<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 Number 0-17028
IRONTON IRON, INC.
(Exact name of registrant as specified in its charter)
OHIO 31-1117407
(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:
Series A Cumulative Preferred Stock*
(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. X
As of March 1, 2000 none of the registrant's common stock was held by
non-affiliates of the registrant; therefore, the aggregate market value of the
registrant's voting stock held by non-affiliates of the registrant was $0.
Twenty three thousand shares of the registrant's common stock were outstanding
as of March 1, 2000 and held by Intermet Corporation.
*Registered as a result of the reclassification of the registrant's common
stock, no par value, into Series A Cumulative Preferred Stock, pursuant to an
amendment to the registrant's Articles of Incorporation filed on October 30,
1988, described in the registrant's Form 8 to its Registration Statement on Form
10, dated November 3, 1988, previously filed with the Commission. See Item 1,
"Business--General."
<PAGE> 2
PART I
ITEM 1. BUSINESS
General
In July 1984, Ironton Iron, Inc. ("Ironton") was incorporated under the laws of
the State of Ohio. Ironton operates a foundry in Ironton, Ohio that manufactures
ductile iron castings for the transportation industry.
In October 1988, Intermet Foundries, Inc. ("IFI"), a Georgia corporation and
wholly-owned subsidiary of Intermet Corporation ("Intermet"), acquired through a
recapitalization, all of the outstanding common stock of Ironton. In connection
with the recapitalization, IFI paid $2 million for 23,000 shares of newly issued
common stock of Ironton and refinanced approximately $2.1 million of Ironton's
debt. As part of the recapitalization, Ironton issued a new class of non-voting
Series A Cumulative Preferred Stock to the former holders of Ironton's common
stock in exchange for all of their common shares. The recapitalization was
approved by a vote of the former common stockholders on October 24, 1988. On
March 31, 1996, IFI was merged into Intermet.
Ironton has had enduring operational difficulties and, as a result, has incurred
significant operating losses since Intermet purchased it in 1988, with the
exception of 1995, when it generated net income of $0.8 million. As of December
31, 1999, Ironton had incurred cumulative losses of approximately $120.2
million. Ironton had revenues of $57.4 million and net losses of approximately
$34.0 million for the year ended December 31, 1999.
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 an older facility and the cost to modernize would further impact
already negative operating results. On December 7, 1999, Intermet announced its
plan for the orderly shutdown of the Ironton facility. Ironton has adopted the
liquidation basis of accounting. The net loss of approximately $34.0 million for
1999 includes charges of $17,584,000 for asset impairment and shutdown. In
addition, Ironton has recorded a liability of approximately $4,700,000, in
accordance with the liquidation basis of accounting, for the liquidation period
of January 1, 2000 to February 29, 2000.
The decision to close Ironton is the reason for recording a $9,795,000 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 $101,000 is included in cost of sales. The impairment
charge includes a write-down of $9,795,000 to fair value for capital assets (as
determined by an independent 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. The land and machinery and equipment used in the
production of ferrous castings and related replacement parts are segregated in
the statement of net liabilities in liquidation as assets held for sale.
Because of the loss of customers and in accordance with the plan for orderly
shutdown, Ironton has scaled down production. As of March 1, 2000 Ironton has
terminated approximately 360 employees (approximately 60% of the workforce at
December 31, 1999). Pursuant to a closing agreement negotiated with the United
Steelworkers of America and its Local 3664, all of the hourly employees have
been paid severance of approximately $1.0 million in the aggregate. Ironton may
make another severance payment to hourly employees after production ends, which
is contingent on predetermined production performance as set forth in the
closing agreement. Ironton's management anticipates that the foundry will cease
operations by the end of the first quarter of 2000.
Financial Information about Segments
Ironton is a single operating unit with essentially one product line. Virtually
all sales are made to one geographic area (United States). Thus, Ironton has
only one reportable segment.
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Products, Markets and Sales
Ironton marketed its products principally to original equipment manufacturers
and their suppliers in the automotive industry. The following table sets forth
information regarding Ironton's sales by market (as a percentage of Ironton's
total sales):
<TABLE>
<CAPTION>
1999
----
<S> <C>
Automotive 91%
Rail Car 8%
Other 1%
</TABLE>
Products manufactured for the automotive industry include brake parts, steering
and suspension system components and differential cases. Ironton produces brake
adapter plates for the rail car industry.
Ironton utilized the in-house sales and customer service staff of Intermet.
Ironton produces principally to customer order and does not maintain any
significant inventory of finished goods not on order.
Ironton's major customers (as a percentage of Ironton's total sales) were as
follows:
<TABLE>
<CAPTION>
1999
----
<S> <C>
Dana 41%
General Products Delaware Corp. 30%
DaimlerChrysler 13%
</TABLE>
Sales to General Products Delaware Corporation, a machining and assembly company
with operations in Michigan and Indiana, are under the terms of a purchase order
issued by Ford. Intermet, through a subsidiary purchased in December 1996, owned
a 35% interest in General Products. Intermet sold its 35% interest in General
Products on March 7, 2000.
As stated above, customers representing a significant portion of Ironton's sales
volumes had informed Intermet and Ironton that they had decided to place their
business with alternate sources. As a result and in accordance with the plan of
orderly shutdown, management anticipates that Ironton will permanently cease all
operations as of the end of the first quarter of 2000. See Item 1, BUSINESS
(General), and Item 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Design, Manufacturing and Machining
Ironton produces ductile iron castings. Ductile iron, which is produced by
removing sulfur from molten iron and adding magnesium and other alloys, has
greater strength and ductility than the more widely used gray iron, and its use
as a higher-strength substitute for gray iron and a lower-cost substitute for
steel has grown steadily.
Ironton shipped approximately 57,000 tons during 1999.
Raw Materials
The primary raw material Ironton uses to manufacture iron castings is steel
scrap. Ironton has no long-term contractual commitments with any steel scrap
supplier. Scrap is obtained from a variety of sources. Competitive prices are
assured through discussions with various suppliers of steel scrap. The cost of
steel scrap is subject to fluctuations, but Ironton had implemented arrangements
with many of its customers for adjusting its castings prices to reflect those
fluctuations. Ironton generally adjusted its castings prices to reflect such
cost fluctuations.
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Ironton has benefited from the contractual arrangements of Intermet and its
suppliers, which expire at various times through 2002, for the purchase of
various materials other than steel scrap used in or during the manufacturing
process. Although these contracts and Intermet's overall level of purchases
provide some protection against price increases, in most cases neither Ironton
nor Intermet has specific arrangements in place to adjust its casting prices for
fluctuations in the price of alloys and other materials.
Cyclicality and Seasonality
Most of Ironton's products are generally not affected by year-to-year automotive
style changes. However, the cyclical nature of the automotive industry has
affected Ironton's sales and earnings during periods of slow economic growth or
recession. Ironton's third and fourth quarter sales are usually lower than first
and second quarter sales due to plant closings by domestic automobile
manufacturers for vacations and model changeovers.
Backlog
Most of Ironton's business involves supplying all or a stated portion of the
customer's annual requirements, generally flexible in amount, for a particular
casting against blanket purchase orders. Credit is extended based on an
evaluation of the customer's financial condition and generally collateral is not
required. The lead-time and cost of commencing production of a particular
casting tend to inhibit transfer of production from one foundry to another.
Customers typically issue releases and shipping schedules on a monthly basis.
Ironton's backlog at any given time therefore consists only of the orders that
have been released for shipment. As previously stated, management anticipates
that the foundry will cease operations by the end of the first quarter of 2000.
Competition
Ironton has competed with many other foundries, including others owned by
Intermet, both in the United States and Europe. Some of these foundries are
owned by major users of iron castings, and a number of foundry operators have,
or are subsidiaries of companies which have, greater financial resources than
Ironton. For example, the three largest automobile manufacturers in North
America, two of which are among Ironton's largest customers, operate their own
foundries. However, they also purchase castings from Ironton and others, and
there is a trend toward increased outsourcing by the domestic original equipment
manufacturers. Castings produced by Ironton also compete to some degree with
malleable iron castings, other metal castings and steel forgings.
Ironton competes on the basis of product quality, engineering, service and
price.
Environmental Matters
In May 1999 Ironton voluntarily notified the Ohio EPA of a breakdown in certain
pollution control equipment at its foundry. However, due to an oversight,
Ironton's notification was not timely under the applicable rules and
regulations. The equipment was subsequently repaired and is operational. On June
2, 1999 a Notice of Violation was issued with respect to this matter and it is
possible that the Ohio EPA may pursue fines or penalties. Ironton does not
believe this matter will have a material adverse affect on its net liabilities
in liquidation or results of its operations or cash flows, or that will affect
Ironton's determination to proceed with the plan for orderly shutdown of
operations and liquidation of assets.
Ironton's operations are subject to various federal, state and local laws and
regulations relating to the protection of the environment. These regulations,
which are implemented principally by the United States Environmental Protection
Agency and the Ohio EPA, govern the management of solid and hazardous waste, the
discharge of pollutants into the air and into surface and ground waters, and the
manufacture, treatment and disposal of hazardous and non-hazardous substances.
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Ironton also has recurring costs related to environmental matters, particularly
the management and disposition of waste (principally non-hazardous) generated as
part of ongoing operations. In 1999 such costs totaled approximately $7.3
million. At December 31, 1999, Ironton accrued $3.7 million for environmental
issues that may occur as a result of the shutdown. A portion of the capital
expenditures that Ironton regularly incurred was to limit or monitor pollution,
principally for ventilation and dust control equipment. Such expenditures were
approximately $0.1 million in 1999.
Ironton currently does not anticipate any environmental costs that would have a
material adverse effect on its financial position or ability to orderly
shutdown. However, there is no assurance that Ironton's activities will not give
rise to actions by governmental agencies or private parties which could cause
Ironton to incur fines, penalties, damages, cleanup costs or other similar
expenses.
Employees
As of February 29, 2000, Ironton employed 187 members of the local bargaining
unit, United Steelworkers of America, and 31 salaried employees. The most recent
bargaining agreement expired January 31, 2000, but was extended to March 31,
2000 pursuant to a closing agreement negotiated with the United Steelworkers of
America and its Local 3664. From December 31, 1999 to February 29, 2000,
approximately 360 employees were terminated. Pursuant to the closing agreement,
all of the hourly employees have been paid severance of approximately $1.0
million in the aggregate. Ironton may make another severance payment to the
hourly employees after production ends, which is contingent on predetermined
production performance as set forth in the closing agreement. Ironton's
management anticipates that the foundry will cease operations by the end of the
first quarter of 2000. As part of the shutdown costs accrued at December 31,
1999, Ironton included approximately $1.2 million for severance pay and employee
benefits related to the termination of approximately 100 salaried employees.
ITEM 2. PROPERTIES
Ironton owns its foundry and offices located at 2520 South Third Street,
Ironton, Ohio. The foundry and offices consist of an aggregate of 514,000 square
feet of buildings situated on 26 acres of land zoned for industrial use.
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 its plan for the orderly shutdown of Ironton. 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 Intermet's oldest facilities and the cost to modernize
would further impact already negative operating results. Management anticipates
that the foundry will cease operations by the end of the first quarter of 2000.
After production ends and environmental issues are resolved the assets will be
sold. Management also expects at the earliest practical date after sale of
assets, but most likely during the fourth quarter of 2000, demolition of the
building will begin. Management anticipates that demolition would be complete in
2001.
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ITEM 3. LEGAL PROCEEDINGS
In May 1999 Ironton voluntarily notified the Ohio EPA of a breakdown in certain
pollution control equipment at its foundry. However, due to an oversight,
Ironton's notification was not timely under the applicable rules and
regulations. The equipment was subsequently repaired and is operational. On June
2, 1999 a Notice of Violation was issued with respect to this matter and it is
possible that the Ohio EPA may pursue fines or penalties. Ironton does not
believe this matter will have a material adverse affect on its net liabilities
in liquidation or results of its operations or cash flows, or that will affect
Ironton's determination to proceed with the plan for orderly shutdown of
operations and liquidation of assets.
Ironton is not aware of any other material pending or threatened legal
proceedings to which Ironton is a party or of which any of its property is the
subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders of Ironton during the
fourth quarter of the 1999 fiscal year.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for Ironton's common stock or
Series A Cumulative Preferred Stock. As of March 1, 2000 none of the
registrant's common stock was held by non-affiliates of the registrant;
therefore, the aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant was $0. As of this same date, there were 1,390
holders of record of Series A Cumulative Preferred Stock and Intermet was the
sole holder of the common stock. Ironton did not sell unregistered securities
within the past three years.
As part of Intermet's 1988 purchase of Ironton, the previous stockholders of
Ironton approved a recapitalization of Ironton. Under the recapitalization, the
existing common stockholders each received an equivalent number of shares of
Ironton's newly issued Series A Cumulative Preferred Stock having a par value of
$200 per share and dividend rights of $10 per share per year with an aggregate
par value of $2,337,000. The preferred shares, by their terms, were to be
redeemed at par value from cumulative net income, if any, in four annual
installments beginning in 1993. Ironton has incurred a cumulative net loss of
$120.2 million since Intermet purchased it in 1988. Therefore, none of the
preferred shares have been redeemed and no dividends have been declared or paid.
Accrued but unpaid dividends on the preferred stock totaled $1,286,000 at
December 31, 1999.
Management believes that, when the plan for orderly shutdown is complete, it is
highly unlikely that there will be any assets available for distribution to its
preferred or common stockholders and Ironton does not contemplate any such
distributions. Therefore, the aggregate par value of the preferred stock, and
related accumulated dividends, common stock, additional paid-in capital and
accumulated deficit have all been eliminated in connection with the adoption of
the liquidation basis of accounting at December 31, 1999.
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ITEM 6. SELECTED FINANCIAL DATA
The selected net liabilities in liquidation and statement of operations data as
of and for the fiscal year ended December 31, 1999 set forth below are derived
from Ironton's audited financial statements. As discussed in Item 1. "BUSINESS"
Ironton has implemented a plan for orderly shutdown; therefore, prior year
financial data is not comparable or meaningful. This selected financial data
should be read in conjunction with Item 7. "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and the Consolidated Financial
Statements of Ironton Iron, Inc. and related notes included in this report,
beginning on page F - 1.
The following data is presented in thousands, except per share data:
<TABLE>
<CAPTION>
Ironton Iron, Inc.
