, after the initial date of such Interest Period. Interest on all Loans
shall be payable on any conversion of any Advances comprising such Loans into
Advances of another type, prepayment (on the amount prepaid), at maturity
(whether by acceleration, notice of prepayment or otherwise) and, after
maturity, on demand; and
(d) The Administrative Agent, upon determining the Adjusted LIBO Rate for
any Interest Period, shall promptly notify by telephone (confirmed in writing)
or in writing Intermet and the other Lenders. Any such determination shall,
absent manifest error, be final, conclusive and binding for all purposes.
SECTION 3.04. INTEREST PERIODS.
(a) In connection with the continuation of, or conversion into, each
Borrowing of Eurodollar Advances, Intermet shall select an Interest Period to be
applicable to such Eurodollar Advances, which Interest Period shall be either a
1, 2, 3 or 6 month period.
(b) Notwithstanding paragraph (a) above:
(i) The initial Interest Period for any Borrowing of Eurodollar Advances
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing consisting of Advances of another Type) and each
Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day which is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period in respect of Eurodollar Advances
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which begins on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period shall, subject to part (iv) below, expire on
the last Business Day of such calendar month; and
(iv) No Interest Period with respect to the Loans shall extend beyond the
Maturity Date.
SECTION 3.05. FEES. Intermet shall pay to the Arrangers (including BNS) for
their own accounts, such fees in the amounts and on the dates set forth in the
Fee Letters.
23
<PAGE> 30
SECTION 3.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) Intermet may, at its option, prepay Borrowings consisting of Base Rate
Advances at any time in whole, or from time to time in part, in amounts
aggregating $100,000 or any greater integral multiple of $100,000, by paying the
principal amount to be prepaid together with interest accrued and unpaid thereon
to the date of prepayment. Those Borrowings consisting of Eurodollar Advances
may be prepaid, at Intermet's option, in whole, or from time to time in part, in
amounts aggregating $1,000,000 or any greater integral multiple of $100,000, by
paying the principal amount to be prepaid, together with interest accrued and
unpaid thereon to the date of prepayment, and all compensation payments pursuant
to Section 3.12 if such prepayment is made on a date other than the last day of
an Interest Period applicable thereto. Each such optional prepayment shall be
applied in accordance with Section 3.06(c) below.
(b) Intermet shall give written notice (or telephonic notice confirmed in
writing) to the Administrative Agent of any intended prepayment of the Loans (i)
prior to 12:00 noon (local time for the Administrative Agent), on the date of
any prepayment of Base Rate Advances and (ii) not less than three Business Days
prior to any prepayment of Eurodollar Advances. Such notice, once given, shall
be irrevocable. Upon receipt of such notice of prepayment, the Administrative
Agent shall promptly notify each Lender of the contents of such notice and of
such Lender's share of such prepayment.
(c) Intermet, when providing notice of prepayment pursuant to Section
3.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid provided that each prepayment made pursuant
to a single Borrowing shall be applied pro rata among the Advances comprising
such Borrowing. In the absence of a designation by Intermet, the Administrative
Agent shall, subject to the foregoing, make such designation in its sole
discretion. All voluntary prepayments shall be applied to the payment of
interest on the Borrowings prepaid before application to principal.
SECTION 3.07. PAYMENTS, ETC.
(a) Except as otherwise specifically provided herein, all payments under
this Agreement and the other Credit Documents shall be made without defense,
set-off or counterclaim to the Administrative Agent not later than 1:00 PM
(local time for the Administrative Agent) on the date when due and shall be made
in Dollars in immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of and without
set-off, deduction or withholding for any Taxes in respect of this Agreement,
the Notes or other Credit Documents, or any payments of principal, interest,
fees or other amounts payable hereunder or thereunder (but excluding, except as
provided in paragraph (iii) hereof, any Taxes imposed on the overall net income
of any Lender pursuant to the laws of the jurisdiction in which the principal
24
<PAGE> 31
executive office or appropriate Lending Office of such Lender is located).
If any Taxes are so levied or imposed, Intermet agrees (A) to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every net payment of all amounts due hereunder and under the Notes and other
Credit Documents, after withholding or deduction for or on account of any such
Taxes (including additional sums payable under this Section 3.07), will not be
less than the full amount provided for herein had no such deduction or
withholding been required, (B) to make such withholding or deduction and (C) to
pay the full amount deducted to the relevant authority in accordance with
applicable law. Intermet will furnish to the Administrative Agent and each
Lender, within 30 days after the date the payment of any Taxes is due pursuant
to applicable law, certified copies of tax receipts evidencing such payment by
Intermet. Intermet will indemnify and hold harmless the Administrative Agent and
each Lender and reimburse the Administrative Agent and each Lender upon written
request for the amount of any Taxes so levied or imposed and paid by the
Administrative Agent or Lender and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or illegally asserted. A certificate as to the amount of
such payment by such Lender or the Administrative Agent, absent manifest error,
shall be final, conclusive and binding for all purposes.
(ii) Each Lender that is organized under the laws of any jurisdiction other
than the United States of America or any State thereof (including the District
of Columbia) agrees to furnish to Intermet and the Administrative Agent, prior
to the time it becomes a Lender hereunder, two copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 or any
successor forms thereto (wherein such Lender claims entitlement to complete
exemption from or reduced rate of U.S. Federal withholding tax on interest paid
by Intermet hereunder) and to provide to Intermet and the Administrative Agent a
new Form 4224 or Form 1001 or any successor forms thereto if any previously
delivered form is found to be incomplete or incorrect in any material respect or
upon the obsolescence of any previously delivered form; provided, however, that
no Lender shall be required to furnish a form under this paragraph (ii) if it is
not entitled to claim an exemption from or a reduced rate of withholding under
applicable law. A Lender that is not entitled to claim an exemption from or a
reduced rate of withholding under applicable law, promptly upon written request
of Intermet, shall so inform Intermet in writing.
(iii) Intermet shall also reimburse the Administrative Agent and each
Lender, upon written request, for any Taxes imposed (including, without
limitation, Taxes imposed on the overall net income of the Administrative Agent
or Lender or its applicable Lending Office pursuant to the laws of the
jurisdiction in which the principal executive office or the applicable Lending
Office of the Administrative Agent or Lender is located) as the Administrative
Agent or Lender shall determine are payable by the Administrative Agent or
Lender in respect of amounts paid by or on behalf of Intermet to or on behalf of
the Administrative Agent or Lender pursuant to paragraph (i) hereof.
25
<PAGE> 32
(c) Subject to Section 3.04(b)(ii), whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or fees
are payable (to the extent computed on the basis of days elapsed), except that
interest on Base Rate Advances shall be computed on the basis of a year of
365/366 days for the actual number of days. Interest on Base Rate Advances shall
be calculated based on the Base Rate from and including the date of such Loan to
but excluding the date of the repayment or conversion thereof. Interest on
Eurodollar Advances shall be calculated as to each Interest Period from and
including the first day thereof to but excluding the last day thereof. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be made in good faith and, except for manifest error, shall be final,
conclusive and binding for all purposes.
(e) Payment by Intermet to the Administrative Agent in accordance with the
terms of this Agreement shall, as to Intermet, constitute payment to the Lenders
under this Agreement.
SECTION 3.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Administrative Agent shall have determined (which determination shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all parties) that on any date for determining the Adjusted LIBO Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Administrative Agent's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted LIBO Rate then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to Intermet and to the
Lenders, of such determination and a summary of the basis for such
determination. Until the Administrative Agent notifies Intermet that the
circumstances giving rise to the suspension described herein no longer exist,
the obligations of the Lenders to make or permit portions of the Loans to remain
outstanding past the last day of the then current Interest Periods as Eurodollar
Advances shall be suspended, and such affected Advances shall bear interest at
the Base Rate (or at such other rate of interest per annum as Intermet and each
of the Administrative Agent and the Lenders shall have agreed to in writing).
26
<PAGE> 33
SECTION 3.09. ILLEGALITY.
(a) In the event that any Lender shall have determined (which determination
shall be made in good faith and, absent manifest error, shall be final,
conclusive and binding upon all parties) at any time that the making or
continuance of any Eurodollar Advance has become unlawful by compliance by such
Lender in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Lender shall give prompt notice (by telephone confirmed in writing) to Intermet
and to the Administrative Agent of such determination and a summary of the basis
for such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) Upon the giving of the notice to Intermet referred to in subsection (a)
above, (i) Intermet's right to request and such Lender's obligation to make
Eurodollar Advances shall be immediately suspended, and such Lender shall make
an Advance as part of the requested Borrowing of Eurodollar Advances, bearing
interest at the Base Rate plus the applicable Base Rate Margin (or at such other
rate of interest per annum as Intermet and each of the Administrative Agent and
such Lender shall have agreed to in writing), which Base Rate Advance shall, for
all other purposes, be considered part of such Borrowing, and (ii) if the
affected Eurodollar Advance or Advances are then outstanding, each such Advance
shall be automatically converted into a Base Rate Advance, provided that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 3.09(b).
SECTION 3.10. INCREASED COSTS.
(a) (i) If, by reason of (x) after the date hereof, the introduction of or
any change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally (whether or not having
the force of law):
(1) any Lender (or its applicable Lending Office) shall be subject to
any tax, duty or other charge with respect to its Eurodollar Advances or
its obligation to make Eurodollar Advances, or the basis of taxation of
payments to any Lender of the principal of or interest on its Eurodollar
Advances or its obligation to make Eurodollar Advances shall have changed
(except for changes in the tax on the overall net income of such Lender or
its applicable Lending Office imposed by the jurisdiction in which such
Lender's principal executive office or applicable Lending Office is
located); or
(2) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar
27
<PAGE> 34
requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender's applicable Lending Office shall be imposed
or deemed applicable or any other condition affecting its Eurodollar
Advances or its obligation to make Eurodollar Advances shall be imposed on
any Lender or its applicable Lending Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate), or there shall be a reduction in the amount received or
receivable by such Lender or its applicable Lending Office; or
(ii) in the event that any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy not currently in effect or fully applicable as of the
Closing Date, or any change therein or in the interpretation or application
thereof after the Closing Date, or compliance by such Lender with any request or
directive regarding capital adequacy not currently in effect or fully applicable
as of the Closing Date (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) from a central bank or
governmental authority or body having jurisdiction, does or shall have the
effect of reducing the rate of return on such Lender's capital as a consequence
of its obligations hereunder to a level below that which such Lender could have
achieved but for such law, treaty, rule, regulation, guideline or order, or such
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then, in the case of (i) or (ii) above, upon written notice from and demand by
such Lender on Intermet (with a copy of such notice and demand to the
Administrative Agent), Intermet shall from time to time (subject, in the case of
certain Taxes, to the applicable provisions of Section 3.07(b)) pay to the
Administrative Agent for the account of such Lender within five Business Days
after the date of such notice and demand, additional amounts sufficient to
indemnify such Lender against such increased cost or reduced yield. A
certificate as to the amount of such increased cost or reduced yield submitted
to Intermet and the Administrative Agent by such Lender in good faith and
accompanied by a statement prepared by such Lender describing in reasonable
detail the basis for and calculation of such increased cost, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Administrative Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 3.10(a)
or any other circumstances beyond such Lender's reasonable control arising after
the date of this Agreement affecting such Lender or the London interbank market
or such Lender's position in such markets, the Adjusted LIBO Rate as determined
by the Administrative Agent, will not adequately and fairly reflect the cost to
such Lender of funding its Eurodollar Advances, then, and in any such event:
28
<PAGE> 35
(i) the Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to Intermet and to the other Lenders of such advice;
(ii) Intermet's right to request and such Lender's obligation to make
or permit portions of the Loans to remain outstanding past the last day of
the then current Interest Periods as Eurodollar Advances shall be
immediately suspended; and
(iii) such Lender shall make an Advance as part of the requested
Borrowing of Eurodollar Advances, as the case may be, bearing interest at
the Base Rate plus the applicable Base Rate Margin (or at such other rate
of interest per annum as Intermet and each of the Administrative Agent and
such Lender shall have agreed to in writing), which Base Rate Advance
shall, for all other purposes, be considered part of such Borrowing.
SECTION 3.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by Intermet, it will use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate an alternate Lending Office with respect to any of its Eurodollar
Advances affected by the matters or circumstances described in Sections 3.07(b),
3.08, 3.09 or 3.10 to reduce the liability of Intermet or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender, which determination if made in good faith,
shall be conclusive and binding on all parties hereto. Nothing in this Section
3.11 shall affect or postpone any of the obligations of Intermet or any right of
any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any jurisdiction
other than the United States of America or any State thereof (including the
District of Columbia) issues a public announcement with respect to the closing
of its lending offices in the United States such that any withholdings or
deductions and additional payments with respect to Taxes may be required to be
made by Intermet thereafter pursuant to Section 3.07(b), such Lender shall use
reasonable efforts to furnish Intermet notice thereof as soon as practicable
thereafter; provided, however, that no delay or failure to furnish such notice
shall in any event release or discharge Intermet from its obligations to such
Lender pursuant to Section 3.07(b) or otherwise result in any liability of such
Lender.
SECTION 3.12. FUNDING LOSSES. Intermet shall compensate each Lender, upon
its written request to Intermet (which request shall set forth the basis for
requesting such amounts in reasonable detail and which request shall be made in
good faith and, absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Advances, in either case to
the extent not recovered by such Lender in connection with the re-employment of
such funds and including loss of anticipated profits), which the Lender may
sustain: (i) if for any reason (other than a default by
29
<PAGE> 36
such Lender) a conversion to or continuation of, Eurodollar Advances to Intermet
does not occur on the date specified therefor in a Notice of
Conversion/Continuation (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and conversions pursuant to Section 3.09(b)) of
any Eurodollar Advances by Intermet occurs on a date which is not the last day
of an Interest Period applicable thereto, or (iii) if, for any reason, Intermet
defaults in its obligation to repay its Eurodollar Advances when required by the
terms of this Agreement.
SECTION 3.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR ADVANCES.
Calculation of all amounts payable to a Lender under this Article III shall be
made as though that Lender had actually funded its relevant Eurodollar Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such Eurodollar Advances in an amount equal to the amount of
the Eurodollar Advances and having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar Advances from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided however, that each Lender may fund each of its
Eurodollar Advances in any manner it sees fit and the foregoing assumption shall
be used only for calculation of amounts payable under this Article III.
SECTION 3.14. APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments in respect of Loans shall be apportioned among all outstanding
Commitments and Loans to which such payments relate, proportionately to the
Lenders' respective pro rata portions of such Commitments and outstanding Loans.
The Administrative Agent shall promptly distribute to each Lender at its Payment
Office set forth beside its name on Schedule 10.01 or such other address as any
Lender may request its share of all such payments received by the Administrative
Agent.
SECTION 3.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the Obligations (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its pro rata portion of
payments or reductions on account of such obligations obtained by all the
Lenders, such Lender shall forthwith (i) notify each of the other Lenders and
Administrative Agent of such receipt, and (ii) purchase from the other Lenders
such participations in the affected obligations as shall be necessary to cause
such purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them, provided that if
all or any portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender obligated to
return such funds is required to pay interest on such funds. Intermet agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 3.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Intermet in
the amount of such participation.
30
<PAGE> 37
SECTION 3.16. BENEFITS TO GUARANTORS. In consideration of the execution and
delivery by the Guarantors of the Guaranty Agreement, Intermet agrees, subject
to the terms hereof, to make extensions of credit hereunder available to the
Guarantors.
SECTION 3.17. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.07 no later
than 90 days after the earlier of (i) the date on which such Lender or
Administrative Agent makes payment of such Taxes, and (ii) the date on which the
relevant taxing authority or other governmental authority makes written demand
upon such Lender or Administrative Agent for payment of such Taxes.
(b) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.12 no later
than 90 days after the event giving rise to the claim for indemnification or
compensation occurs.
(c) Each Lender or Administrative Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.10 no later
than 90 days after such Lender or Administrative Agent receives actual notice or
obtains actual knowledge of the promulgation of a law, rule, order or
interpretation or occurrence of another event giving rise to a claim pursuant to
such sections.
(d) In the event that the Lenders or Administrative Agent fail to give
Intermet notice within the time limitations prescribed in (a) or (b) above,
Intermet shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Administrative Agent fails to
give Intermet notice within the time limitation prescribed in (c) above,
Intermet shall not have any obligation to pay any amount with respect to claims
accruing prior to the ninetieth day preceding such written demand.
SECTION 3.18. [RESERVED].
SECTION 3.19. FAILURE TO MAINTAIN MINIMUM REQUIRED RATING. If any Lender
has either (a) had its long-term deposit rating reduced below the Minimum
Required Rating by either Rating Agency, or (b) in the case of a Lender that is
a party to this Agreement on the Closing Date and has, on such date, a long-term
deposit rating from the Rating Agencies below the applicable Minimum Required
Rating, such Lender has received from either Rating Agency a reduction in its
long-term deposit rating from the rating in effect on the Closing Date, such
Lender, will, upon the request of the Administrative Agent, assign at par its
Commitment and all of its right, title and interest in and to any Loans
outstanding thereunder, to an Eligible Assignee designated by the Administrative
Agent and acceptable to Intermet in accordance with the terms of this Agreement.
31
<PAGE> 38
ARTICLE IV.
CONDITIONS TO BORROWING
The obligations of each Lender to make Advances to Intermet hereunder is
subject to the satisfaction of the following conditions:
SECTION 4.01. CONDITIONS PRECEDENT TO LOANS. On the Closing Date, all
obligations of Intermet hereunder incurred prior to such date (including,
without limitation, Intermet's obligations to reimburse the reasonable fees and
expenses of counsel to the Administrative Agent and any fees and expenses
payable to the Administrative Agent, the Lenders (including BNS and the other
Arrangers) and their Affiliates pursuant to the Fee Letters or as otherwise
previously agreed with Intermet), shall have been paid in full, and the
Administrative Agent shall have received the following, in form and substance
reasonably satisfactory in all respects to the Administrative Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly executed Term Notes evidencing the Commitments;
(c) the duly executed Guaranty Agreement;
(d) certificate of Intermet in substantially the form of Exhibit F attached
hereto and appropriately completed:
(e) certificates of the Secretary or Assistant Secretary of each of the
Credit Parties (or, in the case of any Foreign Subsidiary, a comparable company
officer) attaching and certifying copies of the resolutions of the boards of
directors (or, in the case of any Foreign Subsidiary, the comparable governing
body of such entity) of the Credit Parties, authorizing as applicable the
execution, delivery and performance of the Credit Documents;
(f) certificates of the Secretary or an Assistant Secretary of each of the
Credit Parties (or, in the case of any Foreign Subsidiary, a comparable company
officer) certifying (i) the name, title and true signature of each officer of
such entities executing the Credit Documents, and (ii) the bylaws or comparable
governing documents of such entities;
(g) certified copies of the certificate or articles of incorporation of
each Credit Party (or comparable organizational document) certified by the
Secretary of State or the Secretary or Assistant Secretary of such Credit Party,
together with certificates of good standing or existence, as may be available
from the Secretary of State (or comparable office or registry for each Foreign
Subsidiary) of the jurisdiction of incorporation or organization of such Credit
Party;
32
<PAGE> 39
(h) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
(including, without limitation, the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended) or by any material Contractual Obligation of the Credit
Parties, in connection with the Target Acquisition or the execution, delivery,
performance, validity and enforceability of the Credit Documents and the other
documents to be executed and delivered hereunder, and such consents,
authorizations, filings and orders shall be in full force and effect and all
applicable waiting periods shall have expired without any requests for
additional information;
(i) an internally prepared draft of Intermet's consolidated financial
statements for the fiscal period ending September 30, 1999, certified by the
chief financial officer of Intermet;
(j) [reserved];
(k) certificates, reports and other information as the Administrative Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from matters relating to employees of the Consolidated Companies, including
employee relations, collective bargaining agreements, Plans, Foreign Plans, and
other compensation and employee benefit plans;
(l) certificates, reports, environmental audits and investigations, and
other information as the Administrative Agent may reasonably request from any
Consolidated Company in order to satisfy the Lenders as to the absence of any
material liabilities or obligations arising from environmental and employee
health and safety exposures to which the Consolidated Companies may be subject,
and the plans of the Consolidated Companies with respect thereto;
(m) certificates, reports and other information as the Administrative Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated Companies;
(n) a summary, set forth in format and detail reasonably acceptable to the
Administrative Agent, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies;
(o) (i) the favorable opinion of Dickinson Wright PLLC, counsel to the
Credit Parties, substantially in the form of Exhibit G-1, addressed to the
Administrative Agent and each of the Lenders, (ii) the favorable opinion of
Kilpatrick Stockton LLP, special Georgia counsel to the Credit Parties,
substantially in the form of Exhibit G-2, addressed to the Administrative Agent
and each of the Lenders and (iii) the favorable opinion of Mayer, Brown & Platt,
special
33
<PAGE> 40
New York counsel to the Administrative Agent, substantially in the form of
Exhibit G-3, addressed to the Administrative Agent and each of the Lenders;
(p) all corporate proceedings and all other legal matters in connection
with the authorization, legality, validity and enforceability of the Credit
Documents shall be reasonably satisfactory in form and substance to the Required
Lenders;
(q) copies of each of the Target Acquisition Documents fully executed by
the parties thereto and of all material instruments, agreements and other
documents required to be delivered or furnished thereunder or in connection
therewith (including, in the case of opinions of counsel to Intermet, if any,
reliance letters expressly permitting the Administrative Agent and the Lenders
to rely thereon as if such opinions had been addressed thereto), in each case
certified by an Executive Officer of Intermet, and, except as expressly
permitted by the Administrative Agent and the Required Lenders, none of the
terms of the Target Acquisition (including any condition precedent to Intermet's
performance thereof or obligation to consummate the Target Acquisition) shall
have been amended, waived or otherwise modified in any respect;
(r) evidence that, after giving effect to the Loans to be made hereunder on
the Closing Date and the application thereof by Intermet, the Target Acquisition
shall have been or shall be duly consummated in accordance with the Target
Acquisition Documents for an amount not to exceed $285,000,000 (including
payment of the purchase price for the Targets, payment in full and termination
of the Target Existing Indebtedness and payment of all related fees and expenses
in connection with either of the foregoing) without amendment, waiver or other
modification thereof unless the Administrative Agent and the Required Lenders
shall have expressly consented thereto in writing;
(s) evidence that each of the Five-Year Credit Agreement and the 364-Day
Credit Agreement shall have been amended to provide that the "Applicable Margin"
(as defined therein) shall be no less than 2.00%, the "Base Rate Margin" (as
defined therein) shall be no less than 1.00%, and the "Applicable Commitment Fee
Percentage" (as defined therein) shall be no less than 0.375% under the
Five-Year Credit Agreement or 0.350% under the 364-Day Credit Agreement, in each
case for the first six months following the Closing Date;
(t) evidence that each Target and Intermet Holding Company, a Delaware
corporation, shall have executed and delivered counterparts to the "Guaranty
Agreement" under each of the Five-Year Credit Agreement and the 364-Day Credit
Agreement, together with the other documents required by Section 6.10 thereof;
and
(u) evidence that Intermet shall have complied in all respects with Section
7.03 of the Five-Year Credit Agreement and the 364-Day Credit Agreement,
including, without limitation, in the case of subsection (c)(ii) thereof, all
back-up information and assumptions made in connection therewith.
