<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
SUDBURY, INC.
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(NAME OF SUBJECT COMPANY)
I M ACQUISITION CORP.
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(BIDDER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(TITLE OF CLASS OF SECURITIES)
864635206
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(CUSIP NUMBER OF CLASS OF SECURITIES)
DORETHA CHRISTOPH
VICE PRESIDENT -- FINANCE
INTERMET CORPORATION
5445 CORPORATE DRIVE, SUITE 200
TROY, MICHIGAN 48098
(810) 952-2500
Copy to:
JANET T. GELDZAHLER
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
(NAME, ADDRESS, AND TELEPHONE NUMBERS OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
Transaction value* Amount of filing fee**
$191,387,700 $38,277.54
--------------------------------------- ---------------------------------------
</TABLE>
* For the purpose of calculating the filing fee only. This calculation assumes
the purchase of (i) 11,417,396 shares of Common Stock, par value $0.01 per
share (the "Shares"), issued and outstanding as of November 7, 1996,
according to Sudbury, Inc. (the "Company"), (ii) 1,422,619 Shares reserved
for issuance in connection with the Company's Series B Participation
Certificates and Series C Participation Certificates and (iii) 2,471,001
Shares issuable upon the exercise of presently outstanding stock options.
** 1/50 of 1% of the transaction valuation.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C>
Amount previously paid: Not applicable Filing party: Not applicable
Form or registration number: Not applicable Date filed: Not applicable
</TABLE>
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<PAGE> 2
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Sudbury, Inc., a Delaware
corporation (the "Company"), and the address of its principal executive offices
is 30100 Chagrin Boulevard, Suite 203, Cleveland, Ohio 44124.
(b) The class of securities to which this statement relates is the Common
Stock, par value $0.01 per share (the "Shares"), of the Company. The information
set forth in the Introductory Section and Section 1 of the Offer to Purchase
("Offer to Purchase") annexed hereto as Exhibit 1 is incorporated herein by
reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) The information set forth in Section 9 of the Offer to
Purchase is incorporated herein by reference. The name, business address,
present principal occupation or employment, the material occupations, positions,
offices or employments for the past five years and citizenship of each director
and executive officer of Intermet Corporation, a Georgia corporation
("Intermet"), and I M Acquisition Corp., a Delaware corporation (the
"Purchaser"), which is a direct wholly-owned subsidiary of Intermet, and the
name, principal business and address of any corporation or other organization in
which such occupations, positions, offices and employments are or were carried
on are set forth in Schedule A to the Offer to Purchase and incorporated herein
by reference.
(e); (f) During the last five years, neither the Purchaser nor Intermet,
nor, to the best of Intermet's knowledge, any of the directors or executive
officers of the Purchaser or Intermet has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which any such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introductory Section and Sections
10 and 11 of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 13 of the Offer to Purchase is
incorporated herein by reference. See Exhibit 10.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The information set forth in the Introductory Section and Sections 7 and 11
of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introductory Section and Sections 9, 10
and 11 of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSON RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 17 of the Offer to Purchase is
incorporated herein by reference.
2
<PAGE> 3
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference. See Exhibit 11.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(c) The information set forth in Section 16 of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 7 of the Offer to Purchase is
incorporated herein by reference.
(e) Not applicable.
(f) Not applicable.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(1) Offer to Purchase.
(2) Letter of Transmittal with respect to the Shares.
(3) Form of letter, dated November 22, 1996, to brokers, dealers,
commercial banks, trust companies and nominees.
(4) Form of letter to be used by brokers, dealers, commercial banks, trust
companies and nominees to their clients.
(5) Press Release, dated November 18, 1996.
(6) Form of newspaper advertisement, dated November 22, 1996.
(7) Notice of Guaranteed Delivery.
(8) IRS Guidelines to Substitute Form W-9.
(9) Merger Agreement, dated as of November 18, 1996, among the Company,
Intermet and the Purchaser.
(10) Third Amended and Restated Credit Agreement, dated as of November 14,
1996, among Intermet, SunTrust Bank, Atlanta, NBD Bank and First Union National
Bank of North Carolina.
(11) Audited Financial Statements for the two years ended December 31, 1995
of Intermet. (Incorporated by reference to Intermet's Annual Report on Form 10-K
for the year ended December 31, 1995).
3
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: November 22, 1996
INTERMET CORPORATION
By: /s/ DORETHA CHRISTOPH
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Title: Vice President -- Finance
I M ACQUISITION CORP.
By: /s/ JAMES RYDEL
------------------------------------
Title: President
4
<PAGE> 5
EXHIBIT INDEX
(1) Offer to Purchase.
(2) Letter of Transmittal with respect to the Shares.
(3) Form of letter, dated November 22, 1996, to brokers, dealers,
commercial banks, trust companies and nominees.
(4) Form of letter to be used by brokers, dealers, commercial banks, trust
companies and nominees to their clients.
(5) Press Release, dated November 18, 1996.
(6) Form of newspaper advertisement, dated November 22, 1996.
(7) Notice of Guaranteed Delivery.
(8) IRS Guidelines to Substitute Form W-9.
(9) Merger Agreement, dated as of November 18, 1996, among the Company,
Intermet and the Purchaser.
(10) Third Amended and Restated Credit Agreement, dated as of November 14,
1996, among Intermet, SunTrust Bank, Atlanta, NBD Bank and First Union National
Bank of North Carolina.
(11) Audited Financial Statements for the two years ended December 31, 1995
of Intermet. (Incorporated by reference to Intermet's Annual Report on Form 10-K
for the year ended December 31, 1995).
<PAGE> 1
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
Sudbury, Inc.
at
$12.50 Net Per Share
by
I M Acquisition Corp.
a wholly-owned subsidiary of
Intermet Corporation
------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 20, 1996,
UNLESS THE OFFER IS EXTENDED.
------------------------
THE BOARD OF DIRECTORS OF SUDBURY, INC. HAS UNANIMOUSLY
(WITH ONE DIRECTOR ABSENT) APPROVED THE OFFER AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, A MINIMUM OF 7,800,000
SHARES BEING VALIDLY TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT
WITHDRAWN.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of his shares of
common stock of the Company (the "Shares") should either (1) complete and sign
the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal, including any required signature
guarantees, and mail or deliver the Letter of Transmittal or such facsimile with
his certificate(s) for the tendered Shares and any other required documents to
the Depositary, (2) follow the procedure for book-entry tender of Shares set
forth in Section 2, or (3) request his broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for him. Stockholders having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee are urged to contact such broker, dealer, commercial
bank, trust company or other nominee if they desire to tender Shares so
registered.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply with the procedure
for book-entry transfer on a timely basis, may tender such Shares by following
the procedures for guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies.
------------------------
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
November 22, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<C> <S> <C>
1. Terms of the Offer............................................................. 1
2. Procedure for Tendering Shares................................................. 2
3. Withdrawal Rights.............................................................. 5
4. Acceptance for Payment and Payment for Shares.................................. 6
5. Certain Federal Income Tax Consequences of the Offer........................... 6
6. Price Range of Shares; Dividends............................................... 7
7. Effect of the Offer on Market for the Shares, Stock Exchange Listing, and
Exchange Act Registration...................................................... 7
8. Certain Information Concerning the Company..................................... 8
9. Certain Information Concerning the Purchaser and Parent........................ 10
10. Background of the Offer; Contacts with the Company............................. 12
11. Purpose of the Offer; Plans for the Company; the Merger........................ 12
12. Appraisal Rights............................................................... 15
13. Source and Amount of Funds..................................................... 15
14. Certain Conditions of the Offer................................................ 16
15. Dividends and Distributions.................................................... 18
16. Certain Legal Matters.......................................................... 18
17. Fees and Expenses.............................................................. 20
18. Miscellaneous.................................................................. 20
</TABLE>
i
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK OF SUDBURY, INC.:
I M Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly-owned subsidiary of Intermet Corporation, a Georgia corporation
("Parent"), hereby offers to purchase all of the outstanding shares of Common
Stock, par value $0.01 per share (the "Shares"), of Sudbury, Inc., a Delaware
corporation (the "Company"), at $12.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer"). Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Purchaser. The Purchaser will pay all
charges and expenses of IBJ Schroder Bank & Trust Company (the "Depositary") and
D.F. King & Co., Inc. (the "Information Agent").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, A MINIMUM OF 7,800,000
SHARES BEING VALIDLY TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT
WITHDRAWN.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (WITH ONE DIRECTOR
ABSENT) APPROVED THE OFFER AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of November 18, 1996, among the Company, Parent
and the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company and each outstanding Share,
not owned by Parent or its direct or indirect subsidiaries (or by stockholders
who properly exercise dissenters' rights, if any), will be converted into the
right to receive $12.50 in cash (the "Merger").
According to the Company, as of November 7, 1996 there were 11,417,396
Shares outstanding and there were 4,173,948 Shares subject to issuance pursuant
to the Company's stock options and its Series B and Series C Participation
Certificates. The Offer is not being made to acquire Participation Certificates.
Holders of Participation Certificates must, in order to participate in the
Offer, exercise their Participation Certificates and tender the Shares they
receive.
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions set forth
in the Offer (including, if the Offer is extended or amended, the terms and
conditions of such extension or amendment), the Purchaser will accept for
payment, and pay for, any and all Shares validly tendered on or prior to the
Expiration Date (as herein defined) and not withdrawn as permitted by Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday,
December 20, 1996, unless and until the Purchaser shall, in its sole discretion,
but subject to the limitations imposed by the Merger Agreement, have extended
the period for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date on which the Offer, as so extended by
the Purchaser, shall expire.
The Purchaser expressly reserves the right, in its sole discretion, subject
to the limitations contained in the Merger Agreement, at any time or from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary. Any such extension
will also be publicly announced by press release issued no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date. During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the right of a
tendering stockholder to withdraw his Shares. See Section 3. Subject to the
applicable regulations of the Securities and Exchange Commission (the
"Commission"), the Purchaser also expressly reserves the right, in its sole
discretion, at any time or from time to time, (i) to delay acceptance for
payment of or, regardless of whether such Shares were theretofore accepted for
payment, payment for any Shares or to terminate the Offer and not accept for
payment or pay for any Shares not theretofore accepted for payment, or paid for,
upon the occurrence of any of the conditions specified in Section 14 and (ii) to
waive any condition or otherwise amend the Offer in any respect, by giving oral
or written notice of such delay, termination or amendment to the Depositary and
by making a public announcement thereof. If the Purchaser accepts any Shares for
payment pursuant to the terms of the Offer, it will accept for payment all
Shares validly tendered prior to the Expiration Date and not withdrawn, and,
<PAGE> 4
subject to (i) above, will promptly pay for all Shares so accepted for payment.
The Purchaser confirms that its reservation of the right to delay payment for
Shares which it has accepted for payment is limited by Rule 14e-1(c) under the
Securities Exchange Act of 1934, as amended, which requires that a tender
offeror pay the consideration offered or return the tendered securities promptly
after the termination or withdrawal of a tender offer.
Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c) and
14d-6(d) under the Exchange Act, which require that any material change in the
information published, sent or given to stockholders in connection with the
Offer be promptly disseminated to stockholders in a manner reasonably designed
to inform stockholders of such change) and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
The Purchaser confirms that if, subject to the limitations contained in the
Merger Agreement, it makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c) and 14d-6(d) under the Exchange Act.
If, prior to the Expiration Date, the Purchaser, in its sole discretion,
shall, subject to the limitations contained in the Merger Agreement, decrease
the percentage of Shares being sought or increase the consideration offered to
holders of Shares, such increase or decrease shall be applicable to all holders
whose Shares are accepted for payment pursuant to the Offer and, if at the time
notice of any increase or decrease is first published, sent or given to holders
of Shares, the Offer is scheduled to expire at any time earlier than the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended until the expiration of such ten
business-day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 A.M. through 12:00 Midnight, New York City time.
Pursuant to the Merger Agreement, the Purchaser shall not, without the
written consent of the Company, decrease the per Share price to be paid in the
Offer, change the number of Shares sought in the Offer to less than 50.1% of the
outstanding Shares, change the form of consideration to be paid pursuant to the
Offer, impose conditions to the Offer in addition to those set forth in Section
14 or amend any other term or condition of the Offer in any manner, except as
may be required pursuant to the Commission's rules with respect to the extension
of time periods, which is adverse to the holders of Shares, provided, however,
that if on a scheduled Expiration Date all conditions to the Offer shall not
have been satisfied or waived, the Offer may be extended from time to time
without consent of the Company for such period of time as is reasonably expected
to be necessary to satisfy the unsatisfied conditions, and provided, further,
that if as of a scheduled Expiration Date all of the conditions to the Offer
have been satisfied and in excess of 80% but less than 90% of the Shares have
been tendered, the Purchaser may extend the Offer up to an additional seven
business days.
The Offer is being mailed to holders of Shares from a list provided to the
Purchaser by the Company.
2. PROCEDURE FOR TENDERING SHARES.
Valid Tender. To tender Shares pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions of the Letter of Transmittal, with
any required signature guarantees, certificates for the Shares to be tendered,
and any other documents required by the Letter of Transmittal, must be received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase prior to the Expiration Date, (b) such Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery received by the Depositary, including an
Agent's Message if the tendering stockholder has not delivered a Letter of
Transmittal), prior to the Expiration Date, or (c) the tendering stockholder
must comply with the guaranteed delivery procedures set forth below. The term
"Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility
to, and received by, the Depositary and forming a part of a
2
<PAGE> 5
book-entry confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against the participant.
Book-Entry Delivery. The Depositary will establish accounts with respect
to the Shares at The Depository Trust Company and the Philadelphia Depository
Trust Company (each a "Book-Entry Transfer Facility" and, collectively, the
"Book-Entry Transfer Facilities") for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that is
a participant in any of the Book-Entry Transfer Facilities' systems may make
book-entry transfer of Shares by causing a Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with such
Book-Entry Transfer Facility's procedures for such transfer. However, although
delivery of Shares may be effected through book-entry transfer, either the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in lieu of the Letter of Transmittal, and any other required documents, must, in
any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase by the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT THE STOCKHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees. Except as otherwise provided below, all signatures
on a Letter of Transmittal must be guaranteed by a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (an "Eligible Institution"). Signatures on a Letter
of Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed
by the registered holders (which term, for purposes of this section, includes
any participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered therewith and such registered holder has not completed the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Shares not tendered or not accepted for payment
are to be returned to a person other than the registered holder of the
certificates surrendered, then the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as described
above. See Instructions 1 and 5 of the Letter of Transmittal.
3
<PAGE> 6
Guaranteed Delivery. A stockholder who desires to tender Shares pursuant
to the Offer and whose certificates for Shares are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely basis,
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares by following all of the procedures set
forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary (as provided below) prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal), and any other required documents, are received by the
Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery. A "trading day" is any day on which the New
York Stock Exchange (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Other Requirements. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message in lieu of the Letter of Transmittal) and (c) any other
documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE OF
THE SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
Tender Constitutes an Agreement. The valid tender of Shares pursuant to
one of the procedures described above will constitute a binding agreement
between the tendering stockholder and the Purchaser upon the terms and subject
to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder irrevocably appoints designees of the Purchaser as such
stockholder's proxies, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after November 18, 1996. All such proxies will be considered
coupled with an interest in the tendered Shares. Such appointment is effective
when, and only to the extent that, the Purchaser deposits the payment for such
Shares with the Depositary. Upon the effectiveness of such appointment, all
prior powers of attorney, proxies and consents given by such stockholder will be
revoked, and no subsequent powers of attorney, proxies and consents may be given
(and, if given, will not be deemed effective). The Purchaser's designees will,
with respect to the Shares for which the appointment is effective, be empowered
to exercise all voting and other rights of such stockholder as they, in their
sole discretion, may deem proper at any annual, special or adjourned meeting of
the stockholders of the Company, by written consent in lieu of any such meeting
or otherwise. The Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the Purchaser's payment
for such Shares, the Purchaser must be able to exercise full voting rights with
respect to such Shares.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any and all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the
4
<PAGE> 7
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any defect or irregularity in the tender of any Shares
of any particular stockholder whether or not similar defects or irregularities
are waived in the case of other stockholders. No tender of Shares will be deemed
to have been validly made until all defects and irregularities relating thereto
have been cured or waived. None of the Purchaser, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and Instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such stockholder and payment of cash to such stockholder
pursuant to the Offer may be subject to backup withholding of 31%. All
stockholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Certain stockholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Non-corporate foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that Shares tendered pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date and, unless theretofore accepted for
payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after January 20, 1997.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any notice of
withdrawal must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the names in which the
certificate(s) evidencing the Shares to be withdrawn are registered, if
different from that of the person who tendered such Shares. The signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of any Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry tender as
set forth in Section 2, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares. If certificates have been delivered or otherwise
identified to the Depositary, the name of the registered holder and the serial
numbers of the particular certificates evidencing the Shares withdrawn must also
be furnished to the Depositary as aforesaid prior to the physical release of
such certificates. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in its
sole discretion, which determination shall be final and binding. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent, or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification. Any Shares properly withdrawn will be deemed not to have
been validly tendered for purposes of the Offer. However, withdrawn Shares may
be retendered by following one of the procedures described in Section 2 at any
time prior to the Expiration Date.
If the Purchaser extends the Offer, is delayed in its acceptance for
payment of Shares, or is unable to accept for payment Shares pursuant to the
Offer, for any reason, then, without prejudice to the Purchaser's rights under
this Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares,
5
<PAGE> 8
and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 3.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to
the conditions of the Offer, (including, if the Offer is extended or amended,
the terms and conditions of any such extension or amendment), the Purchaser will
accept for payment, and will pay for, Shares validly tendered and not withdrawn
as promptly as practicable after the later of (i) the expiration or termination
of the waiting period applicable to the acquisition of Shares pursuant to the
Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "H-S-R
Act") and (ii) the Expiration Date. Parent filed a Notification and Report Form
under the H-S-R Act on November 21, 1996, and, accordingly, unless earlier
terminated or extended by a request for additional information, the waiting
period under the H-S-R Act is scheduled to expire at 11:59 P.M., New York City
time, on December 6, 1996. See Section 16. In addition, subject to applicable
rules of the Commission, the Purchaser expressly reserves the right to delay
acceptance for payment of or payment for Shares in order to comply, in whole or
in part, with any applicable law. See Section 14. In all cases, payment for
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of certificates for such Shares (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other required
documents.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Purchaser gives oral or written notice to the Depositary of its acceptance for
payment of such Shares pursuant to the Offer. Payment for Shares accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for the tendering
stockholders for purpose of receiving payments from the Purchaser and
transmitting such payments to the tendering stockholders. Under no circumstances
will interest on the purchase price for Shares be paid, regardless of any delay
in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares tendered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 2, such Shares will be credited to an account maintained with such
Book-Entry Transfer Facility), as soon as practicable following expiration or
termination of the Offer.
The Purchaser reserves the right to transfer or assign in whole or in part
from time to time to one or more direct or indirect subsidiaries of Parent the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER. Sales of Shares
pursuant to the Offer and the exchange of Shares for cash pursuant to the Merger
will be taxable transactions for Federal income tax purposes and may also be
taxable under applicable state, local and other tax laws. In general, for
Federal income tax purposes, a stockholder whose Shares are purchased pursuant
to the Offer or who receives cash as a result of the Merger will realize gain or
loss equal to the difference between the adjusted basis of the Shares sold or
exchanged and the amount of cash received therefor. Such gain or loss will be
capital gain or loss if the Shares are held as capital assets by the
stockholder, and will be long-term capital gain or loss if such stockholder's
holding period for such Shares exceeds one year.
THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE TO STOCKHOLDERS IN SPECIAL SITUATIONS
SUCH AS STOCKHOLDERS WHO RECEIVED THEIR SHARES UPON THE EXERCISE OF EMPLOYEE
STOCK OPTIONS OR OTHERWISE AS COMPENSATION AND STOCKHOLDERS WHO ARE NOT UNITED
STATES PERSONS. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE SPECIFIC TAX CONSE-
6
<PAGE> 9
QUENCES TO THEM OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are traded on the NASDAQ
National Market System ("NASDAQ/NMS"). The following table sets forth, for the
fiscal quarters indicated, the high and low sales prices for the Shares on the
NASDAQ/NMS sources. The Company has never paid cash dividends on Shares.
<TABLE>
<CAPTION>
SHARES
-------------------
YEAR ENDED MAY 31 HIGH LOW
------------------------------------------------------------------ -------- -------
<S> <C> <C>
1995:
First Quarter................................................... 7.00 6.125
Second Quarter.................................................. 7.375 6.25
Third Quarter................................................... 6.75 5.125
Fourth Quarter.................................................. 7.125 5.75
1996:
First Quarter................................................... 8.50 6.375
Second Quarter.................................................. 9.625 7.75
Third Quarter................................................... 8.375 7.00
Fourth Quarter.................................................. 9.625 7.50
1997:
First Quarter................................................... 11.25 7.625
Second Quarter (through November 21, 1996)...................... 13.125 9.438
</TABLE>
On September 3, 1996, the last full trading day prior to the public
announcement by Park-Ohio Industries Inc. that it had offered to buy the Company
at $11 a share, the reported closing price of the Shares on the NASDAQ/NMS was
$10.625. On November 18, 1996, the last full trading day prior to the public
announcement of the terms of the Offer and the Merger, the reported closing
price on the NASDAQ/NMS was $10.00 per Share. On November 21, 1996, the last
full trading day prior to commencement of the Offer, the reported closing price
on the NASDAQ/NMS was $12.3125 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON MARKET FOR THE SHARES, STOCK EXCHANGE LISTING, AND
EXCHANGE ACT REGISTRATION. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly
and may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
The Shares are traded on the NASDAQ/NMS. According to the NASDAQ/NMS
published guidelines, the NASDAQ/NMS will consider cessation of designation of
the Shares as a "national market system security" if the Shares fail to
"substantially meet" specified criteria including, among other things, if the
number of record holders of round lots of Shares is below 300, the number of
publicly held Shares is below 200,000 or the aggregate market value of publicly
held Shares is below $1,000,000. According to the Company's 1996 Annual Report,
there were approximately 1,200 record holders as of August 2, 1996.
Depending upon the number of Shares acquired pursuant to the Offer, the
Shares may no longer "substantially meet" the NASDAQ/NMS criteria and thus may
no longer be eligible for continued designation as a "national market system
security" quoted on the NASDAQ/NMS. If as a result of the purchase of Shares
pursuant to the Offer, Shares no longer meet the requirements of the NASDAQ/NMS
for continued quotation, and the quotation of the Shares is discontinued, the
market for the Shares could be adversely affected.
In the event that the Shares were no longer quoted on the NASDAQ/NMS, it is
possible that the Shares would trade in the over-the-counter market and that
price quotations would be reported through other sources.
7
<PAGE> 10
Such trading and the availability of such quotations would, however, depend upon
the number of stockholders and/or the aggregate market value of the Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration of the
Shares under the Exchange Act, as described herein, and other factors.