Selected Financial Data
-----------------------
<S> <C>
Liquidation Data:
Total assets $16,594
Total liabilities 86,320
Net liabilities in liquidation 69,726
Statement of Operations Data:
Net sales $57,364
Loss from continuing operations (33,990)(b)
Loss from continuing operations per share (a) -
Cash dividends declared per common share -
</TABLE>
(a) On October 31, 1988 IFI became the sole shareholder of Ironton's common
stock. On March 31, 1996, IFI was merged into Intermet. This made
Intermet the sole shareholder of Ironton's common stock. Thus, common
share data is not presented because it is no longer meaningful.
(b) Includes $17,584 for shutdown costs and asset impairment.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of this report, excluding the financial statements
and related notes, 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 Ironton 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:
- - labor negotiations with Ironton's workforce
- - interest rate fluctuations
- - materials price fluctuations
- - factors affecting the ability of Ironton or its key suppliers to
resolve Year 2000 issues in a timely manner,
- - the ability of Ironton to liquidate its assets at the stated values,
- - the ability of Ironton to address and remediate any environmental
issues within the amounts that have been reserved,
- - the future costs that may be associated with the shutdown, including,
but not limited to, demolition of the buildings and other work that may
be required at Ironton's property, and
- - other risks detailed from time to time in Ironton's filings with the
Securities and Exchange Commission.
Ironton does not intend to update these forward-looking statements.
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Liquidity and Capital Resources
On December 7, 1999, Intermet announced plans to permanently close Ironton.
Ironton has had enduring labor and operational difficulties. As a result,
Ironton has incurred significant operating losses since Intermet purchased it in
1988. Because of the 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 Ironton foundry is one of Intermet's oldest facilities and the cost to
modernize would further impact already negative operating results. Management
expects that Ironton will cease operations by the end of the first quarter of
2000.
After the foundry is closed, the assets will be sold. Management also expects
that, at the earliest practical date after sale of assets, but most likely
during the fourth quarter of 2000, demolition of the building will begin.
Management anticipates that demolition would be complete in 2001. We expect that
any required remediation will take place beginning in 2000 or 2001. Ironton
believes that when the plan for orderly shutdown is complete and Ironton's
present and contingent liabilities are satisfied, it is highly unlikely that
there will be any assets available for distribution to its preferred or common
shareholders and Ironton does not anticipate any such distributions.
Assets and Liabilities following the Plan of Orderly Shutdown
As a result of the plan for orderly shutdown, Ironton adopted the liquidation
basis of accounting as of December 31, 1999. The liquidation basis of accounting
requires that assets and liabilities be stated at their estimated fair value.
Accordingly, the statement of net liabilities in liquidation reflects assets and
liabilities based on their estimated fair values and estimated settlement
amounts. Changes in the estimated liquidation value of assets and liabilities
subsequent to December 31, 1999 will be recognized in the period in which such
refinements are known. The statement of net liabilities in liquidation has been
presented on such basis to provide more relevant information. The statements of
operations and cash flows are presented on the going concern basis of
accounting. However, as a result of the plan for orderly shutdown, comparative
information and certain other disclosures are not meaningful and have not been
presented in the Management's Discussion and Analysis of Financial Condition and
Results of Operations and accompanying financial statements.
The decision to close the foundry was the principal reason for recording a
$9,795,000 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 $101,000 is included in cost of sales. The
impairment charge included a write-down of $9,795,000 to fair value for capital
assets (as determined by an independent consultant) and inventories; building
demolition and environmental 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. The land and machinery and
equipment used in the production of ferrous castings and related replacement
parts are segregated on the statement of net liabilities in liquidation as
assets held for sale.
Because Ironton adopted the liquidation basis of accounting, it recorded a
$4,700,000 liability at December 31, 1999 for estimated operating losses during
the liquidation period from January 1, 2000 through February 29, 2000. The
estimated operating losses include estimated severance costs for hourly
employees of approximately $1,000,000. The charge for operating losses was
recorded directly to the statement of deficiency. Estimated operating results
subsequent to February 29, 2000, including additional severance costs, if any,
have not been recorded in the 1999 financial statements as the amounts cannot be
accurately estimated at this time.
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As part of Intermet's 1988 purchase of Ironton, the previous stockholders of
Ironton approved a recapitalization of Ironton. Under the recapitalization, the
existing common stockholders each received an equivalent number of shares of
Ironton's newly issued Series A Cumulative Preferred Stock having a par value of
$200 per share and dividend rights of $10 per share per year with an aggregate
par value of $2,337,000. The preferred shares, by their terms, were to be
redeemed at par value from cumulative net income beginning with the fiscal
period ended December 31, 1988, if any, in four annual installments beginning in
1993. Ironton has incurred a cumulative net loss of $120.2 million since
Intermet purchased it in 1988. Therefore, none of the preferred shares have been
redeemed and no dividends have been paid. Accrued but unpaid dividends on the
preferred stock totaled $1,286,000 at December 31, 1999.
Management believes that when the plan for orderly shutdown is complete and
Ironton's present and contingent liabilities are satisfied, it is highly
unlikely that there will be any assets available for distribution to its
preferred or common shareholders and Ironton does not anticipate any such
distributions. Therefore, the value of the preferred stock, and related
accumulated dividends, common stock, additional paid-in capital and accumulated
deficit has been eliminated in connection with the adoption of the liquidation
basis of accounting.
Results of Operations for 1999
Sales in 1999 were $57.4 million. In an attempt to improve profitability,
Ironton moved the enhanced compacted graphite bedplate from the dry sand process
line to the SPO line in the first quarter of 1999. This business had provided
additional volume for Ironton during 1999. However, Ironton continued to operate
below breakeven levels due to less than optimal manufacturing and labor
performance. Because of Ironton's continuing operational difficulties, customers
representing a significant portion of Ironton's sales volumes moved their
business to alternative sources during the fourth quarter of 1999. Anticipation
that Ironton would lose the remaining volume, in addition to the enduring losses
experienced since inception, led Intermet's management to adopt the plan of
orderly shutdown as discussed previously.
Gross profit as a percentage of sales was a negative 25.1% in 1999. This was the
result of costs associated with the launch and production ramp-up of the
graphite bedplate during the first quarter of 1999, in addition to the ongoing
labor and operational difficulties experienced during the year.
Operating expenses as a percentage of sales was 33.0% for 1999. Without the
charges for the Ironton asset impairment and shutdown discussed previously, the
operating expenses as a percentage of sales would have been 2.5% for 1999.
Interest expense for the year ended December 31, 1999 was $685,000. This was the
interest charged by Intermet on specific working capital account balances.
Intermet files a consolidated federal income tax return that includes Ironton.
Ironton's income tax provision is calculated and reported as if Ironton filed a
separate federal income tax return. Ironton has incurred significant operating
losses since its inception and has reserved its net operating loss
carryforwards. As such, Ironton has zero tax benefit recorded for the year ended
December 31, 1999.
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Year 2000 Issue
Ironton's management, in conjunction with Intermet, conducted an evaluation of
its Informational Technology ("IT") and non-IT computer systems with respect to
the "Year 2000" issue. Ironton completed a Year 2000 readiness assessment of its
business critical IT and non-IT systems. Ironton developed and implemented
corrective action plans designed to address Year 2000 issues. These plans
included modification, upgrade and replacement of its critical administrative,
production, and research and development computer systems to make them Year 2000
ready. Ironton implemented corrective action plans, and had its critical systems
Year 2000 ready prior to December 31, 1999. Ironton also developed contingency
plans intended to avoid or mitigate the risks that either it might not or its
key suppliers might not achieve Year 2000 readiness in time to avoid disruption
of its operations.
Ironton's pro-rata portion of Intermet's costs for Year 2000 compliance was less
than $150,000.
To date, Ironton has not experienced any significant problems or disruptions due
to Year 2000 issues either internally or with its suppliers. Ironton does not
expect to experience any significant problems or disruptions related to Year
2000 problems, nor does it anticipate spending any additional significant
amounts related to these issues. Year 2000 issues are not expected to impact the
shutdown of operations. Actual results may differ materially.
Readers are cautioned that forward looking statements contained in this Year
2000 discussion should be read in conjunction with Ironton's 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Ironton is subject to market risk with regard to interest rate and commodity
pricing. Ironton has analyzed the effect of these risks on the statements of net
liabilities in liquidation, operations, deficiency and cash flows and it
anticipates that the impact will be immaterial.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and the report of independent auditors identified in
Item 14 (a) are included in this report beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
As of March 1, 2000, the directors and executive officers of Ironton, their
respective ages, positions, date of election and principal occupations were as
follows:
<TABLE>
<CAPTION>
Name (Age) Principal Position(s)
---------- ---------------------
<S> <C>
John Doddridge (59) President and Director
James F. Mason (58) Director
</TABLE>
Mr. Doddridge became president in July 1999 and a director of Ironton in March
1995. He also served as president of Ironton from March 1995 to January 1997.
Mr. Doddridge became chairman of the board and chief executive officer of
Intermet in 1994.
Mr. Mason became a director of Ironton in July 1999. 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.
Ms Doretha Christoph, who served as Ironton's Vice President, Secretary,
Treasurer and Director, resigned effective February 18, 2000.
There are no family relationships between or among any of the officers and
directors of Ironton.
The term of office for each director commences with his or her election and
continues until the next annual meeting of shareholders or until his or her
successor is elected and qualified.
ITEM 11. EXECUTIVE COMPENSATION
Ironton has paid no compensation or offered any benefits of any kind to its
executive officers or members of the Board of Directors since its acquisition by
Intermet Foundries, Inc. in 1988 (and subsequently by Intermet).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 1, 2000, none of the officers or directors of Ironton beneficially
owned any of Ironton's common stock, the only class of voting securities of
Ironton. As of that date, Intermet Corporation, 5445 Corporate Drive, Suite 200,
Troy, Michigan 48098-2683, owned 23,000 shares of Ironton's common stock (100%
of the class).
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See Note 5 to the Financial Statements, which is included in this report,
beginning on page F - 10.
11
<PAGE> 12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following financial statements of Ironton are incorporated by reference
into Item 8 of this Report:
- - Report of Independent Auditors
- - Statement of Net Liabilities in Liquidation at December 31, 1999
- - Statement of Operations for the year ended December 31, 1999
- - Statement of Deficiency for the year ended December 31, 1999
- - Statement of Cash Flows for the year ended December 31, 1999
- - Notes to Financial Statements
2. Financial Statement Schedules
The following financial statement schedules for Ironton are included in
Item 14(d):
- - Schedule II - Valuation and Qualifying Accounts
12
<PAGE> 13
3. Exhibits
The following exhibits are filed with this Report pursuant to Item 601 of
Regulation S-K:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
-------
<S> <C>
3.1 Articles of Incorporation of Ironton Iron, Inc., as
amended (included as Exhibit 3.1 and 4 to Ironton's Annual
Report on Form 10-K for the 1988 fiscal year, file no.
0-17028, previously filed with the Commission and
incorporated herein by reference).
3.2 Code of Regulations of Ironton Iron, Inc., as amended
(included as Exhibit 3.2 to Ironton's Annual Report on
Form 10-K for the 1988 fiscal year, file no. 0-17028,
previously filed with the Commission and incorporated
herein by reference).
4.1 Master Note and Continuing Guaranty, dated September 29,
1997, by and among Intermet Corporation, Lynchburg Foundry
Company, Ironton Iron, Inc., Northern Castings
Corporation, Intermet International, Inc., New River
Castings Company and Bank of America National Trust and
Savings Association and other subsidiaries or affiliates
of BankAmerica Corporation (included as Exhibit 4.3 to
Ironton's Annual Report on Form 10-K for the 1997 fiscal
year, file no. 0-17028, previously filed with the
Commission and incorporated herein by reference).
4.2 Third Amended and Restated Credit Agreement, dated
November 14, 1996, by and among Intermet Corporation,
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
herein by reference).
4.3 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 herein by reference).
4.4 Master Assignment and Acceptance Agreement dated December
9, 1996, by and among Intermet Corporation 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 herein by reference).
4.5 Amended and Restated Note Agreement, dated 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 herein by reference).
4.6 (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 (included as Exhibit 4.14 (a) to
Intermet's Form 10-K for the year ended December 31, 1999,
File No. 0-13787, previously filed with the Commission and
incorporated herein by reference).
4.6 (b) Contents of Omitted Exhibits and Schedules to the
$300,000,000 Five-Year Credit Agreement (included as
Exhibit 4.14 (b) to Intermet's Form 10-K for the year
ended December 31, 1999, File No. 0-13787, previously
filed with the Commission and incorporated herein by
reference).
4.6 (c) Guaranty agreement for the $300,000,000 Five-Year
Credit Agreement, dated November 5, 1999, by and among
Intermet Corporation, Ironton Iron, Inc., other
subsidiaries of Intermet named therein, The Bank of Nova
Scotia as lender and administrative agent, and the various
lenders named therein.
</TABLE>
13
<PAGE> 14
<TABLE>
<S> <C>
4.7 (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 (included as Exhibit 4.15 (a) to Intermet's
Form 10-K for the year ended December 31, 1999, File No.
0-13787, previously filed with the Commission and
incorporated herein by reference).
4.7 (b) Contents of Omitted Exhibits and Schedules to the
$100,000,000 364-Day Credit Agreement (included as Exhibit
4.15 (b) to Intermet's Form 10-K for the year ended
December 31, 1999, File No. 0-13787, previously filed with
the Commission and incorporated herein by reference).
4.7 (c) Guaranty agreement for the $100,000,000 364-Day Credit
Agreement, dated November 5, 1999, by and among Intermet
Corporation, Ironton, Iron, Inc., other subsidiaries of
Intermet named therein, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named
therein.
4.8 (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 (included as Exhibit 4.16 (a) to Intermet's
Form 10-K for the year ended December 31, 1999, File No.
0-13787, previously filed with the Commission and
incorporated herein by reference).
4.8 (b) Contents of Omitted Exhibits and Schedules to the
$200,000,000 Term Loan Agreement (included as Exhibit 4.16
(b) to Intermet's Form 10-K for the year ended December
31, 1999, File No. 0-13787, previously filed with the
Commission and incorporated herein by reference).
4.8 (c) Guaranty agreement for the $200,000,000 Term Loan
Agreement, dated December 20, 1999, by and among Intermet
Corporation, Ironton Iron, Inc., other subsidiaries of
Intermet named therein, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named
therein.
10.1 Ironton Iron, Inc. Retirement Plan, as amended (included
as Exhibit 10.1 to Ironton's Annual Report on Form 10-K
for the 1988 fiscal year, file no. 0-17028, previously
filed with the Commission and incorporated herein by
reference).