34
<PAGE> 41
SECTION 4.02. ADDITIONAL CONDITIONS TO LOANS. At the time of the making of
the Loans (before as well as after giving effect to such Loans and to the
proposed use of the proceeds thereof to finance the Target Acquisition), the
following conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Intermet contained herein shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Loans;
(c) since the date of the most recent financial statements of the
Consolidated Companies described in Section 5.14, there shall have been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect (whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 6.07);
(d) there shall be no action or proceeding instituted or pending before any
court or other governmental authority or, to the knowledge of Intermet,
threatened (i) which reasonably could be expected to have a Materially Adverse
Effect, (ii) seeking to prohibit or restrict the Target Acquisition, or (iii)
seeking to prohibit or restrict one or more Credit Party's ownership or
operation of any portion of its business or assets, or to compel one or more
Credit Party to dispose of or hold separate all or any portion of its businesses
or assets, where such portion or portions of such business(es) or assets, as the
case may be, constitute a material portion of the total businesses or assets of
the Consolidated Companies; and
(e) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the Administrative Agent or any
Lender in a violation of, any law, rule, injunction, or regulation, or
determination of any court of law or other governmental authority applicable to
Intermet.
Each request for a Borrowing and the acceptance by Intermet of the proceeds
thereof shall constitute a representation and warranty by Intermet, as of the
date of the Loans comprising such Borrowing, that the applicable conditions
specified in Sections 4.01 and 4.02 have been satisfied or waived in writing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Intermet (as to itself and all other Consolidated Companies (including,
without limitation, the Targets)) represents and warrants as follows:
35
<PAGE> 42
SECTION 5.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Except as set forth
on Schedule 5.01(a), each of the Consolidated Companies (other than the German
Subsidiaries set forth in the next sentence) is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Columbus Neunkirchen Foundry GmbH, Intermet Machining
GmbH and Intermet Holding Deutschland GmbH is a German company with limited
liability duly organized, validly existing and in good standing under the laws
of Germany. Each of the Consolidated Companies (i) has the corporate power and
authority and the legal right to own and operate its property and to conduct its
business, (ii) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership of property or the
conduct of its business requires such qualification, and (iii) is in compliance
with all Requirements of Law, except where the failure to duly qualify or to
comply with applicable Requirements of Law would not have a Materially Adverse
Effect. The jurisdiction of incorporation or organization, and the ownership of
all issued and outstanding capital stock and other equity interests, for each
Subsidiary as of the date of this Agreement is accurately described on Schedule
5.01.
SECTION 5.02. CORPORATE POWER; AUTHORIZATION. Each of the Credit Parties
has the corporate power and authority to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of such Credit Documents.
Except for the amendment required by Section 6.11, no consent or authorization
of, or filing with, any Person (including, without limitation, any governmental
authority), is required in connection with the execution, delivery or
performance by any Credit Party, or the validity or enforceability against any
Credit Party, of the Credit Documents, other than such consents, authorizations
or filings which have been made or obtained (other than routine filings with the
Securities and Exchange Commission).
SECTION 5.03. ENFORCEABLE OBLIGATIONS. This Agreement has been duly
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties, and this Agreement constitutes, and
each other Credit Document when executed and delivered will constitute, legal,
valid and binding obligations of the Credit Parties, respectively, enforceable
against the Credit Parties in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
SECTION 5.04. NO LEGAL BAR. Except for the amendment required by Section
6.11, the execution, delivery and performance by the Credit Parties of the
Credit Documents will not violate any Requirement of Law or cause a breach or
default under any of their respective Contractual Obligations.
SECTION 5.05. NO MATERIAL LITIGATION OR INVESTIGATIONS. Except as set forth
on Schedule 5.05 or in any notice furnished to the Lenders pursuant to Section
6.07(g) at or prior to the respective times the representations and warranties
set forth in this Section 5.05 are made or
36
<PAGE> 43
deemed to be made hereunder, no litigation, investigations or proceedings of or
before any courts, tribunals, arbitrators or governmental authorities are
pending or, to the knowledge of Intermet, threatened by or against any of the
Consolidated Companies, or against any of their respective properties or
revenues, existing or future (a) with respect to any Credit Document, or any of
the transactions contemplated hereby or thereby, or (b) which, if adversely
determined, would reasonably be expected to have a Materially Adverse Effect.
SECTION 5.06. INVESTMENT COMPANY ACT, ETC. None of the Consolidated
Companies is an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Consolidated Companies is subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
SECTION 5.07. MARGIN REGULATIONS. No part of the proceeds of any of the
Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 5.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth on Schedule 5.08 attached hereto, the Consolidated
Companies have received no notices of claims or potential liability under, and
are in compliance with, all applicable Environmental Laws, where such claims and
liabilities under, and failures to comply with, such statutes, regulations,
rules, ordinances, laws or licenses, would reasonably be expected to have a
Materially Adverse Effect.
(b) Except as set forth on Schedule 5.08 attached hereto, none of the
Consolidated Companies has received any notice of violation, or notice of any
action, either judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or alleged violation
of any Environmental Law, including, without limitation, any notice of any
actual or alleged spill, leak, or other release of any Hazardous Substance,
waste or hazardous waste by any Consolidated Company or its employees or agents,
or as to the existence of any contamination on any properties owned by any
Consolidated Company, where any such violation, spill, leak, release or
contamination would reasonably be expected to have a Materially Adverse Effect.
(c) Except as set forth on Schedule 5.08 attached hereto, the Consolidated
Companies have obtained all necessary governmental permits, licenses and
approvals which are material to the operations conducted on their respective
properties, including without limitation, all required material permits,
licenses and approvals for (i) the emission of air pollutants or contaminants,
(ii) the treatment or pretreatment and discharge of waste water or storm water,
(iii)
37
<PAGE> 44
the treatment, storage, disposal or generation of hazardous wastes, (iv) the
withdrawal and usage of ground water or surface water, and (v) the disposal of
solid wastes.
SECTION 5.09. INSURANCE. The Consolidated Companies currently maintain
insurance with respect to their respective properties and businesses, with
financially sound and reputable insurers, having coverages against losses or
damages of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance being in amounts no less than those
amounts which are customary for such companies under similar circumstances. The
Consolidated Companies have paid all material amounts of insurance premiums now
due and owing with respect to such insurance policies and coverages, and such
policies and coverages are in full force and effect.
SECTION 5.10. NO DEFAULT. Except for the amendment required by Section
6.11, none of the Consolidated Companies is in default under or with respect to
any Contractual Obligation in any respect which is having or is reasonably
expected to have a Materially Adverse Effect.
SECTION 5.11. NO BURDENSOME RESTRICTIONS. Except as set forth on Schedule
5.11 or for the amendment required by Section 6.11 or in any notice furnished to
the Lenders pursuant to Section 6.07 at or prior to the respective times the
representations and warranties set forth in this Section 5.11 are made or deemed
to be made hereunder, none of the Consolidated Companies is a party to or bound
by any Contractual Obligation or Requirement of Law which has had or would
reasonably be expected to have a Materially Adverse Effect.
SECTION 5.12. TAXES. Except as set forth on Schedule 5.12, each of the
Consolidated Companies has filed or caused to be filed all declarations, reports
and tax returns which are required to have been filed, and has paid all taxes,
custom duties, levies, charges and similar contributions ("taxes" in this
Section 5.12) shown to be due and payable on said returns or on any assessments
made against it or its properties, and all other taxes, fees or other charges
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Intermet, no claims are being asserted with respect to any such
taxes, fees or other charges.
SECTION 5.13. SUBSIDIARIES. Except as disclosed on Schedule 5.01 or in any
notice given to the Lenders pursuant to Section 6.07 at or prior to the
respective times this representation and warranty is made or deemed to be made
hereunder, Intermet has no Subsidiaries and neither Intermet nor any Subsidiary
is a joint venture partner, partner in any partnership or member of a limited
liability company.
38
<PAGE> 45
SECTION 5.14. FINANCIAL STATEMENTS.
(a) Intermet has furnished to the Administrative Agent and the Lenders (i)
the audited consolidated balance sheet as of December 31, 1998 of Intermet and
the related consolidated statements of income, shareholders' equity and cash
flows for the fiscal year then ended, including in each case the related
schedules and notes, (ii) the unaudited balance sheet of Intermet presented on a
consolidated basis as at the end of the third fiscal quarter of 1999, and the
related unaudited consolidated statements of income, shareholders' equity and
cash flows presented on a consolidated basis for the year-to-date period then
ended, setting forth in each case in comparative form the figures for the
corresponding quarter of Intermet's previous fiscal year. The foregoing
financial statements fairly present in all material respects the consolidated
financial condition of Intermet as at the dates thereof and results of
operations for such periods in conformity with GAAP consistently applied
(subject, in the case of the quarterly financial statements, to normal year-end
audit adjustments and the absence of certain footnotes).
(b) Intermet has furnished to the Administrative Agent and the Lenders (i)
the audited consolidated balance sheets as of December 31, 1998 of the Targets
and the related consolidated statements of income, shareholders' equity and cash
flows for the fiscal year then ended, including in each case the related
schedules and notes, (ii) the unaudited balance sheets of the Targets presented
on a consolidated basis as at October 31, 1999, and the related unaudited
consolidated statements of income, shareholders' equity and cash flows presented
on a consolidated basis for the year-to-date period then ended, setting forth in
each case in comparative form the figures for the corresponding period of the
Targets' previous fiscal year. The foregoing financial statements fairly present
in all respects, except where the failure to so present would not be reasonably
expected to have a Materially Adverse Effect, the consolidated financial
condition of the Targets as at the dates thereof and results of operations for
such periods in conformity with GAAP consistently applied (subject, in the case
of the interim financial statements, to normal year-end audit adjustments and
the absence of certain footnotes).
(c) Intermet has furnished to the Administrative Agent and the Lenders the
pro-forma balance sheet of Intermet presented on a consolidated basis as at the
end of the third fiscal quarter of 1999. The foregoing balance sheet fairly
presents in all respects, except where the failure to so present would not be
reasonably expected to have a Materially Adverse Effect, the consolidated
financial condition of Intermet as at the date thereof, after giving effect to
the Target Acquisition.
(d) The 5-year projections for the Consolidated Companies included in the
Confidential Information Memorandum dated December 1999, which was provided to
the Administrative Agent and the Lenders prior to the date hereof, were prepared
by Intermet in good faith and based upon historical financial information and
assumptions that Intermet deems reasonable and appropriate.
39
<PAGE> 46
(e) The Consolidated Companies taken as a whole do not have any material
contingent obligations, contingent liabilities, or material liabilities for
known taxes, long-term leases or unusual forward or long-term commitments not
reflected in the financial statements mentioned in this Section 5.14 or the
notes thereto. Since December 31, 1998, there have been no changes with respect
to the Consolidated Companies which has had or would reasonably be expected to
have a Materially Adverse Effect.
SECTION 5.15. ERISA. Except as disclosed on Schedule 5.15 or in any notice
furnished to the Lenders pursuant to Section 6.07 at or prior to the respective
times the representations and warranties set forth in this Section 5.15 are made
or deemed to be made hereunder:
(a) (1) Identification of Plans. (A) None of the Consolidated Companies nor
any of their respective ERISA Affiliates maintains or contributes to, or has
during the past two years maintained or contributed to, any Plan that is subject
to Title IV of ERISA, and (B) none of the Consolidated Companies maintains or
contributes to any Foreign Plan;
(2) Compliance. Each Plan and each Foreign Plan maintained by the
Consolidated Companies have at all times been maintained, by their terms and in
operation, in compliance with all applicable laws, and the Consolidated
Companies are subject to no tax or penalty with respect to any Plan of such
Consolidated Company or any ERISA Affiliate thereof, including without
limitation, any tax or penalty under Title I or Title IV of ERISA or under
Chapter 43 of the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 404, or 419 of the Tax Code, where the failure to
comply with such laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would in the
aggregate have a Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies are subject to no liabilities
(including withdrawal liabilities) with respect to any Plans or Foreign Plans of
such Consolidated Companies or any of their ERISA Affiliates, including without
limitation, any liabilities arising from Titles I or IV of ERISA, other than
obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans or Foreign
Plans, where such liabilities, together with all other liabilities referred to
in this Section 5.15 (taken as a whole), would in the aggregate have a
Materially Adverse Effect;
(4) Funding. The Consolidated Companies and, with respect to any Plan which
is subject to Title IV of ERISA, each of their respective ERISA Affiliates, have
made full and timely payment of all amounts (A) required to be contributed under
the terms of each Plan and applicable law, and (b) required to be paid as
expenses (including PBGC or other premiums) of each Plan, where the failure to
pay such amounts (when taken as a whole, including any penalties attributable to
such amounts) would have a Materially Adverse Effect. No Plan subject to Title
IV of ERISA has an "amount of unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA, determined as if such Plan terminated on any date
on which this
40
<PAGE> 47
representation and warranty is deemed made, in any amount which, together with
all other liabilities referred to in this Section 5.15 (taken as a whole), would
have a Materially Adverse Effect if such amount were then due and payable. The
Consolidated Companies are subject to no liabilities with respect to
post-retirement medical benefits in any amounts which, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would have a
Materially Adverse Effect if such amounts were then due and payable.
(b) With respect to any Foreign Plan, reasonable reserves have been
established in accordance with prudent business practice or where required by
generally accepted accounting practices in the jurisdiction where the Foreign
Subsidiary maintains its principal place of business or in which the Foreign
Plan is maintained. The aggregate unfunded liabilities, after giving effect to
any reserves for such liabilities, with respect to such Foreign Plans, together
with all other liabilities referred to in this Section 5.15 (taken as a whole),
would not have a Materially Adverse Effect.
SECTION 5.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as set forth on
Schedule 5.16 or in any notice furnished to the Lenders pursuant to Section 6.07
at or prior to the respective times the representations and warranties set forth
in this Section 5.16 are made or deemed to be made hereunder, (i) the
Consolidated Companies have obtained and hold in full force and effect all
material patents, trademarks, service marks, trade names, copyrights, licenses
and other such rights, free from burdensome restrictions, which are necessary
for the operation of their respective businesses as presently conducted, and
(ii) to the best of Intermet's knowledge, no product, process, method, service
or other item presently sold by or employed by any Consolidated Company in
connection with such business infringes any patents, trademark, service mark,
trade name, copyright, license or other right owned by any other person and
there is not presently pending, or to the knowledge of Intermet, threatened, any
claim or litigation against or affecting any Consolidated Company contesting
such Person's right to sell or use any such product, process, method, substance
or other item where the result of such failure to obtain and hold such benefits
or such infringement would have a Materially Adverse Effect.
SECTION 5.17. OWNERSHIP OF PROPERTY. Except as set forth on Schedule 5.17,
(i) each Consolidated Company that is not a Foreign Subsidiary has good and
marketable fee simple title to or a valid leasehold interest in all of its real
property and good title to, or a valid leasehold interest in, all of its other
property and (ii) each Foreign Subsidiary owns or has a valid leasehold interest
in all of its real property and owns or has a valid leasehold interest in, all
of its other properties, in the case of clauses (i) and (ii) as such properties
are reflected in the consolidated balance sheet of the Consolidated Companies as
of December 31, 1998 referred to in Section 5.14, other than properties disposed
of in the ordinary course of business since such date or as otherwise permitted
by the terms of this Agreement, subject to no Lien or title defect of any kind,
except Liens permitted hereby and title defects not constituting material
impairments in the intended use for such properties. The Consolidated Companies
enjoy peaceful and undisturbed possession under all of their respective leases.
41
<PAGE> 48
SECTION 5.18. FINANCIAL CONDITION. On the Closing Date and after giving
effect to the transactions contemplated by this Agreement and the other Credit
Documents, including without limitation, the use of the proceeds of the Loans to
finance the Target Acquisition as provided in Section 2.01, each of the Credit
Parties is Solvent.
SECTION 5.19. LABOR MATTERS. Since December 31, 1998, the Consolidated
Companies have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of
Intermet, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company which if they occurred, would
reasonably be expected to have a Materially Adverse Effect. Since December 31,
1998, the hours worked and payment made to employees of the Consolidated
Companies have not been in violation in any material respect of the Fair Labor
Standards Act (in the case of Consolidated Companies that are not Foreign
Subsidiaries) or any other applicable law dealing with such matters. All
payments due from the Consolidated Companies, or for which any claim may be made
against the Consolidated Companies, on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as liabilities on
the books of the Consolidated Companies in all jurisdictions where the failure
to pay or accrue such liabilities would reasonably be expected to have a
Materially Adverse Effect.
SECTION 5.20. PAYMENT OR DIVIDEND RESTRICTIONS. Except as set forth in
Section 7.05 or described on Schedule 5.20 or as expressly permitted by the
terms of this Agreement, none of the Consolidated Companies is party to or
subject to any agreement or understanding restricting or limiting the payment of
any dividends or other distributions by any such Consolidated Company.
SECTION 5.21. DISCLOSURE. None of the factual information heretofore or
contemporaneously furnished in writing to any Lender or Agent by or on behalf of
any Credit Party in connection with any Credit Document or any transaction
contemplated hereby (including, without limitation, the Target Acquisition)
contains any untrue statement of a material fact, or omits to state any material
fact necessary to make any information not misleading, and no other factual
information hereafter furnished in connection with any Credit Document by or on
behalf of any Credit Party to any Lender or Agent will contain any untrue
statement of a material fact or will omit to state any material fact necessary
to make any information not misleading on the date as of which such information
is dated or certified. Except as may be set forth herein (including the
Schedules attached hereto) or in any notice furnished to the Lenders pursuant to
Section 6.07 at or prior to the respective times the representations and
warranties set forth in this Section 5.21 are made or deemed to be made
hereunder, there is no fact known to Intermet which is having, or is reasonably
expected to have, a Materially Adverse Effect.
SECTION 5.22. YEAR 2000 COMPLIANCE. The Consolidated Companies have
developed and budgeted for a comprehensive program to address the "Year 2000
problem" (that
42
<PAGE> 49
is, the inability of computers, as well as embedded microchips in non-computing
devices, to perform properly date-sensitive functions with respect to certain
dates prior to and after December 31, 1999). The Consolidated Companies have
implemented that program substantially in accordance with its timetable and
budget and will substantially avoid the Year 2000 problem as to all computers,
as well as embedded microchips in non-computing devices, that are material to
the Consolidated Companies' business, properties or operations. The Consolidated
Companies have developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000 problem,
including those of vendors, customers, and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.
SECTION 5.23. TARGET ACQUISITION DOCUMENTS. The representations and
warranties contained in the Target Acquisition Documents (true and correct
copies of which, together with all schedules and exhibits thereto, have been
delivered to the Lenders), are true and correct in all respects, except where
the failure to be so true and correct would not be reasonably expected to have a
Materially Adverse Effect. As of the date of the Target Acquisition, (i)
Intermet shall have taken all necessary actions to authorize the Target
Acquisition; and (ii) no representation made by Intermet in any notices or
filings with the shareholders of Intermet, with the Securities and Exchange
Commission or any applicable state securities commissions or with any
governmental authority, including, without limitation, any representations
concerning any agreement with, or financing provided by, the Lenders, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or other
Obligation shall remain unpaid, Intermet will (unless waived in writing by the
Required Lenders):
SECTION 6.01. CORPORATE EXISTENCE, ETC. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence
(except for mergers, divestitures and consolidations permitted pursuant to
Section 7.03), its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, service marks and other intellectual property rights, necessary or
desirable in the normal conduct of its business, and its qualification to do
business as a foreign corporation in all jurisdictions where it conducts
business or other activities making such qualification necessary, where the
failure to be so qualified would reasonably be expected to have a Materially
Adverse Effect.
43
<PAGE> 50
SECTION 6.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
SECTION 6.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and cause each of its
Subsidiaries to pay, (i) all taxes, duties, levies, assessments and governmental
charges imposed upon it or upon its property, and (ii) all claims (including,
without limitation, claims for labor, materials, supplies or services) which
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith by appropriate
proceedings and adequate reserves are maintained in its books with respect
thereto in accordance with GAAP.
SECTION 6.04. KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account in accordance with GAAP, containing
complete and accurate entries of all their respective financial and business
transactions.
SECTION 6.05. VISITATION, INSPECTION, ETC. Permit, and cause each of its
Subsidiaries to permit, any representative of the Administrative Agent or any
Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable times
and as often as the Administrative Agent or such Lender may reasonably request
after reasonable prior notice to Intermet; provided, however, that at any time
following the occurrence and during the continuance of a Default or an Event of
Default, no prior notice to Intermet shall be required.
SECTION 6.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially sound and reputable
insurers, insurance with respect to its properties and business, and the
properties and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by reputable companies in the same or similar
businesses, such insurance to be of such types and in such amounts as are
customary for such companies under similar circumstances; provided, however,
that in any event Intermet shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not materially less
favorable to any Consolidated Company as in effect on the date of this
Agreement, except where the costs of maintaining such insurance would, in the
judgment of both Intermet and the Administrative Agent, be excessive.
(b) Cause, and cause each of the Consolidated Companies to cause, all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, settlements and improvements thereof, all
44
<PAGE> 51
as in the judgment of Intermet may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section 6.06 shall prevent
Intermet from discontinuing the operation or maintenance of any such properties
if such discontinuance is, in the judgment of Intermet, desirable in the conduct
of its business or the business of any Consolidated Company.