The Shares are presently "margin securities" under the regulations of the
Federal Reserve Board, which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above, the Shares might no longer constitute "margin
securities" for the purposes of the Federal Reserve Board's margin regulations
in which event the Shares would be ineligible as collateral for margin loans
made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated by the Company upon application to the Commission
if the outstanding Shares are not listed on a national securities exchange and
if there are fewer than 300 holders of record of Shares. Termination of
registration of the Shares under the Exchange Act would reduce the information
required to be furnished by the Company to its stockholders and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) and the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a) and the related requirement of furnishing an annual report to
stockholders, no longer applicable with respect to the Shares. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
under the Securities Act of 1933, as amended, may be impaired or eliminated. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible for NASDAQ reporting or for continued inclusion on
the Federal Reserve Board's list of "margin securities". However, the
Participation Certificates are also registered under the Exchange Act and if
they are not terminated as a result of the Offer (they terminate upon the sale
of substantially all of the Shares), the existence of a sufficient number of
holders of Participation Certificates might result in the Company remaining a
reporting person under the Exchange Act. As of November 14, 1996, there were
approximately 1,100 holders of record of the Series B Participation Certificates
and 1,300 holders of record of the Series C Participation Certificates. The
Purchaser intends to seek to cause the Company to apply for termination of
registration of the Shares as soon as possible after consummation of the Offer
if the requirements for termination of registration are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 30100 Chagrin
Boulevard, Suite 203, Cleveland, Ohio 44124.
The Company, through its subsidiaries, is engaged in the manufacture and
sale of a broad range of industrial products, including iron, aluminum and zinc
castings, coating applications, cranes and truck bodies and precision machined
components. Its largest group of products consists of products and services sold
to the automotive industry.
Set forth below is certain summary consolidated financial information for
the Company's last three fiscal years as contained in the Company's 1996 Annual
Report and for the three months ended August 31, 1996 as contained in the
Company's Quarterly Report on Form 10-Q for the quarter ended August 31, 1996.
More comprehensive financial information is included in such report (including
management's discussion and analysis of financial condition and results of
operation) and other documents filed by the Company with the Commission, and the
following summary is qualified in its entirety by reference to such report and
other documents and all of the financial information and notes contained
therein. Copies of such report and other documents may be examined at or
obtained from the Commission in the manner set forth below.
8
<PAGE> 11
SUDBURY, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED AUGUST FISCAL YEAR ENDED MAY 31
----------------- ----------------------------
1996 1995 1996 1995 1994
------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT INFORMATION:
Net Sales..................................... $ 72.1 $ 71.2 $302.2 $305.4 $250.6
Net Income.................................... 2.8 2.7 15.9 13.6 6.8
BALANCE SHEET INFORMATION:
Working capital............................... $ 25.3 $ 17.1 $ 22.9 $ 15.8 $ 19.7
Total assets.................................. 130.4 124.6 132.4 129.6 114.2
Total indebtedness............................ 10.5 16.9 10.4 18.7 32.3
Stockholders' equity.......................... 66.7 47.8 62.6 44.6 29.4
PER COMMON SHARE INFORMATION:
Net income per common share:..................
Fully Diluted............................... $ .21 $ .21 $ 1.23 $ 1.07 $ .55
Average Common shares and share equivalents
Fully Diluted............................... 13.1 12.9 12.9 12.7 12.5
</TABLE>
9
<PAGE> 12
The Company does not as a matter of course publicly disclose projections as
to future revenues or earnings. The projections set forth below (the
"Projections") were not prepared with a view to public disclosure or compliance
with the published guidelines of the Commission or the guidelines established by
the American Institute of Certified Public Accountants regarding projections and
are included in the Offer to Purchase only because such information was made
available to Parent. None of Parent, the Purchaser, the Company or any of their
financial advisors or any of their respective directors or officers assumes any
responsibility for the accuracy of the Projections. The Company's independent
auditors have not examined or compiled the Projections presented herein and,
accordingly, assume no responsibility for them. In addition, because the
estimates and assumptions, many of which are not set forth herein, underlying
the Projections are inherently subject to significant economic and competitive
uncertainties and contingencies which are difficult or impossible to predict
accurately and are beyond Parent's and the Company's control, there can be no
assurance that the Projections will be realized. Accordingly, it is expected
that there will be differences between actual and projected results, and actual
results may be materially higher or lower than those set forth below.
The Projections showed net sales for the years ended May 31, 1997, 1998 and
1999 of $305.5 million, $323.6 million and $347.7 million, respectively, and
operating income for such periods of $29.5 million, $34.3 million and $38.6
million, respectively.
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase has been taken from or based upon
publicly available documents and records on file with the Commission and other
public sources and is qualified in its entirety by reference thereto. Although
Parent has no knowledge that would indicate that any statements contained herein
based on such documents and records are untrue, Parent cannot take
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Parent.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities, any material interests of such
persons in transactions with the Company and other matters is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference room at the
Commission's office 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.,
and also should be available for inspection and copying at the following
regional offices of the Commission: 230 South Dearborn Street, Chicago,
Illinois; 75 Park Place, New York, New York. Copies may be obtained, by mail,
upon payment of the Commission's customary charges, by writing to its principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser is a
Delaware corporation and to date has engaged in no activities other than those
incident to its formation and the commencement of the Offer. The Purchaser is a
direct wholly-owned subsidiary of Parent. The principal executive offices of the
Purchaser and Parent are located at Suite 200, 5445 Corporate Drive, Troy,
Michigan 48098.
Parent is a leading independent manufacturer of precision ductile and gray
iron and aluminum castings, which are used primarily in passenger cars and light
trucks, as well as in heavy trucks.
Additional information concerning Parent is set forth in Parent's Annual
Report on Form 10-K for the year ended December 31, 1995, which information is
incorporated by reference herein, and subsequent Quarterly Reports on Form 10-Q,
which reports may be obtained from the SEC in the manner set forth with respect
to information concerning the Company in Section 8.
10
<PAGE> 13
Set forth below is certain consolidated financial information of Parent:
PARENT
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 CALENDAR YEAR
----------------- ----------------------------
1996 1995 1995 1994 1993
------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT INFORMATION:
Net sales and operating revenues and other
revenues.................................... $408.2 $419.6 $541.7 $501.3 $444.2
Income before extraordinary items............. 26.4 19.4 25.4 (11.0) (20.5)
Net income.................................... 26.4 19.4 25.4 (11.0) (20.5)
BALANCE SHEET INFORMATION:
Working capital............................... $ 49.8 $ 34.3 $ 11.9 $ 29.1 $ 31.1
Total assets.................................. 294.8 296.2 274.1 306.3 307.5
Total indebtedness............................ 169.1 203.9 173.2 235.4 229.1
Stockholders' equity.......................... 122.8 89.4 98.0 68.0 75.5
PER COMMON SHARE INFORMATION:
Income before extraordinary items............. $ 26.4 $ 19.4 $ 25.4 $(11.0) $(20.5)
Extraordinary items........................... -- -- -- -- --
Net income per common share on a fully diluted
basis....................................... 1.04 0.78 1.02 (.45) (.83)
</TABLE>
- ---------------
* Average number of fully diluted shares during each period was 25,472, 24, 810,
24,893, 24,591 and 24,564.
11
<PAGE> 14
The name, citizenship, business address, present principal occupation, and
material positions held during the past five years of each of the directors and
executive officers of Parent and the Purchaser are set forth in Schedule A to
this Offer to Purchase.
Except as set forth in Section 10, neither the Purchaser nor Parent, nor,
to the best of their knowledge, any of the persons listed in Schedule A hereto
nor any associate or majority-owned subsidiary of any of the foregoing,
beneficially owns or has a right to acquire any equity securities of the
Company. Neither the Purchaser nor Parent, nor, to the best of their knowledge,
any of the persons or entities referred to above, nor any director, executive
officer or subsidiary of any of the foregoing, has effected any transaction in
such equity securities during the past 60 days.
Except as set forth in Section 10, neither the Purchaser nor Parent, nor,
to the best of their knowledge, any of the persons listed in Schedule A hereto,
has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not limited
to, any contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies. Except as set forth in Section 10, there have
been no contacts, negotiations or transactions since June 1, 1993 between Parent
or the Purchaser, or, to the best of their knowledge, any of the persons listed
in Schedule A hereto, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, a tender offer or
other acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets. Except as described in Sections 10,
neither the Purchaser nor Parent, nor, to the best of their knowledge, any of
the persons listed in Schedule A hereto, has since June 1, 1993 had any
transaction with the Company or any of its executive officers, directors or
affiliates that would require disclosure under the rules and regulations of the
Commission applicable to the Offer.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
In 1993, the Company and Parent discussed the possible acquisition by
Parent of the Company's 35% interest in General Products Delaware Corporation.
On a couple of occasions in 1995 and in January 1996, Parent and the Company met
to discuss the two companies and the possibility of a business combination. No
specific terms were discussed and no actions were taken following those meetings
to pursue a business combination. On September 4, 1996, John Doddridge, chief
executive officer of Parent, called Jacques R. Sardas, chief executive officer
of the Company after seeing the announcement by Park-Ohio Industries Inc. that
it had made a proposal to acquire the Company at $11.00 a share. Parent signed a
confidentiality agreement with the Company on September 5, 1996 and commenced
due diligence on October 9, 1996. On November 18, 1996, the Company, Parent and
the Purchaser entered into the Merger Agreement. The terms of the Merger
Agreement are set forth in Section 11.
A copy of the Merger Agreement has been filed as an Exhibit to the Schedule
14D-1 filed by Parent with the Commission and is available for inspection and
copying at the principal office of the Commission in the manner set forth in
Section 8. The description of this document in Section 11 is qualified in its
entirety by reference to such document.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE MERGER. The purpose of the
Offer is to acquire for cash as many outstanding Shares as possible as a first
step in acquiring the entire equity interest in the Company.
If the Purchaser acquires a majority of the outstanding Shares pursuant to
the Offer, it will have the vote necessary under Delaware law to approve the
Merger. If the Purchaser acquires 90% of the outstanding Shares, it will be able
to effect the Merger immediately in a so-called "short-form" merger without any
stockholder meeting. The Merger Agreement provides that, promptly after
expiration of the Offer and receipt of any required approval by the Company's
stockholders of the Merger Agreement and the satisfaction or waiver of certain
other conditions, but no earlier than January 2, 1997, the Purchaser will be
merged into the Company. Upon consummation of the Merger (the "Effective Time"),
each then outstanding Share not
12
<PAGE> 15
owned by Parent or any subsidiary of Parent (other than Shares held by
stockholders of the Company who exercise dissenters' rights under applicable
law) will be converted into the right to receive $12.50 in cash, without
interest (the "Merger Consideration").
The obligations of the Company, the Purchaser and Parent to effect the
Merger are subject to the satisfaction of certain conditions set forth in the
Merger Agreement, including (i) the purchase by the Purchaser of Shares pursuant
to the Offer, (ii) the receipt of stockholder approval, if required, and (iii)
there being no statute, rule, regulation, judgment, decree, injunction or other
order by any court or governmental or regulatory authority which is in effect
which restrains, prevents or materially changes the transactions contemplated by
the Merger Agreement. In addition, Parent's obligations to effect the Merger are
further subject to the satisfaction of the conditions set forth in the Merger
Agreement, including (i) the performance by the Company in all material respects
of all obligations required to be performed by it under the Merger Agreement and
the compliance in all material respects with any agreement or covenants of the
Company to be performed by it under the Merger Agreement, (ii) receipt of all
necessary approvals or authorizations of any governmental authority in
connection with the Merger Agreement except where the failure to have obtained
or made any such approval or authorization would not have a material adverse
effect on the Company, or (iii) the absence of any order by any government
authority in any suit, action or proceeding, which (a) requires the payment of
damages by Parent, the Purchaser or the Company in connection with the Offer or
the Merger which damages are material to the value of the Company and its
subsidiaries taken as a whole, (b) prohibits or limits the ownership or
operation by Parent and its subsidiaries of, or compels Parent or any of its
subsidiaries to dispose of or hold separate, any business or assets which are
material to Parent and its subsidiaries taken as a whole, in each case as a
result of the Offer or the Merger or any of the other transactions contemplated
by the Merger Agreement, or (c) imposes limitations on the ability of Parent to
acquire or hold, or exercise full rights of ownership of, shares of capital
stock of the subsidiaries of the Company, which limitations would have a
material adverse effect with respect to the value of the Company and its
subsidiaries taken as a whole to Parent.
According to its terms, the Merger Agreement may be terminated and the
Merger contemplated therein may be abandoned at any time prior to the Effective
Time, whether before or after stockholder approval of the Company, by the mutual
consent of the Board of Directors of Parent and the Board of Directors of the
Company. In addition the Merger Agreement may be terminated by either the Board
of Directors of Parent or the Board of Directors of the Company if (i) Parent or
the Purchaser has not purchased the Shares in accordance with the terms of the
Offer on or prior to February 14, 1997; provided, any party may not terminate
whose failure to fulfill any obligations under the Merger Agreement has been the
cause of, or resulted in, the failure to satisfy the conditions of the Offer;
provided, further, that Parent may not terminate the Merger Agreement if Parent
or the Purchaser purchases any Shares in connection with the Offer after
February 14, 1997; or (ii) if any governmental authority has issued an order,
decree or ruling, or taken any other action (which order, decree, ruling or
other action the parties shall use their best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by the Merger Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable. The Merger Agreement may be
terminated by the Board of Directors of Parent if (i) (A) prior to the purchase
of Shares pursuant to the Offer, the Board of Directors of the Company takes a
Permitted Action, or (B) prior to the consummation of the Offer, it is publicly
disclosed to Parent or the Purchaser, or Parent or the Purchaser has learned
that, a "group" (as defined in Section 13(d)(3) of the Exchange Act), other than
employees of the Company through the exercise of options, has acquired
beneficial ownership of more than 20% of any class or series of capital stock of
the Company (including the Shares) through the acquisition of stock, or
otherwise; (ii) Parent or the Purchaser terminates the Offer, or the Offer has
expired, without Parent or the Purchaser purchasing any Shares thereunder;
provided Parent or the Purchaser is not in material breach of the Merger
Agreement; or (iii) the Company breaches or fails in any material respect to
perform or comply with any of its material covenants and agreements contained in
the Merger Agreement. A "Permitted Action" is either of the
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<PAGE> 16
following actions in the circumstances described below which the Board of
Directors of the Company may take from time to time without violating the Merger
Agreement: (i) to withdraw or modify its approval or recommendations of the
Merger Agreement, the Offer or the Merger in a manner adverse to Parent and the
Purchaser; or (ii) to approve or recommend or enter into an agreement with
respect to a Permitted Acquisition Proposal; if, in each such case, (A) a
Permitted Acquisition Proposal is publicly proposed, publicly disclosed or
communicated to the Company and (B) the Board of Directors of the Company
determines, based on the advice of the Company's outside legal counsel, that
such action is required in order to comply with its fiduciary duties to the
stockholders of the Company. A "Permitted Acquisition Proposal" is a proposal
with respect to which (1) the Board of Directors of the Company determines,
based on the advice of the Company's outside legal counsel, that failing to
engage in discussions or negotiations or provide information would reasonably be
expected to violate the fiduciary duties of the Board of Directors of the
Company to its stockholders, (2) prior to engaging in discussions or
negotiations with, or furnishing information to, the proposing party, the
Company receives from such party an executed confidentiality agreement in
reasonably customary form on terms not more favorable to such party than the
terms contained in the confidentiality agreement between the Company and Parent,
and (3) the holders of Shares would be entitled to receive consideration which
would in the aggregate exceed $12.50 per Share.
The Merger Agreement may be terminated by the Board of Directors of the
Company if (i) prior to the purchase of Shares, the Company takes a Permitted
Action; provided the requisite termination fee is paid; (ii) prior to the
purchase of Shares pursuant to the Offer, Parent or the Purchaser (A) breaches
or fails in any material respect to perform or comply with any of its material
covenants and agreements contained in the Merger Agreement or (B) breaches its
representation and warranties in any material respect; provided, further, such
breach is not cured; or (iii) Parent or the Purchaser terminates the Offer, or
the Offer expires, without the Purchaser purchasing any Shares; provided, the
Company is not in material violation of the Merger Agreement.
The Merger Agreement provides that if the Board of Directors of the Company
or Parent shall terminate the Merger Agreement because a Permitted Action has
occurred, then the Company shall, not later than the termination date, pay
Parent a fee of $5 million. If the Company fails to promptly pay such amount,
and, in order to obtain such payment, Parent or the Purchaser commences a suit
which results in a judgment against the Company for the fee set forth above, the
Company shall pay to Parent or the Purchaser its cost and expenses (including
attorneys' fees) in connection with such suit, together with interest on the
amount of the fee at the annual rate of interest charged to Parent under its
senior credit facility.
Subject to the applicable provisions of the DGCL, the Merger Agreement may
be amended by action taken by the Company, Parent and the Purchaser at any time
prior to the Effective Time.
The Merger Agreement also provides that the Company will take such action
as may be necessary so that each holder of an outstanding option to purchase
Shares (an "Option") granted under any employee stock option plan of the
Company, whether or not exercisable, shall be entitled to receive at or after
the Effective Time, an amount in cash in cancellation of such Option equal to
the difference between $12.50 and the exercise price per Share of such Option
multiplied by the number of Shares subject to such Option.
The Merger Agreement provides that, after the Effective Time, the surviving
corporation in the Merger will maintain the Company's existing directors' and
officers' primary liability insurance coverage for a period of four years after
the Effective Time, provided that there shall be no obligation to pay annual
premiums in excess of two times the annual premium paid prior to the date of the
Merger Agreement. If the insurance
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<PAGE> 17
premium exceeds such amount, the surviving corporation will obtain as much
insurance as can be obtained for the remainder of such period for such amount.
The Merger Agreement also provides that, after the Effective Time, Parent and
the surviving corporation will indemnify each present and former director and
officer of the Company to the fullest extent the Company would have been
permitted to do so under Delaware law.
Pursuant to the Merger Agreement, Parent has the right to have persons
designated by it become directors of the Company, subject to the Purchaser
acquiring more than 50% of the outstanding Shares pursuant to the Offer, so that
the total number of such persons equals that number of directors, rounded up to
the next whole number, which represents the product of (x) the total number of
directors on the Board of Directors multiplied by (y) the percentage that the
number of Shares so accepted for payment bears to the number of Shares
outstanding at the time of such acceptance for payment; provided, however, that
prior to the Effective Time, the Company's Board of Directors shall always have
at least three members who are neither officers of Parent nor designees,
stockholders or affiliates of Parent.
The Company has agreed that neither it nor any of its subsidiaries nor any
of the respective officers and directors of the Company and its subsidiaries
shall, directly or indirectly, solicit, initiate or knowingly encourage any
inquiries or the making of any proposal with respect to a merger, consolidation
or similar transaction involving, or any purchase of all or any significant
portion of the assets of, or any equity interest in, the Company or any of its
subsidiaries, except that the Company may participate in discussions or
negotiations with, and furnish information concerning the Company to, a party
who makes a Permitted Acquisition Proposal.
The Merger Agreement also contains certain other restrictions as to the
conduct of business by the Company pending the Merger, as well as
representations and warranties of each of the parties customary in transactions
of this kind.
12. APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under Delaware law to dissent and demand appraisal of, and
payment in case of the fair value of, their Shares. Such rights, if the
statutory procedures were complied with, could lead to a judicial determination
of the fair value (excluding any element of value arising from the
accomplishment or expectation of the Merger) required to be paid in cash to such
dissenting holders for their Shares. Any such judicial determination of the fair
value of Shares could be based upon considerations other than, or in addition
to, the price paid in the Offer and the market value of the Shares, including
asset values and the investment value of the Shares. The value so determined
could be more or less than the purchase price per Share pursuant to the Offer or
the consideration per Share to be paid in the Merger.
Rule 13e-3 under the Exchange Act, which Parent does not believe would be
applicable to the Merger, would require, among other things, that certain
financial information concerning the Company and certain information relating to
the fairness of the proposed transaction and the consideration offered to
stockholders of the Company therein, be filed with the Commission and disclosed
to stockholders of the Company prior to consummation of the transaction.
13. SOURCE AND AMOUNT OF FUNDS. The Purchaser estimates that the total amount
of funds required to purchase all of the outstanding Shares, assuming conversion
of all Participation Certificates, pursuant to the Offer and the Merger and to
pay related fees and expenses will be approximately $165 million. Should the
presently exercisable options be exercised and tendered, another approximately
$31 million would be required. The Purchaser will obtain these funds from
Parent. Parent, SunTrust Bank, Atlanta, NBD Bank and First Union National Bank
of North Carolina have entered into a Third Amended and Restated Credit
Agreement dated as of November 14, 1996 (the "Parent Credit Agreement"),
pursuant to which such banks have agreed to provide a revolving credit facility
to Parent in the aggregate principal amount of $200 million, subject to certain
terms and conditions. The following summary of the Parent Credit Agreement is
qualified in its entirety by reference to the Parent Credit Agreement filed as
an Exhibit to the Schedule 14D-1.
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<PAGE> 18
The revolving credit facility is in the maximum principal amount of $200
million and is for a term of three years, unless earlier accelerated in
accordance with the terms of the Parent Credit Agreement.
Under the terms of the Parent Credit Agreement, the revolving credit is
guaranteed by certain subsidiaries of Parent. Neither Parent, the Purchaser nor
any of such subsidiaries currently has pledged any of its assets to secure the
revolving credit facility.
Under the Parent Credit Agreement, revolving credit loans may be borrowed
at rates of interest based on SunTrust's base rate, a LIBOR rate plus an
applicable margin or an overnight rate plus a margin. Such margin for LIBOR
borrowings is based on the funded debt to consolidated EBITDA ratio of Parent.
Parent may also request that bid rate loans be made by the lenders under the
Parent Credit Agreement, at mutually agreed interest rates.
Under the revolving credit facility, Parent also has the ability to request
the issuance of letters of credit by SunTrust. The issuance of such letters of
credit is subject to the payment of certain fees and the satisfaction of certain
other requirements by Parent.
The availability of the revolving credit facility is subject to certain
conditions precedent, including that there shall exist no default or event of
default, that all representations and warranties by Parent be true and correct
in all material respects on the date of any borrowing, that no material adverse
change shall have occurred in the condition of Parent since June 30, 1996, that
no material adverse action or proceeding shall be pending against Parent or any
guarantor; and that the borrowings or use of proceeds shall not violate any
applicable law, rule, injunction or regulation.
The Parent Credit Agreement contains a number of financial and other
covenants that are binding upon Parent during the term of the Parent Credit
Agreement, including without limitation financial covenants requiring Parent to
maintain certain fixed charge coverage, leverage and funded debt to EBITDA
ratios, as well as a number of other covenants and restrictions. The Parent
Credit Agreement also includes a number of other events of default.
Parent anticipates that indebtedness incurred through borrowings under the
Parent Credit Agreement will be repaid from a variety of sources, including, but
not limited to, funds generated internally by Parent and its subsidiaries
(including, following the Merger, funds generated by the Surviving Corporation).