18 Preferability Letter for a Change in Accounting for Spare
Parts Used in Equipment (included as exhibit 18 to
Ironton's Form 10-Q for the quarter ended March 31, 1998,
File No. 0-17028, previously filed with the Commission and
incorporated herein by reference).
24 Power of Attorney is included on the signature pages of
this Report.
27 Financial Data Schedule
</TABLE>
(b) Ironton did not file any reports on Form 8-K for the fourth quarter of 1999.
(c) Ironton has filed as exhibits to this report those exhibits required by Item
601 of Regulation S-K.
(d) Ironton has filed as financial statement schedules to this report those
financial statement schedules required by Regulation S-X, which are
excluded from Ironton's financial statements by Rule 14a-3(b).
- Schedule II - Valuation and Qualifying Accounts
The schedules not filed are omitted because the information required to be
contained in them is disclosed elsewhere in the Financial Statements or the
amounts involved are not sufficient to require submission.
14
<PAGE> 15
Ironton Iron, Inc.
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
- ----------- ------ -------- -------- ---------- ------
(in thousands of dollars)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1999:
Allowance for returns and doubtful accounts $412 $65(b) $ - $477(a) $-
Inventory reserve 80 - - 80(a) -
Deferred tax asset valuation allowance 29,224 11,903(c) - 41,127(a) -
</TABLE>
(a) Effect of adopting the liquidation basis of accounting.
(b) Net effect of amounts charged to expense less actual returns and write-offs.
(c) Increase in certain deferred tax assets due to operating loss carryforwards.
15
<PAGE> 16
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors F-1
Statement of Net Liabilities in Liquidation at December 31, 1999 F-2
Statement of Operations for the year ended December 31, 1999 F-3
Statement of Deficiency for the year ended December 31, 1999 F-4
Statement of Cash Flows for the year ended December 31, 1999 F-5
Notes to Financial Statements F-6
</TABLE>
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Ironton Iron, Inc.
By: /s/ John Doddridge
-----------------------
John Doddridge
President and Director
Date: March 30, 2000
Power of Attorney and Signatures
Know all men by these presents, that each person whose signature appears below
constitutes and appoints John Doddridge and James F. Mason, or either of them,
as attorney-in-fact, each with power of substitution, for such person in any and
all capacities, to sign any amendments to this Report on Form 10-K, and to file
the same, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below, as of March 30, 2000, by the following persons on behalf
of the Company in the capacities indicated.
Signature Capacity
--------- --------
/s/ John Doddridge President and Director (Principal
----------------------------- Executive Officer, Principal
John Doddridge Financial Officer and Principal
Accounting Officer)
/s/ James F. Mason
----------------------------- Director
James F. Mason
<PAGE> 18
Report of Independent Auditors
The Board of Directors and Shareholders
Ironton Iron, Inc.
We have audited the accompanying statement of net liabilities in liquidation of
Ironton Iron, Inc. (a subsidiary of Intermet Corporation) as of December 31,
1999 and the statements of operations, deficiency, and cash flows for the year
then ended. Our audit also included the financial statement schedule listed in
the index at Item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audit.
We conducted our audit 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 audit provides a reasonable basis for our
opinion.
As described in Note 1 to the financial statements, the Board of Directors of
Intermet Corporation authorized the closure of the Company and on December 7,
1999, Intermet's management announced its plan for the orderly shutdown of the
Company. Accordingly, the Company adopted the liquidation basis of accounting
effective December 31, 1999 and the statement of net liabilities in liquidity is
presented on that basis. The Company's statements of operations, deficiency and
cash flows for the year ended December 31, 1999 have been presented using
accounting principles applicable to a going concern.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net liabilities in liquidation of Ironton Iron, Inc.
as of December 31, 1999 and the results of its operations and its cash flows for
the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States, applied on the basis described in the
preceding paragraph. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, present fairly, in all material respects, the information set forth
therein.
/s/ Ernst & Young LLP
Detroit, Michigan
March 24, 2000
F - 1
<PAGE> 19
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
STATEMENT OF NET LIABILITIES IN LIQUIDATION
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
ASSETS DECEMBER 31,
1999
----------------
<S> <C>
Cash $ 16
Accounts receivable 6,654
Inventories 1,831
Assets held for sale 8,093
----------------
Total assets 16,594
----------------
LIABILITIES
Accounts payable 2,699
Accrued liabilities 2,310
Shutdown costs 7,789
Accrued net operating losses 4,700
Due to affiliates 68,822
----------------
Total liabilities 86,320
----------------
Net liabilities in liquidation $ (69,726)
================
</TABLE>
See accompanying notes.
F - 2
<PAGE> 20
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
STATEMENT OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
----------------
<S> <C>
Net sales $ 57,364
Cost of sales 71,757
----------------
Gross profit (14,393)
Operating expenses:
Corporate charges from parent (1,429)
Asset impairment and shutdown costs (17,483)
----------------
Operating loss (33,305)
Interest expense (685)
----------------
Loss before income taxes (33,990)
Provision for income taxes -
----------------
Net loss $(33,990)
================
</TABLE>
See accompanying notes.
F - 3
<PAGE> 21
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
STATEMENT OF DEFICIENCY
(IN THOUSANDS OF DOLLARS, except per share data)
<TABLE>
<CAPTION>
ADDITIONAL NET LIABILITIES
COMMON PAID-IN ACCUMULATED IN
STOCK CAPITAL DEFICIT LIQUIDATION
------------ -------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Balance at January 1, 1999 $ 2,000 $ 49,523 $ (86,057)
Accrued dividends on redeemable
preferred stock ($10 per share) (117)
Net loss (33,990)
------------ -------------- ----------------- ------------------
Balance at December 31, 1999 prior to
adoption of liquidation basis of
accounting 2,000 49,523 (120,164)
Adoption of liquidation basis of
accounting:
Close capital accounts (2,000) (49,523) 120,164 $ 68,641
Adjust net liabilities in
liquidation to fair value 1,085
============ ============== ================= ==================
Net liabilities in liquidation at
December 31, 1999 $ - $ - $ - $ 69,726
============ ============== ================= ==================
</TABLE>
See accompanying notes.
F - 4
<PAGE> 22
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
STATEMENT OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
----------------
<S> <C>
OPERATING ACTIVITIES
Net loss $(33,990)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 2,782
Impairment of assets 9,795
Changes in operating assets and liabilities:
Accounts receivable 1,664
Inventories (1,550)
Other assets 117
Accounts payable (1,321)
Accrued liabilities 555
Shutdown costs 7,789
----------------
Net cash used in operating activities (14,159)
INVESTING ACTIVITIES
Additions to property, plant and equipment (2,082)
----------------
Net cash used in investing activities (2,082)
FINANCING ACTIVITIES
Increase in due to affiliates 16,244
----------------
Net cash provided by financing activities 16,244
----------------
Net decrease in cash and cash equivalents 3
Cash and cash equivalents at beginning of year 13
----------------
Cash and cash equivalents at end of year $ 16
================
</TABLE>
See accompanying notes.
F - 5
<PAGE> 23
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Background and Summary of Significant Developments
Ironton Iron, Inc. ("Ironton") is engaged in the production and sale of ductile
iron castings, primarily for the automotive industry. Ironton is a subsidiary of
Intermet Corporation ("Intermet"). Transactions between Ironton and Intermet are
described in Note 5.
Ironton is a single operating unit with essentially one production process.
Virtually all sales are made to one geographic area (United States). Thus,
Ironton has only one reportable segment. Ironton has no items of other
comprehensive income. Thus, the comprehensive loss for the year ended December
31, 1999 is the same as the loss reported in the statement of operations.
Ironton has had enduring labor and operational difficulties. As a result,
Ironton has incurred significant operating losses since it was acquired by
Intermet in 1988. Because of the 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 Ironton foundry is one of Intermet's oldest facilities and the cost to
modernize would further impact already negative operating results. During the
fourth quarter of 1999, Intermet's board of directors authorized the closure of
Ironton. On December 7, 1999, Intermet announced its plan for the orderly
shutdown of Ironton. Management expects that Ironton will cease operations by
the end of the first quarter of 2000.
After the foundry is closed, the assets will be sold. Management also expects at
the earliest practical date after sale of assets, but most likely during the
fourth quarter of 2000, demolition of the building will begin. Management
anticipates that demolition would be complete in 2001. We expect that any
required remediation will take place beginning in 2000 or 2001.
As a result of the board of directors authorizing the closure and Intermet's
announcement of the plan for orderly shutdown, Ironton adopted the liquidation
basis of accounting as of December 31, 1999. The liquidation basis of accounting
requires that assets and liabilities be stated at their estimated fair value.
Accordingly, the statement of net liabilities in liquidation reflects assets and
liabilities based on their estimated fair values and estimated settlement
amounts. Changes in the estimated liquidation value of assets and liabilities
subsequent to December 31, 1999 will be recognized in the period in which such
changes are known. The statement of net liabilities in liquidation has been
presented on such basis to provide more relevant information. The statements of
operations and cash flows are presented on the going concern basis of
accounting. However, as a result of the adoption of the plan for orderly
shutdown, comparative information and certain other disclosures are not
meaningful and have not been presented in the accompanying financial statements.
F - 6
<PAGE> 24
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The decision to close Ironton is the reason for recording a $9,795,000 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 sales. The impairment
charge includes a write-down of $9,795,000 to fair value for capital assets (as
determined by an independent 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. The land and machinery and equipment used in the
production of ferrous castings and related replacement parts are segregated in
the statement of net liabilities in liquidation as net assets held for sale.
Because Ironton adopted the liquidation basis of accounting, it recorded a
$4,700,000 liability at December 31, 1999 for estimated operating losses during
the liquidation period from January 1, 2000 through February 29, 2000. The
estimated operating losses include estimated severance costs for hourly
employees of approximately $1,000,000. The charge for operating losses was
recorded directly to the statement of deficiency. Estimated operating results
subsequent to February 29, 2000, including additional severance costs, if any,
have not been recorded in the 1999 financial statements as the amounts cannot be
accurately estimated at this time.
As part of Intermet's 1988 purchase of Ironton, the previous stockholders of
Ironton approved a recapitalization of Ironton. Under the recapitalization, the
existing common stockholders each received an equivalent number of shares of
Ironton's newly issued Series A Cumulative Preferred Stock having a par value of
$200 per share and dividend rights of $10 per share per year with an aggregate
par value of $2,337,000. The preferred shares, by their terms, were to be
redeemed at par value from cumulative net income, if any, in four annual
installments beginning in 1993. Ironton has incurred a cumulative net loss of
$120.2 million since Intermet purchased it in 1988. Therefore, none of the
preferred shares have been redeemed and no dividends have been declared or paid.
Accrued but unpaid dividends on the preferred stock totaled $1,286,000 at
December 31, 1999.
Management believes that, when the plan for orderly shutdown is complete, it is
highly unlikely that there will be any assets available for distribution to its
preferred or common stockholders and Ironton does not contemplate any such
distributions. Therefore, the aggregate par value of the preferred stock, and
related accumulated dividends, common stock, additional paid-in capital and
accumulated deficit have all been eliminated in connection with the adoption of
the liquidation basis of accounting.
F - 7
<PAGE> 25
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles under the liquidation basis of accounting requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Ironton has made significant
estimates relative to the valuation of all its assets and liabilities,
including, among others, the estimate for shutdown and net operating losses.
Such estimates have been developed pursuant to the provisions of the plan for
orderly shutdown. Actual results may differ from amounts estimated.
Revenue Recognition
Ironton recognizes revenue upon shipment of products.
Loss Per Common Share
Intermet is the sole common shareholder of Ironton's common stock. As a result,
loss per share data is not presented since it is not meaningful.
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 statement of cash flows.
2. INVENTORIES
Inventories are stated at fair market value in accordance with the liquidation
basis of accounting.
Inventories consist of the following (in thousands of dollars) at December 31,
1999:
<TABLE>
<S> <C>
Finished goods $ 290
Work in process 287
Raw materials 621
Supplies 633
------------
Totals $ 1,831
============
</TABLE>
F - 8
<PAGE> 26
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
3. RETIREMENT PLANS AND BENEFITS
Intermet has an Employee Stock Ownership Plan ("the ESOP") for certain of its
United States employees who are not covered by collective bargaining agreements,
including employees of Ironton. The ESOP requires contributions equal to 3% of
the annual compensation of the plan participants. Intermet may, at its
discretion, make additional contributions within specified limits. Intermet also
has a defined contribution plan for domestic salaried employees, including
employees of Ironton. Intermet and its subsidiaries make contributions equal to
2% of the annual compensation of participants. Participants are also allowed to
make contributions to the defined contribution plan, on a pre-tax basis, up to
15% of their annual compensation. Intermet and its subsidiaries match 50% of
participant's contributions, up to a specified limit. Ironton accrued
contributions to the two plans of $130,000 in 1999.
Ironton also had a defined contribution plan for hourly employees. Contributions
to the plan were based on hours worked by each employee and totaled $228,000 in
1999. The plan also allowed employees to make contributions, on a pre-tax basis,
up to 15% of their compensation.
Intermet provides health care and life insurance benefits to certain retired
salaried employees and their dependents, including employees of Ironton. Costs
for these benefits are incurred by Intermet and are not allocated back to
Ironton. Certain salaried employees can become eligible for retiree health care
benefits at age 55 depending on years of service. Retirees receive substantially
the same benefits as active employees. The medical plan generally pays 80% of
most medical expenses, less deductible amounts, with employees contributing to
the cost of dependent coverage. Coverage converts to a Medicare supplement at
age 65.
4. INCOME TAXES
Intermet files a consolidated federal income tax return that includes Ironton.
Ironton's income tax provisions are calculated and reported as if Ironton filed
a separate federal income tax return.
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>
<S> <C>
Provision for income taxes at U.S. statutory
rate ($11,896)
Change in deferred valuation allowance 11,903
Other (7)
------------------
Total $ -
==================
</TABLE>
F - 9
<PAGE> 27
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
4. INCOME TAXES (CONTINUED)
The tax effects of the types of temporary differences and loss carryforwards
that give rise to deferred tax assets at December 31, 1999 (in thousands of
dollars):
<TABLE>
<S> <C>
Current assets $ 982
Current liabilities (982)
-------------
Total $ -
=============
</TABLE>
5. RELATED PARTY TRANSACTIONS
Intermet incurs various selling, general and administrative costs principally
related to salaries, professional services, aircraft and occupancy, which are
allocated to each of its subsidiaries, including Ironton. Amounts charged to
each subsidiary by Intermet are a function of the subsidiary's sales and total
assets. Intermet and Ironton believe the resulting allocation to be reasonable.