SECTION 6.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the end of each fiscal year of Intermet, balance sheets of
the Consolidated Companies as at the end of such year, presented on a
consolidated basis, and the related statements of income, and cash flows of the
Consolidated Companies for such fiscal year, presented on a consolidated basis,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by a report thereon of
Ernst & Young, LLP or other independent public accountants of comparable
recognized national standing, which such report shall be unqualified as to going
concern and scope of audit and shall state that such financial statements
present fairly in all material respects the financial condition as at the end of
such fiscal year on a consolidated basis, and the results of operations and
statements of cash flows of the Consolidated Companies for such fiscal year in
accordance with GAAP and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in any event
within 60 days after the end of each fiscal quarter of Intermet (other than the
fourth fiscal quarter), balance sheets of the Consolidated Companies as at the
end of such quarter presented on a consolidated basis and the related statements
of income, shareholders' equity, and cash flows of the Consolidated Companies
for such fiscal quarter and for the portion of Intermet's fiscal year ended at
the end of such quarter, presented on a consolidated basis setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of Intermet's previous fiscal year, all in reasonable
detail and certified by the chief financial officer or principal accounting
officer of Intermet that such financial statements fairly present in all
material respects the financial condition of the Consolidated Companies as at
the end of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies for such
fiscal quarter and such portion of Intermet's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
statements required pursuant to subsection (b) above, and also within 60 days
after the end of each fiscal year of Intermet, a certificate substantially in
the form of Exhibit I attached hereto of the president, chief executive officer,
chief financial officer or principal accounting officer of Intermet (i) to the
effect that, based upon a review of the activities of the Consolidated Companies
and such financial statements during the period covered thereby, there exists no
45
<PAGE> 52
Event of Default and no Default under this Agreement, or if there exists an
Event of Default or a Default hereunder, specifying the nature thereof and the
proposed response thereto, and (ii) demonstrating in reasonable detail
compliance as at the end of such fiscal year or such fiscal quarter with Section
6.08 and Sections 7.01 through 7.06;
(d) Auditor's No Default Certificate. Together with the financial
statements required pursuant to subsection (a) above, a certificate of the
accountants who prepared the report referred to therein, to the effect that,
based upon their audit, there exists no Default or Event of Default under this
Agreement, or if there exists a Default or Event of Default hereunder,
specifying the nature thereof;
(e) [reserved];
(f) Notice of Default. Promptly after any Executive Officer of Intermet has
notice or knowledge of the occurrence of an Event of Default or a Default, a
certificate of the chief financial officer or principal accounting officer of
Intermet specifying the nature thereof and the proposed response thereto;
(g) Litigation and Investigations. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse development in any
material action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company, or
any material property of any thereof, or (ii) actual knowledge thereof, notice
of the threat of any such action, suit, proceeding, investigation or
arbitration;
(h) Environmental Notices. Promptly after receipt thereof, notice of any
actual or alleged violation, or notice of any action, claim or request for
information, either judicial or administrative, from any governmental authority
relating to any actual or alleged claim, notice of potential responsibility
under or violation of any Environmental Law, or any actual or alleged spill,
leak, disposal or other release of any waste, petroleum product, or hazardous
waste or Hazardous Substance by any Consolidated Company which could result in
penalties, fines, claims or other liabilities to any Consolidated Company in
amounts in excess of $5,000,000;
(i) ERISA. (A)(i) Promptly after the occurrence thereof with respect to any
Plan of any Consolidated Company or any ERISA Affiliate thereof, or any trust
established thereunder, notice of (A) a "reportable event" described in Section
4043 of ERISA and the regulations issued from time to time thereunder (other
than a "reportable event" not subject to the provisions for 30-day notice to the
PBGC under such regulations), or (B) any other event which could subject any
Consolidated Company to any tax, penalty or liability under Title I or Title IV
of ERISA or Chapter 43 of the Tax Code, or any tax or penalty resulting from a
loss of deduction under Sections 404 or 419 of the Tax Code, or any tax, penalty
or liability under any
46
<PAGE> 53
Requirement of Law applicable to any Foreign Plan, where any such taxes,
penalties or liabilities exceed or could exceed $5,000,000 in the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or to a Plan
participant, beneficiary or alternative payee, any notice required under Section
101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under
Section 401(a)(29) or 412 of the Tax Code with respect to any Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by any Consolidated
Company or any ERISA Affiliate thereof concerning the intent of the PBGC or any
other governmental authority to terminate a Plan of such Company or ERISA
Affiliate thereof which is subject to Title IV of ERISA, to impose any liability
on such Company or ERISA Affiliate under Title IV of ERISA or Chapter 43 of the
Tax Code;
(iv) Upon the request of the Administrative Agent, promptly upon the filing
thereof with the Internal Revenue Service ("IRS") or the Department of Labor
("DOL"), a copy of IRS Form 5500 or annual report for each Plan of any
Consolidated Company or ERISA Affiliate thereof which is subject to Title IV of
ERISA;
(v) Upon the request of the Administrative Agent, (A) true and complete
copies of any and all documents, government reports and IRS determination or
opinion letters or rulings for any Plan of any Consolidated Company from the
IRS, PBGC or DOL, (B) any reports filed with the IRS, PBGC or DOL with respect
to a Plan of the Consolidated Companies or any ERISA Affiliate thereof, or (C) a
current statement of withdrawal liability for each Multiemployer Plan of any
Consolidated Company or any ERISA Affiliate thereof;
(B) Promptly upon any Consolidated Company becoming aware thereof, notice
that (i) any material contributions to any Foreign Plan have not been made by
the required due date for such contribution and such default cannot immediately
be remedied, (ii) any Foreign Plan is not funded to the extent required by the
law of the jurisdiction whose law governs such Foreign Plan based on the
actuarial assumptions reasonably used at any time, or (iii) a material change is
anticipated to any Foreign Plan that may have a Materially Adverse Effect.
(j) Liens. Promptly upon any Consolidated Company becoming aware thereof,
notice of the filing of any federal statutory Lien, tax or other state or local
government Lien or any other Lien affecting their respective properties, other
than those Liens expressly permitted by Section 7.02;
(k) Public Filings, Etc. Promptly upon the filing thereof or otherwise
becoming available, copies of all financial statements, annual, quarterly and
special reports, proxy statements and notices sent or made available generally
by Intermet to its public security holders, of all regular and periodic reports
and all registration statements and prospectuses, if any, filed by any of them
with any securities exchange, and of all press releases and other
47
<PAGE> 54
statements made available generally to the public containing material
developments in the business or financial condition of Intermet and the other
Consolidated Companies;
(l) Burdensome Restrictions, Etc. Promptly upon the existence or occurrence
thereof, notice of the existence or occurrence of (i) any Contractual Obligation
or Requirement of Law described in Section 5.11, (ii) failure of any
Consolidated Company to hold in full force and effect those material trademarks,
service marks, patents, trade names, copyrights, licenses and similar rights
necessary in the normal conduct of its business, and (iii) any strike, labor
dispute, slow down or work stoppage as described in Section 5.19;
(m) New Subsidiaries. Within 30 days after the formation or acquisition of
any Subsidiary, or any other event resulting in the creation of a new
Subsidiary, or the domestication of any Foreign Subsidiary, notice of the
formation or acquisition of such Subsidiary or such occurrence, including a
description of the assets of such entity, the activities in which it will be
engaged, and such other information as the Administrative Agent may request; and
(n) Other Information. With reasonable promptness, any other information
provided under the Note Purchase Agreement and such other information about the
Consolidated Companies as the Administrative Agent or any Lender may reasonably
request from time to time.
SECTION 6.08. FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Maintain as of the last day of each fiscal
quarter, a Fixed Charge Coverage Ratio equal to or greater than 1.50:1.0.
(b) Consolidated EBITDA to Consolidated Interest Expense. Maintain as of
the last day of each fiscal quarter, a minimum ratio of Consolidated EBITDA to
Consolidated Interest Expense, calculated for the immediately preceding four
fiscal quarters, of equal to or greater than 3.50:1.0.
(c) Funded Debt to Consolidated EBITDA. Maintain as of the last day of each
fiscal quarter, a maximum ratio of Funded Debt to Consolidated EBITDA,
calculated for the immediately preceding four fiscal quarters, of less than or
equal to 3.50:1.0.
(d) Third Fiscal Quarter 1999 Calculations. Schedule 6.08 sets forth the
calculation of the financial covenant amounts, ratios, and percentages required
by paragraphs (a) through (c) of this Section 6.08 calculated as of September
30, 1999.
SECTION 6.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS. Immediately upon
its receipt thereof, Intermet shall furnish the Administrative Agent a copy of
any notice received by it or any other Consolidated Company from the holder(s)
of Indebtedness of the Consolidated Companies (or from any trustee, agent,
attorney, or other party acting on behalf of such holder(s))
48
<PAGE> 55
in an amount which, in the aggregate, exceeds $5,000,000, where such notice
states or claims (i) the existence or occurrence of any default or event of
default with respect to such Indebtedness under the terms of any indenture, loan
or credit agreement, debenture, note, or other document evidencing or governing
such Indebtedness, or (ii) the existence or occurrence of any event or condition
which requires or permits holder(s) of any Indebtedness to exercise rights under
any Change in Control Provision.
SECTION 6.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL.
(a) Unless the Required Lenders otherwise agree, promptly after (i) the
formation or acquisition (provided that nothing in this Section shall be deemed
to authorize the acquisition of any entity not otherwise permitted hereunder) of
any Subsidiary not listed on Schedule 5.01 (unless such Subsidiary holds no
assets and conducts no business), (ii) the domestication of any Foreign
Subsidiary, (iii) the occurrence of any other event creating a new Subsidiary,
or (iv) Intermet desires that an existing Subsidiary which is designated as
"inactive" on Schedule 5.01 be designated as "active", Intermet shall cause to
be executed and delivered a counterpart to the Guaranty Agreement from each such
Subsidiary that is not a Foreign 956 Subsidiary, together with related documents
with respect to such Subsidiary of the kind described in Section 4.01(e), (f),
(g), (h) and (o), all in form and substance satisfactory to the Administrative
Agent and the Required Lenders.
(b) In the event that any Foreign Subsidiary ceases to be a Foreign 956
Subsidiary, Intermet shall cause to be executed and delivered a counterpart to
the Guaranty Agreement from such Foreign Subsidiary.
SECTION 6.11. AMENDMENT TO NOTE PURCHASE AGREEMENT. Promptly, and in any
event no later than January 4, 2000, deliver or cause to be delivered to the
Administrative Agent in form and substance satisfactory to the Administrative
Agent and the Required Lenders an amendment to the Note Purchase Agreement
permitting the Credit Parties to enter into the Credit Documents and incur the
Obligations.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note or other
Obligation shall remain unpaid, Intermet will not and will not permit any
Subsidiary to (unless waived in writing by the Required Lenders):
SECTION 7.01. INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, other than:
49
<PAGE> 56
(a) Indebtedness under this Agreement or otherwise outstanding on the
Closing Date as set forth on Schedule 7.01 attached hereto;
(b) unsecured current liabilities (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business;
(c) Indebtedness of Intermet pursuant to the Note Purchase Agreement;
(d) Investments in the form of intercompany loans permitted by Section
7.06(a) hereof;
(e) Subordinated Debt which is unsecured and approved as to terms and
conditions by the Administrative Agent and the Required Lenders;
(f) Indebtedness of a Person which is acquired by or consolidated with a
Consolidated Company as long as such Indebtedness is not obtained in
contemplation of such acquisition;
(g) purchase money Indebtedness to the extent secured by a Lien permitted
pursuant to Section 7.02(g); and
(h) other Indebtedness of Intermet (including, without limitation,
Indebtedness under the Five-Year Credit Agreement and the 364-Day Credit
Agreement) which is pari passu in all material respects with the Obligations,
without limiting the foregoing, such Indebtedness will not have the benefit of
any security or guaranties not benefitting the Obligations and will have
representations and warranties, covenants, events of default and conditions to
borrowing which are not more restrictive than the provisions of this Agreement.
SECTION 7.02. LIENS. Create, incur, assume or suffer to exist any Lien on
any of its property now owned or hereafter acquired other than:
(a) Liens existing on the Closing Date and disclosed on Schedule 7.02 and
Liens in favor of the Administrative Agent and/or the Lenders to secure the
Obligations;
(b) Liens for taxes not yet due, and Liens for taxes or Liens imposed by
ERISA which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in its books in
accordance with GAAP;
(c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate
50
<PAGE> 57
proceedings and with respect to which adequate reserves are being maintained in
its books in accordance with GAAP;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(e) Liens securing Indebtedness permitted by Section 7.01(g) or 7.01(h);
(f) to the extent that, on any date of determination, the value of Margin
Stock of Intermet and its Subsidiaries, whether now owned or hereafter acquired,
in the aggregate exceeds twenty-five percent (25%) of the value of the total
assets of Intermet and its Subsidiaries on such date which assets are subject to
the restrictions of this Section 7.2, Liens encumbering such excess Margin
Stock;
(g) Liens arising in connection with any Permitted Receivables Purchase
Facility; and
(h) Liens (other than those permitted by paragraphs (a) through (g) of this
Section 7.02) encumbering assets having an Asset Value not greater than twenty
percent (20%) of Consolidated Net Worth of Intermet in the aggregate at any one
time.
SECTION 7.03. MERGERS, ACQUISITIONS, DIVESTITURES.
(a) Merge or consolidate with any other Person, except that the foregoing
restrictions shall not be applicable to:
(i) mergers or consolidations of (x) any Subsidiary with and into any
other Subsidiary which is a Guarantor or (y) any Subsidiary with and into
Intermet; or
(ii) mergers or consolidations which result in Acquisitions of Persons
engaged in businesses in which Intermet is engaged on the Closing Date or
substantially related thereto and as otherwise permitted by Section 7.10 of
this Agreement where the surviving corporation is a wholly-owned Subsidiary
of Intermet (or will become a wholly-owned Subsidiary within six (6) months
of such Acquisition) and such Acquisition is in compliance with subsection
(c) hereof;
provided that before and after giving effect to any such mergers or
consolidations, (w) Intermet is in compliance with Section 6.08 hereof (as
demonstrated by delivery of pro forma financial covenants calculations prepared
in compliance with clause (c) hereof); (x) no other Default or Event of Default
exists hereunder; (y) in the event of such merger or consolidation, the
surviving
51
<PAGE> 58
Person is a Consolidated Company and complies with Section 6.10 hereof, if
applicable, and (z) Intermet is the surviving corporation in connection with any
merger or consolidation to which it is a party;
(b) Sell or otherwise dispose of the capital stock of a Subsidiary of
Intermet except as permitted pursuant to Section 7.04(c); or
(c) make or permit any Acquisition other than an Acquisition of Persons
engaged in businesses in which Intermet is engaged on the Closing Date or
substantially related thereto and as otherwise permitted pursuant to Section
7.10 of this Agreement; provided that:
(i) after giving effect to such Acquisition, assets comprising such
Acquisition are owned by Intermet or a wholly-owned Subsidiary of Intermet,
or, in the case of a stock purchase, such Person is a wholly-owned
Subsidiary of Intermet or is merged into Intermet or a wholly-owned
Subsidiary of Intermet;
(ii) prior to the consummation of such Acquisition, Intermet provides
to the Lenders calculations evidencing Intermet's compliance on a pro forma
basis with the financial covenants set forth in Section 6.08 hereof on the
last day of the immediately preceding fiscal quarter of Intermet,
calculated with respect to the immediately preceding four fiscal quarters
of Intermet as if the Acquisition (and any other Acquisitions previously
consummated during or after the immediately preceding four fiscal quarters
of Intermet) had been consummated on the first day of such period;
(iii) such Acquisition shall have been approved in advance by a
majority of the board of directors of the seller; and
(iv) no Default or Event of Default shall exist hereunder or shall
result therefrom and Intermet shall comply with the provisions of Section
6.10 hereof.
SECTION 7.04. ASSET SALES.
Sell, lease or otherwise dispose of its accounts, property, stock of its
Subsidiaries or other assets; provided, however, that the foregoing restrictions
on Asset Sales shall not be applicable to:
(a) sales of inventory in the ordinary course of business;
(b) sales of equipment or other personal property being replaced by other
equipment or other personal property purchased as a capital expenditure item; or
(c) Asset Sales comprised of stock of Subsidiaries or all or substantially
all of the assets of any Subsidiary where, on the date of execution of a binding
obligation to make such
52
<PAGE> 59
Asset Sale (provided that if the Asset Sale is not consummated within six (6)
months of such execution, then on the date of consummation of such Asset Sale
rather than on the date of execution of such binding obligation):
(x) at least 30 days (but not more than 60 days) prior to the
date of execution of such binding obligation (or, if the Asset Sale is
not consummated within six months of such execution, the date of
consummation of such Asset Sale), Intermet shall have delivered to the
Administrative Agent a notice of such Asset Sale (i) stating the nature
and terms of such Asset Sale (including, without limitation, a
description of the consideration payable by the purchaser) and the
nature and use of the proceeds of the transaction and (ii) including
calculations of the pro forma financial tests contained in clause (y)
below; and
(y) on a pro forma basis, after giving effect to such Asset
Sale and the use of proceeds thereof as if such Asset Sale and use of
proceeds had occurred on the first day of the applicable period, the
calculations of the financial covenant ratios described in paragraphs
(a), (b) and (c) of Section 6.08 as of the last day of the fiscal
quarter most recently ended are in compliance with the requirements of
such paragraphs; or
(d) Other Asset Sales (other than sales of capital stock of
Subsidiaries or all or substantially all of the assets of any Subsidiary)
including, without limitation, dispositions of Permitted Receivables pursuant to
Permitted Receivables Purchase Facilities; or
(e) to the extent that, on any date of determination, the value of
Margin Stock of Intermet and its Subsidiaries, whether now owned or hereafter
acquired, in the aggregate exceeds twenty-five percent (25%) of the total assets
of Intermet and its Subsidiaries on such date which assets are subject to the
restriction of this Section 7.04, sales of such excess Margin Stock for fair
value where the proceeds of such sale are held by a Consolidated Company as cash
or invested in cash equivalents such as certificates of deposit, U.S. government
securities, commercial paper with a term of 90 days or less which is rated
A-1/P-1 or other money market instruments;
provided that notwithstanding the foregoing, no transaction pursuant to clauses
(c) or (d) above shall be permitted if (i) any Default or Event of Default
exists at the time of such transaction or would exist as a result of such
transaction or (ii) on the date of execution of a binding obligation to make
such Asset Sale (provided that if the Asset Sale is not consummated within six
(6) months of such execution, then on the date of consummation of such Asset
Sale rather than on the date of execution of such binding obligation), after
giving effect to the proposed Asset Sale, the aggregate Asset Value of all Asset
Sales made pursuant to clauses (c) or (d) by the Consolidated Companies since
the Closing Date would not exceed twenty-five percent (25%) of Intermet's Net
Fixed Assets as of the last day of the most recently ended fiscal quarter of
Intermet.
53
<PAGE> 60
SECTION 7.05. DIVIDENDS, ETC. Declare or pay any dividend or other
distribution on any class of its stock, or make any payment to purchase, redeem,
retire or acquire any Subordinated Debt or stock or any option, warrant, or
other right to acquire such Subordinated Debt or stock (each, a "Restricted
Payment"), other than:
(i) dividends payable solely in shares of any class of its stock; and
(ii) cash dividends by wholly-owned direct or indirect Subsidiaries of
Intermet; and
(iii) other cash dividends declared and paid, and all other Restricted
Payments made, after the Closing Date in an aggregate amount not to exceed
the sum of (x) $25,000,000, plus (y) fifty percent (50%) of Consolidated
Net Income earned during the period commencing on September 30, 1999 and
ending on the last day of the most recently ended fiscal quarter of
Intermet (such period to be treated as one accounting period taking into
account 100% of Consolidated Net Losses during such period);
provided, however, no such dividend or other Restricted Payment may be declared
or paid pursuant to clause (iii) above unless no Default or Event of Default
exists at the time of such declaration or Restricted Payment, or would exist as
a result of such declaration or Restricted Payment.
SECTION 7.06. INVESTMENTS, LOANS, ETC. Make, permit or hold any
Investments other than:
(a) Investments in Subsidiaries which are Guarantors under this
Agreement, whether such Subsidiaries are Guarantors on the Closing Date or
become Guarantors in accordance with Section 6.10 after the Closing Date;
provided, however, nothing in this Section 7.06 shall be deemed to authorize an
Investment pursuant to this subsection (a) in any Person that is not a Guarantor
prior to such Investment;
(b) Investments in the following securities:
(i) direct obligations of the United States or any agency thereof,
or obligations guaranteed by the United States or any agency thereof, in
each case supported by the full faith and credit of the United States and
maturing within one year from the date of creation thereof;
(ii) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(iii) time deposits maturing within one year from the date of
creation thereof with, including certificates of deposit issued by, any
office located in the United
54
<PAGE> 61
States of any bank or trust company which is organized under the laws of
the United States or any state thereof and has capital, surplus and
undivided profits aggregating at least $500,000,000, including without
limitation, any such deposits in Eurodollars issued by a foreign branch of
any such bank or trust company;
(iv) mid-term notes of corporations existing under the laws of the
United States rated in the highest grade by a nationally recognized credit
rating agency;
(v) municipal "lower floater" bonds rated A or better (or backed by a
letter of credit rated A or better) by a nationally recognized credit rating
agency;
(c) Investments made by Plans and Foreign Plans;
(d) Investments outstanding on the Closing Date and listed on Schedule
7.06 hereto;
(e) Investments (other than those permitted by paragraphs (a) through (d)
above), including loans to employees, officers and other Persons (other than
Subsidiaries), in an aggregate amount not to exceed ten percent (10%) of
Consolidated Net Worth at any one time outstanding; and
(f) Investments after the Closing Date in Domestic Subsidiaries that are
not Guarantors in an aggregate amount not to exceed Five Million Dollars
($5,000,000).
SECTION 7.07. SALE AND LEASEBACK TRANSACTIONS. Sell or transfer any
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except as set forth on Schedule 7.07.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of related transactions
which in the aggregate would be material, whether or not in the ordinary course
of business, with any Affiliate of any Consolidated Company (but excluding any
Affiliate which is also a Consolidated Company), other than on terms and
conditions substantially as favorable to such Consolidated Company as would be
obtained by such Consolidated Company at the time in a comparable arm's-length
transaction with a Person other than an Affiliate; and
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business)
55
<PAGE> 62
if at the time of such conveyance or transfer any Default or Event of Default
exists or would exist as a result of such conveyance or transfer.
SECTION 7.09. PREPAYMENTS OF SUBORDINATED DEBT IN VIOLATION THEREOF.
Directly or indirectly, prepay, purchase, redeem, retire, defease or otherwise
acquire, or make any optional payment on account of any principal of, interest
on, or premium payable in connection with any of its Subordinated Debt, in each
case, which is a violation of the subordination provisions of such Subordinated
Debt or a violation of Section 7.05.
SECTION 7.10. CHANGES IN BUSINESS. Enter into any business which is
substantially different from that presently conducted by the Consolidated
Companies taken as a whole (which includes iron and aluminum foundry operations
and machining); provided that, Intermet and the Consolidated Companies may make
Acquisitions of, and Investments in (to the extent permitted by this Agreement),
Persons engaged in an unrelated business as long as the total revenues of such
Persons resulting from unrelated businesses (or total revenues generated by such
assets used in unrelated businesses in the case of a purchase of assets), as
determined for the most recently ended four fiscal quarters of such Person in
accordance with GAAP, do not exceed twenty percent (20%) of Total Sales of the
Consolidated Companies for the most recently ended four fiscal quarters of
Intermet.
SECTION 7.11. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING CONSOLIDATED
COMPANIES. Create or otherwise cause or suffer to exist or become effective, any
consensual encumbrance or restriction on the ability of any Consolidated Company
to (i) pay dividends or make any other distributions on such Consolidated
Company's stock, or (ii) pay any indebtedness owed to Intermet or any other
Consolidated Company, or (iii) transfer any of its property or assets to
Intermet or any other Consolidated Company or (iv) grant a Lien in favor of the
Lenders securing the obligations, except any consensual encumbrance or
restriction existing under the Credit Documents or as set forth on Schedule
5.20.
SECTION 7.12. ACTIONS UNDER CERTAIN DOCUMENTS.
(a) Without the prior written consent of the Administrative Agent and the
Required Lenders, modify, amend or supplement the Note Purchase Agreement to (i)
increase the principal amount of the indebtedness thereunder, (ii) increase the
interest rate thereunder, (iii) modify any requirement of prepayment or
repayment thereunder which would shorten the final maturity or average life of
the indebtedness outstanding thereunder or make the requirement of prepayment
more onerous, or (iv) make any more onerous any other provision thereof.