No decision has been made concerning the method that Parent will use to repay
such indebtedness. Such decision, when made, will be based on Parent's review
from time to time of the prevailing interest rates and financial and other
economic conditions and such other factors as Parent may deem appropriate.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer and provided that the Purchaser shall not be obligated to accept for
payment any Shares until expiration of all applicable waiting periods under the
H-S-R Act, the Purchaser shall not be required to accept for payment or pay for
any Shares, may delay the acceptance for payment of or payment for tendered
Shares, and may, in its sole discretion, terminate or subject to the Merger
Agreement amend the Offer as to any Shares not then paid for if a minimum of
7,800,000 Shares have not been validly tendered pursuant to the Offer and not
withdrawn prior to the Expiration Date, or if on or after November 18, 1996 (or
as to clause (j) below at any time), and at or prior to the time of payment for
any such Shares (whether or not any Shares have theretofore been accepted for
payment), any of the following events shall occur:
(a) there shall have occurred (i) any general suspension of trading in
securities on the NYSE or in the over-the-counter market, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) a commencement or escalation
of a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States, (iv) any limitation
(whether or not mandatory) by any governmental or regulatory authority,
agency, commission or other entity, domestic or foreign ("Governmental
Entity"), on, or any other event which might affect, the extension of
credit by banks or other lending institutions, or (v) or in the case of any
of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Merger Agreement or any representation or warranty of
16
<PAGE> 19
the Company set forth in the Merger Agreement shall have been inaccurate or
incomplete in any material respect when made or thereafter shall become
inaccurate or incomplete in any material respect except (i) for changes
contemplated by the Merger Agreement and (ii) those representations or
warranties that address matters only as of a particular date which are true
and correct as of such date.
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an "Action,"
(including a worsening of any existing Action) before any United States
court or other Governmental Entity by any United States Governmental
Entity: (i) challenging the acquisition by Parent or the Purchaser of
Shares, seeking to restrain or prohibit the consummation of the
transactions contemplated by the Offer or the Merger seeking to obtain any
damages which damages are material to the Company and its subsidiaries
taken as a whole; (ii) seeking to prohibit, or impose any material
limitations on, Parent's or the Purchaser's ownership or operation of all
the Company's business or assets or to compel Parent or the Purchaser to
dispose of or hold separate all or any portion of the Company's business or
assets (including the business or assets of its subsidiaries) as a result
of the transactions contemplated by the Offer or the Merger which
limitations would have a material adverse effect with respect to the value
of the Company and its subsidiaries taken as a whole to Parent; (iii)
seeking to make the acceptance for payment, purchase of, or payment for,
some or all of the Shares illegal or render the Purchaser unable to, or
result in a material delay in, or materially restrict, the ability of the
Purchaser to accept for payment, purchase or pay for some or all of the
Shares; (iv) seeking to impose material limitations on the ability of
Parent or the Purchaser effectively to acquire or hold or to exercise full
rights of ownership of the Shares including, without limitation, the right
to vote the Shares purchased by them on an equal basis with all other
Shares on all matters properly presented to the stockholders; or (v) that
in any event is reasonably likely to have a material adverse effect on the
financial condition, properties, business or operations of the Company and
its subsidiaries taken as a whole or the value of the Shares to Parent or
the Purchaser as a result of consummation of the transactions contemplated
by the Offer and the Merger;
(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed or become applicable to
the Offer or the Merger, or any other action shall have been taken,
proposed or threatened, by any United States court or other Governmental
Entity other than the application to the Offer or the Merger of waiting
periods under the H-S-R Act, that, directly or indirectly, can reasonably
be expected to result in any of the effects of, or have any of the
consequences sought to be obtained or achieved in, any Action referred to
in clauses (i) through (v) of paragraph (c) above;
(e) a tender or exchange offer for some portion or all of the Shares
shall have been commenced or publicly proposed to be made by another person
(including the Company or its subsidiaries), or it shall have been publicly
disclosed that (i) any person (including the Company or its subsidiaries),
entity or "group" (as defined in Section 13(d) of the Exchange Act and the
rules promulgated thereunder), other than employees of the Company through
exercise of Options, shall have become the beneficial owner (as defined in
Section 13(d) of the Exchange Act and the rules promulgated thereunder) of
more than 20% of the Shares; or (ii) any person, entity or group shall have
entered into a definitive agreement or an agreement in principle with
respect to an acquisition proposal with or involving the Company;
(f) any change shall have occurred in the financial condition,
properties, businesses or results of operations of the Company and any of
its subsidiaries that is or is reasonably likely to be materially adverse
to the Company and its Subsidiaries taken as a whole;
(g) the Board of Directors of the Company (or a special committee
thereof) shall have amended, modified or withdrawn its recommendation of
the Offer or the Merger, or shall have failed to publicly reconfirm such
recommendation upon request by Parent or the Purchaser, or shall have
endorsed, approved or recommended any other acquisition proposal, or shall
have resolved to do any of the foregoing;
(h) the Merger Agreement shall have been terminated by the Company or
Parent or the Purchaser in accordance with its terms or Parent or the
Purchaser shall have reached an agreement or
17
<PAGE> 20
understanding in writing with the Company providing for termination or
amendment of the Offer or delay in payment for the Shares;
(i) any Action is instituted or pending by a non-governmental person
or entity (or there shall be a worsening of an existing Action) which, in
the reasonable judgment of Parent, has a reasonable likelihood of success,
and if successful on the merits, is more likely than not to have a material
adverse effect on the financial condition, properties, business or
operations of the Company and its subsidiaries taken as a whole or the
value of the Shares to Parent as a result of the consummation of the
transactions contemplated by the Offer and the Merger; or
(j) if there has been any (y) Release of Hazardous Substance in, on,
under or affecting any properties currently or formerly owned or operated
by the Company or any of its subsidiaries in violation of, or as would
reasonably be anticipated to result in liability under, applicable
Environmental Laws or (z) disposal of Hazardous Substances or any other
substance in a manner that has led to, or could reasonably be anticipated
to lead to, a Release in violation of applicable Environmental Laws except,
in either case, as disclosed by the Company to Parent in writing prior to
the date hereof and except in either case for those which, individually or
in the aggregate, are not reasonably likely to have a Material Adverse
Effect on the Company(as such capitalized terms are defined in the Merger
Agreement),
which, in the sole judgment of Parent and the Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
the Purchaser giving rise to any such conditions, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment of or payment for
Shares.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (including any action or inaction by Parent or the Purchaser)
giving rise to any such conditions or may be waived by Parent or the Purchaser
in whole or in part at any time and from time to time in its sole discretion.
The determination as to whether any condition has occurred shall be in the sole
judgment of Parent and the Purchaser and will be final and binding on all
parties. The failure by Parent or the Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. Notwithstanding the fact that the Purchaser reserves the
right to assert the occurrence of a condition following acceptance for payment
but prior to payment in order to delay payment or cancel its obligation to pay
for properly tendered Shares, the Purchaser will either promptly pay for such
Shares or promptly return such Shares.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
15. DIVIDENDS AND DISTRIBUTIONS. Pursuant to the terms of the Merger Agreement,
the Company is prohibited from declaring, setting aside or paying any dividends
payable in cash, stock or property with respect to the Shares. If, on or after
November 18, 1996, the Company should split, combine or otherwise change the
Shares or its capitalization, or shall disclose that it has taken any such
action, then the Purchaser, in its discretion, subject to the limitations in the
Merger Agreement, may make such adjustments in the Offer consideration and other
terms of the Offer as it deems appropriate to reflect such split, combination or
other change.
16. CERTAIN LEGAL MATTERS.
General. Except as otherwise disclosed herein, based upon an examination
of publicly available filings with respect to the Company, Parent and the
Purchaser are not aware of any licenses or other regulatory permits which appear
to be material to the business of the Company and which might be adversely
affected by the acquisition of Shares by the Purchaser pursuant to the Offer or
of any approval or other action by any governmental, administrative or
regulatory agency or authority which would be required for the acquisition or
ownership of Shares by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is currently contemplated that such
approval or action would be sought or taken. There can be no assurance that any
such approval or action, if needed, would be obtained or, if obtained, that it
will be obtained
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<PAGE> 21
without substantial conditions or that adverse consequences might not result to
the Company's or Parent's business or that certain parts of the Company's or
Parent's business might not have to be disposed of in the event that such
approvals were not obtained or such other actions were not taken, any of which
could cause the Purchaser to elect to terminate the Offer without the purchase
of the Shares thereunder. The Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to certain conditions. See Section 14.
Antitrust Compliance. Under the H-S-R Act and the rules that have been
promulgated thereunder by the Federal Trade Commission ("FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The acquisition of Shares by the Purchaser is subject to these
requirements. See Section 4 of this Offer to Purchase as to the effect of the
H-S-R Act on the timing of the Purchaser's obligation to accept Shares for
payment.
Pursuant to the H-S-R Act, Parent filed a Notification and Report Form with
respect to the acquisition of Shares pursuant to the Offer with the Antitrust
Division and the FTC on November 21, 1996. Under the provisions of the H-S-R Act
applicable to the purchase of Shares pursuant to the Offer, such purchases may
not be made until the expiration of a 15-calendar day waiting period following
the filing by Parent. Accordingly, the waiting period under the H-S-R Act will
expire at 11:59 p.m., New York City time, on December 6, 1996, unless early
termination of the waiting period is granted or Parent receives a request for
additional information or documentary material prior thereto. Pursuant to the
H-S-R Act, Parent has requested early termination of the waiting period
applicable to the Offer. There can be no assurances given, however, that the
15-day H-S-R Act waiting period will be terminated early. If either the FTC or
the Antitrust Division were to request additional information or documentary
material from Parent, the waiting period would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance by
Parent with such request. Thereafter, the waiting period could be extended only
by agreement or by court order. If the acquisition of Shares is delayed pursuant
to a request by the FTC or the Antitrust Division for additional information or
documentary material pursuant to the H-S-R Act, the purchase of and payment for
Shares will be deferred until 10 days after the request is substantially
complied with unless the waiting period is sooner terminated by the FTC or the
Antitrust Division. See Section 4. Only one extension of such waiting period
pursuant to a request for additional information is authorized by the rules
promulgated under the H-S-R Act, except by agreement or by court order. Any such
extension of the waiting period will not give rise to any withdrawal rights not
otherwise provided for by applicable law. See Section 3. Although the Company is
required to file certain information and documentary material with the Antitrust
Division and the FTC in connection with the Offer, neither the Company's failure
to make such filings nor a request from the Antitrust Division or the FTC for
additional information or documentary material made to the Company will extend
the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the Purchaser's
purchase of Shares, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or seeking divestiture of Shares acquired by the Purchaser or the
divestiture of substantial assets of Parent, the Company or any of their
respective subsidiaries. Private parties may also bring legal action under the
antitrust laws under certain circumstances. There can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if a challenge
is made, what the result will be. See Section 14 of this Offer to Purchase for
certain conditions to the Offer that could become applicable in the event of
such a challenge.
State Takeover Laws. A number of states have adopted laws and regulations
applicable to offers to acquire securities of corporations which are
incorporated in such states and/or which have substantial assets, stockholders,
principal executive offices or principal places of business therein. The
Purchaser does not believe that any state takeover laws apply to the Offer and
it has not complied with any state takeover laws. See Section 11. Should any
government official or third party seek to apply any state takeover law to the
Offer, the Purchaser will take such action as then appears desirable.
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<PAGE> 22
If it is asserted that one or more state takeover laws applies to the Offer
and it is not determined by an appropriate court that such act or acts do not
apply or are invalid as applied to the Offer, the Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment any Shares tendered. See Section 14.
17. FEES AND EXPENSES. Morgan Stanley & Co. Incorporated ("Morgan Stanley") is
acting as Dealer Manager in connection with the Offer and has provided certain
financial advisory services to the Purchaser in connection therewith. The
Purchaser has agreed to pay Morgan Stanley as compensation for its services as
Dealer Manager and as financial advisors in connection with the Offer as
follows:
Parent has agreed to pay Morgan Stanley a fee of $350,000 in connection
with the execution of the Merger Agreement. In the event the Purchaser acquires
more than 50% of the Shares, an additional fee of $1,450,000 would be paid. If
not, an advisory fee of approximately $100,000 to $175,000 would be due.
The Purchaser has agreed to reimburse Morgan Stanley for its reasonable
out-of-pocket expenses, including the fees and expenses of its counsel, in
connection with the Offer, and has agreed to indemnify Morgan Stanley against
certain liabilities and expenses in connection with the Offer and the Merger,
including liabilities under the federal securities laws.
The Purchaser has also retained D. F. King & Co., Inc. to act as the
Information Agent in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interviews and may request brokers, dealers and other nominee stockholders to
forward materials relating to the Offer to beneficial owners of Shares. The
Information Agent will receive no more than $15,000 for such services, plus
reimbursement of out-of-pocket expenses and the Purchaser will indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including liabilities under the federal securities laws.
The Purchaser will pay the Depositary reasonable and customary compensation
for its services in connection with the Offer, plus reimbursement for
out-of-pocket expenses, and will indemnify the Depositary against certain
liabilities and expenses in connection therewith, including liabilities under
the federal securities laws. Brokers, dealers, commercial banks and trust
companies will be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding material to their customers.
18. MISCELLANEOUS. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. However, the Purchaser may, in its sole discretion, take
such action as it may deem necessary to make the Offer in any such jurisdiction
and extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction.
The Purchaser and Parent have filed with the Commission a Statement on
Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer, and may file amendments thereto. Such Statement and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
principal office of the Commission in Washington, D.C. in the manner set forth
in Section 8.
No person has been authorized to give any information or make any
representation on behalf of Parent or the Purchaser not contained in this Offer
to Purchase or in the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
I M ACQUISITION CORP.
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SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
THE OFFEROR AND THE PURCHASER
The following sets forth the name, business address, present principal
occupation and material positions and occupations within the past five years of
each director and executive officer of the Offeror and the Purchaser. Each
person listed below is of United States citizenship and, unless otherwise
specified, has his principal business address at the offices of the Offeror,
Suite 200, 5445 Corporate Drive, Troy, Michigan, 48098.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING PAST FIVE YEARS, AND BUSINESS ADDRESS THEREOF
- ------------------------------ -------------------------------------------------------------------
<S> <C>
John Doddridge.................. Chairman of the Board and Chief Executive Officer since
October 27, 1994 and President since February 1995, Mr.
Doddridge was Vice Chairman and Chief Executive Officer of
Magna International, Inc., a supplier of motor vehicle
parts, from November 1992 until November 1994, where he also
served as a director. From mid-1989 to 1992 he served as
President of North American Operations of Dana Corporation,
a motor vehicle parts manufacturer, and prior to mid-1989 he
served as President of Hayes-Dana Inc., a subsidiary of Dana
Corporation. Mr. Doddridge serves as a director of Detroit
Diesel Corporation and The Standard Products Co.
Vernon R. Alden................. Director of the Company since 1986. A director and trustee
of several organizations, Mr. Alden was Chairman of the
Board and Executive Committee of The Boston Company, Inc., a
financial services company, from 1969 to 1978 and President
of Ohio University from 1962 to 1969. He is also a director
of Augat, Inc., Colgate-Palmolive Company, Digital Equipment
Corporation and Sonesta International Hotels Corporation.
J. Frank Broyles................ Director of the Company since 1986 and its predecessor from
1977 to 1984. Mr. Broyles has been Athletic Director of the
University of Arkansas since 1958.
John P. Crecine................. Director of the Company since 1992, Mr. Crecine has served
as Chairman and Chief Executive Officer of Integrated
Digital Systems, Inc. since mid-1994. He was President of
the Georgia Institute of Technology from 1987 to mid-1994.
Previously he served as a professor at the University of
Michigan and founding director of the Institute of Public
Policy Studies from 1965 to 1975. He became Dean of the
College of Humanities and Social Sciences at Carnegie Mellon
University in 1976, a position he held until 1983 when he
became the University's Senior Vice President for Academic
Affairs. He held that position until his Georgia Tech
appointment. Mr. Crecine is a director of HBO and Co.
Anton Dorfmueller, Jr. ......... Director of the Company since 1990, Mr. Dorfmueller served
as North American agent to Red Rock International, a
robotics manufacturer, during 1994. From 1988 to 1994 he
served as a consultant to Andersen Consulting. Mr.
Dorfmueller retired in 1988 as a Group Vice President of
Ashland Chemical Company.
</TABLE>
A-1
<PAGE> 24
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
POSITIONS
NAME AND BUSINESS ADDRESS HELD DURING PAST FIVE YEARS, AND BUSINESS ADDRESS THEREOF
- ------------------------------ ------------------------------------------------------------
<S> <C>
John B. Ellis................. Director of the Company since 1989. A private investor, Mr.
Ellis retired in 1986 as Senior Vice President -- Finance
and Treasurer of Genuine Parts Co., an automotive parts
distributor, where he had been employed in various
capacities since 1974. Mr. Ellis is a director of Flowers
Industries, Inc., Hughes Supply, Inc., Integrity, Inc.,
Oxford Industries, Inc., UAP, Inc. and Interstate/Johnson
Lane, Inc., and director emeritus of Genuine Parts Co.
Wilfred E. Gross, Jr. ........ Director of the Company and its predecessor since 1971, Mr.
Gross is Chief Executive Officer of W.T. Harvey Lumber
Company in Columbus, Georgia.
A. Wayne Hardy................ Director of the Company and its predecessor since 1978. Mr.
Hardy is a private investor and consultant. He was Chairman
and Chief Executive Officer of Eastern Inter-Trans Services,
Inc. from 1986 to 1992. From 1975 to 1986 Mr. Hardy was a
Vice President of the Company and its predecessor.
George W. Mathews, Jr. ....... Director of the Company and its predecessor since 1971. Mr.
Mathews is the founder of the Company and was Chairman of
the Board and Chief Executive Officer from 1971 until 1994.
He retired from the Company in December 1994. Mr. Mathews
serves as a director of Metrotrans Corporation and is
President of George Mathews & Assoc., Inc.
Harold C. McKenzie, Jr. ...... Director of the Company and its predecessor since 1971. Mr.
McKenzie retired at the end of 1986 from Southern Electric
International, Inc., a subsidiary of The Southern Company,
with which he was affiliated for thirty years. He had served
as Executive Vice President of Georgia Power Company and as
President and CEO of Southern Electric International, Inc.
He was Chairman and CEO of Machine Technologies, Inc. of
Martinsville, Virginia, from 1986 until 1989 and a commer-
cial real estate broker with Haas & Dodd Realty Co. in
Atlanta, Georgia from 1989 to 1991. Mr. McKenzie is
presently serving as Facilities Coordinator for The Carter
Center of Emory University.
J. Mason Reynolds............. Director of the Company since 1990. From 1986 until his
retirement in 1989, Mr. Reynolds was Executive Vice
President of Allied Signal Corp. and President of its
Automotive Sector, which manufactures automobile parts.
Curtis W. Tarr................ Director of the Company since 1984. Mr. Tarr retired as Vice
Chairman of the Board as of December 31, 1994, a position he
held since 1992. At that time he also retired as President
of Intermet International, Inc., a position he held since
1991. He served as a consultant to the Company from late
1989 through 1990. Mr. Tarr was a professor and Dean of the
Johnson School of Management at Cornell University from 1984
through 1989 and remained a professor there until 1990. He
was a Vice President of Deere & Co., a farm equipment
manufacturer, from 1973 to 1983. Mr. Tarr was President of
Lawrence University, Appleton, Wisconsin, from 1963 to 1969
and an Undersecretary of State from 1972 to 1973. He is also
a director of State Farm Insurance Companies. He retired
from the George Banta Co., Inc. board in 1995.
</TABLE>
A-2
<PAGE> 25
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT, MATERIAL
NAME AND BUSINESS ADDRESS POSITIONS HELD DURING PAST FIVE YEARS, AND BUSINESS ADDRESS THEREOF
- ------------------------------ -------------------------------------------------------------------
<S> <C>
C. Douglas Brown................ Mr. Brown became Vice President -- Sales and Marketing in
February 1995. Prior to that time he served as Vice
President -- Sales and Marketing of Intermet Foundries, Inc.
("IFI"), commencing in February 1993. From February 1991 to
February 1993 he was General Sales Manager of IFI. Prior to
that time he served as a Regional Sales Manager for IFI.
Doretha J. Christoph............ Ms. Christoph became Vice President -- Finance in June 1995.
Prior to that time she served as Vice President and Director
of Finance and Information Technology of LNP Engineering
Plastics, a worldwide supplier of engineered plastics across
all markets and a subsidiary of Kawasaki Steel Corporation
from November 1991 until May 1995. From 1989 to 1991, she
served as Director of Finance for the Engineering Plastics
Americas operation of ICI plc.
Ms. Christoph is a Director of Purchaser and serves as Vice
President and Secretary.
John C. Engeswick............... Mr. Engeswick became Vice President -- Technical Services in
February 1995. Prior to that time he served as Vice
President -- Quality Assurance for Intermet Foundries, Inc.
Daryl E. Marsh.................. Mr. Marsh became Vice President -- Machining Services of
Parent in February 1995. From 1993 to 1995, he served as
Vice President -- Machining. From 1969 through 1993, Mr.
Marsh was employed by Simpson Industries, Inc., most
recently as Group Vice President.
C. James Peterson............... Mr Peterson became Vice President -- Foundry Operations in
February 1995. He served as Director of Manufacturing of
Intermet Foundries, Inc. from 1993 to 1995. Prior to that
time he served as General Manager of Columbus Foundries,
Inc.
James W. Rydel.................. Mr. Rydel has served as Vice President -- Administration and
Secretary since February 1995. He served as Vice
President -- Human Resources of Parent from 1991 until
February 1995. He served as Director of Compensation and
Benefits of Parent from 1986 until 1990, when he became
Director of Human Resources of Parent.
Mr. Rydel is a Director of Purchaser and serves as
President.
</TABLE>
A-3
<PAGE> 26
Facsimile copies of the Letter of Transmittal will be accepted from
Eligible Institutions. The Letter of Transmittal, certificates for the Shares
and any other required documents should be sent by each stockholder of the
Company or his broker-dealer, commercial bank, trust company or other nominee to
the Depositary as follows:
The Depositary is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT DELIVERY:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Confirm Facsimile New York, NY 10004
New York, NY 10274-0084 by Telephone: Attention:
Attention: Reorganization Dept. (212) 858-2103 Securities Processing Window SC-1
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. You may also contact your broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Bankers and Brokers Call Collect: (212) 269-5550
Call Toll Free: (800) 769-7666
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7891
<PAGE> 1
Letter of Transmittal
To Tender Shares of Common Stock
of
Sudbury, Inc.
Pursuant to the Offer to Purchase Dated November 22, 1996
by
I M Acquisition Corp.
a wholly-owned subsidiary of
Intermet Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 20, 1996, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT DELIVERY:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Confirm Facsimile by Telephone: New York, NY 10004
New York, NY 10274-0084 (212) 858-2103 Attention:
Attention: Reorganization Dept. Securities Processing Window, SC-1
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at a Book-Entry Transfer Facility, as
defined in and pursuant to the procedures set forth in Section 2 of the Offer to
Purchase. Stockholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and other stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for Shares
are not immediately available or who cannot comply with the procedure for
book-entry transfer on a timely basis, or who cannot deliver all required
documents to the Depositary prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase) may tender their Shares in accordance with the
guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Owner(s)
(Please fill in if blank, exactly as name(s) appear(s) Share Tendered
on certificate(s)) (Attach additional list if necessary)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number
of Shares Number
Certificate Represented by of Shares
Number(s)(1) Certificate(s)(1) Tendered(2)
- ------------------------------------------------------------------------------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all
Shares described above are being tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE
PARTICIPANTS IN THE SYSTEM OF ANY BOOK-ENTRY TRANSFER FACILITY MAY DELIVER
SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
----------------------------------------------------------------------------
Check Box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s)________________________________________________
Date of Execution of Notice of Guaranteed Delivery ___________________________
Name of Institution which Guaranteed Delivery ________________________________
If delivered by book-entry transfer, check box:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number _______________________________________________________________
Transaction Code Number ______________________________________________________
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby renders to I M Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is a wholly-owned subsidiary of Intermet
Corporation, a Georgia corporation ("Parent"), the above-described shares of
common stock, par value $0.01 per share (the "Shares"), of Sudbury Inc., a
Delaware corporation (the "Company"), pursuant to the Purchaser's Offer to
Purchase dated November 22, 1996(the "Offer to Purchase") all of the outstanding
Shares at a price of $12.50 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which, together
with the Offer to Purchase, constitute the "Offer"). The undersigned understands
that the Purchaser reserves the right to transfer or assign, from time to time,
in whole or in part, to one or more of its affiliates, the right to purchase the
Shares tendered herewith.