Intermet and its subsidiaries, including Ironton, are jointly and severally
liable for any borrowings under the agreements described below:
Intermet signed a five-year $300 million unsecured revolving credit
agreement with a bank group on November 5, 1999. This agreement replaced
the $200 million unsecured revolving credit facility, which was to expire
January 1, 2000. At the same time, Intermet 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. The revolving credit
agreements provide Intermet with several interest rate-pricing mechanisms
based on LIBOR. Intermet must also pay a fee, at rates ranging from 0.15%
to 0.375% per annum, on any unused portion of the revolving credit
agreements. These revolving credit agreements require Intermet to maintain
specified financial ratios and impose limitations on certain activities.
Intermet's outstanding balance at December 31, 1999 on the revolving credit
agreement was $193,500,000.
Intermet has $15,000,000 outstanding under an unsecured term loan agreement
with The Prudential Insurance Company of America. The note 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 Intermet to
maintain certain financial ratios and imposes limitations on certain
activities.
In December, Intermet borrowed an additional $200 million in the form of an
eighteen-month unsecured term loan with a bank group. 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 Intermet to maintain financial ratios and impose limitations
on specified activities. The balance outstanding at December 31, 1999 was
$200,000,000.
F - 10
<PAGE> 28
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
5. RELATED PARTY TRANSACTIONS (CONTINUED)
Until November 1999, Intermet maintained various uncommitted bank lines of
credit which were payable on demand. As a result of the new revolving
credit agreement dated November 5, 1999, Intermet extinguished the
uncommitted bank lines of credit.
Intermet loans money to, or invests the excess cash of, each of its subsidiaries
including Ironton. Amounts depend on the cash requirements of each subsidiary.
At December 31, 1999 outstanding loans from Intermet to Ironton were $68.8
million in the aggregate. Interest charged by Intermet to each of its
subsidiaries is calculated monthly based on specific working capital account
balances. Interest expense charged by Intermet to Ironton totaled $685,000 in
1999, which Ironton has not paid as of December 31, 1999.
6. MAJOR CUSTOMERS
Net sales to customers exceeding 10% of total net sales for the year ended
December 31, 1999 were as follows (as a percentage of total net sales):
<TABLE>
<S> <C>
Dana 41%
General Products Delaware Corporation 30%
DaimlerChrysler 13%
</TABLE>
Sales to General Products Delaware Corporation are under the terms of a purchase
order issued by Ford. Intermet, through a subsidiary purchased in December 1996,
owned a 35% interest in General Products. Intermet sold its 35% interest in
General Products on March 7, 2000.
7. COMMITMENTS AND CONTINGENCIES
Legal
Ironton is engaged in various other legal proceedings and other matters
incidental to its normal business activities. Ironton does not believe any of
these matters will have a material adverse effect on its net liabilities in
liquidation or results of its operations or cash flows, or that any of these
matters affect Ironton's determination to proceed with the plan for orderly
shutdown of operations and liquidation of assets.
F - 11
<PAGE> 29
IRONTON IRON, INC.
(IN PROCESS OF ORDERLY SHUTDOWN)
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Environmental
In May 1999 Ironton voluntarily notified the Ohio EPA of a breakdown in certain
pollution control equipment at its foundry. However, due to an oversight,
Ironton's notification was not timely under the applicable rules and
regulations. The equipment was subsequently repaired and is operational. On June
2, 1999 a Notice of Violation was issued with respect to this matter and it is
possible that the Ohio EPA may pursue fines or penalties. Ironton does not
believe this matter will have a material adverse affect on its net liabilities
in liquidation or results of its operations or cash flows, or that will affect
Ironton's determination to proceed with the plan for orderly shutdown of
operations and liquidation of assets.
As part of the orderly shutdown, Ironton has accrued $3.7 million for
environmental remediation. Ironton believes that it has adequately projected any
future expenditures in connection with environmental matters and does not
believe that the disposition of any of these matters will have a material
adverse effect on its net liabilities in liquidation, nor will any such
expenditures affect Ironton's determination to proceed with the plan for orderly
shutdown of operations and liquidation of assets.
F - 12
<PAGE> 30
Exhibits Index
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------
<S> <C>
3.1 Articles of Incorporation of Ironton Iron, Inc., as
amended (included as Exhibit 3.1 and 4 to Ironton's Annual
Report on Form 10-K for the 1988 fiscal year, file no.
0-17028, previously filed with the Commission and
incorporated herein by reference).
3.2 Code of Regulations of Ironton Iron, Inc., as amended
(included as Exhibit 3.2 to Ironton's Annual Report on
Form 10-K for the 1988 fiscal year, file no. 0-17028,
previously filed with the Commission and incorporated
herein by reference).
4.1 Master Note and Continuing Guaranty, dated September 29,
1997, by and among Intermet Corporation, Lynchburg Foundry
Company, Ironton Iron, Inc., Northern Castings
Corporation, Intermet International, Inc., New River
Castings Company and Bank of America National Trust and
Savings Association and other subsidiaries or affiliates
of BankAmerica Corporation (included as Exhibit 4.3 to
Ironton's Annual Report on Form 10-K for the 1997 fiscal
year, file no. 0-17028, previously filed with the
Commission and incorporated herein by reference).
4.2 Third Amended and Restated Credit Agreement, dated
November 14, 1996, by and among Intermet Corporation,
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
herein by reference).
4.3 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 herein by reference).
4.4 Master Assignment and Acceptance Agreement dated December
9, 1996, by and among Intermet Corporation 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 herein by reference).
4.5 Amended and Restated Note Agreement, dated 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 herein by reference).
4.6 (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 (included as Exhibit 4.14 (a) to
Intermet's Form 10-K for the year ended December 31, 1999,
File No. 0-13787, previously filed with the Commission and
incorporated herein by reference).
4.6 (b) Contents of Omitted Exhibits and Schedules to the
$300,000,000 Five-Year Credit Agreement (included as
Exhibit 4.14 (b) to Intermet's Form 10-K for the year
ended December 31, 1999, File No. 0-13787, previously
filed with the Commission and incorporated herein by
reference).
</TABLE>
<PAGE> 31
<TABLE>
<S> <C>
4.6 (c) Guaranty agreement for the $300,000,000 Five-Year
Credit Agreement, dated November 5, 1999, by and among
Intermet Corporation, Ironton Iron, Inc., other
subsidiaries of Intermet named therein, The Bank of Nova
Scotia as lender and administrative agent, and the various
lenders named therein.
4.7 (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 (included as Exhibit 4.15 (a) to Intermet's
Form 10-K for the year ended December 31, 1999, File No.
0-13787, previously filed with the Commission and
incorporated herein by reference).
4.7 (b) Contents of Omitted Exhibits and Schedules to the
$100,000,000 364-Day Credit Agreement (included as Exhibit
4.15 (b) to Intermet's Form 10-K for the year ended
December 31, 1999, File No. 0-13787, previously filed with
the Commission and incorporated herein by reference).
4.7 (c) Guaranty agreement for the $100,000,000 364-Day Credit
Agreement, dated November 5, 1999, by and among Intermet
Corporation, Ironton, Iron, Inc., other subsidiaries of
Intermet named therein, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named
therein.
4.8 (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 (included as Exhibit 4.16 (a) to Intermet's
Form 10-K for the year ended December 31, 1999, File No.
0-13787, previously filed with the Commission and
incorporated herein by reference).
4.8 (b) Contents of Omitted Exhibits and Schedules to the
$200,000,000 Term Loan Agreement (included as Exhibit 4.16
(b) to Intermet's Form 10-K for the year ended December
31, 1999, File No. 0-13787, previously filed with the
Commission and incorporated herein by reference).
4.8 (c) Guaranty agreement for the $200,000,000 Term Loan
Agreement, dated December 20, 1999, by and among Intermet
Corporation, Ironton Iron, Inc., other subsidiaries of
Intermet named therein, The Bank of Nova Scotia as lender
and administrative agent, and the various lenders named
therein.
10.1 Ironton Iron, Inc. Retirement Plan, as amended (included
as Exhibit 10.1 to Ironton's Annual Report on Form 10-K
for the 1988 fiscal year, file no. 0-17028, previously
filed with the Commission and incorporated herein by
reference).
18 Preferability Letter for a Change in Accounting for Spare
Parts Used in Equipment (included as exhibit 18 to
Ironton's Form 10-Q for the quarter ended March 31, 1998,
File No. 0-17028, previously filed with the Commission and
incorporated herein by reference).
24 Power of Attorney is included on the signature pages of
this Report.
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 4.6 (C)
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty"), dated as of November 5, 1999,
is made by LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing under
the laws of the Commonwealth of Virginia, IRONTON IRON, INC., a corporation
organized and existing under the laws of the State of Ohio, NORTHERN CASTINGS
CORPORATION, a corporation organized and existing under the laws of the State of
Georgia, INTERMET INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Georgia, ALEXANDER CITY CASTINGS COMPANY, INC., a
corporation organized and existing under the laws of the State of Alabama, SUDM,
INC., a corporation organized and existing under the laws of the State of
Michigan, SUDBURY, INC., a corporation organized and existing under the laws of
the State of Delaware, COLUMBUS FOUNDRY, L.P., a limited partnership organized
and existing under the laws of the State of Delaware, TOOL PRODUCTS, INC., a
corporation organized and existing under the laws of the State of Delaware, IOWA
MOLD TOOLING CO., INC., a corporation organized and existing under the laws of
the State of Iowa, CASTMATIC CORPORATION, a corporation organized and existing
under the laws of the State of Michigan, FRISBY P.M.C., INCORPORATED, a
corporation organized and existing under the laws of the State of Illinois,
WAGNER CASTINGS COMPANY, a corporation organized and existing under the laws of
the State of Delaware, and WAGNER HAVANA, INC., a corporation organized and
existing under the laws of the State of Delaware, and the other subsidiaries of
Intermet that execute and deliver a supplement hereto from time to time (the
foregoing Persons individually a "Guarantor" and collectively the "Guarantors"),
in favor of THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through
its Atlanta Agency (in such capacity, the "Administrative Agent"), in its
capacity as administrative agent for the banks and other lending institutions
parties to the Credit Agreement (as hereinafter defined) and each assignee
thereof becoming a "Lender" as provided therein (the "Lenders"; the Lenders and
the Administrative Agent being collectively referred to herein as the
"Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent and
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;
WHEREAS, Intermet, the Lenders, the Administrative Agent, Bank One,
Michigan, as Syndication Agent, (the "Syndication Agent"), and SunTrust Bank,
Atlanta, as Documentation Agent (the "Documentation Agent") have entered into
that certain Five-Year Credit Agreement dated as of November 5, 1999 (as the
same may hereafter be amended, restated, supplemented or otherwise modified from
time to time, and including all schedules, riders, and supplements thereto, the
"Credit Agreement"; terms defined therein and not otherwise defined herein being
used herein as therein defined);
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<PAGE> 2
WHEREAS, Intermet owns, directly or indirectly, all or a majority of
the outstanding capital stock of each of the Guarantors;
WHEREAS, Intermet and Guarantors share an identity of interest as
members of a consolidated group of companies engaged in substantially similar
businesses with Intermet providing certain centralized financial, accounting
and/or management services to each of the Guarantors;
WHEREAS, consummation of the transactions pursuant to the Credit
Agreement will enhance the overall financial strength and stability of
Intermet's entire corporate group, including the Guarantors;
WHEREAS, it is a condition precedent to the Lenders' obligations to
enter into the Credit Agreement and to make extensions of credit thereunder that
Guarantors execute and deliver this Guaranty, and Guarantors desire to execute
and deliver this Guaranty to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Guaranteed Parties to enter into and perform their obligations under the
Credit Agreement, the Guarantors hereby jointly and severally agree as follows:
SECTION 1. GUARANTY. The Guarantors hereby jointly and severally,
irrevocably and unconditionally, guarantee the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Loans and all
other Obligations owing by Intermet to the Lenders or the Administrative Agent,
or any of them, under the Credit Agreement, the Notes and the other Credit
Documents, including, without limitation, all renewals, extensions,
modifications and refinancings thereof, now or hereafter owing, whether for
principal, interest, fees, expenses or otherwise, and any and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees actually incurred)
and expenses incurred by the Administrative Agent in enforcing any rights under
this Guaranty and the Letter of Credit Obligations (collectively, the
"Guaranteed Obligations"), including without limitation, all interest which, but
for the filing of a petition in bankruptcy with respect to Intermet, would
accrue on any principal portion of the Guaranteed Obligations. Any and all
payments by the Guarantors hereunder shall be made free and clear of and without
deduction for any set-off, counterclaim, or withholding so that, in each case,
each Guaranteed Party will receive, after giving effect to any Taxes (as such
term is defined in the Credit Agreement, but excluding Taxes imposed on overall
net income of the Guaranteed Party to the same extent as excluded pursuant to
the Credit Agreement), the full amount that it would otherwise be entitled to
receive with respect to the Guaranteed Obligations (but without duplication of
amounts for Taxes already included in the Guaranteed Obligations). The
Guarantors acknowledge and agree that this is a guarantee of payment when due,
and not of collection, and that this Guaranty may be enforced up to the full
amount of the Guaranteed Obligations without proceeding against Intermet,
against any security for the Guaranteed Obligations, against any other Guarantor
or under any other guaranty covering any portion of the Guaranteed Obligations.
2
<PAGE> 3
SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Guaranteed Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of,
or addition, consent or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Credit Agreement, the
other Credit Documents, or any other documents, instruments or
agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(b) any lack of validity or enforceability of the Credit
Agreement, the other Credit Documents, or any other document,
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release
or surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party
with respect to the Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of any other
liability of Intermet;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Guarantor or Intermet, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of, consent to, or departure
from, any guaranty or security for all or any of the Guaranteed
Obligations;
(g) any application of sums paid by Intermet or any other
Person with respect to the Obligations of Intermet to the Guaranteed
Parties, regardless of what Obligations of Intermet remain unpaid;
3
<PAGE> 4
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any, against
Intermet to recover payments made under this Guaranty; and
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including Intermet or a trustee in bankruptcy for Intermet),
then and in such event the Guarantors agree that any such judgment, decree,
order, settlement or compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Credit Agreement, the other Credit
Documents, or any other instrument evidencing any liability of Intermet, and the
Guarantors shall be and remain liable to the Guaranteed Party for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to the Guaranteed Party.