(b) Without the prior written consent of the Administrative Agent and the
Required Lenders, modify, amend or supplement any agreement governing
Subordinated Debt to (i) increase the principal amount of the indebtedness
thereunder, (ii) increase the interest rate thereunder, (iii) modify any
requirement of prepayment or repayment thereunder which would shorten the final
maturity or average life of the indebtedness outstanding thereunder or make the
56
<PAGE> 63
requirement of prepayment more onerous, (iv) make any more onerous any other
provision thereof, or (v) amend or modify the subordination provisions thereof.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
SECTION 8.01. PAYMENTS. Intermet shall fail to make promptly when due
(including, without limitation, by mandatory prepayment) any principal payment
with respect to the Loans, or Intermet shall fail to make within five (5) days
after the due date thereof any payment of interest, fee or other amount payable
hereunder or any of the Obligations;
SECTION 8.02. COVENANTS WITHOUT NOTICE. Intermet shall fail to observe or
perform any covenant or agreement contained in Sections 6.07(f), 6.08, 6.11,
7.01 through 7.07, 7.09 through 7.12;
SECTION 8.03. OTHER COVENANTS. Intermet shall fail to observe or perform
any covenant or agreement contained in this Agreement, other than those referred
to in Sections 8.01 and 8.02, and, if capable of being remedied, such failure
shall remain unremedied for thirty (30) days after the earlier of (i) Intermet's
obtaining knowledge thereof, or (ii) written notice thereof shall have been
given to Intermet by the Administrative Agent or any Lender;
SECTION 8.04. REPRESENTATIONS. Any representation or warranty made or
deemed to be made by Intermet or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Administrative Agent or the Lenders by any such Person pursuant to the terms
of this Agreement or any other Credit Document, shall be incorrect in any
material respect when made or deemed to be made or submitted;
SECTION 8.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any Consolidated Company
shall fail to make when due (whether at stated maturity, by acceleration, on
demand or otherwise, and after giving effect to any applicable grace period) any
payment of principal of or interest on any Indebtedness (other than the
Obligations) exceeding $5,000,000 in the aggregate;
SECTION 8.06. DEFAULTS UNDER OTHER AGREEMENTS. Any Consolidated Company
shall fail to observe or perform within any applicable grace period any
covenants or agreements contained in any agreements or instruments relating to
any of its Indebtedness exceeding $5,000,000 in the aggregate, or any other
event shall occur if the effect of such failure or other event is to accelerate,
or to permit the holder of such Indebtedness or any other Person to
57
<PAGE> 64
accelerate, the maturity of such Indebtedness; or any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required prepayment)
in whole or in part prior to its stated maturity; or there occurs any
termination, liquidation, unwind or similar event or circumstance under any
Permitted Receivables Purchase Facility, which permits any purchaser of
receivables thereunder to cease purchasing such receivables or to apply all
collections on previously purchased receivables thereunder to the repayment of
such purchaser's interest in such previously purchased receivables other than
any such event or circumstance that arises solely as a result of a down-grading
of the credit rating of any bank or financial institution not affiliated with
Intermet that provides liquidity, credit or other support in connection with
such facility;
SECTION 8.07. BANKRUPTCY. Intermet or any other Consolidated Company shall
commence a voluntary case concerning itself under the Bankruptcy Code or
applicable foreign bankruptcy laws; or an involuntary case for bankruptcy is
commenced against any Consolidated Company and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) or similar official
under applicable foreign bankruptcy laws is appointed for, or takes charge of,
all or any substantial part of the property of any Consolidated Company; or any
Consolidated Company commences proceedings of its own bankruptcy or to be
granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to any Consolidated Company or there is commenced
against any Consolidated Company any such proceeding which remains undismissed
for a period of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Consolidated Company suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or any
Consolidated Company shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or any Consolidated Company
shall by any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is taken by any
Consolidated Company for the purpose of effecting any of the foregoing;
SECTION 8.08. ERISA. A Plan or Foreign Plan of a Consolidated Company or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum funding
standard required by applicable law, the terms of such Plan or Foreign
Plan, Section 412 of the Tax Code or Section 302 of ERISA for any plan year
or a waiver of such standard is sought or granted with respect to such Plan
or Foreign Plan under applicable law, the terms of such Plan or Foreign
Plan or Section 412 of the Tax Code or Section 303 of ERISA; or
58
<PAGE> 65
(ii) is being, or has been, terminated or the subject of termination
proceedings under applicable law or the terms of such Plan or Foreign Plan;
or
(iii) shall require a Consolidated Company to provide security under
applicable law, the terms of such Plan or Foreign Plan, Section 401 or 412
of the Tax Code or Section 306 or 307 of ERISA; or
(iv) results for any reason, in a liability (including without
limitation, withdrawal liability) to a Consolidated Company under
applicable law, the terms of such Plan or Foreign Plan, or Title IV of
ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC (or any similar Person with respect to any Foreign
Plan), a Plan or any other Person that would have a Materially Adverse Effect;
SECTION 8.09. MONEY JUDGMENT. A judgment or order for the payment of money
in excess of $5,000,000 or otherwise having a Materially Adverse Effect shall be
rendered against Intermet or any other Consolidated Company and such judgment or
order shall continue unsatisfied (in the case of a money judgment) and in effect
for a period of 30 days during which execution shall not be effectively stayed
or deferred (whether by action of a court, by agreement or otherwise);
SECTION 8.10. OWNERSHIP OF CREDIT PARTIES. If Intermet shall at any time
fail to own and control one hundred percent (100%) of the voting stock of any
Credit Party, either directly or indirectly through a wholly-owned Subsidiary of
Intermet, except for (x) as a result of any Asset Sale permitted pursuant to
Section 7.04(c) hereof, and (y) with respect to any Credit Party or Foreign
Subsidiary whose stock is acquired by one of the Consolidated Companies after
the Closing Date where Intermet shall, directly or indirectly, maintain
ownership and control of the percentage of voting stock owned and controlled as
of the date such Person became a Credit Party hereunder or a Foreign Subsidiary
or such greater percentage as shall thereafter be obtained, directly or
indirectly by Intermet;
SECTION 8.11. CHANGE IN CONTROL OF INTERMET. (i) Any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall
become the "beneficial owner(s)" (as defined in said Rule 13d-3) of more than
fifty percent (50%) of the shares of the outstanding capital stock of Intermet
entitled to vote for members of Intermet's board of directors on a fully diluted
basis, (ii) the individuals who are members of the board of directors of the
Company on the Closing Date (together with any new or replacement directors
whose initial nomination for election was approved by a majority of the
directors who were either directors on the Closing Date or previously so
approved) shall cease to constitute a majority of the board of directors of the
Company, or (iii) any event or condition shall occur or exist which, pursuant to
the terms of any Change in Control Provision, requires or permits the
59
<PAGE> 66
holder(s) of Indebtedness of any Consolidated Company to require that such
Indebtedness be redeemed, repurchased, defeased, prepaid or repaid, in whole or
in part, or the maturity of such Indebtedness to be accelerated in any respect;
SECTION 8.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There shall exist or
occur any "Event of Default" as provided under the terms of any other Credit
Document, or any Credit Document ceases to be in full force and effect or the
validity or enforceability thereof is disaffirmed by or on behalf of Intermet or
any other Credit Party, or at any time it is or becomes unlawful for Intermet or
any other Credit Party to perform or comply with its obligations under any
Credit Document, or the obligations of Intermet or any other Credit Party under
any Credit Document are not or cease to be legal, valid and binding on Intermet
or any such Credit Party;
SECTION 8.13. ATTACHMENTS. An attachment or similar action shall be made on
or taken against any of the assets of any Consolidated Company with an Asset
Value exceeding $5,000,000 in aggregate and is not removed, suspended or
enjoined within 30 days of the same being made or any suspension or injunction
being lifted; or
SECTION 8.14. DEFAULT UNDER OTHER CREDIT AGREEMENTS. There shall exist or
occur any "Event of Default" as defined in either the Five-Year Credit Agreement
or the 364- Day Credit Agreement;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Administrative Agent may, with the consent of the
Required Lenders, and upon the written (including telecopied) or telex request
of the Required Lenders, shall, by written notice to Intermet take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against
Intermet or any other Credit Party: (i) declare all Commitments terminated,
whereupon the pro rata Commitments of each Lender shall terminate immediately;
and (ii) declare the principal of and any accrued interest on the Loans, and all
other Obligations owing hereunder, to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by Intermet; provided, that, if an
Event of Default specified in Section 8.07 shall occur, the result which would
occur upon the giving of written notice by the Administrative Agent to any
Credit Party, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice; and (iii) exercise any
rights or remedies under the Security Documents.
ARTICLE IX.
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT OF ADMINISTRATIVE AGENT. Each Lender hereby
designates BNS as Administrative Agent to administer all matters concerning the
Loans and to
60
<PAGE> 67
act as herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize the Administrative Agent to take such actions on its behalf under the
provisions of this Agreement, the other Credit Documents, and all other
instruments and agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through their
agents or employees.
SECTION 9.02. AUTHORIZATION OF ADMINISTRATIVE AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS.
(a) Each Lender hereby authorizes the Administrative Agent to enter into
each of the Security Documents substantially in the form attached hereto, and to
take all action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Administrative Agent for the benefit of the
Administrative Agent and the Lenders and the other beneficiaries thereof upon
the terms thereof. The Lenders further agree that the Administrative Agent may
assign its rights and obligations under any of the Security Documents to any
affiliate of the Administrative Agent or to any trustee, if necessary or
appropriate under applicable law, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Administrative Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Administrative Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Administrative Agent under such Security Document, the Administrative Agent
shall act in respect of such consent, exercise of remedies, determination or
action, as the case may be, with the consent of and at the direction of the
Required Lenders; provided, however, that no such consent of the Required
Lenders shall be required with respect to any consent, determination or other
matter that is, in the Administrative Agent's judgment, ministerial or
administrative in nature. In each circumstance where any consent of or direction
from the Required Lenders is required, the Administrative Agent shall send to
the Lenders a notice setting forth a description in reasonable detail of the
matter as to which consent or direction is requested and the Administrative
Agent's proposed course of action with respect thereto. The Lenders shall
endeavor to respond promptly to such request but in the event the Administrative
Agent shall not have received a response from any Lender within five (5)
Business Days after such Lender's receipt of such notice, such Lender shall be
deemed not to have agreed to the course of action proposed by the Administrative
Agent.
SECTION 9.03. NATURE OF DUTIES OF ADMINISTRATIVE AGENT. The Administrative
Agent shall have no duties or except those expressly set forth in this Agreement
and the other Credit Documents. None of the Administrative Agent nor any of its
respective officers,
61
<PAGE> 68
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Administrative Agent
shall be ministerial and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender; and nothing in this Agreement, express or implied, is intended to
or shall be so construed as to impose upon the Administrative Agent any
obligations in respect of this Agreement or the other Credit Documents except as
expressly set forth herein.
SECTION 9.04. LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT.
(a) Independently and without reliance upon the Administrative Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement, the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.
(b) The Administrative Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreement or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Guaranty Agreement, or the other
documents contemplated hereby or thereby, or the financial condition of the
Credit Parties, or the existence or possible existence of any Default or Event
of Default; provided, however, to the extent that the Administrative Agent has
been advised that a Lender has not received any information formally delivered
to the Administrative Agent pursuant to Section 6.07, the Administrative Agent
shall deliver or cause to be delivered such information to such Lender.
SECTION 9.05. CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until the Administrative Agent shall
have received instructions from the Required Lenders; and the Administrative
Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
62
<PAGE> 69
SECTION 9.06. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for any Credit Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 9.07. INDEMNIFICATION OF ADMINISTRATIVE AGENT. To the extent the
Administrative Agent is not reimbursed and indemnified by the Credit Parties,
each Lender will reimburse and indemnify the Administrative Agent, ratably
according to the respective amounts of the Loans outstanding under all
Facilities (or if no amounts are outstanding, ratably in accordance with the
aggregate Commitments), in either case, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in performing its duties hereunder, in any way relating
to or arising out of this Agreement or the other Credit Documents; provided that
no Lender shall be liable to the Administrative Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
SECTION 9.08. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise the
same as though it were not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Consolidated Companies or any affiliate of
the Consolidated Companies as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Consolidated
Companies for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
SECTION 9.09. HOLDERS OF NOTES. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
63
<PAGE> 70
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
SECTION 9.10. SUCCESSOR ADMINISTRATIVE AGENT.
(a) The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and Intermet and may be removed with or without
cause by the Required Lenders; provided, however, the Administrative Agent may
not resign or be removed until a successor Administrative Agent has been
appointed and shall have accepted such appointment. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Administrative Agent subject to Intermet's prior written approval. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent subject to Intermet's prior written approval, which shall
be a bank which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any State thereof,
or any Affiliate of such bank, having a combined capital and surplus of at least
$100,000,000.
(b) Upon the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article IX shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
an Administrative Agent under this Agreement.
SECTION 9.11. ARRANGERS AND OTHER AGENTS. Each Lender hereby designates
Bank One, Michigan as Syndication Agent and SunTrust Bank, Atlanta as
Documentation Agent. The Syndication Agent, the Documentation Agent and the
Arrangers, in such capacities, shall have no duties or obligations whatsoever
under this Agreement or any other Credit Document.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, telecopy or
similar teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on Schedule 10.01, or
such other address or applicable
64
<PAGE> 71
teletransmission number as such party may hereafter specify by notice to the
Administrative Agent and Intermet. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iii) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section and the appropriate confirmation is
received, or (iv) if given by any other means (including, without limitation, by
air courier), when delivered or received at the address specified in this
Section; provided that notices to the Administrative Agent shall not be
effective until received.
SECTION 10.02. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Intermet and the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by Intermet and all the Lenders do
any of the following: (i) waive any of the conditions specified in Section 4.01
or 4.02, (ii) increase the Commitments or other contractual obligations to
Intermet under this Agreement, (iii) reduce the principal of, or interest on,
the Notes or any fees hereunder, (iv) postpone any date fixed for the payment in
respect of principal of, or interest on, the Notes or any fees hereunder, (v)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number or identity of Lenders which shall be
required for the Lenders or any of them to take any action hereunder, (vi) agree
to release any Guarantor from its obligations under the Guaranty Agreement or
release any collateral with respect to a Guarantor, except in connection with an
Asset Sale permitted pursuant to Section 7.04(c) above where no consent of the
Lenders shall be required for such release, (vii) modify the definition of
"Required Lenders," or (viii) modify this Section 10.02.
SECTION 10.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Administrative Agent, any Lender or any holder of a Note in
exercising any right or remedy hereunder or under any other Credit Document, and
no course of dealing between any Credit Party and the Administrative Agent, any
Lender or the holder of any Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right or remedy hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent, any Lender or the holder of
any Note would otherwise have. No notice to or demand on any Credit Party not
required hereunder or under any other Credit Document in any case shall entitle
any Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent,
the Lenders or the holder of any Note to any other or further action in any
circumstances without notice or demand.
65
<PAGE> 72
SECTION 10.04. PAYMENT OF EXPENSES, ETC. Intermet shall:
(i) pay all reasonable, out-of-pocket costs and expenses of the
Administrative Agent in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred
relating to advice of counsel as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default or Event of Default,
refinancing, renegotiation or restructuring of, this Agreement and the
other Credit Documents and the documents and instruments referred to
therein, and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees actually incurred and disbursements
of counsel for the Administrative Agent), and in the case of enforcement of
this Agreement or any Credit Document after an Event of Default, all such
reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b), pay and hold each Agent and the Lenders
harmless from and against any and all present and future stamp,
documentary, and other similar Taxes with respect to this Agreement, the
Notes and any other Credit Documents, any collateral described therein, or
any payments due thereunder, and save each of the Lenders harmless from and
against any and all liabilities with respect to or resulting from any delay
or omission to pay such Taxes;
(iii) indemnify each Agent and each Lender, and their respective
officers, directors, employees, representatives and agents from, and hold
each of them harmless against, any and all costs, losses, liabilities,
claims, damages or expenses incurred by any of them (whether or not any of
them is designated a party thereto) (an "Indemnitee") arising out of or by
reason of any investigation, litigation or other proceeding related to any
actual or proposed use of the proceeds of any of the Loans or any Credit
Party's entering into and performing of the Agreement, the Notes, or the
other Credit Documents, including, without limitation, the reasonable fees
actually incurred and disbursements of counsel (including foreign counsel)
incurred in connection with any such investigation, litigation or other
proceeding; provided, however, Intermet shall not be obligated to indemnify
any Indemnitee for any of the foregoing arising out of such Indemnitee's
gross negligence or willful misconduct; and
(iv) without limiting the indemnities set forth above, indemnify
each Indemnitee for any and all expenses and costs (including without
limitation, remedial, removal, response, abatement, cleanup, investigative,
closure and monitoring costs), losses, claims (including claims for
contribution or indemnity and including the cost of investigating or
defending any claim and whether or not such claim is ultimately defeated,
and whether such claim arose before, during or after any Credit Party's
ownership,
66
<PAGE> 73
operation, possession or control of its business, property or facilities or
before, on or after the date hereof, and including also any amounts paid
incidental to any compromise or settlement by the Indemnitee or Indemnitees
to the holders of any such claim), lawsuits, liabilities, obligations,
actions, judgments, suits, disbursements, encumbrances, liens, damages
(including without limitation damages for contamination or destruction of
natural resources), penalties and fines of any kind or nature whatsoever
(including without limitation in all cases the reasonable fees actually
incurred, other charges and disbursements of counsel in connection
therewith) incurred, suffered or sustained by that Indemnitee based upon,
arising under or relating to Environmental Laws based on, arising out of or
relating to in whole or in part, the existence or exercise of any rights or
remedies by any Indemnitee under this Agreement, any other Credit Document
or any related documents.
If and to the extent that the obligations of Intermet under this Section 10.04
are unenforceable for any reason, Intermet hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
SECTION 10.05. RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender or other holder of a Note may have under
applicable law, each Lender or other holder of a Note shall, upon the occurrence
of any Event of Default and whether or not such Lender or such holder has made
any demand or any Credit Party's obligations are matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Credit Documents, and Intermet, on behalf of each Credit
Party, hereby grants to each Lender and other Holder of a Note a continuing
security interest in, all deposits of any Credit Party (general or special, time
or demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by such Lender or other holder
to any Credit Party, whether or not related to this Agreement or any transaction
hereunder. Each Lender shall promptly notify Intermet of any offset hereunder.
SECTION 10.06. BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that Intermet may not assign or transfer any of its interest hereunder
without the prior written consent of each Lender.
(b) Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an Affiliate of such Lender.
(c) Each Lender may assign all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of any of its
Commitments and the Loans at the time owing to it and the Notes held by it) to
any Eligible Assignee; provided, however, that (i) the Administrative Agent and
Intermet must give their prior written consent to
67
<PAGE> 74
such assignment (which consent shall not be unreasonably withheld or delayed)
unless such assignment is to another Lender or an Affiliate of a Lender or, in
the case of Intermet, unless an Event of Default has occurred and is continuing,
(ii) the amount of the Commitments or Loans, of the assigning Lender subject to
each assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 (or, if less, the assigning Lender's entire Commitment
and Loans), and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a Note or Notes subject to such assignment and, unless such assignment is to an
Affiliate of such Lender, a processing and recordation fee of $3,000. Intermet
shall not be responsible for such processing and recordation fee or any costs or
expenses incurred by any Lender or the Administrative Agent in connection with
such assignment. From and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, the assignee thereunder shall be a party hereto and
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement. Notwithstanding the
foregoing, the assigning Lender must retain after the consummation of such
Assignment and Acceptance, a minimum aggregate amount of Commitments and the
Loans, as the case may be, of $5,000,000 (unless the Lender is assigning its
entire Commitment); provided, however, no such minimum amount shall be required
with respect to any such assignment made at any time there exists an Event of
Default hereunder. Within five (5) Business Days after receipt of the notice and
the Assignment and Acceptance, Intermet, at its own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Note or
Notes, a new Note or Notes to the order of such assignee in a principal amount
equal to the applicable Commitments assumed by it pursuant to such Assignment
and Acceptance and new Note or Notes to the assigning Lender in the amount of
its retained Commitment or Commitments. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the date of the surrendered Note or
Notes which they replace, and shall otherwise be in substantially the form
attached hereto.
(d) Each Lender may, without the consent of Intermet or the Administrative
Agent, sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it and the Notes held by it);
provided however, that (i) no Lender may sell a participation in its aggregate
Commitments (after giving effect to any permitted assignment hereof) in an
amount in excess of fifty percent (50%) of such aggregate Commitments; provided,
however, sales of participations to an Affiliate of such Lender shall not be
included in such calculation; provided, however, no such maximum amount shall be
applicable to any such participation sold at any time there exists an Event of
Default hereunder, (ii) such Lender's obligations under this Agreement shall
remain unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iv) the
participating bank or other entity shall be entitled to all of the benefits of
Article III and Sections 6.07 and 10.05 of this Agreement as if it were a
Lender, (v) Intermet and the Administrative Agent and other Lenders shall
continue to deal solely and directly with each
68
<PAGE> 75
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Credit Documents, and (vi) such Lender shall retain the
sole right to enforce the obligations of Intermet relating to the Loans and to
approve any amendment, modification or waiver of any provisions of this
Agreement except that such Lender may agree with any participating bank or other
entity that it will not, without such participating bank's or other entity's
consent, take any actions of the types described in clauses (ii), (iii), (iv),
(v) or (viii) of Section 10.02. Any Lender selling a participation hereunder
shall provide prompt written notice to Intermet of the name of such participant.
(e) Any Lender or participant may, in connection with the assignment or
participation or proposed assignment or participation, pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to Intermet or the other Consolidated Companies furnished
to such Lender by or on behalf of Intermet or any other Consolidated Company.
With respect to any disclosure of confidential, non-public, proprietary
information, such proposed assignee or participant shall agree to use the
information only for the purpose of making any necessary credit judgments with
respect to this credit facility and not to use the information in any manner
prohibited by any law, including without limitation, the securities laws of the
United States. The proposed participant or assignee shall agree not to disclose
any of such information except (i) to directors, employees, auditors or counsel
to whom it is necessary to show such information, each of whom shall be informed
of the confidential nature of the information, (ii) in any statement or
testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Intermet and the Administrative Agent
unless otherwise prohibited by the subpoena, order or law), and (iii) upon the
request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Lender, the Administrative Agent or Intermet relating to such confidential
information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its rights in
this Agreement and the Notes issued to it to a Federal Reserve Bank; provided
that no such assignment shall release the Lender from any of its obligations
hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have been levied or
imposed so as to require withholdings or deductions by Intermet and payment by
Intermet of additional amounts to any Lender as a result thereof, (ii) any
Lender shall make demand for payment of increased costs or reduced rate of
return pursuant to Section 3.10 or any Lender determines that LIBOR is
unascertainable or illegal pursuant to Section 3.08 or Section 3.09, or any
Lender makes a claim for increased costs pursuant to Section 3.09, or (iii) any
Lender shall decline to consent to a modification or waiver of the terms of this
Agreement or the other Credit Documents requested by Intermet, then and in such
event, upon request from Intermet delivered to such Lender and the
Administrative Agent, such Lender shall assign, in accordance with the
provisions of Section 10.06(c), all of its rights and obligations under this
Agreement and the
69
<PAGE> 76
other Credit Documents to another Lender or an Eligible Assignee selected by
Intermet, in consideration for the payment by such assignee to the Lender of the
principal of, and interest on, the outstanding Loans accrued to the date of such
assignment, and the assumption of such Lender's Commitment hereunder, together
with any and all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such assignment;
provided, however, that if Intermet shall exercise its rights under this Section
10.06 with respect to any Lender, it shall exercise in a substantially identical
manner such rights as to all similarly affected Lenders.
SECTION 10.07. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) EACH CREDIT DOCUMENT (EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A
CREDIT DOCUMENT) WILL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, INTERMET HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE TRIAL BY JURY, AND INTERMET HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. TO
THE EXTENT THAT INTERMET HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, INTERMET HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THE CREDIT DOCUMENTS. INTERMET ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
70
<PAGE> 77
ADMINISTRATIVE AGENT AND EACH LENDER ENTERING INTO THE CREDIT DOCUMENTS.
(c) INTERMET HEREBY IRREVOCABLY DESIGNATES THE PRENTICE-HALL CORPORATION
SYSTEM, INC., AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND ON
BEHALF OF INTERMET, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO INTERMET AT ITS ADDRESS SET FORTH IN SCHEDULE
10.01, BUT THE FAILURE OF INTERMET TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY
WAY THE SERVICE OF SUCH PROCESS. INTERMET FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO INTERMET AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Administrative Agent, any
Lender, any holder of a Note or any Credit Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Intermet in any other jurisdiction.