Upon the terms and conditions of the Offer, subject to, and effective upon,
acceptance for payment of, and payment for, the Shares tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser, all right, title and
interest in and to all of the Shares that are being tendered hereby and any and
all cash dividends, distributions, rights, other Shares or other securities
issued or issuable in respect of such Shares on or after November 18, 1996
(collectively, "Distributions"), and appoints IBJ Schroder Bank & Trust Company
(the "Depositary") the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any Distributions) with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to the full extent of such stockholder's rights with
respect to such Shares (and any Distributions)(a) to deliver such Share
Certificates (as defined herein) (and any Distributions) or transfer ownership
of such Shares (and any Distributions) on the account books maintained by a
Book-Entry Transfer Facility, together in either such case with all accompanying
evidences of transfer and authenticity, to or upon the order of the Purchaser,
(b) to present such Shares (and any Distributions) for transfer on the books of
the Company and (c) to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distributions), all in accordance
with the terms and the conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of the Purchaser,
and each of them, the attorneys-in-fact and proxies of the undersigned, each
with full power of substitution, to the full extent of such stockholder's rights
with respect to the Shares tendered hereby which have been accepted for payment
and with respect to any Distributions. The designees of the Purchaser will, with
respect to the Shares (and any associated Distributions) for which the
appointment is effective, be empowered to exercise all voting and any other
rights of such stockholder, as they, in their sole discretion, may deem proper
at any annual, special or adjourned meeting of the Company's stockholders, by
written consent in lieu of any such meeting or otherwise. This proxy and power
of attorney shall be irrevocable and coupled with an interest in the tendered
Shares. Such appointment is effective when, and only to the extent that, the
Purchaser deposits the payment for such Shares with the Depositary. Upon the
effectiveness of such appointment, without further action, all prior powers of
attorney, proxies and consents given by the undersigned with respect to such
Shares (and any associated Distributions) will be revoked, and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective). The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser must
be able to exercise full voting rights with respect to such Shares (and any
associated Distributions), including voting at any meeting of stockholders.
<PAGE> 4
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby and, when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment, and transfer of the Shares (and any
Distributions) tendered hereby. In addition, the undersigned shall promptly
remit and transfer to the Depositary for the account of the Purchaser any and
all Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer; and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall not be affected by, and shall survive, the death or
incapacity of the undersigned and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representative, successors and assigns
of the undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that the valid tender of Shares pursuant to one
of the procedures described in Section 2 of the Offer to Purchase will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
owner(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered owner(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or issue any certificates for Shares not tendered or accepted
for payment (and any accompanying documents, as appropriate) in the name of, and
deliver such checks and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. The
undersigned recognizes that Purchaser has no obligation pursuant to the Special
Payment Instructions to transfer any Shares from the name of the registered
owner thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
<PAGE> 5
------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] Check
[ ] Certificate(s) to:
Name:
----------------------------------------------
(Please Print)
Address:
--------------------------------------------
------------------------------------------------------
(Include Zip Code)
------------------------------------------------------
(Tax Identification or Social Security No.)
------------------------------------------------------
------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
purchased are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown above.
Issue: [ ] Check
[ ] Certificate(s) to:
Name:
----------------------------------------------
(Please Print)
Address:
--------------------------------------------
------------------------------------------------------
(Include Zip Code)
------------------------------------------------------
<PAGE> 6
IMPORTANT
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
Signature(s) of Holders(s) -
- --------------------------------------------------------------------------------
Dated:
- ------------------------------
(Must be signed by registered owner(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered owner(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth full title and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (Full Title)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Including Zip Code)
- ------------------------------------------------------
------------------------------------------------------
(Area Code and Telephone No.) (Tax Identification or Social Security
No.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
(Please Type or Print)
Address
- --------------------------------------------------------------------------------
(Include Zip Code)
Name of Firm
- --------------------------------------------------------------------------------
Dated:
- ------------------------------
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). Signatures on
this Letter of Transmittal need not be guaranteed (a) if this Letter of
Transmittal is signed by the registered owners (which term, for purposes of this
document, includes any participant in any of the Book-Entry Transfer Facilities'
systems whose name appears on a security position listing such participant as
the owner of the Shares) of Shares tendered herewith and such registered owner
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5 of this Letter of Transmittal.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This Letter of Transmittal is to be used either if certificates
are to be forwarded herewith or if tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in Section 2 of the Offer
to Purchase. Certificates for all physically tendered Shares ("Share
Certificates"), or confirmation of any book-entry transfer into the Depositary's
account at one of the Book-Entry Transfer Facilities of Shares tendered by book-
entry transfer, as well as this Letter of Transmittal properly completed and
duly executed with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth herein on or prior to the Expiration Date (as
defined in the Offer to Purchase).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver all other required documents to the Depositary on or prior to
the Expiration Date or who cannot comply with the procedures for book-entry
transfer on a timely basis may nevertheless tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Purchaser must be
received by the Depositary prior to the Expiration Date; and (iii) Share
Certificates or confirmation of any book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility of Shares tendered by book-entry
transfer, as well as a Letter of Transmittal, properly completed and duly
executed with any required signature guarantees, (or in the case of a book-entry
transfer, an Agent's Message) and all other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery.
IF SHARE CERTIFICATES ARE FORWARDED SEPARATELY TO THE DEPOSITARY, A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL MUST ACCOMPANY EACH
SUCH DELIVERY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL,
IT IS RECOMMENDED THAT SUCH CERTIFICATES AND DOCUMENTS BE SENT BY REGISTERED
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
<PAGE> 8
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new certificate(s) for the remainder
of the Shares that were evidenced by your old certificate(s) will be sent to the
registered owner, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date. All
Shares represented by certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered owners of the Shares
tendered hereby, the signature must correspond with the names as written on the
face of the certificates without alteration, enlargement or any other change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued in
the name of, a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by the appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or holders appear on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or (in
the circumstances permitted hereby) if certificates for Shares not tendered or
accepted for payment are to be registered in the name of, any person other than
the registered owner, or if tendered certificates are registered in the name of
any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered owner or
such person) payable on account of the transfer to such person will be deducted
from the purchase price if satisfactory evidence of the payment of such taxes,
or exemption therefrom, is not submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be mailed to
a person other than the signer of this Letter of Transmittal or to an address
other than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed.
<PAGE> 9
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses set forth below or from your broker, dealer,
commercial bank or trust company. Additional copies of the Offer to Purchase,
this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender
offer materials may be obtained from the Information Agent.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the stockholder's social security or federal employer identification number, on
Substitute Form W-9 below. Failure to provide the information on the form may
subject the tendering stockholder to 31% federal income tax withholding on the
payment of the purchase price. The box in Part 3 of the form may be checked if
the tendering stockholder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future. If the box in Part 3 is
checked and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price thereafter
until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (TOGETHER WITH SHARE CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO
THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is his or her social security number. If a
stockholder fails to provide a TIN to the Depositary, such stockholder may be
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder or payee. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
<PAGE> 10
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares or of
the last transferee appearing on the transfers attached to, or endorsed on, the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(See Instruction 9)
<TABLE>
<C> <S> <C>
- --------------------------------------------------------------------------------
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- ------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX ------------------------------
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING Social security number
BELOW OR --------------------------
Employer identification number
----------------------------------------------------------------------------
DEPARTMENT OF PART 2 -- Certification -- Under penalties of perjury, I certify that:
THE TREASURY (1) The number shown on this form is my correct Taxpayer Identification
INTERNAL REVENUE Number (or I am waiting for a number to be issued for me); and
SERVICE (2) I am not subject to backup withholding because (i) I am exempt from
backup withholding, (ii) I have not been notified by the Internal Revenue
Service (the "IRS") that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or (iii) the IRS has
notified me that I am no longer subject to backup withholding.
----------------------------------------------------------------------------
Certification Instructions -- You must cross out item (2) in
PAYER'S REQUEST FOR Part 2 above if you have been notified by the IRS that you
TAXPAYER are subject to backup withholding because of under-reporting
IDENTIFICATION interest or dividends on your tax return. However, if after
NUMBER (TIN) being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS
stating that you are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE DATE PART 3
NAME (Please Print) AWAITING
TIN [ ]
- --------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
<PAGE> 11
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (i) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(ii) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number within 60
days, 31% of all reportable payments made to me thereafter will be withheld
until I provide a number to the Depositary.
- --------------------------------------------------------------------------------
Signature Date
--------------------------------------------------------
Name (Please Print)
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(800) 769-7666 (Toll Free)
The Dealer Manager for the Offer is:
MORGAN STANLEY & CO.
Incorporated
1585 Broadway
New York, New York 10036
(212) 761-7891
<PAGE> 1
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
Sudbury, Inc.
at
$12.50 Net Per Share
by
I M Acquisition Corp.
a wholly-owned subsidiary of
Intermet Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 20, 1996, UNLESS THE OFFER IS EXTENDED.
November 22, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by I M Acquisition Corp., a Delaware corporation (the
"Purchaser"), which is a wholly-owned subsidiary of Intermet Corporation, a
Georgia corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of Sudbury, Inc., a Delaware corporation (the
"Company"), at $12.50 per share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase dated
November 22, 1996 and the related Letter of Transmittal (which together
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whom you hold Shares registered in your name or in the
name of your nominee.
Enclosed herewith are the following documents:
1. Offer to Purchase dated November 22, 1996;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. The Letter to Stockholders of the Company from the Chairman and
Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to IBJ Schroder Bank & Trust Company, the
Depositary.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN 7,800,000 SHARES
AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE
PURCHASE OF THE SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
FRIDAY, DECEMBER 20, 1996 UNLESS THE OFFER IS EXTENDED.
The Board of Directors of the Company has unanimously (with one director
absent) approved the Offer and the Merger and determined that the terms of the
Offer and the Merger are fair to, and in the best interests of, the Company and
its stockholders and recommends that the Company's stockholders accept the Offer
and tender their Shares.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of November 18, 1996 (the "Merger Agreement"), among the Company, Parent and
the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company and each outstanding Share,
other than Shares owned by Parent, the Purchaser or any other subsidiary of
Parent and Shares which are held by stockholders exercising appraisal rights
pursuant to Section 262 of the Delaware General Corporation Law, will be
converted into and represent the right to receive $12.50 in cash. The Merger
Agreement is more fully described in the Offer to Purchase.
In all cases, payment for Shares tendered and accepted for payment to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or timely Book-Entry Confirmation (as defined in
the Offer to Purchase) of the book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase) pursuant to the procedures set forth in Section 2 of the
Offer to Purchase, (ii) the Letter of Transmittal, properly completed and duly
executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase))
and (iii) any other documents required by such Letter of Transmittal. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent as disclosed in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed
upon request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your clients.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of the enclosed Offer to Purchase. Requests for
additional copies of the enclosed materials may be directed to the Information
Agent.
Very truly yours,
MORGAN STANLEY & CO.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEALER MANAGER, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR
MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER NOT
CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE> 1
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
Sudbury, Inc.
at
$12.50 Net Per Share
by
I M Acquisition Corp.
a wholly-owned subsidiary of
Intermet Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 20, 1996, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated November 22,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by I M Acquisition Corp.,
a Delaware corporation (the "Purchaser"), which is a wholly-owned subsidiary of
Intermet Corporation, a Georgia corporation ("Parent"), to purchase for cash all
outstanding shares of common stock, par value $0.01 per share (the "Shares"), of
Sudbury, Inc., a Delaware corporation (the "Company"), upon the terms and
subject to the conditions set forth in the Offer. Also enclosed is the Letter to
Stockholders of the Company from the Chairman and Chief Executive Officer of the
Company accompanied by the Company's Solicitation/Recommendation Statement on
Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The Offer price is $12.50 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of
the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has unanimously (with one
director absent) approved the Offer and the Merger (as defined below) and
determined that the terms of the Offer and the Merger are fair to, and in
the best interests of, the Company and its stockholders and recommends that
the Company's stockholders accept the Offer and tender their Shares.
4. The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of November 18, 1996 (the "Merger Agreement"), among the
Company, Parent and the Purchaser, pursuant to which, after the completion
of the Offer, the Purchaser will be merged with and into the Company (the
"Merger") and each outstanding Share, other than Shares owned by Parent,
Purchaser or any other subsidiary of Parent and Shares which are held by
stockholders exercising appraisal rights
<PAGE> 2
pursuant to Section 262 of the Delaware General Corporation Law, will be
converted into and represent the right to receive $12.50 in cash. The
Merger Agreement is more fully described in Section 11 of the Offer to
Purchase.
5. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, December 20, 1996, unless the Offer is extended by
the Purchaser (the "Expiration Date").
6. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer
7,800,000 Shares and (2) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder applicable to the purchase of Shares pursuant to the Offer
having expired or been terminated.
7. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser will be borne by the Purchaser, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the Expiration Date.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by IBJ Schroder Bank & Trust Company
(the "Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation
(as defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter
of Transmittal, properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer effected pursuant
to the procedure set forth in Section 2 of the Offer to Purchase, an Agent's
Message, and (c) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION
OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities or blue sky laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed
made on behalf of the Purchaser by Morgan Stanley & Co. Incorporated, the Dealer
Manager for the Offer, or one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction. An envelope in which to return
your instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise indicated in such instruction
form. Please forward your instructions to us as soon as possible to allow us
ample time to tender Shares on your behalf prior to the expiration of the Offer.
<PAGE> 3
Instructions with Respect to the
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
SUDBURY, INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase of I M Acquisition Corp. dated November 22, 1996 (the "Offer to
Purchase"), and the related Letter of Transmittal relating to shares of common
stock, par value $0.01 per share (the "Shares"), of Sudbury, Inc., a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase and related Letter of Transmittal.
<TABLE>
<S> <C>
Number of Shares to be Tendered*
SIGN HERE
------------------------ Shares
---------------------------------------------
Daytime Area Code
and Tel. No.:
----------------------------
---------------------------------------------
Signature(s)
Taxpayer Identification
No. or Social
Security No.
----------------------------- ---------------------------------------------
Dated:
--------------------------------------
---------------------------------------------
(Please print name(s) and address(s))
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
<PAGE> 1
Exhibit 2
INTERMET CORPORATION
5445 Corporate Drive, Suite 200
Troy, MI 48098 2683
Phone: (810) 952-2500
Fax: (810) 952-2501
[INTERMET LOGO]
November 18, 1996
For IMMEDIATE Release
Contact: James W. Rydel, Intermet
(810) 952-2500
Mark E. Brody, Sudbury
(216)464-7026 x 125
Intermet Corporation and Sudbury, Inc. Enter Into Definitive Merger Agreement.
Detroit, Michigan, November 18, 1996 - Intermet Corporation (Nasdaq: INMT) and
Sudbury, Inc. (Nasdaq: SUDS) announced today they have entered into a definitive
merger agreement whereby Intermet will acquire all of the outstanding shares of
Sudbury common stock for $12.50 per share in cash. Sudbury has approximately
15.6 million shares outstanding on a fully diluted basis; 4.2 million shares are
represented by stock options and participation certificates. Under the merger
agreement, a wholly owned subsidiary of Intermet will promptly commence a cash
tender offer for all shares of Sudbury common stock at $12.50 per share in cash.
Following the tender offer, the Intermet subsidiary would be merged into Sudbury
and holders of any remaining Sudbury common stock would receive the same
consideration.
The combined company, with estimated annual sales of $845 million, is a major
supplier of castings to original-equipment manufacturers (OEMs) of automobiles,
light trucks and commercial highway vehicles in the U.S. and overseas.
Intermet's goal is to continue its leadership in meeting the increasingly global
sourcing and productivity requirements of its customers.
Commenting on the acquisition, John Doddridge, Chairman and CEO of Intermet
stated, "The combination of the two companies will provide greater strength to
serve our customers with added technical support and flexibility. Sudbury has
turned into a solid performer and most of Sudbury's products are complementary
to Intermet's products. Sudbury shares a similar corporate culture and operating
philosophy which should help expedite the integration of our two companies."
<PAGE> 2
Jacques R. Sardas, Chairman, President and CEO of Sudbury, Inc. commented, "It
has always been our mission and goal to maximize value for our stockholders. In
light of that goal, Sudbury's Board of Directors believes this offer is fair and
reasonable and in the best interests of our stockholders. Moreover, a stronger
combined organization will emerge with excellent opportunities for growth. This
transaction represents the culmination of what has been an exceptional
turnaround of Sudbury We are proud of the Company that was built by our
employees, each of whom should take pride in Sudbury's accomplishments."
Consummation of the acquisition is conditioned, among other things, upon the
tender of 7.8 million Sudbury shares and the expiration or termination of any
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act.
Intermet is the largest independent ferrous casting foundry company in North
America and reported sales for fiscal year 1995 of $542 million with over 90% of
its sales to the vehicular industry. Detroit-based Intermet designs,
manufactures and machines precision iron and aluminum parts for automotive and
industrial markets in North America and Europe. The Company's ductile iron, gray
Iron and lost foam aluminum castings are used in many makes of automobiles and
light trucks, as well as industrial engine, marine, railroad, construction end
municipal applications. Intermet employs more than 4,000 employees at nine
operating locations worldwide.
Sudbury is a leading Tier I supplier of parts and services to OEMs in the
automotive industry. Sudbury also manufactures and supplies specialized products
and services to other industrial sectors, including consumer durables and
construction. In addition, Sudbury is a 35% stockholder in General Products
Delaware Corporation, a supplier of metal products to the automotive industry.
Through its five operating businesses which employ more than 2,300 employees,
Sudbury is engaged in the manufacture of metal castings, precision machined
components, cranes and specialty service vehicles and provides custom coating
applications.
#
(To participate in a conference call to be held at 1:30 p.m. E.S.T. on Tuesday,
November 19, call 1 (800)553-0326 to make a reservation. Ask for the Intermet
press release.)
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
November 22, 1996, and the related Letter of Transmittal and any amendments
or supplements thereto and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed to be made on
behalf of the Purchaser by the Dealer Manager or one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SUDBURY, INC.
AT
$12.50 NET PER SHARE
BY
I M ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
INTERMET CORPORATION
I M Acquisition Corp., a Delaware corporation (the "Purchaser"), which
is a wholly-owned subsidiary of Intermet Corporation, a Georgia corporation
("Parent"), is offering to purchase all of the outstanding shares of common
stock, par value $0.01 per share (the "Shares"), of Sudbury, Inc., a Delaware
corporation (the "Company"), at $12.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated November 22, 1996, and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer.
The purpose of the Offer is to acquire for cash as many outstanding Shares as
possible as a first step in acquiring the entire equity interest in the Company.
Following the consummation of the Offer, the Purchaser intends to effect the
merger described below.
<PAGE> 2
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, DECEMBER 20, 1996, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being
validly tendered prior to the expiration of the Offer and not withdrawn
7,800,000 Shares, and (ii) any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations thereunder
applicable to the purchase of the Shares pursuant to the Offer having expired or
been terminated. See Section 14 of the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of November 18, 1996, among the Company, Parent
and the Purchaser, pursuant to which, after the completion of the Offer, the
Purchaser will be merged with and into the Company (the "Merger"). On the
effective date of the Merger, each outstanding Share other than Shares owned by
Parent, the Purchaser or any other subsidiary of Parent and Shares which are
held by stockholders exercising appraisal rights pursuant to Section 262 of the
Delaware General Corporation Law will be converted into and represent the right
to receive $12.50 in cash. The Merger Agreement is more fully described in
Section 11 of the Offer to Purchase.
The Board of Directors of the Company has unanimously (with one director
absent) approved the Offer and the Merger and determined that the terms of the
Offer and the Merger are fair to, and in the best interests of, the Company and
its stockholders and recommends that the Company's stockholders accept the Offer
and tender their Shares.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Purchaser gives oral or written notice to IBJ Schroder Bank & Trust Company (the
"Depositary") of its acceptance for payment of such Shares pursuant to the
Offer. Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for the tendering stockholders for the purpose of receiving
payments from the Purchaser and transmitting such payments to the tendering
stockholders. Under no circumstances will interest on the purchase price for
Shares be paid, regardless of any delay in making such payment.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) certificates for such Shares or timely confirmation of the book-entry
transfer of such Shares into the Depositary's account at the Depository Trust
Company or the Philadelphia Securities Depository Trust Company (each a
"Book-Entry Transfer Facility") pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message (as defined in Section 2 of the Offer to Purchase) and (iii) any other
documents required by such Letter of Transmittal.
Subject to the terms of the Merger Agreement and the applicable rules
and regulations of the Securities and Exchange Commission, the Purchaser
expressly reserves the right, in its sole discretion, at any time or from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary. Any such extension
will also be publicly announced by press release issued no later than 9:00 A.M.,
New York City time, on the next business day after the previously scheduled
expiration date of the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
expiration of the Offer and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after January
20, 1997.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
having tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the names in which the certificate(s) evidencing the Shares to be withdrawn
are registered, if different from that of the person who tendered such
<PAGE> 3
Shares. If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then prior to the physical release of
such certificates, the name of the registered holder and the serial numbers
shown on such certificates must also be submitted to the Depositary and, unless
such Shares have been tendered for the account of any Eligible Institution (as
defined in Section 2 of the Offer to Purchase), the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures for such withdrawal. Any Shares properly
withdrawn will thereafter be deemed not validly tendered for the purposes of
the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described above in Section 2 of the Offer to Purchase at any
time on or prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase).
The Information required to be disclosed by paragraph (e)(1)(vii) of
Rule 14d-6 of the General Rules and Regulations under the Securities and
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder
list and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase and the Letter of Transmittal and,
if required, other relevant materials, will be mailed by the Purchaser to record
holders of Shares and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the Company's stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
The Offer to Purchase and Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth below. Requests for additional copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies. All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in its
sole discretion, which determination shall be final and binding.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(800) 769-7666 (Toll Free)
THE DEALER MANAGER FOR THE OFFER IS:
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
(212) 761-7891
November 22, 1996
<PAGE> 1
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
Sudbury, Inc.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto may be used to accept the Offer (as
defined below) if certificates for shares of common stock, par value $0.01 per
share (the "Shares"), of Sudbury, Inc., a Delaware corporation (the "Company"),
are not immediately available, or if the procedure for book-entry transfer
cannot be complied with on a timely basis, or all required documents cannot be
delivered to the Depositary prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase). This form may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution (as defined
in Section 2 of the Offer to Purchase). See Section 2 of the Offer to Purchase.
The Depositary:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT DELIVERY:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Confirm Facsimile New York, NY 10004
New York, NY 10274-0084 by Telephone: Attention:
Attention: Reorganization Dept. (212) 858-2103 Securities Processing Window SC-1
</TABLE>
------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUC-
TIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE
A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to I M Acquisition Corp., a Delaware
corporation (the "Purchaser"), which is a wholly-owned subsidiary of Intermet
Corporation, a Georgia corporation, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated November 22, 1996 (the "Offer to
Purchase") and the related Letter of Transmittal (which, together constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
Certificate Nos.