SECTION 3. WAIVER. The Guarantors hereby waive notice of acceptance of
this Guaranty, notice of any Obligations to which it may apply, and further
waive presentment, demand of payment, protest, notice of dishonor or nonpayment
of any such Obligations, suit or taking of other action by the Guaranteed
Parties against, and any other notice to, Intermet or any other party liable
with respect to the Guaranteed Obligations (including the Guarantors or any
other Person executing a guaranty of the obligations of Intermet).
SECTION 4. WAIVER OF SUBROGATION; CONTRIBUTION. No Guarantor will
exercise any rights against Intermet which it may acquire by way of subrogation
or contribution, by any payment made hereunder or otherwise and each of the
Guarantors hereby expressly waives any claim, right or remedy which the
Guarantors may now have or hereafter acquire against Intermet that arises
hereunder and/or from the performance by the Guarantors hereunder, including,
without limitation, any claim, right or remedy of any Guaranteed Party against
Intermet or any security which any Guaranteed Party now has or hereafter
acquires, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under color of law or otherwise unless and until the
Guaranteed Obligations have been indefeasibly paid in full.
In the event that any Guarantor (the "Funding Guarantor") shall make
any payment or payments under this Guaranty or shall suffer any loss as a result
of any realization upon any collateral granted by it to secure its obligations
hereunder, each other Guarantor (each, a "Contributing Guarantor") hereby agrees
to contribute to the Funding Guarantor an amount equal to such Contributing
Guarantor's pro rata share of such payment or payments made, or losses suffered,
by such Funding Guarantor determined by reference to the ratio of (a) the
4
<PAGE> 5
dollar amount of the percentage of each such Contributing Guarantor's Net Assets
(without giving effect to any right to receive any contribution or subrogation
or obligation to make any contribution hereunder), to (b) the sum of the Net
Assets of all Guarantors (including the Funding Guarantor) hereunder (without
giving effect to any right to receive contribution or subrogation hereunder or
any obligation to make any contribution hereunder); provided, that the
Contributing Guarantor shall not be obligated to make any such payment to the
Funding Guarantor if the Contributing Guarantor is not solvent at the time of
such contribution or if the Contributing Guarantor would be rendered not solvent
as a result thereof. Nothing in this Section shall affect each Guarantor's
several liability for the entire amount of the Guaranteed Obligations, subject
only to the limitations set forth in Section 15. For the purposes of this
Section 4, (x) the "Net Assets" of any Guarantor shall mean the highest amount,
as of any Determination Date, by which (A) the aggregate present fair saleable
value of the assets of such Guarantor exceeds (B) the amount of all the debts
and liabilities of such Guarantor (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder), and (y) "Determination Date" shall mean each of (1) the Closing
Date, (2) the date of commencement of a case under the Bankruptcy Code in which
a Guarantor is a debtor, and (3) the date enforcement hereunder is sought with
respect to such Guarantor. Each Funding Guarantor covenants and agrees that its
right to receive any contribution from any Contributing Guarantor hereunder
shall be subordinated and junior in right of payment in full of all of the
Guaranteed Obligations.
SECTION 5. SEVERABILITY. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by a Guarantor therefrom shall in any
event be effective unless the same shall be in writing executed by the
Administrative Agent.
SECTION 7. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner specified in the Credit Agreement (i) in
the case of the Administrative Agent, at the address specified for the
Administrative Agent in the Credit Agreement, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in this
Guaranty.
SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the
Administrative Agent or other Guaranteed Parties to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No notice to or demand on
any Guarantor in any case shall entitle such Guarantor to any other further
notice or demand in any similar or other circumstances or constitute a waiver of
the rights of the Administrative Agent or other Guaranteed Parties to any other
or further
5
<PAGE> 6
action in any circumstances without notice or demand. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9. RIGHT OF SET OFF. In addition to and not in limitation of
all rights of offset that the Administrative Agent or other Guaranteed Parties
may have under applicable law, the Administrative Agent and the other Guaranteed
Parties shall, upon the occurrence of any Event of Default and whether or not
the Administrative Agent or other Guaranteed Parties have made any demand or the
Guaranteed Obligations are matured, have the right to appropriate and apply to
the payment of the Guaranteed Obligations, all deposits of any Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property, then or thereafter owing by the
Administrative Agent or other Guaranteed Parties to any Guarantor, whether or
not related to this Guaranty or any transaction hereunder. The Guaranteed
Parties shall promptly notify the relevant Guarantor of any offset hereunder.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This Guaranty
is a continuing guaranty and shall (i) remain in full force and effect until
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the termination of the Commitments, (ii) be binding upon
each Guarantor, its successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Administrative Agent, its successors, transferees and
assigns, for the benefit of the Guaranteed Parties.
SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS;
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 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 GUARANTY OR
OTHERWISE RELATED HERETO 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 GUARANTY, EACH GUARANTOR HEREBY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
ADMINISTRATIVE AGENT AND OTHER GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY
OR ANY DOCUMENT RELATED HERETO. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES THE
PRENTICE-HALL CORPORATION SYSTEM, INC. AS THE DESIGNEE, APPOINTEE AND AGENT OF
SUCH GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OR
PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY OR ANY
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<PAGE> 7
DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS
AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND
BY THE SERVER OF PROCESS BY MAIL TO THE RESPECTIVE GUARANTOR AT ITS ADDRESS SET
FORTH HEREIN, BUT THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH COPY SHALL NOT,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. EACH GUARANTOR 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 ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR
IN ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY GUARANTOR 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, SUCH
GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
EACH GUARANTOR 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 GUARANTEED PARTIES ENTERING INTO THE CREDIT DOCUMENTS.
SECTION 12. SUBORDINATION OF INTERMET'S OBLIGATIONS TO THE GUARANTORS.
As an independent covenant, each Guarantor hereby expressly covenants and agrees
for the benefit of the Administrative Agent and other Guaranteed Parties that
all obligations and liabilities of Intermet to such Guarantor of whatsoever
description including, without limitation, all intercompany receivables of such
Guarantor from Intermet ("Junior Claims") shall be subordinate and junior in
right of payment to all Obligations of Intermet to the
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<PAGE> 8
Administrative Agent and other Guaranteed Parties under the terms of the Credit
Agreement and the other Credit Documents ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) shall be made by Intermet to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities, by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means Intermet or any Guarantor shall commence a
voluntary case concerning itself under the Bankruptcy Code or any other
applicable bankruptcy laws; or any involuntary case is commenced against
Intermet or any Guarantor; or a custodian (as defined in the Bankruptcy Code or
any other applicable bankruptcy laws) is appointed for, or takes charge of, all
or any substantial part of the property of Intermet or any Guarantor, or
Intermet or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Intermet or any Guarantor, or any such
proceeding is commenced against Intermet or any Guarantor, or Intermet or any
Guarantor is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or Intermet or any
Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or Intermet or any Guarantor makes a general
assignment for the benefit of creditors; or Intermet or any Guarantor 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 Intermet or any Guarantor shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or Intermet or any Guarantor 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 shall be taken by Intermet or any Guarantor for the purpose
of effecting any of the foregoing.
In the event any direct or indirect payment or distribution is made to
a Guarantor in contravention of this Section 12, such payment or distribution
shall be deemed received in trust for the benefit of the Administrative Agent
and other Guaranteed Parties and shall be immediately paid over to the
Administrative Agent for application against the Guaranteed Obligations in
accordance with the terms of the Credit Agreement.
Each Guarantor agrees to execute such additional documents as the
Administrative Agent may reasonably request to evidence the subordination
provided for in this Section 12.
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<PAGE> 9
SECTION 13. JUDGMENT CURRENCY. (a) The Guarantors' obligations
hereunder to make payments in a particular currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Guaranteed Parties of the full amount of the Obligation
Currency expressed to be payable under this Guaranty or the Credit Agreement. If
for the purpose of obtaining or enforcing judgment against any Guarantor in any
court or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made, at the currency equivalent
determined, in each case, as on the Business Day immediately preceding the day
on which the judgment is given (such Business Day being hereafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Guarantors covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the currency equivalent for this
Section, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
SECTION 14. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 8.07 of the Credit
Agreement, all Guaranteed Obligations shall automatically become immediately due
and payable by the Guarantors, without notice or other action on the part of the
Administrative Agent or other Guaranteed Parties, and regardless of whether
payment of the Guaranteed Obligations by Intermet has then been accelerated. In
addition, if any event of the types described in Section 8.07 of the Credit
Agreement should occur with respect to any Guarantor, then the Guaranteed
Obligations shall automatically become immediately due and payable by such
Guarantor, without notice or other action on the part of the Administrative
Agent or other Guaranteed Parties, and regardless of whether payment of the
Guaranteed Obligations by Intermet has then been accelerated.
SECTION 15. SAVINGS CLAUSE. (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:
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<PAGE> 10
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code on or within one year from the date
on which any of the Guaranteed Obligations are incurred, the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under (A) Section
548 of the Bankruptcy Code or (B) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 15(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions, if such Guarantor is not
deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the
Guaranteed Obligations would render the Guarantor insolvent, or leave
the Guarantor with an unreasonably small capital to conduct its
business, or cause the Guarantor to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay such debts
as they mature, in each case as of the time any of the Guaranteed
Obligations are deemed to have been incurred under the Avoidance
Provisions and after giving effect to contribution as among Guarantors,
the maximum Guaranteed Obligations for which such Guarantor shall be
liable hereunder shall be reduced to that amount which, after giving
effect thereto, would not cause the Guaranteed Obligations
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<PAGE> 11
(or any other obligations of such Guarantor to the Guaranteed Parties),
as so reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 15(b) is intended solely to preserve the
rights of the Guaranteed Parties hereunder to the maximum extent that
would not cause the Guaranteed Obligations of any Guarantor to be
subject to avoidance under the Avoidance Provisions, and neither such
Guarantor nor any other Person shall have any right or claim under this
Section 15 as against the Guaranteed Parties that would not otherwise
be available to such Person under the Avoidance Provisions.
(c) None of the provisions of this Section 15 are intended in any
manner to alter the obligations of any holder of Subordinated Debt or the rights
of the holders of "senior indebtedness" as provided by the terms of the
Subordinated Debt. Accordingly, it is the intent of each of the Guarantors that
in the event that any payment or distribution is made with respect to the
Subordinated Debt prior to the payment in full of the Guaranteed Obligations by
virtue of the provisions of this Section 15, in any case or proceeding of the
kinds described in clauses (i)-(iii) of Section 15(a), the holders of the
Subordinated Debt shall be obligated to pay or deliver such payment or
distribution to or for the benefit of the Guaranteed Parties. Furthermore, in
respect of the Avoidance Provisions, it is the intent of each Guarantor that the
subrogation rights of the holders of Subordinated Debt with respect to the
obligations of the Guarantor under this Guaranty, be subject in all respects to
the provisions of Section 15(b).
SECTION 16. INFORMATION. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of Intermet's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Guaranteed Parties will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks.
SECTION 17. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents
and warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Credit Agreement are true and
correct.
SECTION 18. SURVIVAL OF AGREEMENT. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the Credit Agreement, the making of the Loans and the execution and delivery
of the Notes and the other Credit Documents.
SECTION 19. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
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<PAGE> 12
SECTION 20. CURRENCY OF PAYMENT. All payments to be made by the
Guarantors hereunder shall be made in the relevant currency or currencies in
which the Guaranteed Obligations are denominated in immediately available funds.
If any Guarantor is unable for any reason to effect payment of any of the
Guaranteed Obligations in the currency in which such Guaranteed Obligations are
denominated, the Guaranteed Parties may, at their option, require such payment
to be made in the Dollar Equivalent of such currency. If in any case where any
of the Guarantors shall make any such payment in the Dollar Equivalent, the
Guarantors agree to hold the Guaranteed Parties harmless from any loss incurred
by the Lenders arising from any change in the value of Dollars in relation to
such currency between the date such payment became due and the date of payment
thereof.
SECTION 21. ADDITIONAL GUARANTORS. Upon execution and delivery by any
Subsidiary of Intermet of an instrument in the form of Annex 1, such Subsidiary
of Intermet shall become a Guarantor hereunder with the same force and effect as
if originally named a Guarantor herein (each an "Additional Guarantor"). The
execution and delivery of any such instrument shall not require the consent of
any Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guaranty.
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<PAGE> 13
IN WITNESS WHEREOF, each Guarantor and the Administrative Agent have caused this
Guaranty to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.