SECTION 10.08. INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights pursuant to
this Agreement and its Notes, and it shall not be necessary for any other Lender
to be joined as an additional party in any proceeding for such purpose.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date (the "Effective
Date") on which all of the parties hereto shall have signed a copy hereof
(whether the same or different copies) and shall have delivered the same to the
Administrative Agent pursuant to Section 10.01 or, in the case of the Lenders,
shall have given to the Administrative Agent written or telex notice (actually
received) that the same has been signed and mailed to them.
71
<PAGE> 78
(b) The obligations of Intermet under Sections 3.07(b), 3.10, 3.12, 3.13,
10.04 and 10.05 hereof shall survive the payment in full of the Notes and all
other Obligations after the Maturity Date. All representations and warranties
made herein, in the certificates, reports, notices, and other documents
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement, the other Credit Documents, and such other agreements and
documents, the making of the Loans hereunder, and the execution and delivery of
the Notes.
SECTION 10.11. SEVERABILITY. In case any provision in or obligation under
this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
SECTION 10.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR OR TAX LAWS. If
(i) any preparation of the financial statements referred to in Section 6.07
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) (other than changes mandated by FASB 106)
result in a material change in the method of calculation of financial covenants,
standards or terms found in this Agreement, (ii) there is any change in
Intermet's fiscal quarter or fiscal year, or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement or any such event referred to in clause (i) through (iii) above no
longer makes such financial covenants, standards or terms comparable to those
existing on the Effective Date, Intermet and the Required Lenders agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after such changes
as if such changes had not been made. Unless and until such provisions have been
so amended, the provisions of this Agreement shall govern.
SECTION 10.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement. This Agreement, the other Credit Documents, and the
agreements and documents required to be delivered pursuant to the terms of this
Agreement constitute the entire agreement among the
72
<PAGE> 79
parties hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements, representations and understandings related to
such subject matters.
73
<PAGE> 80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and to be delivered in New York, New York, by their duly
authorized officers as of the day and year first above written.
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
------------------------
Name: Doretha J. Christoph
Title: V.P. Finance
THE BANK OF NOVA SCOTIA,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By: /s/ F.C.H. Ashby
--------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
BANK ONE, MICHIGAN,
INDIVIDUALLY AND AS SYNDICATION AGENT
By: /s/ Paul Flynn
-----------------
Name: Paul Flynn
Title: Vice President
SUNTRUST BANK, ATLANTA,
INDIVIDUALLY AND AS DOCUMENTATION AGENT
By: /s/ Charles C. Pick
-------------------
Name: Charles C. Pick
Title: Vice President
COMERICA BANK,
By: /s/ Mark A. Reifel
------------------
Name: Mark A. Reifel
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ J.T. Taylor
-----------------
Name: J.T. Taylor
Title: Vice President
THE BANK OF NEW YORK,
By: /s/ Joshua M. Feldman
---------------------------
Name: Joshua M. Feldman
Title: Assistant Vice President
HARRIS TRUST AND SAVINGS BANK,
By: /s/ Kirby M. Law
-----------------
Name: Kirby M. Law
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
By: /s/ Peter F. Stack
------------------
Name: Peter F. Stack
Title: Vice President
THE BANK OF TOKYO - MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ Hisashi Miyashiro
-------------------------
Name: Hisashi Miyashiro
Title: Deputy General Manager
BANKERS TRUST COMPANY
By: /s/ Robert R. Telesca
---------------------------
Name: Robert R. Telesca
Title: Assistant Vice President
FLEET NATIONAL BANK
By: /s/ David M. Harnisch
---------------------
Name: David M. Harnisch
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
-------------------------------------
Name: Peter L. Chinnici
Title: Senior Vice President & Group Head
MICHIGAN NATIONAL BANK
By: /s/ John M. Bebb
-----------------
Name: John M. Bebb
Title: Vice President
THE MITSUBISHI TRUST & BANKING
CORPORATION
By: /s/ Nobuo Tominaga
------------------
Name: Nobuo Tominaga
Title: Chief Manager
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Bernardo Lacayo
---------------------------
Name: Bernardo Lacayo
Title: Assistant Vice President
<PAGE> 81
Schedule 1
Commitments
<TABLE>
<CAPTION>
Lender Commitment Pro Rata Share
- - ------ ---------- --------------
<S> <C> <C>
The Bank of Nova Scotia $16,200,000 8.1%
Bank One, Michigan $16,200,000 8.1%
SunTrust Bank, Atlanta $16,200,000 8.1%
Comerica Bank $16,200,000 8.1%
KeyBank National Association $16,200,000 8.1%
LaSalle Bank National Association $25,000,000 12.5%
Bankers Trust Company $20,000,000 10.0%
The Mitsubishi Trust & Banking Corporation $15,000,000 7.5%
PNC Bank, National Association $15,000,000 7.5%
Fleet National Bank $10,000,000 5.0%
The Fuji Bank, Limited $10,000,000 5.0%
The Bank of New York $7,000,000 3.5%
Harris Trust and Savings Bank $7,000,000 3.5%
Michigan National Bank $5,000,000 2.5%
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch $5,000,000 2.5%
TOTAL 200,000,000 100%
</TABLE>
Term Loan Agreement
<PAGE> 1
EXHIBIT 4.16(b)
Contents of Omitted Exhibits and Schedules to the $200,000,000 Term Loan
Agreement
(We will furnish a copy of any of the omitted schedules and exhibits to the
Commission upon request)
<TABLE>
<S> <C>
Schedule 5.01 Organization and Ownership of Subsidiaries
Schedule 5.01 (a) Lack of Qualification
Schedule 5.05 Certain Pending and Threatened Litigation
Schedule 5.08 Environmental Matters
Schedule 5.11 Burdensome Restrictions
Schedule 5.12 Tax Filings and Payments
Schedule 5.15 Employee Benefit Matters
Schedule 5.16 Patent, Trademark, License and Other Intellectual Property Matters
Schedule 5.17 Ownership of Properties
Schedule 5.20 Dividend Restrictions
Schedule 6.08 Financial Covenant Calculations
Schedule 7.01 Existing Indebtedness
Schedule 7.02 Existing Liens
Schedule 7.06 Existing Investments
Schedule 7.07 Permitted Sale and Leaseback Transactions
Schedule 10.01 Notice Information
Exhibit A Form of Term Note
Exhibit D-1 Form of Notice of Borrowing
Exhibit D-2 Form of Notice of Continuation/Conversion
Exhibit E Form of Guaranty Agreement
Exhibit F Form of Closing Certificate
Exhibit G-1 Form of Opinion of Dickinson Wright PLLC
Exhibit G-2 Form of Opinion of Kilpatrick Stockton LLP
Exhibit G-3 Form of Opinion of Mayer, Brown & Platt
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Compliance Certificate
</TABLE>
<PAGE> 1
EXHIBIT 10.3
INTERMET CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE I - ESTABLISHMENT OF PLAN
1.1 ESTABLISHMENT OF PLAN. The Employer hereby establishes the INTERMET
Corporation Deferred Compensation Plan (hereinafter referred to as the "Plan")
for the benefit of certain Key Management Employees of INTERMET Corporation.
ARTICLE II - PURPOSE OF PLAN
2.1 PURPOSE OF PLAN. The Employer intends and desires by the adoption
of this Plan to recognize the value to the Employer of the past and present
services of Eligible Employees covered by the Plan and to encourage and assure
their continued service with the Employer by making provisions for their future
retirement security by allowing Eligible Employees to elect to defer payment of
a portion of regular compensation and/or performance bonus (if any).
The Plan is intended to be a "top-hat" plan, that is, an unfunded
deferred compensation plan maintained for a select group of management or highly
compensated employees, under Sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974 (ERISA).
2.2 EFFECTIVE DATE. The Effective Date of the Plan is December 1, 1999.
ARTICLE III - DEFINITIONS
3.1 "ACCOUNT" means the account on the books of the Employer to which
an Eligible Employee's salary reduction contributions under Article IV are
recorded. Each account shall be adjusted for investment earnings or loss as
indicated in Article VI. Each Account shall be held in the Employer's name and
remain a general asset of the Employer until distributed pursuant to Article
VII. Amounts attributable to the Account of each Eligible Employee remain
subject to the claims of the general creditors of the Employer at all times.
3.2 "BENEFICIARY" means the person(s) entitled hereunder to receive the
benefits which may be payable upon or after a Participant's death.
3.3 "BOARD" means the Board of Directors of the Employer.
3.4 "ELIGIBLE EMPLOYEE" means, for any Plan Year, an employee of the
Employer who is a Key Management Employee and is eligible to participate in the
Plan as determine exclusively by the Chief Executive Officer of the Employer.
-1-
<PAGE> 2
3.5 "EMPLOYER" means INTERMET Corporation, its affiliates and
subsidiaries, or any company which is a successor to INTERMET Corporation as a
result of merger, consolidation, liquidation, transfer of assets, or other
reorganization.
3.6 "KEY MANAGEMENT EMPLOYEE" means those select management employees
who contribute materially to the continued growth, development, and future
success of the Company.
3.7 "NORMAL RETIREMENT AGE" means the date the Participant attains age
65.
3.8 "PLAN ADMINISTRATOR" means the person(s) or entity appointed by the
Employer to administer the Plan, or if the Employer fails to make such
appointment, the Employer.
3.9 "PLAN YEAR" means the twelve (12) month period ending each December
31st during which the Plan is in effect.
3.10 "PARTICIPANT" means any Eligible Employee who becomes entitled to
participate in the Plan.
3.11 "SEPARATION FROM SERVICE" means the severance of a Participant's
employment with the Employer for any reason, including, but not limited to
death, retirement, or disability.
ARTICLE IV - SALARY REDUCTION CONTRIBUTIONS
An Eligible Employee may, for any Plan Year in which he or she is an
Eligible Employee, elect to accept a salary reduction in base compensation
and/or bonus payments from the Employer equal to a dollar amount or whole
percentage of his or her base compensation and/or bonus totaling no more than
$200,000 for the year. No annual salary reduction election will be effective in
the event that the requested salary reduction election is less than $20,000.
Salary reduction elections under this Plan must be made before the
beginning of the Plan Year to which they apply. Once a Plan Year begins, salary
reduction elections for that year under this Plan may not be amended or revoked,
nor may salary reductions be suspended. The Employer will credit to each
Eligible Employee's Account the amount of that Eligible Employee's salary
reduction contributions under this Article. The entire bonus will be deferred in
the event that the bonus payment deferral election exceeds the available bonus.
ARTICLE V - VESTING
A Participant shall always be one-hundred percent (100%) vested in and
have a nonforfeitable right to the amount of his or her Account.
-2-
<PAGE> 3
ARTICLE VI -ACCOUNTING AND INVESTMENTS
6.1 INVESTMENT ELECTION BY PARTICIPANT. Each Participant will
self-direct the investment of his or her Account. A Participant shall indicate
his or her investment selection(s) by filing a written designation with the Plan
Administrator on a form provided by the Plan Administrator. A Participant may
self-direct among the same investment fund options that are available under the
Employer's 401(k) plan.
6.2 FREQUENCY OF INVESTMENT ELECTION. With respect to future
contributions, a Participant may file a new investment election at any time,
which shall become effective as of the first day of the calendar quarter
following the written designation.
In the absence of a new designation, future contributions shall be
treated as invested among available funds in the same proportions as specified
in the Participant's most recently filed election.
With respect to his or her existing Account balance, a Participant
may change his or her investment designation and reinvest such Account among
available funds at any time upon submitting a written request. Such request
shall be effective on the first day of the calendar quarter following acceptance
by the Plan Administrator of the Participant's investment designation.
6.3 ABSENCE OF SELF-DIRECTION BY PARTICIPANT. In the absence of an
investment election, a Participant's Account will be invested in a money market
fund.
6.4 INVESTMENT INCOME. Periodically, each Account will be adjusted,
with either an increase or a decrease, to reflect the related investment
earnings (or losses) within the Account. Investment earnings (or losses)
include, but are not limited to, interest, dividends, realized and unrealized
appreciation, and expenses (if any) within the Account.
6.5 DISTRIBUTIONS. Each Account will be reduced for any distribution of
benefits to Participants or Beneficiaries pursuant to Article VII.
ARTICLE VII - DISTRIBUTION OF BENEFITS
7.1 PAYMENT OF BENEFITS. Distribution of benefits from the Plan shall
begin on the 1st day of the calendar quarter following the calendar quarter that
the Participant incurs a Separation from Service, and continue quarterly
thereafter. A Participant is only entitled to a distribution of benefits to the
extent of the Participant's Account. Distribution of benefits shall be made in
twelve (12) quarterly payments over a three-year period, each payment to
represent a prorata interest in the Account. For example, the first payment will
be 1/12th of the entire Account, while the second payment will be 1/11th, of the
entire Account. At the exclusive discretion of the Board, payments of a
Participant's Account may be paid in a lump sum when the
-3-
<PAGE> 4
Participant incurs a Separation from Service.
7.2 DISTRIBUTION UPON DEATH. If the Participant dies before
distribution of his or her Account commences, any benefits payable after the
Participant's death will begin on the 1st day of the calendar quarter following
the calendar quarter of the Participant's death, and continue quarterly
thereafter in accordance with Section 7.1.
7.3 CHANGE IN COMPANY OWNERSHIP. If the Employer ownership changes, and
the successor employer fails to adopt the plan, then all Participant Accounts
will be distributed immediately. For purposes of this Section, change in
Employee ownership shall mean any merger, combination, or purchase, wherein a
person or entity acquires an interest in the Employer of more than 50% of the
ordinary voting power of the Employer.
ARTICLE VIII - BENEFICIARY INFORMATION
8.1 DESIGNATION. A Participant shall have the right to designate a
Beneficiary, and amend or revoke such designation at any time, in writing. Such
designation, amendment or revocation shall be effective upon receipt by the
Administrator.
8.2 FAILURE TO DESIGNATE A BENEFICIARY. If no designated Beneficiary
survives the Participant and benefits are payable following the Participant's
death, the Administrator shall direct that the payment of benefits be made to
the person or persons in the first of the following classes of successive
preference Beneficiaries.
The Participant's:
- spouse,
- issue, per stirpes, and
- estate.
ARTICLE XI - PAYMENTS TO PLAN PARTICIPANTS
AND THEIR BENEFICIARIES
9.1 BENEFITS PAYABLE TO PLAN PARTICIPANTS. The Employer shall make
payments to the Plan Participants and their Beneficiaries in accordance with
Articles VII and VIII. The Employer shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing authorities.
9.2 ENTITLEMENT TO BENEFITS. The entitlement of a Plan Participant or
Beneficiary(ies) to benefits under the Plan shall be determined by the Plan
Administrator or such party as it shall designate under the Plan, and any claim
for such benefits shall be considered and reviewed under the procedures set out
in the Plan.
-4-
<PAGE> 5
9.3 DIRECT PAYMENT OF BENEFITS. The Employer will make payment of
benefits directly to Plan Participants or their Beneficiaries as they become due
under the terms of the Plan.
9.4 FICA TAXABILITY. The liability for tax under the Federal Insurance
Contributions Act (FICA) to which Plan benefits may become subject will be
shared equally by Employer and Participant. Contributions will be subject to
FICA in the year when payment would have otherwise been made to the Eligible
Employee, but for the election to defer under this Plan.
ARTICLE X - ACCOUNTING BY EMPLOYER
The Employer shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other Plan transactions.
ARTICLE XI - ADMINISTRATION
11.1 PLAN ADMINISTRATOR. The Plan Administrator shall administer,
construe, and interpret this Plan and shall determine, subject to the provisions
of this Plan, the Eligible Employees who shall participate in the Plan from time
to time and the amount, if any, due an Eligible Employee (or his or her
beneficiary) under this Plan. The Plan Administrator shall not be liable for any
act done or determination made in good faith. The Plan Administrator who is a
Participant in this Plan may vote on matters affecting his or her personal
benefit under this Plan, but any such member shall otherwise be fully entitled
to act in matters arising or affecting this Plan notwithstanding his or her
participation herein. In carrying out its duties herein, the Plan Administrator
shall have discretionary authority to exercise all powers and to make all
determinations, consistent with the terms of the Plan, in all matters entrusted
to it, and its determinations shall be given deference and shall be final and
binding on all interested parties.
11.2 CLAIMS PROCEDURES.
(A) NOTICE OF CLAIM. Any Eligible Employee or beneficiary, or
the duly authorized representative of an Eligible Employee or
beneficiary, may file with the Plan Administrator a claim for a Plan
benefit. Such a claim must be in writing on a form provided by the Plan
Administrator and must be delivered to the Plan Administrator, in
person or by mail, postage prepaid. Within ninety (90) days after the
receipt of such a claim, the Plan Administrator shall send to the
claimant, by mail, postage prepaid, a notice of the granting or the
denying, in whole or in part, of such claim unless special
circumstances require an extension of time for processing the claim. In
no event may the extension exceed ninety (90) days from the end of the
initial period. If such an extension is necessary, the claimant will be
given a written notice to this effect prior to the expiration of the
initial ninety (90) day period. The Plan Administrator shall
-5-
<PAGE> 6
have full discretion to deny or grant a claim in whole or in part in
accordance with the terms of the Plan. If notice of the denial of a
claim is not furnished in accordance with this Section, the claim shall
be denied and the claimant shall be permitted to exercise his or her
right to review pursuant to Section 11.2(c) and 11.2(d) of the Plan, as
applicable.
(B) ACTION ON CLAIM. The Plan Administrator shall provide to
every claimant who is denied a claim for benefits a written notice
setting forth, in a manner calculated to be understood by the claimant;
(i) The specific reason or reasons for the denial;
(ii) A specific reference to the pertinent Plan provisions
on which the denial is based;
(iii) A description of any additional material or
information necessary of the claimant to perfect the claim and
an explanation of why such material or information is
necessary; and
(iv) An explanation of the Plan's claim review procedure.
(C) REVIEW OF DENIAL. Within sixty (60) days after the receipt
by a claimant of written notification of the denial (in whole or in
part) of a claim, the claimant or the claimant's duly authorized
representative, upon written application to the Plan Administrator,
delivered in person or by certified mail, postage prepaid, may review
pertinent documents and may submit to the Plan Administrator, in
writing, issues and comments concerning the claim.
(D) DECISION ON REVIEW. Upon the Plan Administrator's receipt
of a notice of a request for review, the Plan Administrator shall make
a prompt decision on the review and shall communicate the decision on
review in writing to the claimant. The decision on review shall be
written in a manner calculated to be understood by the claimant and
shall include specific reasons for the decision and specific references
to the pertinent Plan provisions on which the decision is based. The
decision on review shall be made no later than sixty (60) days after
the Plan Administrator's receipt of a request for a review, unless
special circumstances require an extension of time for processing, in
which case a decision shall be rendered no later than one hundred
twenty (120) days after receipt of the request for review. If an
extension is necessary, the claimant shall be given written notice of
the extension by the Plan Administrator prior to the expiration of the
initial sixty (60) day period. If notice of the decision on review is
not furnished in accordance with this Section, the claim shall be
deemed denied on review.
-6-
<PAGE> 7
ARTICLE XII - MISCELLANEOUS PROVISIONS
12.1 LIMITATION OF RIGHTS. Nothing contained in this Plan shall be
construed to:
(A) limit in any way the right of the Employer to terminate an
Eligible Employee's employment at any time; or
(B) be evidence of any agreement or understanding, express or
implied, that the Employer will employ an Eligible Employee in any
particular position or at any particular rate of remuneration.
12.2 NONALIENATION OF BENEFITS; NO WITHDRAWALS. No amounts payable
hereunder may be assigned, pledged, mortgaged, or hypothecated, and, to the
extent permitted by law, no such amounts shall be subject to legal process or
attachment of the payment of any claims against any person entitled to receive
the same. No amounts credited to an Eligible Employee's Account may be withdrawn
or paid to the Eligible Employee prior to his or her Separation from Service.
12.3 AMENDMENT OR TERMINATION OF PLAN. Although it is expected that
this Plan shall continue indefinitely, the Board may amend this Plan from time
to time in any respect, and may at any time terminate the Plan in its entirety;
provided, however, that an Eligible Employee's Account as of the date of any
such amendment or termination may not be reduced nor may any such amendment or
termination adversely affect an Eligible Employee's entitlement to his or her
Account as of such date.
12.4 GENDER AND NUMBER. Wherever used in this Plan, the masculine shall
be deemed to include the feminine and the singular shall be deemed to include
the plural, unless the context clearly indicates otherwise.
12.5 LAW GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Michigan to the extent such laws are not
preempted by federal law.
-7-
<PAGE> 8
EMPLOYER:
INTERMET CORPORATION
APPROVED BY BOARD OF DIRECTORS COMPENSATION COMMITTEE
/s/ Thomas H. Jeffs II December 2, 1999
----------------------- ----------------
Member Date
/s/ Harold C. McKenzie, Jr. December 2, 1999
---------------------------- ----------------
Member Date
/s/ John H. Reed December 2, 1999
------------------ ----------------
Member Date
-8-
<PAGE> 1
EXHIBIT 13
<TABLE>
<CAPTION>
- - -----------------------------------------------------
FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, 1999 1998 1997 1996 1995 1994
- - ----------------------------------------------------- ------------ ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data (in thousands of dollars)
Net sales $956,832 $841,598 $813,729 $534,478 $541,749 $501,269
Operating profit 62,161 75,649 75,198 56,103 52,815 1,728
Net income (loss) 36,377 40,989 40,013 43,153 25,395 (10,985)
Share Data (in thousands, except per share data)
Income (loss) per common share - diluted $1.42 $1.58 $1.55 $1.69 $1.02 ($0.45)
Cash dividends per share $0.16 $0.16 $0.16 $0.08 - -
Weighted average shares outstanding - diluted 25,571 25,947 25,783 25,594 24,893 24,591
Balance Sheet Data (in thousands of dollars)
Total assets $957,292 $584,015 $539,446 $526,312 $274,071 $306,264
Long-term debt due after one year 448,634 156,690 167,295 149,477 32,675 87,698
Total long-term debt 455,040 163,101 177,833 162,153 35,271 99,715
Shareholders' equity 242,377 217,005 175,428 141,102 98,028 67,971
- - ----------------------------------------------------- ------------ ----------- ----------- ----------- ------------ -----------
</TABLE>
<PAGE> 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
THE CHAIRMAN'S LETTER, THE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS AND THE QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN
THESE SECTIONS, THE WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE" AND "EXPECT" AND
SIMILAR EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. READERS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS, INCLUDING
STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF INTERMET OR
ITS MANAGEMENT, ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND
UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE IN THE
FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS INCLUDING, BUT NOT
LIMITED TO:
- - - GENERAL ECONOMIC CONDITIONS IN THE MARKETS IN WHICH INTERMET OPERATES
- - - FLUCTUATIONS IN WORLDWIDE OR REGIONAL AUTOMOBILE AND LIGHT AND HEAVY TRUCK
PRODUCTION
- - - LABOR DISPUTES INVOLVING INTERMET OR ITS SIGNIFICANT CUSTOMERS
- - - CHANGES IN PRACTICES AND/OR POLICIES OF INTERMET'S SIGNIFICANT CUSTOMERS
TOWARD OUTSOURCING AUTOMOTIVE COMPONENTS AND SYSTEMS
- - - FOREIGN CURRENCY AND EXCHANGE FLUCTUATIONS
- - - INTEREST RATE FLUCTUATIONS
- - - MATERIALS PRICE FLUCTUATIONS
- - - ABILITY TO BRING ADDITIONAL FOUNDRY CAPACITY ON LINE AS SCHEDULED
- - - ABILITY TO SECURE ALL REGULATORY PERMITS ON A TIMELY BASIS WITH RESPECT TO
ONGOING CAPITAL EXPENDITURES FOR ADDITIONAL FOUNDRY CAPACITY
- - - FACTORS OR PRESENTLY UNKNOWN CIRCUMSTANCES THAT MAY AFFECT THE CHARGES RELATED
TO THE IMPAIRMENT OF ASSTS AND SHUTDOWN OF IRONTON
- - - FACTORS AFFECTING THE ABILITY OF INTERMET OR ITS KEY SUPPLIERS TO RESOLVE
YEAR-2000 ISSUES IN A TIMELY MANNER, AND
- - - OTHER RISKS DETAILED FROM TIME TO TIME IN INTERMET'S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
INTERMET DOES NOT INTEND TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
Results of Operations
1999 Compared to 1998
Sales in 1999 were $956.8 million compared to 1998 sales of $841.6 million, an
increase of $115.2 million or 13.7%. Sales for operations in place both years
were 8.3% higher in 1999 than in 1998. Ferrous-metals segment sales for 1999,
excluding acquisitions or dispositions in 1999 or 1998, were $69.1 million
(10.0%) higher than for 1998. This is primarily a result of strong domestic
light truck sales and European vehicle sales, which are two of the largest
markets we supply. Light-metals segment sales for 1999, excluding acquisitions
or dispositions in 1999 or 1998, were $3.7 million (12.9%) lower than for 1998.