(if available):
Please print
Address(es):
(Check one box if Shares
will be tendered by book-entry transfer)
Zip Code
[ ] The Depository Trust Company Daytime Area Code
[ ] Philadelphia Depository Trust Company and Tel. No.:
Account Number: Signature(s):
Dated:
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), and any other required documents, within three trading days after the
date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm: Authorized Signature
Address: Name:
Zip Code Please Print
Title:
Area Code and Tel. No.: Dated:
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE,
CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the
minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under State
law
8. Sole proprietorship account The owner(4)
<CAPTION>
------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
------------------------------------------------------------
<S> <C>
9. A valid trust, estate or pension trust The Legal entity (Do
not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>
- ------------------------------------------------------------
- ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file a tax return. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- if you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
among
INTERMET CORPORATION,
I M ACQUISITION CORP.
and
SUDBURY, INC.
Dated as of November 18, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS................................................................................1
1.1 Definitions...................................................................1
1.2 Other Terms...................................................................6
1.3 Other Definitional Provisions.................................................6
ARTICLE II THE TENDER OFFER...........................................................................6
2.1 Tender Offer..................................................................6
ARTICLE III THE MERGER.................................................................................8
3.1 Merger........................................................................8
3.2 Closing.......................................................................8
3.3 Effective Time................................................................9
3.4 Effects of the Merger.........................................................9
3.5 Certificate of Incorporation and By-laws......................................9
3.6 Directors.....................................................................9
3.7 Officers......................................................................9
3.8 Boards of Directors; Committees...............................................9
3.9 Actions by Directors.........................................................10
ARTICLE IV EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES..................................................................10
4.1 Effect on Capital Stock......................................................10
4.2 Exchange of Certificates.....................................................11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................................13
5.1 Organization, Standing and Corporate Power...................................13
5.2 Subsidiaries.................................................................13
5.3 Capitalization...............................................................13
5.4 Authority; Enforceability; No Conflicts; and Consents........................14
5.5 Vote Required; State Takeover Statutes; Rights Agreement.....................15
5.6 Compliance with Applicable Laws..............................................16
5.7 Company SEC Documents; Undisclosed Liabilities...............................17
5.8 Absence of Changes or Events.................................................17
5.9 Litigation...................................................................18
5.10 Taxes........................................................................18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C> <C>
5.11 Employee Benefits............................................................20
5.12 Title to Properties..........................................................22
5.13 Insurance....................................................................22
5.14 Labor Matters................................................................23
5.15 Intellectual Property........................................................23
5.16 Takeover Statutes............................................................24
5.17 Dispositions.................................................................24
5.18 Brokers and Intermediaries...................................................24
5.19 Opinion of Financial Advisor.................................................25
5.20 Transactions With Affiliates.................................................25
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF
ACQUIROR AND MERGER SUB...................................................................25
6.1 Organization, Standing and Corporate Power
of Acquiror and Merger Sub..................................................25
6.2 Authority; Enforceability; No Conflicts and Consents.........................25
6.3 Brokers......................................................................26
6.4 Financing....................................................................26
ARTICLE VII COVENANTS RELATING TO CONDUCT OF BUSINESS.................................................27
7.1 Conduct of Business of the Company...........................................27
7.2 Access to Information........................................................30
ARTICLE VIII ADDITIONAL AGREEMENTS.....................................................................30
8.1 Preparation of Proxy Statement; Stockholders' Meeting........................30
8.2 Efforts; Notification........................................................31
8.3 Supplemental Disclosure......................................................32
8.4 Announcements................................................................32
8.5 No Solicitation..............................................................32
8.6 Indemnification; Directors' and Officers Insurance...........................34
8.7 Employee Benefits............................................................35
8.8 Transfer Taxes...............................................................37
8.9 Vote of Company Stock.......................................................38
8.10 Agreement to Advance Funds...................................................38
ARTICLE IX CONDITIONS PRECEDENT......................................................................38
9.1 Conditions to Each Party's Obligation to Effect the Merger...................38
9.2 Conditions of Obligations of Acquiror........................................38
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE X TERMINATION...............................................................................39
10.1 Termination..................................................................39
10.2 Effect of Termination........................................................41
10.3 Termination Fee..............................................................41
ARTICLE XI GENERAL PROVISIONS........................................................................42
11.1 Effectiveness of Representations, Warranties and Agreements..................42
11.2 Expenses.....................................................................42
11.3 Governing Law................................................................42
11.4 Notices......................................................................42
11.5 Entire Agreement.............................................................43
11.6 Disclosure Schedule..........................................................43
11.7 Headings; References.........................................................44
11.8 Counterparts.................................................................44
11.9 Parties in Interest; Assignment..............................................44
11.10 Severability; Enforcement....................................................45
ANNEX A...................................................................................................
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 18, 1996, among
Intermet Corporation, a Georgia corporation ("Acquiror"), I M Acquisition Corp.,
a Delaware corporation and wholly-owned subsidiary of Acquiror ("Merger Sub"),
and SUDBURY, INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the boards of directors of Acquiror and the Company have
approved, and deem it advisable and in the best interests of their respective
stockholders to consummate the acquisition of the Company by Acquiror upon the
terms and subject to the conditions set forth herein;
WHEREAS, it is intended that the acquisition be accomplished by a
merger of Merger Sub with and into the Company ("Merger"), with the Company
continuing as the surviving corporation (the "Surviving Corporation"); and
WHEREAS, Acquiror, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms
shall have the meanings set forth below:
"Acquisition Proposal" shall have the meaning set forth in Section
8.5(c).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such other Person.
"Applicable Laws" shall mean, with respect to any Person, all statutes,
laws, ordinances, rules, orders, judgments, decrees, arbitration awards and
regulations of any Governmental Authority applicable to such Person and its
business, properties and assets.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close.
"Certificate of Merger" shall have the meaning set forth in Section
3.3.
"Certificates" shall have the meaning set forth in Section 4.2 (b).
<PAGE> 6
"Closing" shall have the meaning set forth in Section 3.2.
"Closing Date" shall have the meaning set forth in Section 3.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended and the
rules and regulations promulgated thereunder.
"Company Common Stock" shall have the meaning set forth in Section
4.1(c).
"Company Disclosure Schedule" shall have the meaning set forth in
Section 11.6.
"Company Representatives" shall have the meaning set forth in Section
8.5.
"Company SEC Documents" shall have the meaning set forth in Section
5.7.
"Company Stock Option Plans" shall have the meaning set forth in
Section 8.7(e).
"Company Stockholder Approval" shall have the meaning set forth in
Section 5.4(a).
"Company Stockholders' Meeting" shall have the meaning set forth in
Section 8.1(d).
"Confidentiality Agreement" shall have the meaning set forth in Section
7.2.
"Dissenting Shares" shall have the meaning set forth in Section 4.2(d).
"DGCL" shall mean the Delaware General Corporation Law.
"DOJ" shall mean the Department of Justice.
"Effective Time" shall have the meaning set forth in Section 3.3.
"Employee Benefit Plans" shall have the meaning set forth in Section
5.11(a).
"Encumbrances" shall mean any and all mortgages, security interests,
liens, claims, pledges, restrictions, leases, title exceptions, rights of
others, charges or other encumbrances.
"Environmental Laws" shall mean all applicable United States, foreign,
state, provincial, and local laws, regulations, ordinances or orders relating to
the protection of the environment, including but not limited to the Clean Air
Act, 42 U.S.C. Section 7401 et. seq., the Clean Water Act ("CWA"), 33 U.S.C.
Section 1251 et. seq., the Resource Conservation Recovery Act ("RCRA"), 42
U.S.C. Section 6901 et. seq., the Toxic Substances Control Act ("TSCA"), 15
U.S.C. Section 2601 et. seq., the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et. seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et. seq., any
administrative or judicial
2
<PAGE> 7
judgment, order or decree; and any other state, federal or local law,
regulation, rule, ordinance or order, currently in existence which govern:
(a) the existence, cleanup and/or remedy of contamination
on property;
(b) the emission or discharge of Hazardous Substances
into the environment;
(c) the control of hazardous waste;
(d) the use, generation, transport, treatment, storage,
disposal, removal or recovery of Hazardous
Substances, including building materials; or
(e) the protection of health and safety.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended and the applicable regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Agent" shall have the meaning set forth in Section 4.2(a).
"Exchange Fund" shall have the meaning set forth in Section 4.2(a).
"FTC" shall mean the Federal Trade Commission.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America as of the date of the applicable determination.
"General Products" shall mean General Products Delaware Corporation, a
Delaware corporation.
"Governmental Authority" shall mean any foreign, Federal, state,
municipal or other governmental authority, department, commission, board,
bureau, agency or instrumentality.
"Hazardous Substances" shall mean (A) any oil, flammable substances,
explosives, radioactive materials, hazardous wastes or substances, toxic wastes
or substances or any other wastes, materials or pollutants which (1) pose a
hazard to the Real Property or to persons on or about the Real Property or (2)
cause the Real Property to be in violation of any Environmental Law; (B)
asbestos in any form which is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls, or radon gas; (C) any chemical,
material or substance defined as, or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," or "toxic substances" or words of similar
import under any applicable local, state or federal law or under the regulations
adopted pursuant thereto,
3
<PAGE> 8
including but not limited to Environmental Laws; (D) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
a governmental authority.
"HSR Act" shall have the meaning set forth in Section 5.4(c).
"Improvements" shall mean, with respect to any Real Property, all
buildings, fixtures, improvements and facilities located on or attached to such
Real Property or owned or leased by the Company or any of its Subsidiaries and
used in, on or at such Real Property, together with any and all loading docks,
parking lots, garages, and other facilities serving any such buildings; and
landscaping and site improvements.
"Indemnified Liabilities" shall have the meaning set forth in Section
8.6(a).
"Indemnified Parties" shall have the meaning set forth in Section
8.6(a).
"IRS" means the United States Internal Revenue Service.
"Legal Proceedings" means any civil or criminal judicial,
administrative or arbitral actions, suits, proceedings, hearings (public or
private) or governmental proceedings.
"Material Adverse Effect" shall mean, with respect to any Person, any
change, occurrence or effect that is or is reasonably likely to be materially
adverse to the assets, business, results of operations or condition (financial
or otherwise) of such Person and its Subsidiaries taken as a whole.
"Merger" shall have the meaning set forth in the second recital to this
Agreement.
"Merger Consideration" shall have the meaning set forth in Section
4.1(c).
"Offer" shall have the meaning set forth in Section 2.1(a).
"Options" shall have the meaning set forth in Section 8.7(e).
"Participation Agreement" shall mean the Participation Certificate
Agreement dated September 1, 1992.
"Participation Certificates" shall have the meaning set forth in
Section 5.3.
"Permits" shall have the meaning set forth in Section 5.6(a).
"Permitted Encumbrances" shall mean only the following title
exceptions: (a) taxes either not delinquent or being diligently contested; (b)
mechanics', materialmen's or similar statutory liens being diligently contested;
(c) other exceptions that do not and would not, individually or in the
aggregate, have a Material Adverse Effect with respect to the Company; and (d)
Encumbrances related to indebtedness disclosed in the Company SEC Documents
filed and publicly available prior
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to the date of this Agreement, provided that all Permitted Encumbrances set
forth in (a), (b), (c) and (d) shall not in the aggregate have a Material
Adverse Effect on the Company.
"Person" shall mean an individual, corporation, partnership, trust or
unincorporated organization or a government or any agency or political
subdivision thereof.
"Proxy Statement" shall mean the proxy or information statement
relating to the Company Stockholder Approval in connection with the consummation
of the transactions contemplated by this Agreement, as such proxy statement may
be amended or supplemented from time to time.
"Real Property" shall have the meaning set forth in Section 5.12.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, placing, discharging, injecting, escaping, leaching, dumping, or
disposing into the environment, whether intentional or unintentional.
"Sardas Options" mean the stock options granted to Jacques R. Sardas by
the Company pursuant to his Amended and Restated Employment Agreement with the
Company dated January 13, 1992 and his stock option agreement with the Company
dated July 29, 1994.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SEC" shall mean the Securities and Exchange Commission.
"Subsidiary" shall mean, with respect to any Person, (i) each
corporation, partnership, joint venture, limited liability company or other
legal entity of which such Person owns, either directly or indirectly, 50% or
more of the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or similar governing
body of such corporation, partnership, joint venture or other legal entity and
(ii) each partnership or limited liability company in which such Person or
another Subsidiary of such Person is the general partner, managing partner or
otherwise controls.
"Surviving Corporation" shall have the meaning set forth in the second
recital of this Agreement.
"Tax" or "Taxes" shall mean all taxes, charges, fees, imposts, levies,
assessments, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
and shall include any transferee liability in respect of Taxes, any liability in
respect of Taxes imposed by contract, tax sharing agreement, tax indemnity
agreement or any similar agreement.
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"Tax Return" shall mean any report, return, document, declaration or
any other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes, including without
limitation, information returns, any document with respect to or accompanying
payments or estimated Taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return document, declaration
or other information.
"Third Party" shall mean a party or parties unaffiliated with either
the Company or Acquiror.
"Wagner" shall mean Wagner Castings Company, a Delaware corporation.
1.2 Other Terms. Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
1.3 Other Definitional Provisions.
(a) The words "hereof," "herein," and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$"shall mean United States
dollars.
ARTICLE II
THE TENDER OFFER
2.1 Tender Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article X hereof and none of the events
set forth in Annex A hereto shall have occurred or be existing, within
five business days of the date hereof, Merger Sub will commence a
tender offer (the "Offer") for all of the outstanding shares of Company
Common Stock at a price of $12.50 per share in cash, net to the seller
("Offer Price"), subject only to the conditions set forth in Annex A
hereto. Subject to the terms and conditions of the Offer, Merger Sub
will accept for payment and promptly pay for all shares of Company
Common Stock duly tendered that it is obligated to purchase thereunder.
The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") containing the terms set forth in this Agreement and the
conditions set forth in Annex A hereto. Without the written consent of
the Company, Merger Sub shall not decrease the Offer Price, change the
number of shares of Company Common Stock sought to an amount less than
50.1% of the outstanding shares of Company Common Stock, change the
form of consideration to be paid pursuant to the Offer or impose
conditions to the Offer in addition to those set forth in Annex A
hereto, or
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amend any other term or condition of the Offer in any manner, except as
may be required pursuant to the SEC's rules with respect to the
extension of time periods, which is adverse to the holders of shares of
Company Common Stock; provided, however, that if on a scheduled
expiration date of the Offer (as it may be extended in accordance with
the terms hereof), all conditions to the Offer shall not have been
satisfied or waived, the Offer may be extended from time to time
without the consent of the Company for such period of time as is
reasonably expected to be necessary to satisfy the unsatisfied
conditions and provided further that if as of a scheduled expiration
date all of the conditions to the Offer have been satisfied and in
excess of 80% but less than 90% of the outstanding shares of Company
Common Stock have been tendered, Merger Sub may extend the Offer up to
an additional seven business days.
(b) Acquiror and Merger Sub shall file with the SEC on the
date the Offer is commenced a Tender Offer Statement on Schedule 14D-1
with respect to the Offer (together with all amendments and supplements
thereto and including the exhibits thereto, the "Schedule 14D-1") which
will include, as exhibits, the Offer to Purchase and a form of letter
of transmittal and summary advertisement. The Company's Board of
Directors shall recommend acceptance of the Offer to its stockholders
in a Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") to be filed with the SEC upon commencement of the
Offer; provided, however, that if the Company's Board of Directors
determines to amend or withdraw its recommendation in accordance with
Section 8.5 hereof, such amendment or withdrawal shall not constitute a
breach of this Agreement. Acquiror and Merger Sub represent that the
Schedule 14D-1, and the Company represents that the Schedule 14D-9,
will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the
date first published, sent or given to the Company's stockholders, will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statement therein, in light of the circumstances under
which they were made, not misleading, except that no representation is
made by Acquiror or Merger Sub with respect to information supplied by
the Company in writing for inclusion in the Schedule 14D-1. The
information supplied by the Company for inclusion in the Schedule 14D-1
will not, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. Each of Acquiror and Merger Sub further agrees to
take all steps necessary to cause the Schedule 14D-1, and the Company
agrees to take all steps necessary to cause the Schedule 14D-9, to be
filed with the SEC and to be disseminated to holders of shares of
Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. Each of Acquiror and Merger Sub, on
the one hand, and the Company, on the other hand, agrees promptly to
correct any information in the Schedule 14D-1 or Schedule 14D-9, as
applicable, if and to the extent that it shall have become false or
misleading in any material respect, and Acquiror, Merger Sub and the
Company further agree to take all steps necessary to cause the Schedule
14D-1 or Schedule 14D-9, as applicable, as so corrected to be filed
with the SEC and to be disseminated to holders of shares of Company
Common Stock, in each case as and
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to the extent required by applicable federal securities laws. The
Company and its counsel shall be given the opportunity to review the
Schedule 14D-1 before it is filed with the SEC and Acquiror and its
counsel shall be given the opportunity to review the Schedule 14D-9
before it is filed with the SEC. In addition, Acquiror and the Company
agree to provide each other and its counsel in writing with any
comments it or its counsel may receive from time to time from the SEC
or its staff with respect to the Schedule 14D-1 or Schedule 14D-9, as
applicable, promptly after the receipt of such comments.
(c) In connection with the Offer, the Company will cause its
Transfer Agent to furnish promptly to Merger Sub a list, as of a recent
date, of the record holders of shares of Company Common Stock and their
addresses, as well as mailing labels containing the names and addresses
of all record holders of shares of Company Common Stock and lists of
security positions of shares of Company Common Stock held in stock
depositories. The Company will furnish Merger Sub with such additional
information (including, but not limited to, updated lists of holders of
shares of Company Common Stock and their addresses, mailing labels and
lists of security positions) and such other assistance as Acquiror or
Merger Sub or their agents may reasonably request in communicating the
Offer to the record and beneficial holders of shares of Company Common
Stock.
(d) Immediately following the execution hereof, the Company
shall give notice to the holders of Participation Certificates of the
Offer, the form and substance of which will be mutually acceptable to
the Company and Acquiror.
ARTICLE III
THE MERGER
3.1 Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the DGCL, Merger Sub shall be merged with
and into Company at the Effective Time. Following the Merger, the separate
corporate existence of Merger Sub shall cease and the Company shall continue as
the Surviving Corporation and shall continue to be governed by the laws of the
State of Delaware in accordance with the DGCL and the separate corporate
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger.
3.2 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
10.1, the closing of the Merger (the "Closing") will take place at 9:00 a.m.,
Cleveland time, on the later of the first Business Day following the date on
which the last of the conditions set forth in Article IX is fulfilled or waived
or January 2, 1997 (the "Closing Date"), at the offices of Benesch, Friedlander,
Coplan and Aronoff P.L.L., 200 Public Square, Cleveland, Ohio 44114-2378, unless
another date, time or place is agreed to by the parties hereto.
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3.3 Effective Time. On the Closing Date, or as soon as practicable
thereafter, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL with the Secretary of State
of the State of Delaware. The Merger shall become effective at such time as the
Certificate of Merger is so duly filed or at such time thereafter as is provided
in the Certificate of Merger (the "Effective Time").
3.4 Effects of the Merger. The Merger shall have the effects as set
forth in Section 259 of the DGCL.
3.5 Certificate of Incorporation and By-laws.
(a) The Certificate of Incorporation of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation after the
Effective Time, until duly amended in accordance with its terms and the
DGCL.
(b) The By-laws of Merger Sub, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving
Corporation after the Effective Time until duly amended as provided
therein, by the DGCL or the Certificate of Incorporation of the
Surviving Corporation.
3.6 Directors. The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignations or removal or until their respective successors
are duly elected and qualified, as the case may be.
3.7 Officers. The officers of the Company immediately prior to the
Effective Time shall remain the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
3.8 Boards of Directors; Committees. (a) If requested by Acquiror, the
Company will, subject to compliance with applicable law and promptly following
the purchase by Merger Sub of more than 50 percent of the outstanding Company
Common Stock pursuant to the Offer, take all actions necessary to cause persons
designated by Acquiror to become directors of the Company so that the total
number of such persons equals that number of directors, rounded up to the next
whole number, which represents the product of (x) the total number of directors
on the Board of Directors multiplied by (y) the percentage that the number of
shares of Company Common Stock so accepted for payment bears to the number of
shares of Company Common Stock outstanding at the time of such acceptance for
payment. In furtherance thereof, the Company will increase the size of the
Board, or use its reasonable efforts to secure the resignation of directors, or
both, as is necessary to permit Acquiror's designees to be elected to the
Company's Board of Directors; provided, however, that prior to the Effective
Time, the Company's Board of Directors shall always have at least three members
who are neither officers of Acquiror nor designees, stockholders or affiliates
of Acquiror. At such time, the Company, if so requested, will use its reasonable
efforts to cause persons designated by Acquiror to constitute the same
percentage of each committee of such board, each board of directors of each
Subsidiary of the Company and each committee of each such board, (in
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<PAGE> 14
each case to the extent of the Company's ability to elect such persons). The
Company's obligations to appoint designees to the Board of Directors shall be
subject to Section 14(f) of the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 14f-1 thereunder. The Company shall promptly take all actions
required pursuant to such Section and Rule in order to fulfill its obligations
under this Section 3.8 and shall provide for inclusion in Acquiror's Schedule
14D-1 being mailed to stockholders contemporaneously with the commencement of
the Offer such information with respect to the Company and its officers and
directors as is required under such Section and Rule in order to fulfill its
obligations under this Section 3.8.
3.9 Actions by Directors. For purposes of Article X, no action taken by
the Board of Directors of the Company prior to the Merger shall be effective
unless such action is approved by the affirmative vote of at least a majority of
the directors of the Company which are not officers of Acquiror or designees,
stockholders or affiliates of Acquiror.
ARTICLE IV
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
4.1 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Company
Common Stock or the holder of any shares of the capital stock of Merger Sub, the
Merger shall have the following effects on such shares of capital stock:
(a) Capital Stock of Merger Sub. Each share of the capital
stock of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one share of Company Common
Stock.
(b) Cancellation of Treasury Stock and Acquiror-Owned Stock.
Each share of Company Common Stock that is directly owned by the
Company and each share of Company Common Stock that is directly owned
by Merger Sub or Acquiror or any subsidiary of Acquiror shall be
canceled and retired and shall cease to exist and no consideration
shall be delivered or deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Other than shares
canceled in accordance with subsection (b) above, each share of Common
Stock, par value $0.01 per share ("Company Common Stock"), of the
Company, issued and outstanding immediately prior to the Effective Time
(excluding Dissenting Shares, if any), shall be converted into the
right to receive $12.50 in cash without interest (the "Merger
Consideration"). All such shares, by virtue of the Merger, shall no
longer be outstanding and shall be canceled and retired and shall cease
to exist.
(d) No Rights as Stockholders After Effective Time. On and
after the Effective Time, holders of certificates which immediately
prior to the Effective Time represented
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outstanding shares of Company Common Stock shall cease to have any
rights as stockholders of the Company except the right to receive the
consideration set forth in this Article IV for each such share held by
them or, if applicable, payments due to holders of Dissenting Shares,
if any, in accordance with Section 4.2(d).