Address for Notices: LYNCHBURG FOUNDRY COMPANY
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 --------------------------
Title: Treasurer
Attn: Doretha J. Christoph
S-1
<PAGE> 14
Address for Notices: IRONTON IRON, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: NORTHERN CASTINGS CORPORATION
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: INTERMET INTERNATIONAL, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: ALEXANDER CITY CASTINGS COMPANY,
- ------------------- INC. ("Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
<PAGE> 15
Attn: Doretha J. Christoph
Address for Notices: SUDM, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: SUDBURY, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
-------------------------
Troy, Michigan 48098 Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: COLUMBUS FOUNDRY, L.P.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
-------------------------
Troy, Michigan 48098 Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: TOOL PRODUCTS, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
-------------------------
Troy, Michigan 48098 Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: IOWA MOLD TOOLING CO., INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
-------------------------
Troy, Michigan 48098 Title: Treasurer
<PAGE> 16
Attn: Doretha J. Christoph
Address for Notices: CASTMATIC CORPORATION
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: FRISBY P.M.C., INCORPORATED
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: WAGNER CASTINGS COMPANY
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: WAGNER HAVANA, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
<PAGE> 17
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By: /s/ F.C.H. Ashby
----------------------------
Title: Senior Manager Loan
Operations
<PAGE> 18
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
Title: VP - Finance
<PAGE> 1
EXHIBIT 4.7 (C)
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty"), dated as of November 5, 1999,
is made by LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing under
the laws of the Commonwealth of Virginia, IRONTON IRON, INC., a corporation
organized and existing under the laws of the State of Ohio, NORTHERN CASTINGS
CORPORATION, a corporation organized and existing under the laws of the State of
Georgia, INTERMET INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Georgia, ALEXANDER CITY CASTINGS COMPANY, INC., a
corporation organized and existing under the laws of the State of Alabama, SUDM,
INC., a corporation organized and existing under the laws of the State of
Michigan, SUDBURY, INC., a corporation organized and existing under the laws of
the State of Delaware, COLUMBUS FOUNDRY L.P., a limited partnership organized
and existing under the laws of the State of Delaware, TOOL PRODUCTS, INC., a
corporation organized and existing under the laws of the State of Delaware, IOWA
MOLD TOOLING, CO., INC., a corporation organized and existing under the laws of
the State of Iowa, CASTMATIC CORPORATION, a corporation organized and existing
under the laws of the State of Michigan, FRISBY P.M.C., INCORPORATED, a
corporation organized and existing under the laws of the State of Illinois,
WAGNER CASTINGS COMPANY, a corporation organized and existing under the laws of
the State of Delaware, and WAGNER HAVANA, INC., a corporation organized and
existing under the laws of the State of Delaware, and the other subsidiaries of
Intermet that execute and deliver a supplement hereto from time to time (the
foregoing Persons individually a "Guarantor" and collectively the "Guarantors"),
in favor of THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through
its Atlanta Agency (in such capacity, the "Administrative Agent"), in its
capacity as administrative agent for the banks and other lending institutions
parties to the Credit Agreement (as hereinafter defined) and each assignee
thereof becoming a "Lender" as provided therein (the "Lenders"; the Lenders and
the Administrative Agent being collectively referred to herein as the
"Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent and
Lenders have agreed subject to the terms and conditions of this Agreement, to
make available to Intermet a revolving credit facility;
WHEREAS, Intermet, the Lenders, the Administrative Agent, Bank One,
Michigan, as Syndication Agent, (the "Syndication Agent"), and SunTrust Bank,
Atlanta, as Documentation Agent (the "Documentation Agent") have entered into
that certain 364-Day Credit Agreement dated as of November 5, 1999 (as the same
may hereafter be amended, restated, supplemented or otherwise modified from time
to time, and including all schedules, riders, and supplements thereto, the
"Credit Agreement"; terms defined therein and not otherwise defined herein being
used herein as therein defined);
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<PAGE> 2
WHEREAS, Intermet owns, directly or indirectly, all or a majority of
the outstanding capital stock of each of the Guarantors;
WHEREAS, Intermet and Guarantors share an identity of interest as
members of a consolidated group of companies engaged in substantially similar
businesses with Intermet providing certain centralized financial, accounting
and/or management services to each of the Guarantors;
WHEREAS, consummation of the transactions pursuant to the Credit
Agreement will enhance the overall financial strength and stability of
Intermet's entire corporate group, including the Guarantors;
WHEREAS, it is a condition precedent to the Lenders' obligations to
enter into the Credit Agreement and to make extensions of credit thereunder that
Guarantors execute and deliver this Guaranty, and Guarantors desire to execute
and deliver this Guaranty to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Guaranteed Parties to enter into and perform their obligations under the
Credit Agreement, the Guarantors hereby jointly and severally agree as follows:
SECTION 1. GUARANTY. The Guarantors hereby jointly and severally,
irrevocably and unconditionally, guarantee the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Loans and all
other Obligations owing by Intermet to the Lenders or the Administrative Agent,
or any of them, under the Credit Agreement, the Notes and the other Credit
Documents, including, without limitation, all renewals, extensions,
modifications and refinancings thereof, now or hereafter owing, whether for
principal, interest, fees, expenses or otherwise, and any and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees actually incurred)
and expenses incurred by the Administrative Agent in enforcing any rights under
this Guaranty (the "Guaranteed Obligations"), including without limitation, all
interest which, but for the filing of a petition in bankruptcy with respect to
Intermet, would accrue on any principal portion of the Guaranteed Obligations.
Any and all payments by the Guarantors hereunder shall be made free and clear of
and without deduction for any set-off, counterclaim, or withholding so that, in
each case, each Guaranteed Party will receive, after giving effect to any Taxes
(as such term is defined in the Credit Agreement, but excluding Taxes imposed on
overall net income of the Guaranteed Party to the same extent as excluded
pursuant to the Credit Agreement), the full amount that it would otherwise be
entitled to receive with respect to the Guaranteed Obligations (but without
duplication of amounts for Taxes already included in the Guaranteed
Obligations). The Guarantors acknowledge and agree that this is a guarantee of
payment when due, and not of collection, and that this Guaranty may be enforced
up to the full amount of the Guaranteed Obligations without proceeding against
Intermet, against any security for the Guaranteed Obligations, against any other
Guarantor or under any other guaranty covering any portion of the Guaranteed
Obligations.
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<PAGE> 3
SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Guaranteed Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of,
or addition, consent or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Credit Agreement, the
other Credit Documents, or any other documents, instruments or
agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(b) any lack of validity or enforceability of the Credit
Agreement, the other Credit Documents, or any other document,
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release
or surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party
with respect to the Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of any other
liability of Intermet;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Guarantor or Intermet, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of, consent to, or departure
from, any guaranty or security for all or any of the Guaranteed
Obligations;
(g) any application of sums paid by Intermet or any other
Person with respect to the Obligations of Intermet to the Guaranteed
Parties, regardless of what Obligations of Intermet remain unpaid;
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<PAGE> 4
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any, against
Intermet to recover payments made under this Guaranty; and
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including Intermet or a trustee in bankruptcy for Intermet),
then and in such event the Guarantors agree that any such judgment, decree,
order, settlement or compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Credit Agreement, the other Credit
Documents, or any other instrument evidencing any liability of Intermet, and the
Guarantors shall be and remain liable to the Guaranteed Party for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to the Guaranteed Party.
SECTION 3. WAIVER. The Guarantors hereby waive notice of acceptance of
this Guaranty, notice of any Obligations to which it may apply, and further
waive presentment, demand of payment, protest, notice of dishonor or nonpayment
of any such Obligations, suit or taking of other action by the Guaranteed
Parties against, and any other notice to, Intermet or any other party liable
with respect to the Guaranteed Obligations (including the Guarantors or any
other Person executing a guaranty of the obligations of Intermet).
SECTION 4. WAIVER OF SUBROGATION; CONTRIBUTION. No Guarantor will
exercise any rights against Intermet which it may acquire by way of subrogation
or contribution, by any payment made hereunder or otherwise and each of the
Guarantors hereby expressly waives any claim, right or remedy which the
Guarantors may now have or hereafter acquire against Intermet that arises
hereunder and/or from the performance by the Guarantors hereunder, including,
without limitation, any claim, right or remedy of any Guaranteed Party against
Intermet or any security which any Guaranteed Party now has or hereafter
acquires, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under color of law or otherwise unless and until the
Guaranteed Obligations have been indefeasibly paid in full.
In the event that any Guarantor (the "Funding Guarantor") shall make
any payment or payments under this Guaranty or shall suffer any loss as a result
of any realization upon any collateral granted by it to secure its obligations
hereunder, each other Guarantor (each, a "Contributing Guarantor") hereby agrees
to contribute to the Funding Guarantor an amount equal to such Contributing
Guarantor's pro rata share of such payment or payments made, or losses suffered,
by such Funding Guarantor determined by reference to the ratio of (a) the
4
<PAGE> 5
dollar amount of the percentage of each such Contributing Guarantor's Net Assets
(without giving effect to any right to receive any contribution or subrogation
or obligation to make any contribution hereunder), to (b) the sum of the Net
Assets of all Guarantors (including the Funding Guarantor) hereunder (without
giving effect to any right to receive contribution or subrogation hereunder or
any obligation to make any contribution hereunder); provided, that the
Contributing Guarantor shall not be obligated to make any such payment to the
Funding Guarantor if the Contributing Guarantor is not solvent at the time of
such contribution or if the Contributing Guarantor would be rendered not solvent
as a result thereof. Nothing in this Section shall affect each Guarantor's
several liability for the entire amount of the Guaranteed Obligations, subject
only to the limitations set forth in Section 15. For the purposes of this
Section 4, (x) the "Net Assets" of any Guarantor shall mean the highest amount,
as of any Determination Date, by which (A) the aggregate present fair saleable
value of the assets of such Guarantor exceeds (B) the amount of all the debts
and liabilities of such Guarantor (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder), and (y) "Determination Date" shall mean each of (1) the Closing
Date, (2) the date of commencement of a case under the Bankruptcy Code in which
a Guarantor is a debtor, and (3) the date enforcement hereunder is sought with
respect to such Guarantor. Each Funding Guarantor covenants and agrees that its
right to receive any contribution from any Contributing Guarantor hereunder
shall be subordinated and junior in right of payment in full of all of the
Guaranteed Obligations.
SECTION 5. SEVERABILITY. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by a Guarantor therefrom shall in any
event be effective unless the same shall be in writing executed by the
Administrative Agent.
SECTION 7. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner specified in the Credit Agreement (i) in
the case of the Administrative Agent, at the address specified for the
Administrative Agent in the Credit Agreement, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in this
Guaranty.
SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the
Administrative Agent or other Guaranteed Parties to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No notice to or demand on
any Guarantor in any case shall entitle such Guarantor to any other further
notice or demand in any similar or other circumstances or constitute a waiver of
the rights of the Administrative Agent or other Guaranteed Parties to any other
or further
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<PAGE> 6
action in any circumstances without notice or demand. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9. RIGHT OF SET OFF. In addition to and not in limitation of
all rights of offset that the Administrative Agent or other Guaranteed Parties
may have under applicable law, the Administrative Agent and the other Guaranteed
Parties shall, upon the occurrence of any Event of Default and whether or not
the Administrative Agent or other Guaranteed Parties have made any demand or the
Guaranteed Obligations are matured, have the right to appropriate and apply to
the payment of the Guaranteed Obligations, all deposits of any Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property, then or thereafter owing by the
Administrative Agent or other Guaranteed Parties to any Guarantor, whether or
not related to this Guaranty or any transaction hereunder. The Guaranteed
Parties shall promptly notify the relevant Guarantor of any offset hereunder.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This Guaranty
is a continuing guaranty and shall (i) remain in full force and effect until
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the termination of the Commitments, (ii) be binding upon
each Guarantor, its successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Administrative Agent, its successors, transferees and
assigns, for the benefit of the Guaranteed Parties.
SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS;
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 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 GUARANTY OR
OTHERWISE RELATED HERETO 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 GUARANTY, EACH GUARANTOR HEREBY CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THE AFORESAID
COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING ITS RIGHTS OR THE RIGHTS OF THE
ADMINISTRATIVE AGENT AND OTHER GUARANTEED PARTIES WITH RESPECT TO THIS GUARANTY
OR ANY DOCUMENT RELATED HERETO. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES THE
PRENTICE-HALL CORPORATION SYSTEM, INC. AS THE DESIGNEE, APPOINTEE AND AGENT OF
SUCH GUARANTOR TO RECEIVE, FOR AND ON BEHALF OF SUCH GUARANTOR, SERVICE OR
PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY OR ANY
6
<PAGE> 7
DOCUMENT RELATED HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS
AFTER MAILING THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND
BY THE SERVER OF PROCESS BY MAIL TO THE RESPECTIVE GUARANTOR AT ITS ADDRESS SET
FORTH HEREIN, BUT THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH COPY SHALL NOT,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH
PROCESS. EACH GUARANTOR 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 ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR
IN ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY GUARANTOR 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, SUCH
GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
EACH GUARANTOR 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 ANY GUARANTOR ENTERING INTO THE CREDIT DOCUMENTS.
SECTION 12. SUBORDINATION OF INTERMET'S OBLIGATIONS TO THE GUARANTORS.
As an independent covenant, each Guarantor hereby expressly covenants and agrees
for the benefit of the Administrative Agent and other Guaranteed Parties that
all obligations and liabilities of Intermet to such Guarantor of whatsoever
description including, without limitation, all intercompany receivables of such
Guarantor from Intermet ("Junior Claims") shall be subordinate and junior in
right of payment to all Obligations of Intermet to the
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<PAGE> 8
Administrative Agent and other Guaranteed Parties under the terms of the Credit
Agreement and the other Credit Documents ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) shall be made by Intermet to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities, by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means Intermet or any Guarantor shall commence a
voluntary case concerning itself under the Bankruptcy Code or any other
applicable bankruptcy laws; or any involuntary case is commenced against
Intermet or any Guarantor; or a custodian (as defined in the Bankruptcy Code or
any other applicable bankruptcy laws) is appointed for, or takes charge of, all
or any substantial part of the property of Intermet or any Guarantor, or
Intermet or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Intermet or any Guarantor, or any such
proceeding is commenced against Intermet or any Guarantor, or Intermet or any
Guarantor is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or Intermet or any
Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or Intermet or any Guarantor makes a general
assignment for the benefit of creditors; or Intermet or any Guarantor 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 Intermet or any Guarantor shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or Intermet or any Guarantor 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 shall be taken by Intermet or any Guarantor for the purpose
of effecting any of the foregoing.
In the event any direct or indirect payment or distribution is made to
a Guarantor in contravention of this Section 12, such payment or distribution
shall be deemed received in trust for the benefit of the Administrative Agent
and other Guaranteed Parties and shall be immediately paid over to the
Administrative Agent for application against the Guaranteed Obligations in
accordance with the terms of the Credit Agreement.
Each Guarantor agrees to execute such additional documents as the
Administrative Agent may reasonably request to evidence the subordination
provided for in this Section 12.
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<PAGE> 9
SECTION 13. JUDGMENT CURRENCY. (a) The Guarantors' obligations
hereunder to make payments in a particular currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Guaranteed Parties of the full amount of the Obligation
Currency expressed to be payable under this Guaranty or the Credit Agreement. If
for the purpose of obtaining or enforcing judgment against any Guarantor in any
court or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made, at the currency equivalent
determined, in each case, as on the Business Day immediately preceding the day
on which the judgment is given (such Business Day being hereafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Guarantors covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the currency equivalent for this
Section, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
SECTION 14. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 8.07 of the Credit
Agreement, all Guaranteed Obligations shall automatically become immediately due
and payable by the Guarantors, without notice or other action on the part of the
Administrative Agent or other Guaranteed Parties, and regardless of whether
payment of the Guaranteed Obligations by Intermet has then been accelerated. In
addition, if any event of the types described in Section 8.07 of the Credit
Agreement should occur with respect to any Guarantor, then the Guaranteed
Obligations shall automatically become immediately due and payable by such
Guarantor, without notice or other action on the part of the Administrative
Agent or other Guaranteed Parties, and regardless of whether payment of the
Guaranteed Obligations by Intermet has then been accelerated.