The acquisition of Tool Products at the end of 1998 increased our light-metals
segment sales 256% for 1999 over 1998 levels. Other segment sales, for
operations in place both years, were up 2.9% over 1998.
Sales for our domestic operations were up 15.4% in 1999 from the prior year.
Excluding acquisitions or dispositions in either year, sales in 1999 for
domestic operations increased 8.9% from 1998 primarily because North American
light vehicle production was an all-time record. In 1999, North American
light-vehicle production was 17 million units and exceeded 15 million units for
the sixth consecutive year.
European sales during 1999, in local currency and excluding acquisitions or
dispositions in 1999 and 1998, increased 5.7% from 1998. This set a new record
for our European-based operations compared to previous years. This is due
primarily to an increase in production and sales of light- and heavy-duty
vehicles in Europe. The
2
<PAGE> 3
effect of changes in exchange rates on 1999 consolidated European sales was an
unfavorable $4.9 million (4.2%) when compared using exchange rates for the same
period in 1998.
Looking forward to 2000, industry analysts expect light-vehicle production in
North America to taper off slightly but still to exceed 15 million units. These
analysts anticipate that light-trucks will make up slightly more than one half
of this production. Industry analysts project that automotive sales in Europe
will increase 3% over 1999 levels. Actual results may differ materially.
Gross profit increased to $122.2 million in 1999 from $110.7 million in 1998.
Gross profit for operations in place both years was $2.7 million lower in 1999
than in 1998. This decrease was due primarily to the higher costs associated
with operating some facilities in excess of capacity and the difficulty of
obtaining qualified labor in a full employment economy. Gross profit as a
percentage of sales was 12.8% in 1999 versus 13.2% in 1998.
Operating expenses as a percentage of sales were 6.3% and 4.2% for 1999 and
1998, respectively. During December 1999, we announced the shutdown of our
Ironton Iron, Inc. facility (see Asset Impairment and Shutdown section of
Management's Discussion and Analysis). Without the charges for the Ironton asset
impairment and shutdown and the charges related to a recapitalization of our
international operations, the operating expenses as a percentage of sales would
have been 4.3% for 1999.
Interest expense for the years ended December 31, 1999 and 1998 was $15.2
million and $11.3 million, respectively. This change was a result of an increase
in borrowings to purchase fixed assets and two companies at the end of 1999.
The net of other income and expenses was net income of $1.2 million and $0.6
million in 1999 and 1998, respectively.
Diluted earnings per share for 1999 were $1.42. During the year, we were able to
utilize two non-recurring tax benefits of $8.5 million in aggregate ($0.33 per
diluted share). These benefits are discussed further in Note 10 of the Notes to
Consolidated Financial Statements. The after-tax effect of the charges for the
asset impairment and shutdown of Ironton was $12.1 million or $0.47 per diluted
share (see Asset Impairment and Shutdown section of Management's Discussion and
Analysis).
For additional information concerning the provision for income taxes as well as
information regarding differences between effective tax rates and statutory
rates, see Note 10 of the Notes to Consolidated Financial Statements.
Results of Operations
1998 Compared to 1997
Sales in 1998 were $841.6 million compared to 1997 sales of $813.7 million, an
increase of 3.4%. Sales from operations in place both years were 6.9% higher in
1998 than in 1997. Ferrous-metals segment sales for 1998, excluding acquisitions
or dispositions in either year, were $57.8 million (9.1%) higher than for 1997.
North American light-vehicle production for 1998 was greater than 15 million
units for the fifth consecutive year. Sales from our light-metals segment
decreased $2.3 million or 7.3% from 1997 to 1998. Other segment sales, for
operations in place both years, were down 5.2% over 1997 levels, due primarily
to a decrease in market demand.
European sales from continuing operations increased 13.5% in local currency and
increased 11.8% in U.S. dollars for 1998 over 1997. This set a new record
compared to previous years. Exchange rates negatively impacted these sales by
$1.5 million.
Gross profit increased to $110.7 million in 1998 from $107.0 million in 1997.
Gross profit, excluding
3
<PAGE> 4
acquisitions and dispositions in both years, was $6.2 million higher in 1998
than in 1997. This improvement was due primarily to higher sales. Gross profit
was negatively affected by production inefficiencies resulting from operating
some facilities in excess of capacity and the cost associated with launching in
excess of 100 parts. Gross profit as a percentage of sales was 13.2 % in 1998
versus 13.1% in 1997.
Operating expenses in 1998 were $35.1 million, an increase of $3.3 million over
1997. This increase relates primarily to the write-off of assets at IWESA.
Operating expenses as a percentage of sales for the years ended December 31,
1998 and 1997 were 4.2% and 3.9%, respectively. Operating expenses include
expenses related to acquisition investigations of $0.5 and $0.4 million in 1998
and 1997, respectively.
Interest expense for the years ended December 31, 1998 and 1997 was $11.4
million and $12.4 million, respectively. This change was a result of a decrease
in borrowings due to cash provided by operating activities and the sale of
Industrial Powder Coatings, Inc.
The net of other income and expenses was income of $0.6 million in 1998 compared
to $2.0 million of net expense in 1997. This change relates primarily to net
losses in our equity investments in 1997 of $3.2 million.
For information concerning the provision for income taxes as well as information
regarding differences between effective tax rates and statutory rates, see Note
10 of the Notes to Consolidated Financial Statements.
Liquidity and Capital Resources
On December 20, 1999 we acquired all of the issued and outstanding stock of
Diversified Diemakers, Inc. and Ganton Technologies, Inc. These acquisitions did
not materially affect our consolidated results of operations in 1999; however,
the impact on our consolidated balance sheet at December 31, 1999 was
significant. Following is summarized consolidated balance sheet information at
December 31, 1999, which will illustrate the impact of the acquisition.
<TABLE>
<CAPTION>
Intermet Impact of Intermet
Pre-Acquisitions Acquisitions Post-Acquisitions
---------------- ------------ -----------------
(in thousands of dollars)
<S> <C> <C> <C>
Current assets $222,013 $82,507 $304,520
Net property, plant and equipment 263,262 106,469 369,731
Other assets (1) 151,781 131,260 283,041
Current liabilities, excluding debt 165,276 36,792 202,068
Debt 185,050 270,000 455,040
</TABLE>
(1) Other assets include intangibles. For more information on intangibles, see
Note 1 of the Notes to Consolidated Financial Statements.
During 1999, net cash provided by operating activities was $70.3 million. Net
non-cash charges (principally depreciation, amortization and impairment expense)
were $44.9 million. Accounts receivable increased primarily because of higher
sales at the end of 1999 compared to those in the same period in 1998. Accounts
payable and current liabilities increased from December 31, 1998 primarily for
the same reason. The impairment of assets and shutdown costs relate to the
shutdown of Ironton and were $18.6 million in aggregate. Our investing
activities for 1999 used cash of $357.0 million. This included $274.3 million
paid for the purchase of businesses and related expenses and $78.8 million for
property, plant and equipment additions. Furthermore, we spent an additional
$4.5 million to complete our initial investment in PortCast. Primarily because
of these purchases, bank borrowings increased $289.8 million, in the aggregate,
from the end of 1998. In addition, we paid $6.8 million for the acquisition of
Intermet stock pursuant to our stock buyback program and paid $4.1 million for
dividends during 1999 ($0.04 per share per quarter).
Cash and cash equivalents decreased to $3.4 million at December 31, 1999 from
$5.8 million at December 31, 1998.
4
<PAGE> 5
Outstanding funded debt moved from a low in mid-1999 of $179.2 million to a high
at December 31, 1999 of $455.0 million. The increase in borrowings at the end of
the year was expected and related primarily to funds required for the Ganton and
Diemakers acquisitions. Our debt-to-equity ratio increased from 43% at December
31, 1998 to 65% at December 31, 1999 (45% without Ganton and Diemakers).
Shareholders' equity increased $25.4 million from $217.0 million at December 31,
1998, to $242.4 million at December 31, 1999.
We have recurring costs related to environmental matters, particularly the
management and disposition of waste (principally non-hazardous waste) generated
as part of ongoing operations. In 1999 and 1998, such costs totaled
approximately $15.1 and $14.4 million, respectively. Although we continue to
take various steps to control environmental costs, they are expected to increase
in the future. In addition, a portion of our capital expenditures is regularly
incurred to limit or monitor pollution, principally for ventilation and dust
control equipment. Such expenditures were approximately $5.7 million in 1999 and
$5.2 million in 1998. We expect to spend approximately $4.5 million in capital
expenditures related to environmental matters in 2000. Sales volume levels and
available engineering resources, among other factors, will influence the actual
amount of capital expenditures.
In addition, some of our operating and non-operating subsidiaries have been
named as potentially responsible parties liable for cleanup of known
environmental conditions. For known environmental conditions, Intermet, with the
assistance of environmental engineers and consultants, has accrued $10.2 million
to cover estimated future environmental expenditures. This reserve includes $3.7
million related to the shutdown of Ironton. There could exist, however, more
extensive or unknown environmental situations at existing or previously owned
businesses for which the future cost is not known or accrued at December 31,
1999.
In addition to these recurring and anticipated expenditures, the 1990 amendments
to the Federal Clean Air Act, and regulations promulgated thereunder are
expected to have a major impact on the compliance cost of many U.S. companies,
including foundries of the type owned by Intermet. Until Federal and state
governments adopt final regulations implementing those amendments and until
certain control measures under existing regulations are determined, it is not
possible to estimate such costs.
We are also a party to certain lawsuits and claims arising out of the conduct of
our business, including those relating to commercial transactions, product
liability, environmental, safety and health matters. We self-insure a
significant portion of our health care, property and casualty insurance risks.
However, we purchase additional insurance for catastrophic losses.
While the ultimate result of the contingencies described above cannot be
predicted with certainty, Intermet's management does not expect such known
contingencies to have a material adverse effect on its consolidated financial
position, results of operations or cash flows. However, we cannot be assured
that our activities will not give rise to actions by governmental agencies or
private parties that could cause us to incur fines, penalties, operational
shutdowns, damages, cleanup costs or other similar expenses. In addition, our
ability to increase foundry capacity levels is dependent upon our ability to
maintain or obtain increases under applicable permits for air emissions and
water discharges.
At December 31, 1999, we had commitments for the purchase of operating equipment
of approximately $3.5 million, which we expect to fund through cash flow from
operations. We have unsecured revolving credit agreements with bank groups that
provide for loans up to $400.0 million in the aggregate and an unsecured
eighteen-month term loan that provides for loans up to $200.0 million in the
aggregate. We had $455.0 million of long-term debt outstanding at December 31,
1999. Of this amount, we are scheduled to pay $6.4 million during 2000. We had
committed and uncommitted bank credit facilities with outstanding borrowing
capacity of approximately $169.4 million at December 31, 1999.
5
<PAGE> 6
Quantitative and Qualitative Disclosures about Market Risks
Intermet is subject to market risk with regard to interest rate, foreign
exchange and commodity pricing. We have analyzed the effect of these risks on
the balance sheets, results of operations and cash flows and we consider the
impact to be immaterial with respect to the commodity pricing risk.
Our earnings are affected by changes in interest rates because we have long-term
debt agreements with variable interest rates. A portion of this risk is offset
using interest rate swap agreements. A 1% change in interest rates on the debt
not covered by swap agreements would change net income approximately $1.0
million and $0.5 million for 1999 and 1998, respectively. Our sensitivity
analysis does not consider the effects of the reduced or increased level of
overall economic activity that could result from a change in interest rates.
Our earnings are also affected by fluctuations in the value of the U.S. dollar
as compared to foreign currencies, predominately in Germany, as a result of the
sales of our products in foreign markets. The result of an average 5% change in
the value of the dollar relative to the currencies in which our sales are
denominated would have resulted in a change in net income of approximately $0.5
million and $0.3 million for the years ended December 31, 1999 and 1998,
respectively. Our sensitivity analysis of the effects of the changes in foreign
currency exchange rates does not factor in a potential change in the sales
levels or local currency sales prices.
Asset Impairment and Shutdown
On December 7, 1999, Intermet announced plans to permanently close its Ironton
Iron, Inc. foundry. Ironton is included in the ferrous metals segment of the
Reporting for Business Segments footnote. Ironton has had enduring operational
difficulties and, as a result, has incurred significant operating losses since
Intermet purchased it in 1988. Because of Ironton's continuing operational
difficulties, customers representing a significant portion of its sales volumes
had informed Intermet and Ironton in late 1999 that they had decided to place
their business with alternate sources. The foundry is one of our oldest
facilities and the cost to modernize would further impact already negative
operating results. Ironton had revenues of $57 million , $55 million and $51
million and net operating losses of approximately $35 million, $10 million and
$7 million for the years ended December 31, 1999, 1998 and 1997, respectively.
The net loss of $35 million for 1999 includes the charges for asset impairment
and shutdown. We anticipate that the foundry will cease operations by the end of
the first quarter of 2000.
The decision to close this foundry was the principal reason for recording a
$10,811,000 charge for impairment of assets and a $7,789,000 charge for shutdown
costs in the fourth quarter of 1999. All but $101,000 of the charges are
included in operating expenses; the remainder is included in cost of goods sold.
The charge included a write-down of $10,811,000 to fair value for capital assets
(as determined by an outside consultant) and inventories; building demolition
and remediation costs of $6,637,000; and provisions totaling $1,152,000 for
severance pay and employee benefits related to the termination of approximately
100 salaried employees. Ironton's land, machinery and equipment used in the
production of ferrous castings and related replacement parts are segregated on
our consolidated balance sheet as assets held for sale. Intermet did not
provided for severance pay and employee benefits for approximately 500 union
employees because the amount was not then determinable. We anticipate that any
such charges will be recorded in the first quarter of 2000. The accrual for
shutdown costs of $7,789,000 is included in current liabilities at December 31,
1999.
Intermet intends that subsequent to the closing of the foundry, the assets will
be sold. We also expect at the earliest practical date after sale of assets, but
most likely during the fourth quarter of 2000, demolition of the building will
begin. We anticipate that demolition would be complete in 2001.
We do not expect to incur material additional charges related to the impairment
and shutdown of Ironton, excluding any losses it may incur while still
operating.
6
<PAGE> 7
Readers are cautioned that forward looking statements contained in this Asset
Impairment and Shutdown discussion should be read in conjunction with our
disclosures under the cautionary statement for the purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995, included
elsewhere in Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Year 2000 Issue
Intermet conducted an evaluation of its Informational Technology ("IT") and
non-IT computer systems with respect to the "Year 2000" ("Y2K") issue. We
completed a Y2K readiness assessment of our business critical IT and non-IT
systems. We developed and implemented corrective action plans designed to
address Y2K issues. These plans included modification, upgrade and replacement
of our critical administrative, production, and research and development
computer systems to make them Y2K ready. We implemented corrective action plans,
and had our critical systems Y2K ready prior to December 31, 1999. We also
developed contingency plans intended to avoid or mitigate the risks that either
we might not or our key suppliers might not achieve Y2K readiness in time to
avoid disruption of our operations.
We began addressing Y2K issues in 1995 and, by December 31, 1999, we spent
approximately $7.5 million to address the Y2K issue. The majority of this
spending was for required upgrades to or for new business systems required in
the ordinary course of business, which were also Y2K ready.
To date, we have not experienced any significant problems or disruptions due to
Y2K issues either internally or with our suppliers. We do not expect to
experience any significant problems or disruptions related to Y2K problems, nor
do we anticipate spending any additional significant amounts related to these
issues. Actual results may differ materially.
Readers are cautioned that forward looking statements contained in this
Year-2000 Issue discussion should be read in conjunction with our disclosures
under the cautionary statement for the purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995, included elsewhere in
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
7
<PAGE> 8
Consolidated Financial Statements
Intermet Corporation
Years ended December 31, 1999, 1998 and 1997
with Report of Independent Auditors
<PAGE> 9
Report of Independent Auditors
The Board of Directors and Shareholders
Intermet Corporation
We have audited the accompanying consolidated balance sheets of Intermet
Corporation as of December 31, 1999 and 1998, and the related consolidated
statements of operations, comprehensive income, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Intermet
Corporation at December 31, 1999 and 1998, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
ERNST & YOUNG LLP
Detroit, Michigan
January 26, 2000
<PAGE> 10
Intermet Corporation
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
----------------- ---------------- --------------
(in thousands of dollars, except per share data)
<S> <C> <C> <C>
Net sales $956,832 $841,598 $813,729
Cost of sales 834,545 730,857 706,771
----------------- ---------------- --------------
Gross profit 122,287 110,741 106,958
Operating expenses:
Selling 11,938 8,878 9,810
General and administrative 29,689 26,214 21,950
Asset impairment and shutdown costs 18,499 - -
----------------- ---------------- --------------
Operating profit 62,161 75,649 75,198
Other income and expenses:
Interest income 305 230 546
Interest expense (15,210) (11,305) (12,396)
Other, net 1,197 614 (1,959)
----------------- ---------------- --------------
(13,708) (10,461) (13,809)
----------------- ---------------- --------------
Income before income taxes 48,453 65,188 61,389
Provision for income taxes 12,076 24,199 21,376
----------------- ---------------- --------------
Net income $36,377 $40,989 $40,013
================= ================ ==============
Income per common share - Basic $1.43 $1.60 $1.59
================= ================ ==============
Income per common share - Diluted $1.42 $1.58 $1.55
================= ================ ==============
</TABLE>
See accompanying notes.
2
<PAGE> 11
Intermet Corporation
Consolidated Statements of Comprehensive Income
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
----------------- ---------------- --------------
(in thousands of dollars, except per share data)
<S> <C> <C> <C>
Net income $36,377 $40,989 $40,013
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment (1,155) 348 (1,440)
Minimum pension liability adjustment 849 (837) 473
----------------- ---------------- --------------
Total other comprehensive loss (306) (489) (967)
----------------- ---------------- --------------
Comprehensive income $36,071 $40,500 $39,046
================= ================ ==============
Comprehensive income per common share - Basic $1.42 $1.58 $1.55
================= ================ ==============
Comprehensive income per common share - Diluted $1.41 $1.56 $1.51
================= ================ ==============
</TABLE>
See accompanying notes.
3
<PAGE> 12
Intermet Corporation
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31,
1999 1998
--------------- -------------
(in thousands of dollars)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $3,416 $5,848
Accounts receivable:
Trade, less allowances of $7,426 in 1999 and $5,133 in
1998 154,742 105,678
OTHER 19,649 8,713
--------------- -------------
174,391 114,391
Inventories:
Finished goods 24,235 14,701
Work in process 19,054 18,522
Raw materials 15,313 8,467
Supplies and patterns 44,200 24,208
--------------- -------------
102,802 65,898
Deferred income taxes 10,047 2,829
Assets held for sale 8,093 -
Other current assets 5,771 8,464
--------------- -------------
Total current assets 304,520 197,430
Property, plant and equipment, at cost:
Land 5,411 4,567
Buildings and improvements 110,777 93,667
Machinery and equipment 422,215 357,545
Construction in progress 67,818 29,303
--------------- -------------
606,221 485,082
Less:
Foreign industrial development grants, net of amortization 3,533 4,153
Accumulated depreciation and amortization 232,957 240,227
--------------- -------------
Net property, plant and equipment 369,731 240,702
Intangible assets, net of amortization 248,864 126,896
Other noncurrent assets 34,177 18,987
=============== =============
$957,292 $584,015
=============== =============
</TABLE>
4
<PAGE> 13
Intermet Corporation
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31,
1999 1998
--------------- -------------
(in thousands of dollars,
except share and per share data)
<S> <C> <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $114,105 $ 90,205
Notes payable - 1,000
Accrued wages, severance and benefits 33,449 24,117
Income taxes payable 4,190 5,684
Other accrued liabilities 42,535 21,121
Shutdown costs 7,789 -
Long-term debt due within one year 6,406 6,411
------------- -----------
Total current liabilities 208,474 148,538
Noncurrent liabilities:
Long-term debt 448,634 156,690
Retirement benefits 46,628 45,964
Other noncurrent liabilities 11,179 13,481
------------- -----------
Total noncurrent liabilities 506,441 216,135
Minority interest - 2,337
Shareholders' equity:
Preferred stock; 5,000,000 shares authorized; none issued
Common stock, $0.10 par value; 50,000,000 shares
authorized; 25,846,824 and 25,832,824 shares issued in
1999 and 1998, respectively 2,585 2,583
Capital in excess of par value 56,661 63,382
Retained earnings 183,432 151,131
Accumulated other comprehensive income (loss) (234) 72
Unearned restricted stock (67) (163)
------------- -----------
Total shareholders' equity 242,377 217,005
------------- -----------
$957,292 $584,015
============= ===========
</TABLE>
See accompanying notes.