4.2 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Acquiror
shall designate a bank or trust company to act as exchange agent in the
Merger which shall be reasonably satisfactory to the Company (the
"Exchange Agent"), and Acquiror shall make available to the Exchange
Agent for the benefit of the holders of shares of Company Common Stock
for exchange in accordance with this Article IV, through the Exchange
Agent, the Merger Consideration deliverable pursuant to Section 4.1(c)
in exchange for outstanding shares of Company Common Stock (the
"Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable
instructions, deliver the Merger Consideration deliverable pursuant to
Section 4.1(c) out of the Exchange Fund upon the holder's satisfaction
of the exchange procedures set forth in subsection (b) below.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, Acquiror shall instruct the Exchange Agent to
mail to each holder of record of a certificate or certificates that
immediately prior to the Effective Time evidenced outstanding shares of
Company Common Stock (the "Certificates"), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Acquiror reasonably may specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such
letter of transmittal, duly executed and completed in accordance with
the instructions thereto, and such other customary documents as may be
required by the Exchange Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor payment evidencing the Merger
Consideration, less any required tax withholdings, and the Certificates
so surrendered shall forthwith be canceled. No interest will be paid or
will accrue on the amount payable upon the surrender of any such
certificate. If payment is to be made to a person other than the
registered holder of the certificate surrendered, it shall be a
condition of such payment that the certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that the
person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the registered
holder of the certificate surrendered or establish to the satisfaction
of the Surviving Corporation or the Exchange Agent that such tax has
been paid or is not applicable. One hundred and eighty days following
the Effective Time, the Surviving Corporation shall be entitled to
cause the Exchange Agent to deliver to it any funds (including any
interest received with respect thereto) made available to the Exchange
Agent which have not been disbursed to holders of certificates formerly
representing Shares outstanding on the Effective Time or Options
outstanding, and thereafter such holders shall be entitled to look to
the Surviving Corporation only as general creditors thereof with
respect to the cash payable upon
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due surrender of their Certificates. The Surviving Corporation shall
pay all charges and expenses, including those of the Exchange Agent, in
connection with the exchange of cash for Shares.
(c) Transfer Books. After the Effective Time, there shall be
no transfers on the stock transfer books of the Surviving Corporation
of any shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
certificates for such shares of Company Common Stock are presented to
the Surviving Corporation, they shall be canceled and exchanged as
provided in this Section 4.2 subject to the satisfaction of the
exchange procedures set forth above and the DGCL in the case of
Dissenting Shares.
(d) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock which
immediately prior to the Effective Time are held by stockholders who
have properly exercised and perfected appraisal rights under Section
262 of the DGCL (the "Dissenting Shares"), shall not be converted into
the right to receive the Merger Consideration, but the holders of
Dissenting Shares shall be entitled to receive such consideration as
shall be determined pursuant to Section 262 of the DGCL; provided,
however, that if any such holder shall have failed to perfect or shall
withdraw or lose his right to appraisal and payment under the DGCL,
such holder's shares of Company Common Stock shall thereupon be deemed
to have been converted as of the Effective Time into the right to
receive the Merger Consideration, without any interest thereon, and
such shares of Company Common Stock shall no longer be Dissenting
Shares. The Company shall give Acquiror notice of any Dissenting Shares
and Acquiror shall have the right to participate in all negotiations
and proceedings with respect to any such demands. Neither the Company
nor the Surviving Corporation shall, except with the prior written
consent of Acquiror, voluntarily make any payment with respect to, or
settle or offer to settle, any such demand for payment.
(e) No Liability. None of Company, Acquiror or Merger Sub
shall be liable to any holder of shares of Company Common Stock for
such cash that has been delivered to a public official pursuant to any
applicable abandoned property, escheat or similar laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquiror and Merger Sub
as follows:
5.1 Organization, Standing and Corporate Power. Each of the Company,
each Subsidiary of the Company with employees, Transnational Indemnity Company,
and General Products is a corporation or partnership duly organized and validly
existing and each Subsidiary of the Company with employees and Transnational
Indemnity Company, and the Company is in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate or
partnership
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power and authority to carry on its business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualifications or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not have a Material Adverse
Effect on the Company or, as to Wagner's failure to be so qualified or licensed,
as to Wagner. The Company has delivered to Acquiror complete and correct copies
of the certificate of incorporation and by-laws, or similar organizational
documents, of the Company, Wagner, Cast-Matic Corporation, Frisby P.M.C.,
Incorporated, Industrial Powder Coatings, Inc., Iowa Mold Tooling Co., Inc.,
Transnational Indemnity Company, and General Products, in each case as amended
to the date of this Agreement, all of which are in full force and effect.
5.2 Subsidiaries. Section 5.2 of the Company Disclosure Schedule sets
forth all the Subsidiaries of the Company. All the outstanding shares of capital
stock or other equity interests of each Subsidiary of the Company and those
shares of General Products owned by the Company, are duly authorized, validly
issued, fully paid and nonassessable and are owned by the Company, by another
wholly-owned Subsidiary of the Company or by the Company and another
wholly-owned Subsidiary of the Company, free and clear of all Encumbrances.
Neither the respective certificates of incorporation and bylaws nor other
organizational documents of the Company's Subsidiaries and General Products nor
any other agreement, understanding or arrangement contain any provision limiting
or otherwise restricting the ability of Acquiror, following the Effective Time,
from controlling such Subsidiaries and General Products on the same basis as the
Company. The Company does not have any equity interest in any Person other than
its Subsidiaries and General Products, as set forth in Schedule 5.2 of the
Company Disclosure Schedule.
5.3 Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Company Common Stock and no shares of preferred
stock. As of November 7, 1996, (i) 11,417,396 shares of Company Common Stock
were issued and outstanding, (ii) no shares of Company Common Stock were held by
the Company in its treasury, (iii) 2,751,329 shares of Company Common Stock were
reserved for issuance upon exercise of outstanding Options, (iv) 1,422,619
shares of Company Common Stock were reserved for issuance in connection with
rights granted under the Company's Series B Participation Certificates and
Series C Participation Certificates pursuant to the Participation Agreement
("Participation Certificates"). Except as set forth above, no shares of common
stock or other voting or equity securities of the Company are reserved for
issuance. Except as set forth in Section 5.3 of the Company's Disclosure
Schedule, there are no outstanding stock appreciation rights and there are no
other outstanding contractual rights the value of which is derived from the
financial performance of the Company or the value of shares of Company Common
Stock. All outstanding shares of Company Common Stock are duly authorized,
validly issued, fully paid and nonassessable and are not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of the
Company or any of its Subsidiaries having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which stockholders of the Company may vote. Except as set forth above there
are no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
of its Subsidiaries is a party or by which any of them is bound, obligating the
Company or any of its Subsidiaries to issue, deliver
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or sell or cause to be issued, delivered or sold, additional shares of capital
stock or other voting or equity securities of the Company or any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. Except as set forth on
Schedule 5.3 of the Company Disclosure Schedules, there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries.
5.4 Authority; Enforceability; No Conflicts; and Consents.
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and, subject to obtaining the
Company Stockholder Approval, to consummate the transactions
contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of the Company, subject,
in the case of the consummation of the Merger, to adoption of this
Agreement by the holders of a majority of the outstanding shares of
Company Common Stock (the "Company Stockholder Approval"), at a special
meeting of the holders of Company Common Stock. This Agreement has been
duly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding obligations of Acquiror and Merger
Sub, constitutes the valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms.
(b) The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict
with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or
cause loss of a material benefit under, or result in the creation or
maturation of any Encumbrance or purchase right upon any of the
properties or assets of the Company or any of its Subsidiaries under,
(i) the Restated Certificate of Incorporation or By-laws of the Company
or the comparable charter or organizational documents of any of its
Subsidiaries or General Products, (ii) other than severance agreements,
severance plans and employment agreements disclosed in the Company SEC
Documents or in Section 5.4 of the Company Disclosure Schedule or
otherwise previously disclosed to Acquiror, the Options and bank credit
agreements and indentures relating to notes and debentures identified
under "Long Term Debt" of the Notes to Consolidated Financial
Statements of the Company included in its 1996 Annual Report or as set
forth in Section 5.4 of the Company Disclosure Schedule and subject to
the governmental filings and other matters referred to in Section
5.4(c), any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, arrangement obligation, instrument,
concession, franchise, permit or license applicable to the Company or
any of its Subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to
in Section 5.4(c), any judgment, order, award decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries or their respective properties or assets, other than, in
the case of clauses
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(ii) or (iii), any such conflicts, violations, defaults, rights or
liens that individually or in the aggregate would not (X) have a
Material Adverse Effect on the Company or Wagner, (Y) impair, in any
material respect, the ability of the Company to perform its obligations
under this Agreement or (Z) prevent or significantly delay the
consummation of any of the transactions contemplated by this Agreement.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required by the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated by this
Agreement, except for (i) the filing of a premerger notification and
report form by the Company under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), (ii) as required by the
Exchange Act, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is
qualified to do business, and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in
the aggregate, (X) have a Material Adverse Effect on the Company or, to
the extent that any such consent, approval, order, authorization,
registration, declaration or filing pertain to Wagner, on Wagner, (Y)
impair, in any material respect, the ability of the Company to perform
its obligations under this Agreement or (Z) prevent or significantly
delay the consummation of the transactions contemplated by this
Agreement.
5.5 Vote Required; State Takeover Statutes; Rights Agreement.
(a) The Company Stockholder Approval is the only vote of the
holders of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated hereby.
(b) The Board of Directors of the Company has approved the
Merger and this Agreement and such approval is sufficient to render the
provisions of Section 203 of the DGCL inapplicable to the Merger, this
Agreement and the other transactions contemplated by this Agreement.
5.6 Compliance with Applicable Laws.
(a) Each of the Company and its Subsidiaries has in effect all
Federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises, licenses, notices,
permits and rights, including all authorizations under Environmental
Laws ("Permits"), necessary for it to own, lease or operate its
properties and assets and to carry on its business as now conducted
other than such Permits the absence of which would not, individually or
in the aggregate, have a Material Adverse Effect on the Company or, to
the extent such Permits are required of, on Wagner, or have a Material
Adverse Effect on the operations of either of Wagner's foundry
facilities, and there has occurred no default under any such Permit
other than such defaults which, individually or in the aggregate, would
not have a Material Adverse Effect on the Company or, to the extent
such default pertains to Wagner, on Wagner or have a Material Adverse
Effect on the operations of either of Wagner's foundry facilities.
Except as disclosed in the Company SEC Documents filed and publicly
available prior to the date of this Agreement, the Company and its
Subsidiaries are in compliance with all Applicable Laws, except for
such noncompliance which, individually or in the aggregate, would not
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have a Material Adverse Effect on the Company, or as to any
noncompliance by Wagner, on Wagner. The preceding sentence of this
Section 5.6 does not apply to matters specifically covered by Sections
5.10, 5.11 or 5.6(b) and 5.6(c).
(b) Each of the Company and its Subsidiaries is, and has been,
and each of the Company's former Subsidiaries, while a Subsidiary of
the Company, was in compliance with all applicable Environmental Laws,
except as set forth on Schedule 5.6 and except for such noncompliance
which, individually or in the aggregate, would not have a Material
Adverse Effect on the Company or as to any noncompliance by Wagner, on
Wagner.
(c) To the knowledge of the Company, during the period of
ownership or operation by the Company and its Subsidiaries of any of
their owned or leased properties, (y) there have been no Releases of
Hazardous Substances in, on, under or affecting any properties
currently or formerly owned or operated by the Company or any of its
Subsidiaries in violation of, or as would reasonably be anticipated to
result in liability under, applicable Environmental Laws and (z) none
of the Company or its Subsidiaries have disposed of any Hazardous
Substances or any other substance in a manner that has led to, or could
reasonably be anticipated to lead to, a Release in violation of
applicable Environmental Laws except, in each case, as disclosed on
Schedule 5.6 of the Company Disclosure Schedules and except in each
case for those which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on the Company.
5.7 Company SEC Documents; Undisclosed Liabilities.
(a) The Company has delivered to Acquiror each registration
statement, schedule, report, proxy statement or information statement
prepared by it since May 31, 1996, including, without limitation, (i)
the Company's Annual Report on Form 10-K for the year ended May 31,
1996 (ii) the Company's Quarterly Report on Form 10-Q for the period
ended August 31, 1996 and (iii) the Company's Proxy Statement for its
1996 Annual Meeting each in the form (including exhibits and any
amendments thereto) filed with the SEC (collectively, the "Company SEC
Documents") which documents are all filings required to be made by the
Company during such period. As of their respective dates, (i) the
Company SEC Documents (including any financial statements filed as a
part thereof or incorporated by reference therein) complied, and any
Company SEC Documents filed with the SEC subsequent to the date hereof
will comply, in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, to such Company SEC
Documents, and (ii) none of the Company SEC Documents contained or will
contain at the time of filing any untrue statement of a material fact
or omitted or will omit at the time of filing to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Each of the consolidated balance
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<PAGE> 21
sheets included in or incorporated by reference into the Company SEC
Documents (including the related notes and schedules) fairly presents
the consolidated financial position of the Company and its Subsidiaries
as of its date and each of the consolidated statements of income, of
stockholders' equity and of cash flows included in or incorporated by
reference into the Company SEC Documents (including the related notes
and schedules) fairly presents the results of operations, retained
earnings and cash flow, as the case may be, of the Company and its
subsidiaries for the periods set forth therein (subject to, in the case
of unaudited statements, normal year-end audit adjustments which will
not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be
noted therein. Other than the Company SEC Documents, the Company has
not filed any other definitive reports or statements with the SEC
between May 31, 1996 and the date hereof.
(b) Except as disclosed in the Company SEC Documents filed and
publicly available prior to the date of this Agreement or in Section
5.8 or 7.1 of this Agreement or the related Sections of the Company
Disclosure Schedule, the Company and its Subsidiaries do not have any
material indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise) (i) required by GAAP to be
reflected on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes, exhibits or schedules
thereto (except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since August
31, 1996) or (ii) which reasonably could be expected to have a Material
Adverse Effect on the Company.
5.8 Absence of Changes or Events. Except as disclosed in the Company
SEC Documents filed and publicly available prior to the date of this Agreement
or as set forth in Section 5.8 or 7.1 of the Company Disclosure Schedule or
permitted by Section 7.1 of this Agreement, since May 31, 1996, the Company and
its Subsidiaries have conducted their respective businesses only in the ordinary
course, and there has not been (i) any change or occurrence (other than those
which relate to the industries the Company operates in generally or the economy
in general) which resulted in or is reasonably likely to have a Material Adverse
Effect on the Company or, as such change or occurrence relates directly to the
business of Wagner, on Wagner, (ii) any declaration, setting aside or payment of
any dividend or other distribution with respect to the Company Common Stock,
(iii) any issuance of any shares of Company Common Stock or other capital stock
of the Company or any securities convertible into or exchangeable or exercisable
for capital stock of the Company, (iv) any split, combination or
reclassification of any of the capital stock of the Company or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock of the Company, (v) (X)
any granting by the Company or any of its Subsidiaries to any director or
officer of the Company or any of its Subsidiaries of any increase in
compensation, except as required under employment agreements in effect as of
August 23, 1996 that were included as an exhibit to a Company SEC Document filed
and publicly available prior to the date of this Agreement, (Y) any granting by
the Company or any of its Subsidiaries to any such person of any increase in
severance or termination pay, except as disclosed in Section 5.8 or 7.1 of the
Company Disclosure Schedule or, (Z) any entry by the Company or any of its
Subsidiaries into any employment, severance or termination agreement with any
such person, (vi) other than those listed on Section 5.8 of the Company
Disclosure Schedule, any acquisition of
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or commitment to purchase or build any property or project involving an
expenditure in excess of $11 million in the aggregate, (vii) any damage,
destruction or loss not covered by insurance, that has or reasonably could be
expected to have a Material Adverse Effect on the Company or (viii) any change
in accounting methods, principles or practices by the Company affecting its
assets, liabilities or business, except insofar as may have been required by a
change in GAAP.
5.9 Litigation. Except as disclosed in Section 5.9 of the Company
Disclosure Schedule or in the Company SEC Documents filed and publicly available
prior to the date of this Agreement, there are no Legal Proceedings pending
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, threatened that, individually or in the aggregate, could reasonably be
expected to (i) have a Material Adverse Effect on the Company or if with respect
to Wagner, on Wagner or (ii) prevent, or significantly delay the consummation of
the transactions contemplated by this Agreement. Except as disclosed in Section
5.9 of the Company Disclosure Schedule or as set forth in the Company SEC
Documents filed and publicly available prior to the date of this Agreement,
there is no judgment, order, injunction or decree of any Governmental Authority
outstanding against the Company.
5.10 Taxes. Except as disclosed in Section 5.10 of the Company
Disclosure Schedule:
(a) The Company and each of its Subsidiaries, and each
affiliated group (as defined in Section 1504(a) of the Code without
regard to the limitations of Section 1504(b) of the Code) of which the
Company or any of its Subsidiaries is or has ever been a member, has
timely filed all Federal income Tax Returns and all other material Tax
Returns and reports required to be filed by it. The Company and each of
its Subsidiaries has paid (or the Company has paid on its Subsidiaries'
behalf) all taxes shown due on such Tax Returns. The most recent
consolidated financial statements contained in the Company SEC
Documents reflect an adequate reserve for all Taxes payable by the
Company and its Subsidiaries for all taxable periods and portions
thereof through the date of such financial statements.
(b) No material deficiencies for any Taxes and no deficiencies
for any federal or state income taxes have been proposed, asserted or
assessed against the Company or any of its Subsidiaries that have not
been fully paid or adequately provided for in the appropriate financial
statements of the Company and its Subsidiaries, no requests for waivers
of the time to assess any Taxes are pending. No material issues
relating to Taxes have been raised in writing by the relevant taxing
authority during any presently pending audit or examination.
(c) No liens for Taxes exist with respect to any assets or
properties of the Company or any of its Subsidiaries, except for
statutory liens for Taxes not yet due.
(d) Other than with respect to contractual tax indemnity
obligations of the Company and its Subsidiaries involving claims for
state and local Taxes which are not material in amount, none of the
Company or any of its Subsidiaries is a party to or is bound by any tax
sharing agreement, tax indemnity obligation or similar agreement,
arrangement
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or practice with respect to Taxes (including any advance pricing
agreement, closing agreement or other agreement relating to Taxes with
any taxing authority).
(e) As a result, directly or indirectly, of the transactions
contemplated by this Agreement (including, without limitation, as a
result of any termination of employment prior to or following the
Effective Time) none of Acquiror, Merger Sub, the Company or the
Surviving Corporation, or any of their respective Subsidiaries will be
obligated to make a payment to an individual who is a "disqualified
individual", that would be characterized as an "excess parachute
payment" (as such terms are defined in Section 280G of the Code)
without regard to whether such payment is reasonable compensation for
personal services performed or to be performed in the future.
(f) The Company and it Subsidiaries have complied in all
material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes. No tax is required to
be withheld pursuant to Section 1445 of the Code as a result of the
transactions contemplated by this Agreement.
(g) No Federal, state, local or foreign audits or other
administrative proceedings or court proceedings are presently pending
with regard to any Federal income or material state, local or foreign
Taxes or Tax Returns of the Company or its Subsidiaries and neither the
Company nor any of its Subsidiaries has received a written notice of
any material pending audit or proceeding.
(h) Neither the Company nor any of its Subsidiaries has agreed
to make any adjustment under Section 481(a) of the Code.
(i) Neither the Company nor any of its Subsidiaries has, with
regard to any assets or property held or acquired by any of them, filed
a consent to the application of Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section 341(f)(4) of
the Code) owned by the Company or any of its Subsidiaries.
(j) No property owned by the Company or any of its
Subsidiaries (i) is property required to be treated as being owned by
another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately
prior to the enactment of the Tax Reform Act of 1986; (ii) constitutes
"tax exempt use property" within the meaning of Section 168(h)(1) of
the Code; or (iii) is tax exempt bond financed property within the
meaning of Section 168(g) of the Code.
5.11 Employee Benefits.
(a) Section 5.11(a) contains a complete and accurate list of
all existing bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock, stock option, severance, welfare and
fringe benefit plans, employment or severance agreements and all
similar arrangements in
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which any employee or former employee or director or former director of
the Company or any of its Subsidiaries (the "Employees") participates
(the "Employee Benefit Plans"). Except as set forth in Schedule
5.11(a), neither the Company nor any of its Subsidiaries has any formal
plan to create any additional material Employee Benefit Plan or to
modify or change any existing Employee Benefit Plan in a material
respect.
(b) Except as set forth in Schedule 5.11(b), each Employee
Benefit Plan has been operated and administered in all material
respects in accordance with its terms and with applicable law,
including, but not limited to, ERISA, and the Code, and all filings,
disclosures and notices required by ERISA or the Code (including
notices under Section 4980B of the Code) have been, in all material
respects, timely made. Each Employee Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (a
"Pension Plan") and which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service for "TRA" (as defined in Rev. Proc.
93-39), or has filed or will file for such a determination letter prior
to the expiration of the remedial amendment period for such Employee
Benefit Plan, and the Company is not aware of any circumstances likely
to result in revocation of any such favorable determination letter.
Except as set forth in Schedule 5.11(b), there is no material pending
or, to the best knowledge of the Company, threatened legal action, suit
or claim relating to the Employee Benefit Plans. Neither the Company
nor any of its Subsidiaries has engaged in a transaction with respect
to any Employee Benefit that, assuming the taxable period of such
transaction expired as of the date hereof, would reasonably be expected
to subject the Company or any of its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502(i) of ERISA
in an amount which would be material.
(c) No liability to the Pension Benefit Guaranty Corporation
(the "PBGC") or otherwise with respect to the termination of a plan
under Title IV of ERISA has been or is expected to be incurred by the
Company or any of its Subsidiaries with respect to any ongoing, frozen
or terminated "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any of them,
or any single- employer plan of any entity (an "ERISA Affiliate") which
is considered one employer with the Company under Section 4001(b) of
ERISA or Section 414(b) or (c) of the Code (an "ERISA Affiliate Plan"),
other than liability for payment of PBGC premiums. The Company and its
Subsidiaries do not have any liability for and do not expect to incur
any withdrawal liability with respect to a "multiemployer plan" (within
the meaning of Section 3(37) of ERISA) under Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate) or
any liability in connection with the reorganization or termination of
any multiemployer plan. No notice of a "reportable event", within the
meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
Employee Benefit Plan or by any ERISA Affiliate Plan within the
12-month period ending on the date hereof. The PBGC has not instituted
proceedings to terminate any Pension Plan or ERISA Affiliate Plan and,
to the Company's knowledge, no condition exists that presents a
material risk that such proceedings will be instituted.
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(d) To the best knowledge of the Company, (i) all
contributions required to be made under the terms of any Employee
Benefit Plan or ERISA Affiliate Plan or any collective bargaining
agreement have been timely made or properly reflected on the books of
the Company. To the best knowledge of the Company, (i) neither any
Pension Plan nor any ERISA Affiliate Plan has or reasonably expects to
have an "accumulated funding deficiency" (whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA; and
(ii) all required payments to the PBGC with respect to each Pension
Plan or ERISA Affiliate Plan have been made on or before their due
dates. Neither the Company nor any of its Subsidiaries has provided, or
is required to provide, security to any Pension Plan or to any ERISA
Affiliate Plan pursuant to Section 401(a)(29) of the Code.