SECTION 15. SAVINGS CLAUSE. (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:
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<PAGE> 10
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code on or within one year from the date
on which any of the Guaranteed Obligations are incurred, the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under (A) Section
548 of the Bankruptcy Code or (B) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 15(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions, if such Guarantor is not
deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the
Guaranteed Obligations would render the Guarantor insolvent, or leave
the Guarantor with an unreasonably small capital to conduct its
business, or cause the Guarantor to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay such debts
as they mature, in each case as of the time any of the Guaranteed
Obligations are deemed to have been incurred under the Avoidance
Provisions and after giving effect to contribution as among Guarantors,
the maximum Guaranteed Obligations for which such Guarantor shall be
liable hereunder shall be reduced to that amount which, after giving
effect thereto, would not cause the Guaranteed Obligations
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(or any other obligations of such Guarantor to the Guaranteed Parties),
as so reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 15(b) is intended solely to preserve the
rights of the Guaranteed Parties hereunder to the maximum extent that
would not cause the Guaranteed Obligations of any Guarantor to be
subject to avoidance under the Avoidance Provisions, and neither such
Guarantor nor any other Person shall have any right or claim under this
Section 15 as against the Guaranteed Parties that would not otherwise
be available to such Person under the Avoidance Provisions.
(c) None of the provisions of this Section 15 are intended in any
manner to alter the obligations of any holder of Subordinated Debt or the rights
of the holders of "senior indebtedness" as provided by the terms of the
Subordinated Debt. Accordingly, it is the intent of each of the Guarantors that
in the event that any payment or distribution is made with respect to the
Subordinated Debt prior to the payment in full of the Guaranteed Obligations by
virtue of the provisions of this Section 15, in any case or proceeding of the
kinds described in clauses (i)-(iii) of Section 15(a), the holders of the
Subordinated Debt shall be obligated to pay or deliver such payment or
distribution to or for the benefit of the Guaranteed Parties. Furthermore, in
respect of the Avoidance Provisions, it is the intent of each Guarantor that the
subrogation rights of the holders of Subordinated Debt with respect to the
obligations of the Guarantor under this Guaranty, be subject in all respects to
the provisions of Section 15(b).
SECTION 16. INFORMATION. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of Intermet's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Guaranteed Parties will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks.
SECTION 17. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents
and warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Credit Agreement are true and
correct.
SECTION 18. SURVIVAL OF AGREEMENT. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the Credit Agreement, the making of the Loans and the execution and delivery
of the Notes and the other Credit Documents.
SECTION 19. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
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<PAGE> 12
SECTION 20. CURRENCY OF PAYMENT. All payments to be made by the
Guarantors hereunder shall be made in the relevant currency or currencies in
which the Guaranteed Obligations are denominated in immediately available funds.
If any Guarantor is unable for any reason to effect payment of any of the
Guaranteed Obligations in the currency in which such Guaranteed Obligations are
denominated, the Guaranteed Parties may, at their option, require such payment
to be made in the Dollar Equivalent of such currency. If in any case where any
of the Guarantors shall make any such payment in the Dollar Equivalent, the
Guarantors agree to hold the Guaranteed Parties harmless from any loss incurred
by the Lenders arising from any change in the value of Dollars in relation to
such currency between the date such payment became due and the date of payment
thereof.
SECTION 21. ADDITIONAL GUARANTORS. Upon execution and delivery by any
Subsidiary of Intermet of an instrument in the form of Annex 1, such Subsidiary
of Intermet shall become a Guarantor hereunder with the same force and effect as
if originally named a Guarantor herein (each an "Additional Guarantor"). The
execution and delivery of any such instrument shall not require the consent of
any Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guaranty.
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<PAGE> 13
IN WITNESS WHEREOF, each Guarantor and the Administrative Agent have
caused this Guaranty to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.
Address for Notices: LYNCHBURG FOUNDRY COMPANY
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
S-1
<PAGE> 14
Address for Notices:
- -------------------- IRONTON IRON, INC.
(a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098 By: /s/ Doretha J. Christoph
------------------------
Attn: Doretha J. Christoph Title: Treasurer
Address for Notices:
- -------------------- NORTHERN CASTINGS CORPORATION
(a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098 By: /s/ Doretha J. Christoph
------------------------
Attn: Doretha J. Christoph Title: Treasurer
Address for Notices:
- -------------------- INTERMET INTERNATIONAL, INC.
(a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098 By: /s/ Doretha J. Christoph
------------------------
Attn: Doretha J. Christoph Title: Treasurer
Address for Notices:
- -------------------- ALEXANDER CITY CASTINGS COMPANY, INC.
("Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098 By: /s/ Doretha J. Christoph
------------------------
Attn: Doretha J. Christoph Title: Treasurer
<PAGE> 15
Address for Notices: SUDM, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: SUDBURY, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: COLUMBUS FOUNDRY, L.P.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: TOOL PRODUCTS, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: IOWA MOLD TOOLING, CO., INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
<PAGE> 16
Address for Notices: CASTMATIC CORPORATION
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: FRISBY P.M.C., INCORPORATED
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: WAGNER CASTINGS COMPANY
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: WAGNER HAVANA, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
Attn: Doretha J. Christoph
<PAGE> 17
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By: /s/ F.C.H. Ashby
----------------------------
Title: Senior Manager Loan
Operations
<PAGE> 18
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
------------------------
Title: Treasurer
<PAGE> 1
EXHIBIT 4.8(C)
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (this "Guaranty"), dated as of December 20,
1999, is made by LYNCHBURG FOUNDRY COMPANY, a corporation organized and existing
under the laws of the Commonwealth of Virginia, IRONTON IRON INC., a corporation
organized and existing under the laws of the State of Ohio, NORTHERN CASTINGS
CORPORATION, a corporation organized and existing under the laws of the State of
Georgia, INTERMET INTERNATIONAL, INC., a corporation organized and existing
under the laws of the State of Georgia, ALEXANDER CITY CASTING COMPANY, INC., a
corporation organized and existing under the laws of the State of Alabama, SUDM,
INC., a corporation organized and existing under the laws of the State of
Michigan, SUDBURY, INC., a corporation organized and existing under the laws of
the State of Delaware, COLUMBUS FOUNDRY, L.P., a limited partnership organized
and existing under the laws of the State of Delaware, TOOL PRODUCTS, INC., a
corporation organized and existing under the laws of the State of Delaware, IOWA
MOLD TOOLING, CO., INC., a corporation organized and existing under the laws of
the State of Iowa, CAST-MATIC CORPORATION, a corporation organized and existing
under the laws of the State of Michigan, FRISBY P.M.C., INCORPORATED, a
corporation organized and existing under the laws of the State of Illinois,
WAGNER CASTINGS COMPANY, a corporation organized and existing under the laws of
the State of Delaware, GANTON TECHNOLOGIES INC., a corporation organized and
existing under the laws of the State of Illinois, DIVERSIFIED DIEMAKERS, INC, a
corporation organized and existing under the laws of the State of Delaware,
INTERMET HOLDING COMPANY, a corporation organized and existing under the laws of
the State of Delaware and WAGNER HAVANA, INC., a corporation organized and
existing under the laws of the State of Delaware, and the other subsidiaries of
Intermet that execute and deliver a supplement hereto from time to time (the
foregoing Persons individually a "Guarantor" and collectively the "Guarantors"),
in favor of THE BANK OF NOVA SCOTIA, a Canadian chartered bank acting through
its Atlanta Agency (in such capacity, the "Administrative Agent"), in its
capacity as administrative agent for the banks and other lending institutions
parties to the Term Loan Agreement (as hereinafter defined) and each assignee
thereof becoming a "Lender" as provided therein (the "Lenders"; the Lenders and
the Administrative Agent being collectively referred to herein as the
"Guaranteed Parties");
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<PAGE> 2
W I T N E S S E T H:
WHEREAS, Intermet has requested, and the Administrative Agent and
Lenders have agreed subject to the terms and conditions of this Agreement, to
make available to Intermet a term loan facility to finance the Target
Acquisition;
WHEREAS, Intermet, the Lenders, the Administrative Agent, Bank One,
Michigan, as Syndication Agent, (the "Syndication Agent"), and SunTrust Bank,
Atlanta, as Documentation Agent (the "Documentation Agent") have entered into
that certain Term Loan Agreement dated as of December [ ], 1999 (as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, and including all schedules, riders, and supplements thereto, the "Term
Loan Agreement"; terms defined therein and not otherwise defined herein being
used herein as therein defined);
WHEREAS, Intermet owns, directly or indirectly, all or a majority of
the outstanding capital stock of each of the Guarantors;
WHEREAS, Intermet and Guarantors share an identity of interest as
members of a consolidated group of companies engaged in substantially similar
businesses with Intermet providing certain centralized financial, accounting
and/or management services to each of the Guarantors;
WHEREAS, consummation of the Target Acquisition will enhance the
overall financial strength and stability of Intermet's entire corporate group,
including the Guarantors;
WHEREAS, it is a condition precedent to the Lenders' obligations to
enter into the Term Loan Agreement and to make extensions of credit thereunder
that Guarantors execute and deliver this Guaranty, and Guarantors desire to
execute and deliver this Guaranty to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Guaranteed Parties to enter into and perform their obligations under the
Term Loan Agreement, the Guarantors hereby jointly and severally agree as
follows:
SECTION 1. GUARANTY. The Guarantors hereby jointly and severally,
irrevocably and unconditionally, guarantee the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Loans and all
other Obligations owing by Intermet to the Lenders or the Administrative Agent,
or any of them, under the Term Loan Agreement, the Notes and the other Credit
Documents, including, without limitation, all renewals, extensions,
modifications and refinancings thereof, now or hereafter owing, whether for
principal, interest, fees, expenses or otherwise, and any and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees actually incurred)
and expenses incurred by the Administrative Agent in enforcing any rights under
this Guaranty (the "Guaranteed Obligations"), including without limitation, all
interest which, but for the filing of a petition in bankruptcy with respect to
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Intermet, would accrue on any principal portion of the Guaranteed Obligations.
Any and all payments by the Guarantors hereunder shall be made free and clear of
and without deduction for any set-off, counterclaim, or withholding so that, in
each case, each Guaranteed Party will receive, after giving effect to any Taxes
(as such term is defined in the Term Loan Agreement, but excluding Taxes imposed
on overall net income of the Guaranteed Party to the same extent as excluded
pursuant to the Term Loan Agreement), the full amount that it would otherwise be
entitled to receive with respect to the Guaranteed Obligations (but without
duplication of amounts for Taxes already included in the Guaranteed
Obligations). The Guarantors acknowledge and agree that this is a guarantee of
payment when due, and not of collection, and that this Guaranty may be enforced
up to the full amount of the Guaranteed Obligations without proceeding against
Intermet, against any security for the Guaranteed Obligations, against any other
Guarantor or under any other guaranty covering any portion of the Guaranteed
Obligations.
SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional in accordance with its terms
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):
(a) any change in the time, place or manner of payment of, or
in any other term of, all or any of the Guaranteed Obligations, any
waiver, indulgence, renewal, extension, amendment or modification of,
or addition, consent or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Term Loan Agreement, the
other Credit Documents, or any other documents, instruments or
agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(b) any lack of validity or enforceability of the Term Loan
Agreement, the other Credit Documents, or any other document,
instrument or agreement referred to therein or any assignment or
transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any additional
security for the Guaranteed Obligations, or any sale, exchange, release
or surrender of, or realization on, any security for the Guaranteed
Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party
with respect to the Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of any other
liability of Intermet;
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(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to any Guarantor or Intermet, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any nonperfection of any security interest or lien on any
collateral, or any amendment or waiver of, consent to, or departure
from, any guaranty or security for all or any of the Guaranteed
Obligations;
(g) any application of sums paid by Intermet or any other
Person with respect to the Obligations of Intermet to the Guaranteed
Parties, regardless of what Obligations of Intermet remain unpaid;
(h) any act or failure to act by any Guaranteed Party which
may adversely affect a Guarantor's subrogation rights, if any, against
Intermet to recover payments made under this Guaranty; and
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including Intermet or a trustee in bankruptcy for Intermet),
then and in such event the Guarantors agree that any such judgment, decree,
order, settlement or compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Term Loan Agreement, the other
Credit Documents, or any other instrument evidencing any liability of Intermet,
and the Guarantors shall be and remain liable to the Guaranteed Party for the
amounts so repaid or recovered to the same extent as if such amount had never
originally been paid to the Guaranteed Party.
SECTION 3. WAIVER. The Guarantors hereby waive notice of acceptance of
this Guaranty, notice of any Obligations to which it may apply, and further
waive presentment, demand of payment, protest, notice of dishonor or nonpayment
of any such Obligations, suit or taking of other action by the Guaranteed
Parties against, and any other notice to, Intermet or any other party liable
with respect to the Guaranteed Obligations (including the Guarantors or any
other Person executing a guaranty of the obligations of Intermet).
SECTION 4. WAIVER OF SUBROGATION; CONTRIBUTION. No Guarantor will
exercise any rights against Intermet which it may acquire by way of subrogation
or contribution, by any payment made hereunder or otherwise and each of the
Guarantors hereby expressly waives any claim, right or remedy which the
Guarantors may now have or hereafter acquire against Intermet
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that arises hereunder and/or from the performance by the Guarantors hereunder,
including, without limitation, any claim, right or remedy of any Guaranteed
Party against Intermet or any security which any Guaranteed Party now has or
hereafter acquires, whether or not such claim, right or remedy arises in equity,
under contract, by statute, under color of law or otherwise unless and until the
Guaranteed Obligations have been indefeasibly paid in full.
In the event that any Guarantor (the "Funding Guarantor") shall make
any payment or payments under this Guaranty or shall suffer any loss as a result
of any realization upon any collateral granted by it to secure its obligations
hereunder, each other Guarantor (each, a "Contributing Guarantor") hereby agrees
to contribute to the Funding Guarantor an amount equal to such Contributing
Guarantor's pro rata share of such payment or payments made, or losses suffered,
by such Funding Guarantor determined by reference to the ratio of (a) the dollar
amount of the percentage of each such Contributing Guarantor's Net Assets
(without giving effect to any right to receive any contribution or subrogation
or obligation to make any contribution hereunder), to (b) the sum of the Net
Assets of all Guarantors (including the Funding Guarantor) hereunder (without
giving effect to any right to receive contribution or subrogation hereunder or
any obligation to make any contribution hereunder); provided, that the
Contributing Guarantor shall not be obligated to make any such payment to the
Funding Guarantor if the Contributing Guarantor is not solvent at the time of
such contribution or if the Contributing Guarantor would be rendered not solvent
as a result thereof. Nothing in this Section shall affect each Guarantor's
several liability for the entire amount of the Guaranteed Obligations, subject
only to the limitations set forth in Section 15. For the purposes of this
Section 4, (x) the "Net Assets" of any Guarantor shall mean the highest amount,
as of any Determination Date, by which (A) the aggregate present fair saleable
value of the assets of such Guarantor exceeds (B) the amount of all the debts
and liabilities of such Guarantor (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder), and (y) "Determination Date" shall mean each of (1) the Closing
Date, (2) the date of commencement of a case under the Bankruptcy Code in which
a Guarantor is a debtor, and (3) the date enforcement hereunder is sought with
respect to such Guarantor. Each Funding Guarantor covenants and agrees that its
right to receive any contribution from any Contributing Guarantor hereunder
shall be subordinated and junior in right of payment in full of all of the
Guaranteed Obligations.