5
<PAGE> 14
Intermet Corporation
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
-------------- ------------- --------------
(in thousands of dollars)
<S> <C> <C> <C>
Operating activities:
Net income $ 36,377 $ 40,989 $ 40,013
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation 35,140 31,975 32,482
Amortization 4,978 3,868 3,849
Impairment of assets 10,811 - -
Results of equity investments (337) 351 3,199
Deferred income taxes (6,391) (2,406) (2,577)
Dissolution of foreign holding - 4,282 -
(Gain) loss on sale of subsidiary and other assets 692 (575) (320)
Changes in operating assets and liabilities excluding the
effects of acquisitions and dispositions:
Accounts receivable (18,688) (13,944) (6,098)
Inventories (4,811) (78) (5,608)
Accounts payable and current liabilities 10,305 35,078 (6,219)
Shutdown costs 7,789 - -
Other assets and liabilities (5,606) (3,095) 4,094
------------ ----------- ------------
Cash provided by operating activities 70,259 96,445 62,815
Investing activities:
Additions to property, plant and equipment (78,743) (49,496) (40,585)
Purchase of businesses, net of cash acquired (274,338) (60,339) (36,396)
Investment in joint venture (4,500) (2,000) -
Proceeds from sales of property, plant and equipment 1,032 1,441 815
Proceeds from sale of subsidiary - 22,860 -
Other, net (418) (915) (616)
------------ ----------- ------------
Cash used in investing activities (356,967) (88,449) (76,782)
Financing activities:
Proceeds from revolving credit facility 193,500 5,000 6,600
Proceeds from term loan 200,000 - -
Payment on revolving credit facility (130,000) - -
Net increase in debt 31,342 (7,787) (12,576)
(Payment on) proceeds from notes payable (5,000) (4,000) 5,000
Acquisition of treasury stock (6,833) - -
Issuance of common stock 114 5,263 877
Dividends paid (4,076) (4,100) (4,038)
Other, net 849 (836) 420
------------ ----------- ------------
Cash provided by (used in) financing activities 279,896 (6,460) (3,717)
Effect of exchange rate changes on cash and cash equivalents 4,380 (2,710) 1,221
------------ ----------- ------------
Net decrease in cash and cash equivalents (2,432) (1,174) (16,463)
Cash and cash equivalents at beginning of year 5,848 7,022 23,485
------------ ----------- ------------
Cash and cash equivalents at end of year $ 3,416 $ 5,848 $ 7,022
============ =========== ============
</TABLE>
See accompanying notes.
6
<PAGE> 15
Intermet Corporation
Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
----------------- -------------- --------------
(in thousands of dollars, except share and per share data)
<S> <C> <C> <C>
Common stock
Beginning balance $ 2,583 $ 2,526 $ 2,517
Exercise of options to purchase 14,000, 576,450 and 88,500
shares of common stock in 1999, 1998 and 1997, respectively 2 57 9
-------------- -------------- --------------
Ending balance 2,585 2,583 2,526
Capital in excess of par value
Beginning balance 63,382 58,176 57,308
Exercise of options to purchase shares of common stock 112 5,206 868
Purchase of 509,000 shares of treasury stock (6,833) - -
-------------- -------------- --------------
Ending balance 56,661 63,382 58,176
Retained earnings
Beginning balance 151,131 114,242 78,267
Net income 36,377 40,989 40,013
Cash dividends of $0.16 per share in 1999, 1998 and 1997 (4,076) (4,100) (4,038)
-------------- -------------- --------------
Ending balance 183,432 151,131 114,242
Accumulated translation adjustment
Beginning balance 921 573 3,548
Translation adjustment (1,777) 535 (4,575)
Related income tax effect 622 (187) 1,600
-------------- -------------- --------------
Ending balance (234) 921 573
Minimum pension liability adjustment
Beginning balance (849) (12) (485)
Adjustment 1,306 (1,379) 776
Related income tax effect (457) 542 (303)
-------------- -------------- --------------
Ending balance - (849) (12)
Unearned restricted stock
Beginning balance (163) (77) (53)
Issuance of 8,000 and 7,500 shares of common stock in 1998
and 1997, respectively - (155) (115)
Amortization 96 69 91
-------------- -------------- --------------
Ending balance (67) (163) (77)
-------------- -------------- --------------
Total shareholders' equity $242,377 $217,005 $175,428
============== ============== ==============
</TABLE>
See accompanying notes.
7
<PAGE> 16
Intermet Corporation
Notes to Consolidated Financial Statements
Years ended December 31, 1999, 1998 and 1997
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements, presented in conformity with
accounting principles generally accepted in the United States ("GAAP"), include
the accounts of Intermet Corporation and its subsidiaries. All significant
intercompany transactions and balances have been eliminated in consolidation.
Business
Intermet produces ferrous metals, including ductile and gray iron, and light
metals castings, including aluminum, magnesium and zinc. In addition, we perform
value-added services, principally for automotive manufacturers in North America
and Europe. We also supply cranes, truck bodies and related equipment, and
precision-machined components to automotive and other industrial customers.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
Reclassification
Certain amounts previously reported in the 1998 financial statements and notes
thereto have been reclassified to conform to the 1999 presentation.
Revenue Recognition
We recognize revenue upon shipment of products.
Income per Common Share
Basic and diluted earnings per share are calculated in accordance with the
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share".
Cash and Cash Equivalents
All short-term investments with original maturities of less than 90 days are
deemed to be cash equivalents for purposes of the statements of cash flows.
8
<PAGE> 17
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Inventories
Inventories are stated at the lower of cost or market. Cost is determined on the
last-in, first-out ("LIFO") method for 31% and 34% of the December 31, 1999 and
1998 inventories, respectively. Certain raw materials and supplies inventories
are valued on a weighted average cost basis; average production cost is used for
certain work in process and finished goods inventories and other inventories are
valued by the first-in, first-out ("FIFO") method. The specific identification
method is used for pattern inventories. If LIFO inventories were valued using
the same cost methods used for other inventories, their carrying values would
have increased by $1,343,000 and $1,105,000 at December 31, 1999 and 1998,
respectively.
Property, Plant and Equipment
The provision for depreciation and amortization of property, plant and equipment
is determined on the basis of estimated useful lives using the straight-line
method. Industrial development grants provided by the Federal and State
governments of Germany are included as reductions of property, plant and
equipment and are being amortized over the estimated useful lives of the related
assets.
Intangible Assets
Intangible assets of $248,864,000 and $126,896,000 (net of accumulated
amortization of $10,867,000 and $7,147,000) at December 31, 1999 and 1998,
respectively, consist principally of costs in excess of net assets acquired. We
amortize these costs using the straight-line method over periods ranging
principally from ten to forty years. In setting the life of intangibles, we
consider the long term strategic value of the acquired assets. We periodically
assess the recoverability of the cost of our intangibles based on a review of
projected undiscounted cash flows of the related operating entities.
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for cash and
cash equivalents, accounts receivable and accounts payable approximate fair
value. The fair value of our debt approximates the reported amounts in the
accompanying consolidated balance sheets as their respective interest rates
approximate the respective year end market rates for similar debt instruments.
We obtain the fair value of the interest rate swaps, as noted in Note 6, from
dealer quotes. These values represent the estimated amount we would receive or
pay to terminate agreements taking into consideration current interest rates,
the creditworthiness of the counter-parties and current foreign currency
exchange rates.
Stock-Based Compensation
We generally grant stock options for a fixed number of shares to employees and
directors with an exercise price equal to the fair value of the shares at the
date of grant. We account for stock option grants in accordance with APB Opinion
No. 25, "Accounting for Stock Issued to Employees", and, accordingly, recognize
no compensation expense for the stock option grants.
9
<PAGE> 18
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Recently Issued Accounting Standards
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". We expect to adopt SFAS No. 133 effective
January 1, 2001. SFAS No. 133 will require us to recognize all derivatives on
the balance sheet at fair value. We do not anticipate that the adoption of this
SFAS will have a significant effect on our results of operations or financial
position.
2. Reporting for Business Segments
Intermet's management evaluates the operating performance of its business units
individually. Under the provisions of SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information", we have aggregated operating segments
that have similar characteristics, including manufacturing processes and raw
materials. The ferrous-metals segment consists of ferrous foundry operations and
their related machining operations. The light-metals segment consists of
aluminum, magnesium and zinc casting operations and their related machining
operations. The operating units that comprise other are all non-foundry
operations, and none of them constitutes a reportable segment on its own.
Previously, we had one segment, but with the acquisitions at the end of 1999, we
now have two segments. We have restated 1998 and 1997 segment disclosure to
conform to the new segment disclosure structure. This information is displayed
in the following table.
<TABLE>
<CAPTION>
Ferrous Metals Light Metals Other Consolidated
-------------- ------------ ----- ------------
(in thousands of dollars)
<S> <C> <C> <C> <C>
Year ended December 31, 1999
Net sales $770,393 $102,239 $84,200 $956,832
Depreciation expense 28,685 3,925 2,530 35,140
Amortization expense 4,812 166 - 4,978
Provision for income taxes 8,397 1,415 2,264 12,076
Net income 31,077 1,851 3,449 36,377
Purchases of property, plant and equipment 62,141 13,661 2,941 78,743
December 31, 1999
Total assets $526,733 $388,055 $42,504 $957,292
Year ended December 31, 1998
Net sales $702,679 $28,785 $110,134 $841,598
Depreciation expense 27,220 1,505 3,250 31,975
Amortization expense 3,722 146 - 3,868
Provision for income taxes 24,470 (863) 592 24,199
Net income 41,650 (1,602) 941 40,989
Purchases of property, plant and equipment 42,414 2,958 4,124 49,496
December 31, 1998
Total assets $521,945 $22,919 $39,151 $584,015
Year ended December 31, 1997
Net sales $635,618 $31,065 $147,046 $813,729
Depreciation expense 26,767 1,057 4,658 32,482
Amortization expense 3,704 145 - 3,849
Provision for income taxes 22,049 (3,712) 3,039 21,376
Net income 41,764 (6,861) 5,110 40,013
Purchases of property, plant and equipment 30,094 2,622 7,869 40,585
December 31, 1997
Total assets $443,907 $21,483 $74,056 $539,446
</TABLE>
10
<PAGE> 19
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
3. Acquisitions and Dispositions
On December 20, 1999 we acquired all of the issued and outstanding stock of
Diversified Diemakers, Inc. and Ganton Technologies, Inc. for a purchase price
of $110,000,000 and $160,000,000, respectively. The balance sheets of Diemakers
and Ganton are subject to review, which may result in adjustments to the
purchase prices in fiscal year 2000.
We accounted for these transactions using purchase accounting and, accordingly,
the purchase price has been allocated to the assets purchased and the
liabilities assumed based upon the estimated fair values at the date of
acquisitions. The excess of the purchase price, including acquisition costs of
$5.5 million, over the estimated fair values of net assets acquired was
$125,635,000, which has been recorded as goodwill and is being amortized on a
straight-line basis over 40 years. The results of operations of Ganton and
Diemakers from the date of acquisition to December 31, 1999 are included in
Intermet's consolidated results of operations.
Intermet accrued approximately $3.7 million for severance and office closing
costs. Sales, engineering and certain other administrative and operating
functions of Ganton and Diemakers are being combined with Intermet's existing
functions. As a result of this combination of activities, we will eliminate
duplicate activities during fiscal year 2000.
Ganton is a Wisconsin-based supplier of die-cast aluminum components to the
automotive industry. Ganton operates three manufacturing facilities, two located
in Wisconsin and one in Tennessee. Ganton also has an engineering center in
Wisconsin. Diemakers, with headquarters in Missouri, is a leading manufacturer
of magnesium die-cast automotive components. Diemakers has three production
facilities and a product development center, all in Missouri.
11
<PAGE> 20
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
3. Acquisitions and Dispositions (continued)
On December 31, 1998, Intermet acquired certain operating assets and the
aluminum die-casting business of Quadion Corporation for $56,951,000 and certain
operating supplies inventories for $1,353,000, both in cash. These assets form
the base of our wholly owned subsidiary, Tool Products, Inc. This transaction
was accounted for as a purchase and, accordingly, the purchase price was
allocated to the assets purchased and the liabilities assumed based upon the
estimated fair values at the date of acquisition. The excess of the purchase
price over the fair value of tangible net assets acquired was approximately
$39,105,000 and was recorded as goodwill, which is being amortized on a
straight-line basis over 40 years. The consolidated financial statements include
the balance sheet of Tool Products as of December 31, 1998.
Also on December 31, 1998 we acquired 100% of the outstanding shares of
Vorpommersche Eisenwerke GmbH Ueckermunde ("VEGU") for DM 6,000,000 in cash. We
accounted for this transaction using purchase accounting and, accordingly, the
purchase price was allocated to the assets purchased and the liabilities assumed
based upon the estimated fair values at the date of acquisition. The fair values
of net assets acquired exceeded the purchase price and resulted in negative
goodwill of approximately DM 3,300,000, which is being amortized on a
straight-line basis over five years. The consolidated financial statements
include the balance sheet of VEGU as of December 31, 1998. VEGU is a ferrous
foundry company located in eastern Germany.
In June 1998 we sold substantially all the operating assets of our subsidiary,
Industrial Powder Coatings, for $22,860,000 in cash and recognized a net gain of
approximately $115,000.
The following represents our unaudited pro forma consolidated results of
operations (in thousands of dollars, except per share data) for 1999 and 1998,
assuming the above acquisitions and disposition occurred on January 1 of each
year presented.
<TABLE>
<CAPTION>
1999 1998
------------- ------------
<S> <C> <C>
Net sales $1,182,044 $1,102,286
Net income $36,339 $40,693
Income per common share - Basic $1.43 $1.59
Income per common share - Diluted $1.42 $1.57
</TABLE>
These unaudited pro forma results are presented for comparative purposes only.
They are not necessarily indicative of what would have occurred had the
acquisitions and disposition actually been made on the dates indicated or of
future results of operations.
12
<PAGE> 21
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
3. Acquisitions and Dispositions (continued)
During the second quarter of 1998, we entered into an agreement with Portuguese
Grupo Jorge de Mello, creating a joint venture company called PortCast-Fundicao
Nodular, S.A. PortCast is located in Porto, Portugal and increased our ferrous
capacity in Europe. As of December 31, 1999, we spent $6,500,000 of capital for
our investment in a 50% equity interest in PortCast, as agreed upon with
Portuguese Grupo Jorge de Mello. Our investment in PortCast is accounted for on
the equity method. The previous owners of PortCast have contributed property,
plant and equipment (after these fixed assets were cleared of liens in the
fourth quarter of 1999) for their 50% share in PortCast. We have managerial
control. Our equity in net loss of PortCast for 1999 is approximately $719,000
and is included in other income and expense in the accompanying statements of
operations.
In the first half of 1998, we wrote-off certain assets related to IWESA, an
82.4% owned subsidiary. In May 1998, IWESA entered bankruptcy proceedings
whereby the receiver assumed all remaining assets and obligations, without cash
effect, in accordance with German bankruptcy laws.
4. Impairment of Assets and Shutdown
On December 7, 1999, Intermet announced plans to permanently close its Ironton
Iron, Inc. foundry. Ironton is included in the ferrous-metals segment of the
Reporting for Business Segments footnote. Ironton has had enduring operational
difficulties and, as a result, has incurred significant operating losses since
Intermet purchased it in 1988. Because of Ironton's continuing operational
difficulties, customers representing a significant portion of its sales volumes
had informed Intermet and Ironton in late 1999 that they had decided to place
their business with alternate sources. The foundry is one of our oldest
facilities and the cost to modernize would further impact already negative
operating results. Ironton had revenues of $57 million, $55 million and $51
million and net losses of approximately $35 million, $10 million and $7 million
for the years ended December 31, 1999, 1998 and 1997, respectively. The net loss
of $35 million for 1999 includes the charges for asset impairment and shutdown.
We anticipate that the foundry will cease operations by the end of the first
quarter of 2000.
13
<PAGE> 22
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
4. Impairment of Assets and Shutdown (continued)
The decision to close this foundry was the principal reason for recording a
$10,811,000 charge for impairment of assets and a $7,789,000 charge for shutdown
costs in the fourth quarter of 1999. All but $101,000 of the charges are
included in operating expenses; the remainder is included in cost of goods sold.
The charge included a write-down of $10,811,000 to fair value for capital assets
(as determined by an outside consultant) and inventories; building demolition
and remediation costs of $6,637,000; and provisions totaling $1,152,000 for
severance pay and employee benefits related to the termination of approximately
100 salaried employees. Ironton's land, machinery and equipment used in the
production of ferrous castings and related replacement parts are segregated on
our consolidated balance sheet as assets held for sale. Intermet did not
provided for severance pay and employee benefits for approximately 500 union
employees because the amount was not then determinable. We anticipate that any
such charges will be recorded in the first quarter of 2000. The accrual for
shutdown costs of $7,789,000 is included in current liabilities at December 31,
1999.
Intermet intends that subsequent to the closing of the foundry, the assets will
be sold. We also expect at the earliest practical date after sale of assets, but
most likely during the fourth quarter of 2000, demolition of the building will
begin. We anticipate that demolition would be complete in 2001.
As part of the 1988 purchase of Ironton, the previous common stockholders of
Ironton received an equivalent number of shares of Ironton's 5% cumulative
preferred stock with an aggregated stated value of $2,337,000. The obligation of
Ironton to redeem the preferred stock was dependent on Ironton generating
positive cumulative net income. Because Ironton has incurred significant
cumulative net losses since 1988, no portion of the preferred stock has been
redeemed. No dividends have been paid on the preferred stock.
5. Notes Payable
Columbus Neunkirchen Foundry GmbH, a wholly owned subsidiary of Intermet, has
various revolving note agreements which are payable upon the earlier of demand
or December 31, 2000, unless extended. These notes provide for borrowings up to
DM 14,000,000 (approximately $7,192,000) at December 31, 1999. There were no
outstanding borrowings under these agreements as of December 31, 1999 and 1998.
Until November 1999, we maintained various other uncommitted bank lines of
credit, which were payable on demand. As a result of the new revolving credit
agreement dated November 5, 1999 (see Note 6), we extinguished these uncommitted
bank lines of credit. At December 31, 1998, our borrowings under the lines of
credit totaled $1,000,000.
14
<PAGE> 23
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
6. Long-Term Debt
Long-term debt consisted of the following at December 31, (in thousands of
dollars):
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
Intermet:
Revolving credit facility $193,500 $130,000
Term loan 200,000 -
Prudential note 15,000 20,000
Domestic subsidiaries:
Bonds 42,400 8,075
Capitalized leases 3,262 3,781
Other - 3
Foreign subsidiaries:
Foreign bank term notes 878 1,242
-------------- --------------
Total 455,040 163,101
Less: long-term debt due within one year 6,406 6,411
-------------- --------------
Long-term debt due after one year $448,634 $156,690
============== =============
</TABLE>
On November 5, 1999, Intermet signed a five-year $300 million unsecured
revolving credit agreement with a bank group. This agreement replaced the $200
million unsecured revolving credit facility, which was to expire January 1,
2000. At the same time, we executed a $100 million 364-day unsecured revolving
credit agreement. Standby letters of credit reduce the borrowing limits of these
two agreements. At December 31, 1999, such standby letters of credit totaled
$44,324,716. Interest on outstanding borrowings on the revolving credit
agreement, for the first six months after the acquisitions, is LIBOR plus 2%.
After the first six-month period, interest rates are based on grid pricing.
Unused commitment fees for the revolving credit agreements are 0.375% and 0.35%,
per annum, for the first six months after the acquisitions. After the first
six-month period, unused commitment fees for the revolving credit agreement
revert to a range of 0.15% to 0.375% per annum, based on leverage. These
revolving credit agreements require us to maintain specified financial ratios
and imposes limitations on certain activities.
In order to facilitate the financing of Ganton and Diemakers, we borrowed an
additional $200 million in the form of an eighteen-month unsecured term loan.
This loan, dated December 20, 1999, is with a consortium of banks. Interest on
outstanding borrowings for the first six months is LIBOR plus 2%. After the
first six-month period, interest rates are based on grid pricing. The term loan
requires us to maintain financial ratios and imposes limitations on specified
activities.
The Prudential note is unsecured and bears interest at a rate of 8.05% per
annum, payable quarterly. Annual principal payments of $5,000,000 are required.
The note agreement requires us to maintain certain financial ratios and imposes
limitations on certain activities. The final principal payment on this note is
due December 11, 2002.
On December 23, 1999, Columbus Foundry, L.P., a wholly owned subsidiary of
Intermet, issued $35,000,000 of variable rate limited obligation revenue bonds.
Under the terms of the indenture, Columbus Foundry is required to make
interest-only payments at a variable rate. The interest rate for the period
outstanding in 1999 was 6.75%. The entire principal is due December 1, 2019.
15
<PAGE> 24
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
6. Long-Term Debt (continued)
Under the terms of a bond indenture entered into by Lynchburg Foundry Company, a
wholly owned subsidiary of Intermet, Lynchburg Foundry Company is required to
redeem various amounts of industrial development revenue bonds on an annual
basis through June 2006. These amounts range from $175,000 to $350,000 per year,
with a final payment at maturity of $1,650,000. The balance outstanding as of
December 31, 1999 was $3,400,000. The bonds are subject to optional redemption
prior to maturity.
As part of our acquisition of Tool Products, we assumed $4,500,000 of industrial
development revenue bond debt. We are required to make annual principal payments
of $500,000, with a final maturity date of January 1, 2007. The balance as of
December 31, 1999 was $4,000,000.
We also have capital leases of approximately $3,262,000 at December 31, 1999,
which relate to assets with net book values of approximately $3,401,000.
Interest rates for these leases range from 7.50% to 8.58%.
The foreign bank term notes bear an interest rate of 5.0% per annum. These
borrowings are secured by property, plant and equipment with net book values
aggregating to approximately $18,393,000 at December 31, 1999.
Maturities of long-term debt and capital leases at December 31, 1999 are as
follows (in thousands of dollars):
<TABLE>
<S> <C>
2000 $ 6,406
2001 206,402
2002 6,617
2003 1,561
2004 194,912
Thereafter 39,142
------------
Totals $455,040
============
</TABLE>
Interest paid totaled approximately $12,953,000, $10,398,000 and $11,500,000 in
1999, 1998 and 1997, respectively.
At December 31, 1999, approximately $25,000,000 plus 50% of fourth quarter net
income was available for the payment of dividends.
Interest rate swaps are contractual agreements between parties to exchange fixed
and floating interest rate payments periodically, over the life of the
agreements, without the exchange of underlying principal amounts. At December
31, 1999, we have two interest rate swap transaction arrangements in effect for
which we pay a fixed interest rate of 6.75% and 6.755% per annum with respect to
notional amounts, and off balance sheet risk, of $40,000,000 and $30,000,000,
respectively. These swaps are used to partially hedge an underlying debt
obligation and are not marked to market. We do not expect to terminate the swaps
prior to maturity. Had the swaps been terminated at December 31, 1999, we would
have been obligated to the counter-parties for approximately $230,000.
The swap transactions terminate in May 2000.
16
<PAGE> 25
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
7. Shareholders' Equity
We have a Key Employee Stock Option Plan ("Employee Plan") and a Directors'
Stock Option Plan ("Directors' Plan"). The Employee Plan, which permits the
grant of options and restricted shares for up to 1,500,000 shares of common
stock, was approved by the shareholders of Intermet on April 27, 1995. The
Directors' Plan was approved by the shareholders of Intermet on April 10, 1997
and permits the grant of options to purchase up to 150,000 shares of common
stock. Options granted under the Employee Plan vest over a four-year period.
Options under the Directors' Plan were exercisable at the grant date. Certain
options also remain outstanding from prior stock option plans. At December 31,
1999 options for 784,500 shares were exercisable, while 100,500 Employee Plan
shares and 114,000 Directors' Plan shares were available for future grant.
We apply Accounting Principles Board Opinion No. 25 and related interpretations
in accounting for the stock option plans. Accordingly, we have not recognized
compensation expense for our stock option plans. Had compensation expense for
these plans been determined based on the fair value at the grant dates for
awards under those plans consistent with the method of SFAS No. 123, our pro
forma net income, basic earnings per share and diluted earnings per share would
have been $35,733,000, $40,290,000 and $39,413,000; $1.40, $1.57 and $1.56; and
$1.40, $1.55 and $1.53 in 1999, 1998 and 1997, respectively.