(e) To the knowledge of the Company, with respect to each
Pension Plan which is a single-employer plan covered under Title IV of
ERISA and each ERISA Affiliate Plan (a "Title IV Plan"), the financial
statements of the Company set forth in the most recent Form 10-K of the
Company, as modified by the most recent Quarterly Report on Form 10-Q
of the Company sets forth a true and accurate statement in all material
respects of the funded status of such Title IV Plan as required to be
reflected in such financial statements under Statement 87 of the
Financial Accounting Standards Board. To the knowledge of the Company,
since the date as of which the funded status was determined under the
preceding sentence, there has not been an adverse change in the
financial condition of any such Title IV Plan which would have caused a
material change in the funded status of such Title IV Plan.
(f) Except as set forth on Schedule 5.11(f), neither the
Company nor any of its Subsidiaries has any obligations to provide
retiree health and life benefits under any Employee Benefit Plan, other
than benefits mandated by Section 4980B of the Code.
(g) Except as set forth on Schedule 5.11(g), the Company and
its Subsidiaries do not maintain any Employee Benefit Plans covering
foreign Employees, and all such Employee Benefit Plans are in material
compliance with applicable local law and, to the best knowledge of the
Company, are funded in accordance with applicable law.
(h) With respect to each Employee Benefit Plan, the Company
has provided or will make available to Acquiror upon request, if
applicable, true and complete copies of existing: (a) plan documents
and amendments thereto; (b) trust instruments and insurance contracts;
(c) Forms 5500 filed with the IRS; (d) most recent actuarial report and
financial statement; (e) the most recent summary plan description; (f)
forms filed with the PBGC; (g) most recent determination letter issued
by the IRS; (h) any Form 5310 or Form 5330 filed with the IRS; and (i)
most recent nondiscrimination tests performed under ERISA and the Code
(including 401(k) and 401(m) tests).
(i) Except as set forth on Schedule 5.11(i), the consummation
of the transactions contemplated by this Agreement would not reasonably
be expected to, directly or indirectly, (A) entitle, any Employee to
severance pay, unemployment compensation or any other severance
payment, (B) result in any payment becoming due or increase the amount
of compensation due to any Employee, (C) increase the benefits payable
under any Employee
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Benefit Plan or (D) result in the acceleration of the time of payment
or the vesting of any benefits under any Employee Benefit Plan.
5.12 Title to Properties. Section 5.12 of the Company Disclosure
Schedule sets forth a complete list of all material real property owned in fee
by the Company or one of its Subsidiaries and sets forth all material real
property leased by the Company or one of its Subsidiaries as lessee as of the
date hereof (such owned and leased material real property, including all
Improvements, referred to collectively as the "Real Property"). Except as set
forth in Section 5.12 of the Company Disclosure Schedule, each of the Company
and its Subsidiaries has good and valid title to, or a valid leasehold interest
in, the Real Property held by it. Except as set forth in Section 5.12 of the
Company Disclosure Schedule, the Real Property is free of Encumbrances, except
for Permitted Encumbrances, and the consummation of the transactions
contemplated by this Agreement will not create any Encumbrance on any of the
Real Property which, individually or in the aggregate, would have a Material
Adverse Effect on the Company or, with respect to the Real Property of Wagner,
on Wagner. Each of the Company and each of its Subsidiaries enjoys peaceful and
undisturbed possession under all leases of Real Property, expect for such
breaches of the right to peaceful and undisturbed possession that do not
materially interfere with the ability of the Company and its Subsidiaries to
conduct their business.
5.13 Insurance. The Company and its subsidiaries have insurance
coverage with insurance companies or associations in such amounts, on such terms
and covering such risks, including fire and other risks insured against by
extended coverage, as is reasonably prudent, and each has public liability
insurance, insurance against claims for personal injury or death or property
damage occurring in connection with any of activities of the Company or any of
its Subsidiaries or of any properties owned, occupied or controlled by the
Company or any of its Subsidiaries, in such amount as is deemed reasonably
necessary by the Company or any of its Subsidiaries.
5.14 Labor Matters. Except as set forth in Schedule 5.14 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is the
subject of any material proceeding asserting that the Company or any of its
Subsidiaries has committed an unfair labor practice or is seeking to compel it
to bargain with any labor union or labor organization nor is there pending or,
to the knowledge of the management of the Company, threatened, nor has there
been for the past five years, any material labor strike, dispute, walkout, work
stoppage, slow-down or lockout involving the Company or any of its Subsidiaries.
The Company has previously made available to Acquiror correct and complete
copies of all labor and collective bargaining agreements to which the Company or
any of its Subsidiaries is party or by which any of them are otherwise bound.
5.15 Intellectual Property.
(a) The Company and/or each of its Subsidiaries owns, or is
licensed or otherwise possesses legally enforceable rights to use all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs
or applications, and tangible or intangible proprietary information or
materials that are used in the business of the Company and its
subsidiaries as currently conducted, except
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for any such failures to own, be licensed or possess that, individually
or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on the Company.
(b) Except as disclosed in Section 5.15 of the Company
Disclosure Schedule or the Company SEC Documents or as is not
reasonably likely to have a Material Adverse Effect on the Company:
(i) The Company is not, nor will it be as a result of
the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any
licenses, sublicenses and other agreements as to which the
Company is a party and pursuant to which the Company is
authorized to use any third-party patents, trademarks, service
marks, and copyrights ("Third-Party Intellectual Property
Rights");
(ii) no claims with respect to the patents,
registered and material unregistered trademarks and service
marks, registered copyrights, trade names, and any
applications therefor owned by the Company or any its
subsidiaries (the "Company Intellectual Property Rights"), any
trade secret material to the Company, or Third Party
Intellectual Property Rights to the extent arising out of any
use, reproduction, or distribution of such Third Party
Intellectual Property Rights by or through the Company or any
of its subsidiaries, are currently pending or, to the
knowledge of the management of the Company, are overtly
threatened by any person;
(iii) the Company does not know of any valid grounds
for any material bona fide claims (A) to the effect that the
manufacture, sale, licensing or use of any product as now
used, sold or licensed or proposed for use, sale or license by
Company or any of its subsidiaries, infringes on any
copyright, patent, trademark, service mark, or trade secret;
(B) against the use by the Company or any of its subsidiaries,
of any trademarks, trade names, trade secrets, copyrights,
patents, technology, know-how, or computer software programs
and applications used in the business of the Company or any of
its subsidiaries as currently conducted or as proposed to be
conducted; (C) challenging the ownership, validity, or
effectiveness of any of the Company Intellectual Property
Rights or other trade secret material to the Company; or (D)
challenging the license or legally enforceable right to use of
the Third Party Intellectual Rights by the Company or any of
its Subsidiaries;
(iv) to the knowledge of the management of the
Company, all material patents, registered trademarks and
service marks, and copyrights held by the Company are valid,
enforceable and subsisting; and
(v) to the knowledge of the management of the
Company, there is no material unauthorized use, infringement
or misappropriation of any of the Company Intellectual
Property Rights by any third party, including any employee or
former employee of the Company or any of its Subsidiaries.
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5.16 Takeover Statutes. No "fair price," "moratorium," "control share
acquisition or other similar anti-takeover statute or regulation (each a
"Takeover Statute") or any applicable anti-takeover provision in the Company's
certificate of incorporation and by-laws is, or at the Effective Time will be,
applicable to the Company, the Company Common Stock, the Offer, the Merger or
the other transactions contemplated by this Agreement. The board of directors of
the Company has taken all action so that Acquiror will not become an "Interested
Stockholder" within the meaning of Section 203 of the DGCL.
5.17 Dispositions. Except as set forth in Section 5.17 of the Company
Disclosure Schedules, as of the date hereof the Company has not received any
claims for indemnification, contribution, breach or otherwise that are
unresolved with respect to any businesses, corporations, properties or assets
(other than inventory sold in the ordinary course) sold by it from the beginning
of 1989 to the present.
5.18 Brokers and Intermediaries. No broker, investment banker,
financial advisor or other person, other than Alex. Brown & Sons Incorporated
(whose fee arrangements have been disclosed to Acquiror in writing and will not
be modified subsequent to the date of this Agreement), the fees and expenses of
which will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
5.19 Opinion of Financial Advisor. The Board of Directors of the
Company has received the opinion of Alex. Brown & Sons Incorporated to the
effect that, as of the date of this Agreement, the cash consideration to be
received in the Offer and the Merger by the holders of Company Common Stock
(other than Acquiror and its affiliates) is fair to such holders from a
financial point of view.
5.20 Transactions With Affiliates. Other than the transactions
contemplated by this Agreement and except to the extent disclosed in the Company
SEC Documents or as set forth in Schedule 5.20 of the Company Disclosure
Schedule, from January 1, 1995 through the date of this Agreement, there have
been no transactions, agreements, arrangements or understandings between the
Company or its Subsidiaries, on the one hand, and the Company's affiliates
(other than wholly-owned Subsidiaries of the Company) or other Persons, on the
other hand, that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB
Acquiror and Merger Sub each hereby represent and warrant to the
Company as follows:
6.1 Organization, Standing and Corporate Power of Acquiror and Merger
Sub. Each of Acquiror and Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has the requisite corporate power and
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authority to carry on its business as now being conducted. Each of Acquiror and
Merger Sub is duly qualified or licensed to do business and is in good standing
in each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualifications or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a Material Adverse
Effect on Acquiror. Acquiror and Merger Sub each has delivered to the Company
complete and correct copies of its certificate of incorporation and by-laws (or
comparable charter documents) in each case as amended to the date of this
Agreement.
6.2 Authority; Enforceability; No Conflicts and Consents.
(a) Each of Acquiror and Merger Sub has the requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Acquiror and Merger Sub and
the consummation by Acquiror and Merger Sub of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Acquiror and Merger Sub. This
Agreement has been duly executed and delivered by Acquiror and Merger
Sub and, assuming this Agreement constitutes the valid and binding
obligations of the Company, constitutes valid and binding obligations
of each of Acquiror and Merger Sub, enforceable against Acquiror and
Merger Sub in accordance with its terms.
(b) The execution and delivery of this Agreement do not, and
the consummation of the transaction contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict
with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of
termination, cancellation, or acceleration of any obligation or cause
loss of a material benefit under, or result in the creation or
maturation of any Encumbrance or purchase right upon any of the
properties or assets of Acquiror or Merger Sub under, (i) the
certificate of incorporation or by-laws (or comparable charter
documents) of Acquiror or Merger Sub, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to
Acquiror or Merger Sub or (iii) any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Acquiror or Merger Sub
or their respective properties or assets, other than, in the case of
clauses (ii) or (iii), any such conflicts, violations, defaults, rights
or liens that individually or in the aggregate would not (Y) impair, in
any material respect, the ability of Acquiror or Merger Sub to perform
its obligations under this Agreement or (Z) prevent or significantly
delay the consummation of any of the transactions contemplated by this
Agreement.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority is
required by Acquiror or Merger Sub in connection with the execution and
delivery of this Agreement or the consummation by Acquiror of any of
the transactions contemplated by this Agreement, except for (i) the
filing of a premerger notification and report form by Acquiror under
the HSR Act, (ii) such reports and filings under the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (iii) the filing of the Certificate of
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Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which the Company is
qualified to do business, (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to be obtained or made would not, individually or in the
aggregate, (Y) impair, in any material respect, the ability of Acquiror
or Merger Sub to perform its obligations under this Agreement or (Z)
prevent or significantly delay the consummation of the transactions
contemplated by this Agreement.
6.3 Brokers. No broker, investment banker, financial advisor or other
person, other than Morgan Stanley & Co. Incorporated, the fees and expenses of
which will be paid by Acquiror, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Acquiror.
6.4 Financing. Acquiror has entered into a Third Amended and Restated
Credit Agreement, dated as of November 14, 1996, by and among Acquiror, Sun
Trust Bank, Atlanta, as Agent, NBD Bank and First Union National Bank of North
Carolina, as Co-agents, and the lenders party thereto, pursuant to which
Acquiror has obtained the financing necessary to effect the transactions
described in this Agreement, including the Offer and the Merger. At or prior to
the Effective Time, Acquiror shall fund the Exchange Agent with funds sufficient
to pay the aggregate Merger Consideration.
ARTICLE VII
COVENANTS RELATING TO CONDUCT OF BUSINESS
7.1 Conduct of Business of the Company. Except as otherwise provided by
the terms of this Agreement or as set forth in Section 5.8 of this Agreement or
in Section 5.8 or 7.1 of the Company Disclosure Schedule, from and after the
date hereof to the Effective Time, the Company shall, and shall cause its
Subsidiaries to, carry on their respective businesses in the ordinary course and
use their best efforts to preserve intact their current business organizations,
keep available the services of their current officers and key employees and
preserve their relationships consistent with past practice with customers,
suppliers and others having business dealings with them to the end that their
goodwill and ongoing businesses shall be unimpaired in all material respects at
the Effective Time. Without limiting the generality of the foregoing, prior to
the Effective Time, except as otherwise provided by the terms of this Agreement
or as set forth in Section 5.8 of this Agreement or in Section 5.8 or 7.1 of the
Company Disclosure Schedule, the Company shall not (and shall cause its
Subsidiaries not to), without the written consent of Acquiror, which consent may
not be unreasonably withheld:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than dividends and distributions by any direct or indirect wholly-owned
Subsidiary of the Company to its parent, (B) split, combine or
reclassify any of its capital stock or, except pursuant to the exercise
of options or the
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Participation Certificates existing on the date hereof, issue or
authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or other equity
interests or (C) purchase, redeem or otherwise acquire or amend any
shares of capital stock or other equity interests of the Company or any
of its Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares, interests or other
securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or
amend any shares of its capital stock, any other voting securities or
any securities convertible into, or any rights, warrants or options to
acquire, any such shares, interests, voting securities or convertible
securities (other than the issuance of Company Common Stock upon the
exercise of Options outstanding on the date of this Agreement in
accordance with their present terms and the issuance of Company Common
Stock upon exercise of Participation Certificates);
(iii) amend its Restated Certificate of Incorporation, By-laws
or other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing all or substantially all of the
assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division thereof or (B) any assets except (x) mergers and
consolidations between or among one or more wholly-owned Subsidiaries
of the Company that will not create adverse tax consequences to the
Company or its Subsidiaries, (y) purchases of inventory, furnishings
and equipment in the ordinary course of business consistent in nature
and amount with past practice or (z) expenditures listed on Section 7.1
of the Company Disclosure Schedule;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of any of its properties or
assets, except sales in the ordinary course of business consistent with
past practice;
(vi) (A) other than (1) ordinary course working capital
borrowings, of which not more than $3 million may be outstanding at any
one time plus amounts necessary to make payments to holders of Options
upon cancellation as is provided for in Section 8.7(e) of this
Agreement, (2) borrowings required to finance specific projects listed
on Section 7.1 of the Company Disclosure Schedule, incur any
indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other
rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of another person, enter
into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement
having the economic effect of any of the foregoing or (B) make any
loans, advances or capital contributions to, or investments in, any
other person other than (x) to the Company or any direct or indirect
wholly-owned Subsidiary of the Company and (y) advances to employees,
suppliers or customers in the ordinary course of business consistent
with past practice;
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(vii) pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement
or satisfaction, (A) in the ordinary course of business consistent with
past practice or (B) in accordance with their terms of liabilities
reflected or reserved against in the most recent consolidated financial
statements (or the notes thereto) of the Company included in the
Company SEC Documents filed and publicly available prior to the date of
this Agreement or incurred in the ordinary course of business
consistent with past practice since the date of such financial
statements or waive the benefits of, or agree to modify in any manner,
any confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party;
(viii) except as required to comply with Applicable Law, (A)
adopt, enter into, terminate or amend any Employee Benefit Plan or
other arrangement for the benefit or welfare of any director, officer
or current or former employee including any collective bargaining
agreements or arrangements, (B) increase in any manner the compensation
or fringe benefits of, or pay any bonus to, any director, officer or
employee (except for normal increases or bonuses as contractually
required pursuant to agreements disclosed in the Company SEC Documents
filed and publicly available prior to the date of this Agreement and in
Section 5.8 of the Company Disclosure Schedule), (C) pay any benefit
subject to the requirements of ERISA that is not provided for under any
Employee Benefit Plan, (D) except for payments or awards in cash
permitted by clause (B), grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Employee
Benefit Plan (including the grant of stock options, stock appreciation
rights, stock based or stock related awards, performance units or
restricted stock, or the removal of existing restrictions in any
Employee Benefit Plans or agreements or awards made thereunder) (E)
take any action to fund or in any other way secure the payment of
compensation or benefits under any employee plan, agreement, contract
or arrangement or Employee Benefit Plan other than in the ordinary
course of business consistent with past practice or (F) unless
requested to do so by Acquiror, which the Company agrees to do
following the acquisition of Company Common Stock in the Offer if so
requested, take any action to accelerate the payment or vesting of
compensation or benefits under any employee plan, agreement, contract
or arrangement or Employee Benefit Plan;
(ix) except in the ordinary course of business, modify, amend
or terminate any contract or agreement set forth in the Company SEC
Documents to which the Company or any Subsidiary is a party or waive,
release or assign any material rights or claims;
(x) conduct its business in a manner or take, or cause to be
taken, any other action that would prevent or materially delay the
Company or Acquiror from consummating the transactions contemplated
hereby in accordance with the terms of this Agreement (regardless of
whether such action would otherwise be permitted or not prohibited
hereunder), including, without limitation, any action which may
materially limit the ability of the Company or Acquiror to consummate
the transactions contemplated hereby as a result of antitrust or other
regulatory concerns; or
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(xi) buy or sell any interest in General Products during 1996;
(xii) grant any severance or termination pay to, or enter into
any employment or severance agreement with any director, officer or
other employee of the Company or its Subsidiaries; and neither the
Company nor any of its Subsidiaries shall establish, adopt, enter into,
make any new grants or awards under or amend, any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, employee stock ownership,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees (the "Benefit Plans");
(xiii) make any federal tax election or permit any insurance
policy naming it as a beneficiary or a loss payable payee to be
canceled or terminated without notice to Acquiror, except in the
ordinary and usual course of business; and
(xiv) authorize any of, or commit or agree to take any of, the
foregoing actions.
7.2 Access to Information. The Company shall, and shall cause each of
its respective Subsidiaries to, afford to Acquiror and Merger Sub and to the
officers, employees, accountants, counsel, financial advisors and other
representatives of Acquiror and Merger Sub, reasonable access during normal
business hours (during the period prior to the Effective Time) to all their
respective properties, books, environmental reports, contracts, commitments,
personnel, consultants, attorneys, and records and, during such period, the
Company shall, and shall cause its respective Subsidiaries to, furnish promptly
to the other party (a) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the requirements
of Federal or state securities laws and (b) all other information concerning its
business, properties and personnel as such other party may reasonably request.
Except as required by Applicable Law, Acquiror and Merger Sub will hold, and
will cause its respective officers, employees, accountants, counsel, financial
advisors and other representatives and affiliates to hold, any nonpublic
information in confidence to the extent required by, and in accordance with, the
provisions of the letter, dated September 5, 1996, between the Company and
Acquiror (the "Confidentiality Agreement").
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Preparation of Proxy Statement; Stockholders' Meeting.
(a) If required following termination of the Offer, the
Company shall prepare and file with the SEC the Proxy Statement. The
Company shall use reasonable efforts to have the Proxy Statement
cleared by the SEC, as promptly as practicable thereafter. The Proxy
Statement shall not be filed, and no amendment or supplement thereto
will be made by the Company, without consultation with Acquiror and its
counsel.
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(b) Each of the Company, Acquiror and Merger Sub covenants
that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in the Proxy Statement will, at
the date it is first mailed to the stockholders of the Company, or at
the time of the Company Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, (i) no representation or covenant is
made by the Company with respect to statements made therein based on
information supplied in writing by Acquiror or Merger Sub specifically
for inclusion. If at any time prior to the Effective Time there shall
occur (i) any event with respect to the Company or any of its
Subsidiaries, or with respect to other information supplied by the
Company for inclusion in the Proxy Statement or (ii) any event with
respect to Acquiror or Merger Sub, or with respect to information
supplied by Acquiror or Merger Sub for inclusion in the Proxy
Statement, in either case which event is required to be described in an
amendment of, or a supplement to, the Proxy Statement, such event shall
be so described, and such amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the
stockholders of the Company.
(c) The Company shall promptly notify Acquiror and Merger Sub
of the receipt of any comments from the SEC or its staff or any other
appropriate government official and of any requests by the SEC or its
staff or any other appropriate government official for amendments or
supplements to any of the filings with the SEC in connection with the
Merger and other transactions contemplated hereby or for additional
information and shall supply Acquiror and Merger Sub with copies of all
correspondence between the Company or any of its representatives, and
the SEC or its staff or any other appropriate government official, on
the other hand, with respect thereto. The Company shall use reasonable
efforts to respond to any comments of the SEC with respect to the Proxy
Statement, shall provide promptly to Acquiror and Merger Sub any
information such party may obtain that could necessitate amending any
such document and shall consult with counsel to Acquiror with respect
to such comments.
(d) If required following the termination of the Offer, the
Company shall take all action necessary in accordance with Applicable
Law and its Restated Certificate of Incorporation and By-laws to
convene and hold a meeting of its stockholders (the "Company
Stockholders' Meeting") as promptly as practicable for the purpose of
obtaining the Company Stockholder Approval. The Company shall, through
its Board of Directors, recommend to its stockholders the adoption of
this Agreement and the transactions contemplated hereby and shall use
reasonable efforts to solicit from its stockholders proxies in favor of
adoption of this Agreement and to take all other lawful action
necessary to secure the Company Stockholder Approval. Notwithstanding
the foregoing, the Company's obligation to convene and hold the Company
Stockholders' Meeting and to recommend the adoption of this Agreement
and to solicit proxies from its stockholders shall be subject to any
action (including any withdrawal or change of its recommendation) taken
by, or upon authority of, the Board of Directors of the Company which
the Board of Directors
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determines, based on the advice of outside legal counsel to the
Company, is required in the exercise of its fiduciary duties to the
Company's stockholders under Applicable Law.
8.2 Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement, including (i)
the obtaining of all necessary actions or nonactions, waivers, consents
and approvals from Governmental Authorities and the making of all
necessary registrations and filings (including filings with
Governmental Authorities, if any) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Authority (including
in respect of any Governing Law), (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of any
of the transactions contemplated by this Agreement, including seeking
to have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed and (iv) the execution
and delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of,
this Agreement.
(b) The Company shall give prompt notice to Acquiror and
Merger Sub, and Acquiror and Merger Sub shall give prompt notice to the
Company, of (i) any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate in any material respect
(including in the case of representations or warranties by the Company
or Acquiror and Merger Sub, as applicable, such party's receiving
knowledge of any fact, event or circumstance which may cause any
representation qualified as to the knowledge of such party to be or
become untrue or inaccurate in any material respect) or (ii) the
failure by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements
of the parties or the conditions to the obligations of the parties
under this Agreement.
8.3 Supplemental Disclosure. The Company shall confer on a regular
basis with Acquiror or Merger Sub, report on operational matters and promptly
notify Acquiror or Merger Sub of, and furnish Acquiror or Merger Sub with, any
information it may reasonably request with respect to, any event or condition or
the existence of any fact that would cause any of the conditions to Acquiror's
or Merger Sub's obligation to consummate the Offer or the Merger not to be
completed, and Acquiror and Merger Sub shall promptly notify the Company of, and
furnish the Company any information it may reasonably request with respect to,
any event or condition or the existence of any fact that would cause any of the
conditions to the Company's obligation to consummate the Merger not to be
completed.