SECTION 5. SEVERABILITY. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by a Guarantor therefrom shall in any
event be effective unless the same shall be in writing executed by the
Administrative Agent.
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SECTION 7. NOTICES. All notices and other communications provided for
hereunder shall be given in the manner specified in the Term Loan Agreement (i)
in the case of the Administrative Agent, at the address specified for the
Administrative Agent in the Term Loan Agreement, and (ii) in the case of the
Guarantors, at the respective addresses specified for such Guarantors in this
Guaranty.
SECTION 8. NO WAIVER; REMEDIES. No failure on the part of the
Administrative Agent or other Guaranteed Parties to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. No notice to or demand on
any Guarantor in any case shall entitle such Guarantor to any other further
notice or demand in any similar or other circumstances or constitute a waiver of
the rights of the Administrative Agent or other Guaranteed Parties to any other
or further action in any circumstances without notice or demand. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 9. RIGHT OF SET OFF. In addition to and not in limitation of
all rights of offset that the Administrative Agent or other Guaranteed Parties
may have under applicable law, the Administrative Agent and the other Guaranteed
Parties shall, upon the occurrence of any Event of Default and whether or not
the Administrative Agent or other Guaranteed Parties have made any demand or the
Guaranteed Obligations are matured, have the right to appropriate and apply to
the payment of the Guaranteed Obligations, all deposits of any Guarantor
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property, then or thereafter owing by the
Administrative Agent or other Guaranteed Parties to any Guarantor, whether or
not related to this Guaranty or any transaction hereunder. The Guaranteed
Parties shall promptly notify the relevant Guarantor of any offset hereunder.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF OBLIGATIONS. This Guaranty
is a continuing guaranty and shall (i) remain in full force and effect until
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the termination of the Commitments, (ii) be binding upon
each Guarantor, its successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Administrative Agent, its successors, transferees and
assigns, for the benefit of the Guaranteed Parties.
SECTION 11. GOVERNING LAW; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS;
SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTION 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 GUARANTY OR
OTHERWISE RELATED HERETO MAY BE BROUGHT IN THE
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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 GUARANTY,
EACH GUARANTOR HEREBY CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE JURISDICTION OF THE AFORESAID COURTS SOLELY FOR THE PURPOSE OF ADJUDICATING
ITS RIGHTS OR THE RIGHTS OF THE ADMINISTRATIVE AGENT AND OTHER GUARANTEED
PARTIES WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED HERETO. EACH
GUARANTOR HEREBY IRREVOCABLY DESIGNATES THE PRENTICE-HALL CORPORATION SYSTEM,
INC. AS THE DESIGNEE, APPOINTEE AND AGENT OF SUCH GUARANTOR TO RECEIVE, FOR AND
ON BEHALF OF SUCH GUARANTOR, SERVICE OR PROCESS IN SUCH JURISDICTION IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY DOCUMENT RELATED
HERETO AND SUCH SERVICE SHALL BE DEEMED COMPLETED THIRTY DAYS AFTER MAILING
THEREOF TO SAID AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE SERVER OF
PROCESS BY MAIL TO THE RESPECTIVE GUARANTOR AT ITS ADDRESS SET FORTH HEREIN, BUT
THE FAILURE OF SUCH GUARANTOR TO RECEIVE SUCH COPY SHALL NOT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. EACH
GUARANTOR 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
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS IN RESPECT OF THIS
GUARANTY OR ANY DOCUMENT RELATED THERETO. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE ADMINISTRATIVE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GUARANTOR
IN ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY GUARANTOR 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, SUCH
GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT OR ANY MATTER ARISING IN CONNECTION HEREUNDER OR THEREUNDER.
EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
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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 SUCH GUARANTOR ENTERING INTO THE CREDIT DOCUMENTS.
SECTION 12. SUBORDINATION OF INTERMET'S OBLIGATIONS TO THE GUARANTORS.
As an independent covenant, each Guarantor hereby expressly covenants and agrees
for the benefit of the Administrative Agent and other Guaranteed Parties that
all obligations and liabilities of Intermet to such Guarantor of whatsoever
description including, without limitation, all intercompany receivables of such
Guarantor from Intermet ("Junior Claims") shall be subordinate and junior in
right of payment to all Obligations of Intermet to the Administrative Agent and
other Guaranteed Parties under the terms of the Term Loan Agreement and the
other Credit Documents ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by setoff or
otherwise) shall be made by Intermet to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities, by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means Intermet or any Guarantor shall commence a
voluntary case concerning itself under the Bankruptcy Code or any other
applicable bankruptcy laws; or any involuntary case is commenced against
Intermet or any Guarantor; or a custodian (as defined in the Bankruptcy Code or
any other applicable bankruptcy laws) is appointed for, or takes charge of, all
or any substantial part of the property of Intermet or any Guarantor, or
Intermet or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Intermet or any Guarantor, or any such
proceeding is commenced against Intermet or any Guarantor, or Intermet or any
Guarantor is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or Intermet or any
Guarantor suffers any appointment of any custodian or the like for it or any
substantial part of its property; or Intermet or any Guarantor makes a general
assignment for the benefit of creditors; or Intermet or any Guarantor 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 Intermet or any Guarantor shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or Intermet or any Guarantor 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 shall be taken by Intermet or any Guarantor for the purpose
of effecting any of the foregoing.
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In the event any direct or indirect payment or distribution is made to
a Guarantor in contravention of this Section 12, such payment or distribution
shall be deemed received in trust for the benefit of the Administrative Agent
and other Guaranteed Parties and shall be immediately paid over to the
Administrative Agent for application against the Guaranteed Obligations in
accordance with the terms of the Term Loan Agreement.
Each Guarantor agrees to execute such additional documents as the
Administrative Agent may reasonably request to evidence the subordination
provided for in this Section 12.
SECTION 13. JUDGMENT CURRENCY. (a) The Guarantors' obligations
hereunder to make payments in a particular currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Guaranteed Parties of the full amount of the Obligation
Currency expressed to be payable under this Guaranty or the Term Loan Agreement.
If for the purpose of obtaining or enforcing judgment against any Guarantor in
any court or in any jurisdiction, it becomes necessary to convert into or from
any currency other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in the
Obligation Currency, the conversion shall be made, at the currency equivalent
determined, in each case, as on the Business Day immediately preceding the day
on which the judgment is given (such Business Day being hereafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Guarantors covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the currency equivalent for this
Section, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
SECTION 14. AUTOMATIC ACCELERATION IN CERTAIN EVENTS. Upon the
occurrence of an Event of Default specified in Section 8.07 of the Term Loan
Agreement, all Guaranteed Obligations shall automatically become immediately due
and payable by the Guarantors, without notice or other
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action on the part of the Administrative Agent or other Guaranteed Parties, and
regardless of whether payment of the Guaranteed Obligations by Intermet has then
been accelerated. In addition, if any event of the types described in Section
8.07 of the Term Loan Agreement should occur with respect to any Guarantor, then
the Guaranteed Obligations shall automatically become immediately due and
payable by such Guarantor, without notice or other action on the part of the
Administrative Agent or other Guaranteed Parties, and regardless of whether
payment of the Guaranteed Obligations by Intermet has then been accelerated.
SECTION 15. SAVINGS CLAUSE. (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code on or within one year from the date
on which any of the Guaranteed Obligations are incurred, the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under (A) Section
548 of the Bankruptcy Code or (B) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding
by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranteed Obligations are incurred, the
maximum amount which would not otherwise cause the Guaranteed
Obligations (or any other obligations of the Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws), the maximum
amount which would not otherwise cause the Guaranteed Obligations (or
any other obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 15(a), but only to the
extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions, if such Guarantor is not
deemed to have received valuable consideration, fair value or
reasonably equivalent value for the Guaranteed Obligations, or if the
Guaranteed Obligations would render the Guarantor insolvent, or leave
the Guarantor with an
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unreasonably small capital to conduct its business, or cause the
Guarantor to have incurred debts (or to have intended to have incurred
debts) beyond its ability to pay such debts as they mature, in each
case as of the time any of the Guaranteed Obligations are deemed to
have been incurred under the Avoidance Provisions and after giving
effect to contribution as among Guarantors, the maximum Guaranteed
Obligations for which such Guarantor shall be liable hereunder shall be
reduced to that amount which, after giving effect thereto, would not
cause the Guaranteed Obligations (or any other obligations of such
Guarantor to the Guaranteed Parties), as so reduced, to be subject to
avoidance under the Avoidance Provisions. This Section 15(b) is
intended solely to preserve the rights of the Guaranteed Parties
hereunder to the maximum extent that would not cause the Guaranteed
Obligations of any Guarantor to be subject to avoidance under the
Avoidance Provisions, and neither such Guarantor nor any other Person
shall have any right or claim under this Section 15 as against the
Guaranteed Parties that would not otherwise be available to such Person
under the Avoidance Provisions.
(c) None of the provisions of this Section 15 are intended in any
manner to alter the obligations of any holder of Subordinated Debt or the rights
of the holders of "senior indebtedness" as provided by the terms of the
Subordinated Debt. Accordingly, it is the intent of each of the Guarantors that
in the event that any payment or distribution is made with respect to the
Subordinated Debt prior to the payment in full of the Guaranteed Obligations by
virtue of the provisions of this Section 15, in any case or proceeding of the
kinds described in clauses (i)-(iii) of Section 15(a), the holders of the
Subordinated Debt shall be obligated to pay or deliver such payment or
distribution to or for the benefit of the Guaranteed Parties. Furthermore, in
respect of the Avoidance Provisions, it is the intent of each Guarantor that the
subrogation rights of the holders of Subordinated Debt with respect to the
obligations of the Guarantor under this Guaranty, be subject in all respects to
the provisions of Section 15(b).
SECTION 16. INFORMATION. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of Intermet's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Guaranteed Parties will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks.
SECTION 17. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents
and warrants as to itself that all representations and warranties relating to it
contained in Sections 5.01 through 5.06 of the Term Loan Agreement are true and
correct.
SECTION 18. SURVIVAL OF AGREEMENT. All a, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the Term Loan Agreement, the making of the Loans and the execution and
delivery of the Notes and the other Credit Documents.
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SECTION 19. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
SECTION 20. CURRENCY OF PAYMENT. All payments to be made by the
Guarantors hereunder shall be made in the relevant currency or currencies in
which the Guaranteed Obligations are denominated in immediately available funds.
If any Guarantor is unable for any reason to effect payment of any of the
Guaranteed Obligations in the currency in which such Guaranteed Obligations are
denominated, the Guaranteed Parties may, at their option, require such payment
to be made in the Dollar Equivalent of such currency. If in any case where any
of the Guarantors shall make any such payment in the Dollar Equivalent, the
Guarantors agree to hold the Guaranteed Parties harmless from any loss incurred
by the Lenders arising from any change in the value of Dollars in relation to
such currency between the date such payment became due and the date of payment
thereof.
SECTION 21. ADDITIONAL GUARANTORS. Upon execution and delivery by any
Subsidiary of Intermet of an instrument in the form of Annex 1, such Subsidiary
of Intermet shall become a Guarantor hereunder with the same force and effect as
if originally named a Guarantor herein (each an "Additional Guarantor"). The
execution and delivery of any such instrument shall not require the consent of
any Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guaranty.
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IN WITNESS WHEREOF, each Guarantor and the Administrative Agent have
caused this Guaranty to be duly executed and delivered by their respective duly
authorized officers as of the date first above written.
Address for Notices: LYNCHBURG FOUNDRY COMPANY
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: IRONTON IRON INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: NORTHERN CASTING CORPORATION
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: INTERMET INTERNATIONAL, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: ALEXANDER CITY CASTINGS COMPANY,
- -------------------- INC. ("Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
<PAGE> 14
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: SUDM, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: SUDBURY, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: COLUMBUS FOUNDRY, L.P.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: TOOL PRODUCTS, INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: IOWA MOLD TOOLING, CO., INC.
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
<PAGE> 15
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: CAST-MATIC CORPORATION
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: FRISBY P.M.C., INCORPORATED
- -------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: WAGNER CASTINGS COMPANY
- -------------------- (a "Guarantor")
c c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 ------------------------
Title: Treasurer
---------
Attn: Doretha J. Christoph
Address for Notices: GANTON TECHNOLOGIES INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: DIVERSIFIED DIEMAKERS, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
<PAGE> 16
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: INTERMET HOLDING COMPANY
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
Address for Notices: WAGNER HAVANA, INC.
- ------------------- (a "Guarantor")
c/o Intermet Corporation
5445 Corporate Drive
Suite 200 By: /s/ Doretha J. Christoph
Troy, Michigan 48098 -------------------------
Title: Treasurer
Attn: Doretha J. Christoph
<PAGE> 17
THE BANK OF NOVA SCOTIA, as
Administrative Agent
By: /s/ F.C.H. Ashby
------------------------------
Title: Senior Manager Loan
Operations
<PAGE> 18
SECTION 12 OF THE
FOREGOING GUARANTY
ACKNOWLEDGED AND
AGREED TO:
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
-------------------------
Title: VP - Finance & Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 16
<SECURITIES> 0
<RECEIVABLES> 6,654
<ALLOWANCES> 0
<INVENTORY> 1,831
<CURRENT-ASSETS> 16,594
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,594
<CURRENT-LIABILITIES> 86,320
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 86,320
<SALES> 57,364
<TOTAL-REVENUES> 57,364
<CGS> 71,757
<TOTAL-COSTS> 73,186
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 685
<INCOME-PRETAX> (33,990)
<INCOME-TAX> 0
<INCOME-CONTINUING> (33,990)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,990)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