The fair values of our stock options, as disclosed above, were estimated as of
the date of grant using a Black-Scholes option pricing model with the following
weighted average assumptions for 1999, 1998 and 1997: risk-free interest rates
ranging from 5.25% to 6.4%; a dividend yield of 1.0%; volatility factor of the
expected market price of our common stock ranging from .32 to .451; and a
weighted average expected life of the options of 6 years. For purposes of the
pro forma disclosures required under SFAS No. 123, the estimated fair value of
the options is amortized over the options' vesting period.
The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
our employee stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options.
18
<PAGE> 26
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
7. Shareholders' Equity (continued)
A summary of our stock option activity for the three years ended December 31,
1999 is as follows:
<TABLE>
<CAPTION>
Weighted
Number of Average Exercise
Options Exercise Price Price Range
---------------- ----------------- -------------------
<S> <C> <C> <C>
Outstanding at January 1, 1997 1,390,000 $ 9.87
Granted 219,500 16.27 $15.375-$17.00
Exercised (88,500) 7.22 5.69-12.75
Forfeited (41,500) 10.12 9.00-12.75
================
Outstanding at December 31, 1997 1,479,500 $9.87
================
Exercisable at December 31, 1997 856,375 $9.36
Weighted average fair value of
options granted during 1997 $6.48
Outstanding at January 1, 1998 1,479,500 $ 9.87
Granted 305,750 18.11 $18.06-$19.38
Exercised (576,450) 8.79 5.69-12.75
Forfeited (24,750) 13.74 9.00-17.00
================
Outstanding at December 31, 1998 1,184,050 $13.64
================
Exercisable at December 31, 1998 557,050 $11.14
Weighted average fair value of
options granted during 1998 $7.91
Outstanding at January 1, 1999 1,184,050 $13.64
Granted 323,000 14.28 $12.75-$14.31
Exercised (14,000) 8.05 5.69-10.75
Forfeited (43,500) 15.94 12.75 - 18.06
================
Outstanding at December 31, 1999 1,449,550 $13.76
================
Exercisable at December 31, 1999 784,500 $12.14
Weighted average fair value of
options granted during 1999 $14.31
</TABLE>
Exercise prices for options outstanding as of December 31, 1999 ranged
principally from $9.00 to $10.65 and $12.75 to $18.10, with weighted-average
remaining contractual lives of those options ranging from 2.7 to 5.2 years and
6.6 to 8.5 years.
19
<PAGE> 27
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
7. Shareholders' Equity (continued)
We have an Employee Stock Ownership Plan and Trust ("ESOP") for some of our
United States employees who are not covered by collective bargaining agreements.
The ESOP requires that we make contributions equal to 3% of the annual
compensation of the ESOP participants. We may, at our discretion, make
additional contributions within specified limits. Contributions to the ESOP of
$984,000, $872,000 and $827,000 were expensed in 1999, 1998 and 1997,
respectively.
On October 6, 1995 our board of directors declared a dividend of one right for
each share of Intermet common stock held of record at the close of business on
October 17, 1995, pursuant to a Shareholder Protection Rights Agreement dated
October 6, 1995. The rights are generally not exercisable until 10 days after an
announcement by Intermet that a person, as defined (excluding, with certain
limitations, certain holders of 10% or more of our common stock who do not
acquire additional shares, any of our ESOPs or benefit plans, and Intermet or
any of its wholly-owned subsidiaries), has acquired 10% of our common stock or
announces a tender offer which could result in the ownership of 10% or more of
our common stock. Each right, should it become exercisable, will entitle the
owner to buy 1/100th of a share of Participating Preferred Stock, a new series
of our preferred stock, at an exercise price of $40. On October 16, 1997, we
amended the rights agreement to provide that certain institutional investors who
own in excess of 10%, but less than 15% of our common stock, are not "Acquiring
Persons", as defined by the rights agreement.
In the event the rights become exercisable as a result of the acquisition of
shares, each right will entitle the owner, other than the acquiring person, to
buy at the rights' then current exercise price a number of shares of common
stock with a market value equal to twice the exercise price. In addition, unless
the acquiring person owns more than 50% of the outstanding shares of common
stock, the board of directors may elect to exchange all outstanding rights
(other than those owned by such acquiring person or affiliates thereof) at an
exchange ratio of one share of common stock per right. Unless we merge with
another company under certain conditions or redeem or exchange the rights before
October 6, 2005, the rights will expire on such date.
8. Commitments and Contingencies
Future minimum rental payments required under building and equipment operating
leases that have initial or remaining non-cancelable lease terms in excess of
one year at December 31, 1999 are as follows (in thousands of dollars):
<TABLE>
<S> <C>
2000 $5,527
2001 3,956
2002 2,868
2003 1,726
2004 1,087
Thereafter 920
-------
Total $16,084
=======
</TABLE>
20
<PAGE> 28
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
8. Commitments and Contingencies (continued)
Total rental expense under operating leases aggregated $5,242,000, $5,255,000
and $5,445,000 in 1999, 1998 and 1997, respectively.
At December 31, 1999 we had commitments to purchase capital equipment of
approximately $3,500,000 in the aggregate.
Some of our subsidiaries have been named as potentially responsible parties
liable for cleanup of known environmental conditions. For known environmental
situations, Intermet, with the assistance of environmental engineers and
consultants, has recorded reserves to cover estimated future environmental
expenditures. Environmental reserves at December 31, 1999 and 1998 approximated
$10,198,000 and $4,633,000 respectively. The environmental reserve at December
31, 1999 includes $3,705,000 related to the shutdown of Ironton Iron. Also
included is an environmental reserve of $3,257,000 acquired as part of the
purchase of Ganton, which is fully covered by specifically identified liquid
assets. We also have corrective action plans and/or preventive environmental
projects to ensure the safe and lawful operation of our facilities. There could
exist, however, more extensive or unknown environmental situations at existing
or previously owned businesses for which the future cost is not known or exceeds
amounts accrued at December 31, 1999.
In addition to these recurring and anticipated expenditures, the 1990 amendments
to the Federal Clean Air Act, and regulations promulgated thereunder are
expected to have a major impact on the compliance cost of many U.S. companies,
including foundries of the type owned by Intermet. Until Federal and state
governments adopt final regulations implementing those amendments and until
certain control measures under existing regulations are determined, it is not
possible to estimate such costs.
We are also engaged in various legal proceedings and other matters incidental to
our normal business activities. We do not believe any of these above-mentioned
proceedings or matters will have a material adverse effect on our consolidated
financial position or results of operations or cash flows.
21
<PAGE> 29
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
9. Retirement Plans and Benefits
We maintain several noncontributory defined benefit pension plans for certain of
our U.S. employees covered by collective bargaining agreements. The benefits are
based on years of service. Our policy is to fund amounts as required under
applicable laws and regulations. In addition to providing pension benefits, we
provide health care and life insurance benefits to certain retired U.S.
employees and their dependents. Certain salaried employees can become eligible
for retiree health care benefits at age 55 depending on years of service.
Certain hourly employees currently can become eligible for retiree health care
benefits at age 60 depending on years of service. Retirees receive substantially
the same health care benefits as active employees. The medical plans generally
pay most medical expenses less deductible and co-pay amounts. Salaried and
hourly employees also contribute to the cost of dependent coverage. Certain
salaried employee coverage converts to a Medicare supplement at age 65, while
most hourly employee coverage ceases at age 65.
<TABLE>
<CAPTION>
Years ended December 31,
Pension Benefits Other Benefits
---------------- --------------
1999 1998 1999 1998
---- ---- ---- ----
(in thousands of dollars)
<S> <C> <C> <C> <C>
Change in benefit obligation
Benefit obligation at beginning of year $61,927 $55,246 $37,951 $35,191
Service cost 1,434 1,204 749 707
Interest cost 4,335 4,044 2,535 2,490
Amendments - 772 - (358)
Actuarial (gains)/losses (3,270) 3,865 (3,449) 3,133
Acquisition 4,763 - 789 183
Benefits paid (3,239) (3,204) (3,357) (3,395)
-----------------------------------------------------------
Benefit obligation at end of year $65,950 $61,927 $35,218 $37,951
Change in plan assets
Fair value of plan assets at beginning of year $61,019 $58,962
Actual return on plan assets 10,176 3,315
Company contributions 1,030 1,945
Acquisition 3,738 -
Benefits paid (3,239) (3,203)
-------------------------
Fair value of plan assets at end of year $72,724 $61,019
Funded status of the plan (under-funded) $ 6,774 ($908) ($35,218) ($37,951)
Unrecognized net actuarial loss/(gain) (6,281) 1,504 (13,507) (11,038)
Unrecognized transition obligation 120 171 - -
Unrecognized prior service cost 2,074 2,348 (77) (90)
Minimum liability (513) - - -
-----------------------------------------------------------
Prepaid (accrued) benefit cost $ 2,174 $3,115 ($48,802) ($49,079)
===========================================================
</TABLE>
22
<PAGE> 30
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
9. Retirement Plans and Benefits (continued)
The discount rate used in determining the actuarial present value of the
projected benefit obligations was 8.0% in 1999 and 7.125% in 1998. The expected
long-term rate of return on assets used in determining net pension expense was
9.5% in 1999 and 9.0% to 9.5% in 1998. Plan assets consist of publicly traded
stocks and bonds, cash equivalents and insurance contracts.
The assumed health care cost trend rate used in measuring the accumulated
post-retirement benefit obligation was 6.0% to 7.5% in 1999, declining by 0.5%
per year to an ultimate rate of 5.0% for the applicable employee age groups.
Certain subsidiaries providing a dental benefit assumed a 5.25% cost trend rate
for dental in 1999, declining to 5.0% in 2000.
<TABLE>
<CAPTION>
Years ended December 31,
Pension Benefits Other Benefits
---------------- --------------
Components of net periodic cost: 1999 1998 1997 1999 1998 1997
------- ------- ------- ------ ------ -------
(in thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
Service cost $1,434 $1,204 $1,232 $749 $707 $949
Interest cost 4,335 4,044 3,855 2,535 2,490 2,924
Expected return on plan assets (5,665) (5,062) (10,198) - - -
Amortization of prior service cost and
net transition obligation 344 283 6,264 (13) (508) 11
Recognized net actuarial gain - - - (980) (813) (783)
----------------------------------------------------------------
Benefit cost $448 $469 $1,153 $2,291 $1,876 $3,101
================================================================
</TABLE>
The assumed health care cost trend rate has a significant effect on the amounts
reported. A one-percentage-point change in the assumed health care cost trend
rate would have the following effects:
<TABLE>
<CAPTION>
One Percentage One Percentage
Point Increase Point Decrease
---------------------- -------------------
(in thousands of dollars)
<S> <C> <C>
Effect on total service and interest cost
components in 1999 $255 ($208)
Effect on postretirement benefit obligation as of
December 31, 1999 $2,231 ($1,862)
</TABLE>
23
<PAGE> 31
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
9. Retirement Plans and Benefits (continued)
Amounts recognized for pension benefits in the consolidated balance sheets
consist of:
<TABLE>
<CAPTION>
December 31,
1999 1998
---------------- --------------
(in thousands of dollars)
<S> <C> <C>
Prepaid benefit cost $3,895 $3,115
Accrued benefit liability (2,234) (3,910)
Intangible asset 513 2,519
Accumulated other comprehensive income (pretax) - 1,391
---------------- --------------
Net amount recognized $2,174 $3,115
================ ==============
</TABLE>
Because we aggregate the disclosures for our pension plans with plans with
accumulated benefit obligations in excess of plan assets (underfunded plans),
the following additional disclosures are applicable to our pension plans with
accumulated benefit obligations in excess of plan assets, in thousands of
dollars, as of December 31, 1999:
<TABLE>
<S> <C>
Projected benefit obligation $8,291
Accumulated benefit obligation 7,598
Fair value of plan assets 7,019
</TABLE>
We maintain several defined contribution plans for certain hourly employees.
Contributions to these plans, which are principally based on hours worked by
each employee, totaled $1,308,000, $1,034,000 and $1,173,000 in 1999, 1998 and
1997, respectively. Some of the plans allow participants to make pretax
contributions as a percentage of their compensation.
We also maintain defined contribution plans for domestic salaried employees. In
certain plans we contribute a specified percentage of the annual compensation of
participants. Participants are also allowed to make pretax contributions to the
plans, as a percentage of their compensation. We match participant contributions
up to a specified limit. Certain plans provide for a discretionary
profit-sharing contribution. We accrued contributions to the plans of
$1,838,000, $1,602,000 and $1,297,000 in 1999, 1998 and 1997, respectively.
24
<PAGE> 32
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
10. Income Taxes
The provision for income taxes consists of the following (in thousands of
dollars):
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
-------------- -------------- --------------
<S> <C> <C> <C>
Current:
Federal $14,890 $22,317 $13,489
State 3,716 3,555 2,811
Foreign (139) 733 7,653
-------------- -------------- --------------
18,467 26,605 23,953
Deferred:
Federal (7,406) (5,651) (1,769)
State (922) (467) (71)
Foreign 1,937 3,712 (737)
-------------- -------------- --------------
(6,391) (2,406) (2,577)
-------------- -------------- --------------
Totals $12,076 $24,199 $21,376
============== ============== ==============
</TABLE>
We paid income taxes of approximately $14,949,000, $15,245,000 and $2,931,000 in
1999, 1998 and 1997, respectively.
The provision for income taxes differs from the amount computed using the
statutory U.S. federal income tax rate for the following reasons (in thousands
of dollars):
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
------------- -------------- -------------
<S> <C> <C> <C>
Provision for income taxes at U.S. statutory
rate $16,959 $22,816 $21,486
(Income) loss with no tax effect (118) (267) 1,160
Difference between U.S. and foreign tax rates
82 84 1,561
Utilization of NOL and credit carryforwards
(190) - (4,862)
State income taxes, net of federal income
tax benefits 2,810 2,030 1,781
Reduction in valuation allowance (9,018) - (1,246)
Other 1,551 (464) 1,496
------------- -------------- -------------
Totals $12,076 $24,199 $21,376
============= ============== =============
</TABLE>
25
<PAGE> 33
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
10. Income Taxes (continued)
The tax effects of temporary differences and carryforwards that give rise to
deferred income tax assets (liabilities) at December 31, 1999 and 1998 are as
follows (in thousands of dollars):
<TABLE>
<CAPTION>
1999 1998
--------------- --------------
<S> <C> <C>
Compensation and benefit items, primarily related to SFAS
No. 106 $22,274 $22,896
Operating loss, capital loss, foreign tax credit and AMT
credit carryforwards 8,192 23,092
Ironton asset impairment and shutdown costs 9,164 -
Deductible goodwill 2,178 -
Other temporary differences 17,124 7,929
--------------- --------------
Gross deferred tax assets 58,932 53,917
Depreciation and related items (23,200) (19,935)
Other temporary differences (14,533) (13,590)
--------------- --------------
Gross deferred tax liabilities (37,733) (33,525)
--------------- --------------
Net deferred tax asset 21,199 20,392
Valuation allowance (3,728) (16,240)
--------------- --------------
Net deferred income taxes $17,471 $4,152
=============== ==============
</TABLE>
Net deferred income taxes at December 31, 1999 increased $13,319,000 from
December 31, 1998, $6,928,000 of which relates to the acquisition of Ganton and
Diemakers. During 1999, we reversed a valuation allowance of $4,518,000, due to
a change in German tax law in 1999, which allowed us to utilize 100% of the NOL
for VEGU. In addition, we reduced the valuation allowance approximately
$4,500,000 as a result of a recapitalization of our international operations.
This recapitalization will allow us to utilize foreign tax credits that would
have otherwise expired. Also, we reduced the deferred tax assets and the related
valuation allowance by approximately $3,494,000 for expired capital loss
carryforwards. Tax loss carryforwards with a value of approximately $3,728,000
expire in various amounts between 2000 and 2010. There are certain limitations
on the use of most of the tax loss carryforwards noted above. We provided a
valuation allowance for the full amount of the tax loss carryforwards at
December 31, 1999.
These income tax amounts are included in the consolidated balance sheets as
follows (in thousands of dollars):
<TABLE>
<CAPTION>
December 31,
1999 1998
-------------- ------------
<S> <C> <C>
Current assets $10,047 $2,829
Other noncurrent assets 7,424 4,449
Other noncurrent liabilities - (3,126)
-------------- ------------
Totals $17,471 $4,152
============== ============
</TABLE>
26
<PAGE> 34
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
11. Geographic Area and Major Customer Information
All sales are to unaffiliated customers. Revenue and income amounts for each of
the three years ended December 31, 1999, and identifiable assets at the end of
each year, were as follows from North America, principally United States, and
other international, principally Germany, source operations:
<TABLE>
<CAPTION>
As of and for the years ended December 31,
1999 1998 1997
-------- -------- --------
(in thousands of dollars)
<S> <C> <C> <C>
Net sales:
North America $846,876 $733,889 $723,644
Other international 109,956 107,709 90,085
Operating profit:
North America 41,708 61,413 59,466
Other international 20,453 14,236 15,732
Income before income taxes:
North America 29,263 53,239 50,972
Other international 19,190 11,949 10,417
Assets:
North America 888,720 517,515 453,992
Other international 68,572 66,500 85,454
</TABLE>
Net sales to customers exceeding 10% of consolidated net sales in 1999, 1998 or
1997, and other major customers, were as follows (as a percentage of
consolidated net sales):
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ----------
<S> <C> <C> <C>
Customer:
DaimlerChrysler 17% 20% 18%
Ford 16% 18% 18%
Delphi 7% 4% - %
TRW 5% 6% 6%
General Motors 2% 2% 8%
</TABLE>
For 1999, Ford sales include sales to Ford Motor Company (8%) and Visteon
Automotive Systems (8%). For 1998, Ford sales include sales to Ford Motor
Company (10%) and Visteon Automotive Systems (8%). These sales are generated by
the ferrous-metals and the light-metals segments.
27
<PAGE> 35
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
12. Earnings per Share
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
period. Dilutive earnings per share reflects the assumed exercise of stock
options and unearned restricted stock.
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998 1997
------------- ----------- ------------
(in thousands, except per share data)
<S> <C> <C> <C>
Numerator:
Net income $36,377 $40,989 $40,013
Denominator:
Denominator for basic earnings per
share - weighted average shares 25,480 25,610 25,211
Effect of dilutive securities:
Employee stock options and unearned
restricted stock 91 337 572
------------ ----------- ------------
Denominator for diluted earnings per share
- adjusted weighted average shares and
assumed conversions 25,571 25,947 25,783
============ =========== ============
Basic earnings per share $1.43 $1.60 $1.59
============ =========== ============
Diluted earnings per share $1.42 $1.58 $1.55
============ =========== ============
</TABLE>
28
<PAGE> 36
Intermet Corporation
Notes to Consolidated Financial Statements (continued)
13. Quarterly Data and Share Information (Unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter (1) Quarter Quarter (2)
------------- ------------ ------------ -------------
(in thousands of dollars, except per share data)
<S> <C> <C> <C> <C>
1999
Net sales $245,227 $245,698 $225,350 $240,557
Gross profit 34,137 33,146 23,989 31,015
Net income 12,133 16,626 7,442 176
Net income per common share - Basic 0.47 0.65 0.29 0.01
Net income per common share - Diluted 0.47 0.65 0.29 0.01
Share prices (Nasdaq):
High 14.813 15.750 15.750 11.813
Low 10.063 13.250 8.219 8.813
1998
Net sales $224,033 $219,857 $188,808 $208,900
Gross profit 29,975 31,500 22,494 26,772
Net income 11,271 12,337 9,314 8,067
Net income per common share - Basic 0.44 0.48 0.36 0.31
Net income per common share - Diluted 0.43 0.47 0.36 0.31
Share prices (Nasdaq):
High 22.500 23.750 20.188 17.125
Low 16.000 16.875 12.625 8.500
</TABLE>
1. During the second quarter of 1999, we were able to use a one-time tax
benefit of $4.5 million related to a change of tax law in Germany.
Without this benefit, results for the second quarter of 1999 would have
been as follows:
<TABLE>
<S> <C>
Net income (in thousands) $12,108
Net income per common share - Basic $0.48
Net income per common share - Diluted $0.47
</TABLE>
2. During the fourth quarter of 1999, we recapitalized our international
operations, which resulted in a one-time tax benefit of $4.0 million.
Also, for the fourth quarter of 1999, we recorded asset impairment and
shutdown costs for the closure of Ironton totaling $18.6 million before
taxes. Without these items, results for the fourth quarter of 1999
would have been as follows:
<TABLE>
<S> <C>
Net income (in thousands) $8,286
Net income per common share - Basic $0.33
Net income per common share - Diluted $0.33
</TABLE>
Third and fourth quarter sales are usually lower than the first- and
second-quarter sales due to plant closings by automotive manufacturers for
vacations and model changeovers. The above share price information represents
inter-dealer transactions in The Nasdaq National Market without retail markup,
markdown or commission.
29
<PAGE> 1
Subsidiaries of Intermet EXHIBIT 21
<TABLE>
<CAPTION>
Name of Subsidiary Incorporation or Place of Organization
- - ------------------ --------------------------------------
<S> <C>
Alexander City Casting Company, Inc. Alabama
Cast-Matic Corporation Michigan
Columbus Foundry, L.P. Delaware
Columbus Neunkirchen Foundry GmbH Germany
Diversified Diemakers, Inc. Delaware
Frisby P.M.C., Incorporated Illinois
Ganton Technologies, Inc. Illinois
Intermet International, Inc. Georgia
Iowa Mold Tooling Co., Inc. Iowa
Ironton Iron, Inc. Ohio
Lynchburg Foundry Company Virginia
Northern Castings Corporation Georgia
Tool Products, Inc. Delaware
Vorpommersche Eisenwerke GmbH Ueckermunde Germany
Wagner Castings Company Delaware
Wagner Havana, Inc. Delaware
Intermet wholly owns the above subsidiaries directly or indirectly, unless
otherwise indicated.
</TABLE>
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Intermet Corporation of our report dated January 26, 2000, included in the
1999 Annual Report to Shareholders of Intermet Corporation.
Our audits also included the financial statement schedule of Intermet
Corporation listed in Item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-57665, 33-58354, 33-58352 and 33-59011) pertaining to 50,000
shares of Intermet Corporation Common Stock, the Intermet Corporation Director's
Stock Option Plan, the Intermet Corporation Key Individual Stock Option Plan and
the Intermet Corporation Executive Stock Option and Incentive Award Plan,
respectively, of our report dated January 26, 2000, with respect to the
consolidated financial statements of Intermet Corporation incorporated herein
by reference, and our report included in the preceding paragraph with respect
to the financial statement schedule of Intermet Corporation, included in this
Annual Report (Form 10-K) for the year ended December 31, 1999.
/s/ Ernst & Young LLP
Detroit, Michigan
March 24, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,416
<SECURITIES> 0
<RECEIVABLES> 162,168
<ALLOWANCES> 7,426
<INVENTORY> 102,802
<CURRENT-ASSETS> 304,520
<PP&E> 606,221
<DEPRECIATION> 232,957
<TOTAL-ASSETS> 957,292
<CURRENT-LIABILITIES> 208,474
<BONDS> 0
0
0
<COMMON> 2,585
<OTHER-SE> 239,792
<TOTAL-LIABILITY-AND-EQUITY> 242,377
<SALES> 956,832
<TOTAL-REVENUES> 956,832
<CGS> 834,545
<TOTAL-COSTS> 878,207
<OTHER-EXPENSES> 13,708
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,210
<INCOME-PRETAX> 48,453
<INCOME-TAX> 12,076
<INCOME-CONTINUING> 36,377
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,377
<EPS-BASIC> 1.43
<EPS-DILUTED> 1.42
</TABLE>