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8.4 Announcements. Prior to the Closing, neither the Company, Acquiror
nor Merger Sub will issue any press release or otherwise make any public
statement with respect to this Agreement and the transactions contemplated
hereby without the prior consent of the other (which consent shall not be
unreasonably withheld), except as may be required by Applicable Law or
applicable stock exchange regulations, in which event the party required to make
the release or announcement shall, if possible, allow the other party reasonable
time to comment on such release or announcement in advance of such issuance. The
parties agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.
8.5 No Solicitation.
(a) From and after the date hereof until the Effective Time,
the Company shall not, nor shall it authorize any of its officers,
directors, employees, agents, investment bankers, attorneys, financial
advisors or other representatives (collectively, "Company
Representatives") to (i) solicit, initiate or knowingly encourage the
submission of, any Acquisition Proposal, (ii) enter into any agreement
with respect to any Acquisition Proposal, or (iii) participate in any
discussions or negotiations regarding, or furnish to any Person any
non-public information with respect to, or take any other action to
knowingly facilitate any inquiries or the making of any proposal that
constitutes or would reasonably be expected to lead to, an Acquisition
Proposal; provided, however, that, notwithstanding anything to the
contrary in this Agreement, (i) the Company may participate in
discussions or negotiations with, and may furnish information
concerning the Company and its business, properties and assets to, a
third party who, without any solicitation by the Company or any Company
Representatives after the date of this Agreement, seeks to engage in
such discussions or negotiations or requests such information, if (1)
the Board of Directors of the Company determines, based on the advice
of the Company's outside legal counsel, that failing to engage in such
discussion or negotiations or provide such information would reasonably
be expected to violate the fiduciary duties of the Board of Directors
of the Company to its stockholders, (2) prior to engaging in
discussions or negotiations with, or furnishing information to, such
Third Party, the Company shall receive from such Third Party an
executed confidentiality agreement in reasonably customary form on
terms not more favorable to such Person or entity than the terms
contained in the Confidentiality Agreement, and (3) the Acquisition
Proposal would result in the holders of Company Common Stock being
entitled to receive consideration which, in the aggregate, would be
greater than $12.50 per share (collectively, a "Permitted Acquisition
Proposal"), and (ii) the Board of Directors of the Company may take and
disclose to the Company's stockholders a position with regard to a
tender offer or exchange offer contemplated by Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act and may make such disclosure to the
stockholders of the Company as may be required under Applicable Law;
provided, that the Board of Directors of the Company shall not
recommend that the stockholders of the Company tender their shares of
Company Common Stock unless such recommendation is permitted by Section
8.5(d).
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(b) The Company shall immediately notify Acquiror and Merger
Sub of any Acquisition Proposal, including the identity of the Third
Party making any such Acquisition Proposal and the material terms and
conditions of any Acquisition Proposal.
(c) As used in this Agreement, "Acquisition Proposal" shall
mean any proposal or offer from any person relating to (i) any direct
or indirect acquisition or purchase of more than 20% of either the
capital stock of the Company or the consolidated assets of the Company
and its Subsidiaries taken as a whole, (ii) any tender offer or
exchange offer that if consummated would result in any person
beneficially owning 20% or more of the capital stock of the Company or
(iii) any merger, consolidation or business combination, involving the
Company other than the transactions contemplated by this Agreement.
(d) Notwithstanding anything to the contrary in this
Agreement, the Board of Directors of the Company shall be permitted
from time to time to take the following actions in the circumstances
described below: (i) to withdraw or modify its approval or
recommendation of this Agreement, the Offer or the Merger in a manner
adverse to Acquiror and Merger Sub; or (ii) to approve or recommend or
enter into an agreement with respect to a Permitted Acquisition
Proposal; if, in each such case, (A) a Permitted Acquisition Proposal
is publicly proposed, publicly disclosed or communicated to the Company
and (B) the Board of Directors of the Company determines, based on the
advice of the Company's outside legal counsel, that such action is
required in order to comply with its fiduciary duties to the
stockholders of the Company. No action by the Board of Directors of the
Company permitted by the preceding sentence (each, a "Permitted
Action") shall constitute a breach of this Agreement by the Company.
8.6 Indemnification; Directors' and Officers Insurance.
(a) Until the Effective Time the Company shall, and from and
after the Effective Time, Acquiror and Merger Sub shall, indemnify,
defend and hold harmless each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective
Time, an officer or director of the Company or any of its Subsidiaries
(the "Indemnified Parties") against all losses, claims, damages, costs,
expenses (including reasonable attorneys' fees and expenses),
liabilities or judgments or amounts that are paid in settlement of or
in connection with any threatened or actual claim, action, suit,
proceeding or investigation based in whole or substantially on, or
arising in whole or substantially out of the fact that such person is
or was a director or officer of the Company or any of its Subsidiaries,
whether pertaining to any matter existing or occurring at or prior to
the Effective Time and whether asserted or claimed prior to, or at or
after, the Effective Time ("Indemnified Liabilities"), including all
Indemnified Liabilities based in whole or substantially on, or arising
in whole or substantially out of, or pertaining to this Agreement or
the transactions contemplated hereby, in each case to the fullest
extent a corporation is permitted under the DGCL to indemnify its own
directors or officers as the case may be (and the Company or the
Surviving Corporation, as the case may be, will pay expenses in advance
of the final disposition of any such action or proceeding to each
Indemnified Party to the fullest extent permitted by law), provided the
person to whom expenses are advanced provides an undertaking to repay
such
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advances if it is ultimately judicially determined that such person is
not entitled to indemnification.
(b) The Acquiror and Surviving Corporation shall and shall
cause the Subsidiaries of the Surviving Corporation to keep in effect
provisions in their respective Certificates of Incorporation and
By-laws providing for exculpation for director, officer and employee
liability and such corporation's indemnification of the Indemnified
Parties to take fullest extent permitted under the DGCL, which
provisions shall not be amended, repealed or otherwise modified for a
period of six years after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers or employees of
the Company in respect of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required
by law.
(c) For a period of four years after the Effective Time,
Acquiror and Surviving Corporation shall cause to be maintained in
effect the current primary policy of directors and officers liability
insurance maintained by the Company and its Subsidiaries (provided that
Surviving Corporation may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions that are no
less advantageous in any material respect to the Indemnified Parties)
with respect to matters arising before the Effective Time; provided
that Surviving Corporation and Acquiror shall not be required to pay
annual premiums therefor in excess of two times the annual premiums at
present paid for such insurance. If such insurance premium cost exceeds
such amount, Acquiror and Surviving Corporation shall be required to
purchase the maximum amount of such coverage that can be purchased for
such amount.
(d) After the Effective Time, any Indemnified Party wishing to
claim indemnification under this Section, upon learning of any such
action, suit, claim, Proceeding or investigation, shall notify Acquiror
and Surviving Corporation within 30 days thereof; provided, however,
that any failure so to notify Acquiror and Surviving Corporation of any
obligation to indemnify such Indemnified Party or of any other
obligation imposed by this Section shall not affect such obligations
except to the extent Acquiror or Surviving Corporation is materially
prejudiced thereby. Acquiror and Surviving Corporation shall be
entitled to assume the defense of any such action, suit, claim,
proceeding or investigation with counsel of its choice (who shall be
reasonably acceptable to the Indemnified Party), unless there is a
conflict between the positions of Acquiror and Surviving Corporation,
on the one hand, and the Indemnified Party, on the other, in which
event the Indemnified Party, together with all other similarly situated
Indemnified Parties in the proceeding as a group, may retain one law
firm and one local counsel to represent them with respect to such
matter, the reasonable cost of which shall be borne by Acquiror and
Surviving Corporation. Neither Acquiror and Surviving Corporation, on
the one hand, nor any Indemnified Party, on the other hand, may settle
any such action, suit, claim, proceeding or investigation without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed.
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(e) The provisions of this Section 8.6 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party,
his or her heirs and his or her personal representatives and shall be
binding on all successors and assigns of Acquiror, Merger Sub and the
Company.
8.7 Employee Benefits.
(a) To the extent permitted by law, Acquiror and Merger Sub
shall or shall cause the Surviving Corporation to maintain in effect
employee benefit plans and arrangements which provide benefits which
have a value which is substantially comparable, in the aggregate, to
the benefits provided by the Employee Benefit Plans (not taking into
account the value of any benefits under any such plans which are equity
based) for a period of one year after the Effective Time, other than
benefits provided under collective bargaining agreements; provided,
however, if during this period Acquiror implements any widespread
decrease in benefits under compensation and benefit plans (or in the
costs thereof) to participants under plans applicable to Acquiror and
its Subsidiaries, the benefits for the Surviving Corporation (and costs
thereof) may be similarly adjusted.
(b) The Surviving Corporation shall honor pursuant to the
terms of such agreements all employment, severance and termination
agreements (including change in control provisions) of the employees of
the Company and its Subsidiaries, all of which are disclosed in Section
5.11(a) of the Company Disclosure Schedules. Any bonus compensation
required to be paid to any employee of the Company on a pro rata or
similar basis as a result of a termination of employment pursuant to
any such employment, severance or termination agreements shall be paid
based upon the actual results of the Company as of the end of the month
next preceding the date of termination of such employment. Such bonus
compensation shall be paid within thirty days after the end of such
month notwithstanding anything in such agreements to the contrary.
(c) For purposes of determining eligibility to participate and
vesting, but not accrual or entitlement to benefits (other than
severance benefit accrual) where length of service is relevant under
any employee benefit plan or arrangement of Acquiror or the Surviving
Corporation, employees of the Company and its Subsidiaries immediately
prior to the Effective Time shall receive service credit for service
with the Company and any of its Subsidiaries to the same extent such
service was granted under the Employee Benefit Plans. With respect to
employees of the Company and its Subsidiaries immediately prior to the
Effective Time who are employed by Acquiror or the Surviving
Corporation, the medical coverage provided by the Acquiror or the
Surviving Corporation shall: (i) impose no waiting periods and no
pre-existing condition exclusions, other than as were applicable to the
individuals immediately prior to the Effective Time; and (ii) provide
credit for deductibles, co-payments and out-of-pocket charges paid with
respect to the individuals prior to the Effective Time as if paid under
the medical program provided by the Acquiror or the Surviving
Corporation but only to the extent such payments were paid during the
plan year of such medical program in which the Effective Time occurs.
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<PAGE> 40
(d) With respect to each Eligible Employee (as defined below)
who terminates or otherwise loses employment within one (1) year
following the Effective Time: (i) medical coverage shall be provided by
the Acquiror or the Surviving Corporation (A) for the period of time,
if any, used in determining the amount of the employee's severance or
termination pay but shall cease upon such Eligible Employee's
reemployment and (B) on terms (including costs to the participant) not
less favorable to the employee as in effect immediately prior to such
termination or other loss of employment; and (ii) the duration of
medical coverage made available with respect to the employee pursuant
to Code Section 4980B and/or ERISA Section 601 et. seq. ("COBRA") after
termination of the coverage provided under clause (i) shall be reduced
for the period of such coverage under clause (i). For purposes of this
Section 8.7(d), the term "Eligible Employee" means: (x) each employee
of the Company immediately prior to the Effective Time who receives
severance or termination pay as a result of termination or loss of
employment during such one-year period; and (y) each person identified
on Schedule 5.8(v)(Z) who, immediately prior to the Effective Time, is
an employee of a Company Subsidiary who receives severance or
termination pay as a result of termination or loss of employment during
such one-year period.
(e) Stock Options. Prior to the Effective Time, the Company
shall take such actions as may be necessary such that at the Effective
Time, each then outstanding option to purchase shares of Company Common
Stock under the Company's 1990 Stock Option Plan, 1995 Stock Option
Plan and the Sardas Options (collectively, the "Company Stock Option
Plans"), whether or not then vested or exercisable in accordance with
its terms (collectively, the "Options"), shall be canceled and entitle
the holder thereof, upon surrender to the Company, to receive an amount
of cash equal to the product of (x) the amount by which the Merger
Consideration exceeds the exercise price per share of Company Common
Stock subject to such Option (whether vested or unvested) and (y) the
number of shares of Company Common Stock issuable pursuant to the
unexercised portion of such Option (whether vested or unvested), less
any required withholding of taxes (such amount being hereinafter
referred to as, the "Option Consideration"). The surrender of an Option
to the Company in exchange for the Option Consideration shall be deemed
a release of any and all rights the holder had or may have had in
respect of such Option. All Company Stock Option Plans and Options
shall terminate as of the Effective Time and the provisions in any
other plan, program or arrangement providing for the issuance or grant
of any other interest in respect of the capital stock of the Company or
any Subsidiary thereof, shall be canceled as of the Effective Time, and
the Company shall take all permitted action necessary, including
receiving applicable consents from optionees, to ensure that following
the Effective Time no participant in any Company Stock Option Plan or
other plans, programs or arrangements shall have any right thereunder
to acquire equity securities of the Company, the Surviving Corporation
or any Subsidiary thereof and to terminate all such plans.
(f) With respect to the Sudbury, Inc. Directors' Deferral Plan
("Deferral Plan"), the Company shall take such actions as may be
necessary such that as of the Effective Time, the Deferral Plan shall
be terminated and, as soon as practicable after the Effective Time,
each participant's "Deferred Account" (as defined under the Deferral
Plan) shall be paid to the participant in one lump sum cash payment.
For purposes of the preceding sentence, the
36
<PAGE> 41
portion of a participant's "Deferred Account" representing the
participant's "Stock Account" (as defined under the Deferral Plan)
shall be valued on a per share basis using the Merger Consideration.
8.8 Transfer Taxes. The Company Acquiror and Merger Sub shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer and stamp taxes, any transfer, recording, registration and
other fees and any similar taxes that become payable in connection with the
transactions contemplated by this Agreement ("Transfer Taxes"). The Company
shall pay or cause to be paid any such Transfer Taxes.
8.9 Vote of Company Stock. Acquiror and Merger Sub shall vote all
shares of Company Common Stock currently owned by them or subsequently acquired
in favor of adoption of this Agreement.
8.10 Agreement to Advance Funds. If requested by the Company,
immediately prior to the Effective Time, Acquiror will advance to the Company up
to $30 million (the "Advance"). The Advance will bear interest at the rate per
annum charged to Acquiror under its senior credit facility. Principal and
interest will be due and payable three months after the Advance is made and the
Advance will be evidenced by a promissory note that is mutually acceptable to
Acquiror and the Company.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction or waiver on or prior to the Closing Date of each of the following
conditions:
(a) Stockholder Approval. The Company shall have obtained the
Company Stockholder Approval.
(b) HSR Act. The applicable waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have expired
or been earlier terminated.
(c) No Injunctions or Restraints. Subject to fulfillment by
each party of its obligations under Section 8.2(a) of this Agreement no
statute, rule, regulation, decree, preliminary or permanent injunction,
temporary restraining order or other order of any nature of any court
or Governmental Authority shall be in effect that restrains, prevents
or materially changes the transactions contemplated hereby; provided,
however, that in the case of a decree, injunction or other order, the
party invoking this condition shall have used reasonable efforts to
prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order.
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<PAGE> 42
(d) Merger Sub (or another Subsidiary of Acquiror) shall have
acquired shares of Company Common Stock pursuant to the Offer.
9.2 Conditions of Obligations of Acquiror. The obligations of Acquiror
and Merger Sub to effect the Merger are further subject to the satisfaction of
each of the following conditions, any or all of which may be waived on or prior
to the Closing Date in whole or in part by Acquiror and Merger Sub:
(a) Agreements. The Company shall have performed in all
material respects all obligations required to be performed by it under
this Agreement at or prior to or at the Closing Date and shall have
complied or be in compliance in all material respects with any
agreement or covenant of the Company to be performed by it under this
Agreement at or prior to the Closing Date.
(b) Consents. All necessary approvals or authorizations of any
Governmental Authority in connection with the Merger shall have been
obtained except where the failure to have obtained or made any such
approval or authorization would not have a Material Adverse Effect on
the Company.
(c) Litigation. Subject to fulfillment by each party of its
obligations under Section 8.2(a) there shall not have been entered any
order by any Governmental Authority in any suit, action or proceeding,
which (i) requires the payment of damages by Acquiror, Merger Sub or
the Company in connection with the Offer or the Merger which damages
are material to the value of the Company and its Subsidiaries taken as
a whole, (ii) prohibits or limits the ownership or operation by
Acquiror and its Subsidiaries of, or compels Acquiror or any of its
Subsidiaries to dispose of or hold separate, any business or assets
which are material to Acquiror and its Subsidiaries taken as a whole,
in each case as a result of the Offer or the Merger or any of the other
transactions contemplated by this Agreement, or (iii) imposes
limitations on the ability of Acquiror to acquire or hold, or exercise
full rights of ownership of, shares of capital stock of the
Subsidiaries of the Company, which limitations would have a Material
Adverse Effect with respect to the value of the Company and its
Subsidiaries taken as a whole to the Acquiror.
ARTICLE X
TERMINATION
10.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval hereof;
(a) By the mutual consent of the Board of Directors of
Acquiror and the Board of Directors of the Company.
38
<PAGE> 43
(b) By either of the Board of Directors of the Company or the
Board of Directors of Acquiror:
(i) if Acquiror or Merger Sub has not purchased shares
of Company Common Stock in accordance with the terms of the
Offer on or prior to February 14, 1997; provided, however,
that the right to terminate this Agreement under this Section
10.1(b)(i) shall not be available to any party whose failure
to fulfill any obligations under this Agreement has been the
cause of, or resulted in, the failure to satisfy the
conditions to the Offer; provided further, however, that
Acquiror shall not have the right to terminate this Agreement
under this Section 10.1(b)(i) if Acquiror or Merger Sub
purchases any Shares in connection with the Offer after
February 14, 1997; or
(ii) if any Governmental Authority shall have issued an
order, decree or ruling or taken any other action (which
order, decree, ruling or other action the parties hereto shall
use their best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and
non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of
the Company shall have taken a Permitted Action; provided that
the fee provided for in Section 10.3 must be paid at or prior
to such termination;
(ii) if prior to the purchase of shares of Company
Common Stock pursuant to the Offer, Acquiror or Merger Sub (y)
breaches or fails in any material respect to perform or comply
with any of its material covenants and agreements contained
herein or (z) breaches its representations and warranties in
any material respect; provided, however, that if any such
breach is cured prior to termination, the Company may not
terminate this Agreement pursuant to this Section 10.1(c)(ii);
(iii) if Acquiror or Merger Sub shall have terminated the
Offer, or the Offer shall have expired, without Merger Sub
purchasing any shares of Company Common Stock pursuant
thereto; provided that the Company may not terminate this
Agreement pursuant to this Section 10.1(c)(iii) if the Company
is in material breach of this Agreement; or
(iv) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to
satisfy any of the conditions set forth in Annex A hereto,
Acquiror or Merger Sub shall have failed to commence the Offer
on or prior to five business days following the date of the
initial public announcement of
39
<PAGE> 44
the Offer; provided, that the Company may not terminate
this Agreement pursuant to this Section 10.1(c)(iv) if the
Company is in material breach of this Agreement.
(d) By the Board of Directors of Acquiror:
(i) if, due to an occurrence that if occurring after
the commencement of the Offer would result in a failure to
satisfy any of the conditions set forth in Annex A hereto,
Acquiror or Merger Sub shall have failed to commence the Offer
on or prior to five business days following the date of the
initial public announcement of the Offer; provided that
Acquiror may not terminate this Agreement pursuant to this
Section 10.1(d)(i) if Acquiror or Merger Sub is in material
breach of this Agreement; or
(ii) if (A) prior to the purchase of shares of Company
Common Stock pursuant to the Offer, the Board of Directors of
the Company takes a Permitted Action, or (B) prior to the
consummation of the Offer, it shall have been publicly
disclosed or Acquiror or Merger Sub shall have learned that
any person, entity or "group" (as that term is defined in
Section 13(d)(3) of the Exchange Act) (an "Acquiring Person"),
other than employees of the Company through exercise of
options, shall have acquired beneficial ownership (determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of
more than 20% of any class or series of capital stock of the
Company (including the Shares), through the acquisition of
stock, the formation of a group or otherwise, or shall have
been granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 20% of
any class or series of capital stock of the Company (including
the Shares);
(iii) if Acquiror or Merger Sub, as the case may be,
shall have terminated the Offer, or the Offer shall have
expired without Acquiror or Merger Sub, as the case may be,
purchasing any shares of Company Common Stock thereunder,
provided that Acquiror or Merger Sub may not terminate this
Agreement pursuant to this Section 10.1(d)(iii) if Acquiror or
Merger Sub is in material breach of this Agreement; or
(iv) if the Company breaches or fails in any material
respect to perform or comply with any of its material
covenants and agreements contained herein.
10.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 10.1, written notice thereof shall forthwith be
given to the other party to parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void, and there shall be no liability on the part of Acquiror, Merger Sub or
the Company except (A) for fraud or for material breach of this Agreement and
(B) as set forth in Sections 7.2, 10.3 and 11.2 hereof.
10.3 Termination Fee. If (y) the Board of Directors of the Company
shall terminate this Agreement pursuant to Section 10.1(c)(i) hereof or (z) the
Board of Directors of Acquiror shall
40
<PAGE> 45
terminate this Agreement pursuant to Section 10.1(d)(ii)(A) hereof, the Company
shall pay to Acquiror (not later than the date of termination of this Agreement)
an amount equal to $5 million. The Company acknowledges that the agreements
contained in this Section 10.3 are an integral part of the transactions
contemplated in this Agreement, and that, without these agreements, Acquiror and
Merger Sub would not enter into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to this Section 10.3, and, in
order to obtain such payment, Acquiror or Merger Sub commences a suit which
results in a judgment against the Company for the amount set forth in this
Section, the Company shall pay to Acquiror or Merger Sub its costs and expenses
(including attorneys' fees) in connection with such suit, together with interest
on the amount of the fee at the annual rate of interest charged to Acquiror
under its senior credit facility.
ARTICLE XI
GENERAL PROVISIONS
11.1 Effectiveness of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to Article
X, except that the agreements set forth in Articles III and IV and Sections 8.6
and 8.7 shall survive the Effective Time and those set forth in Sections 10.2,
10.3 and Article XI hereof shall survive termination.
11.2 Expenses. Each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants and other experts and shall pay
all other costs and expenses incurred by it in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby.
11.3 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without reference to
choice of law principles, including all matters of construction, validity and
performance.
11.4 Notices. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand,
deposited in the United States mail (registered or certified, return receipt
requested), properly addressed and postage prepaid, or delivered by telecopy:
If to the Company, to:
Sudbury, Inc.
Suite 203
30100 Chagrin Blvd.
Cleveland, OH 44124
Attention: Jacques R. Sardas
Facsimile: (216) 464-4614
41
<PAGE> 46
with a copy to:
Benesch, Friedlander, Coplan & Aronoff P.L.L.
200 Public Square
Cleveland, OH 44114
Attention: Ira Kaplan
Facsimile: (216) 363-4588
and:
If to Acquiror, to:
Intermet Corporation
5445 Corporate Drive, Suite 200
Troy, MI 48098-2683
Attn: Doretha Christoph
Facsimile: (810) 952-2501
with a copies to:
Sullivan & Cromwell
125 Broad St.
N.Y., N.Y. 10004
Attn: Janet T. Geldzahler
Facsimile: (212)558-3588
and
Dickinson, Wright, Moon, VanDusen & Freeman
500 Woodward, Suite 4000
Detroit, MI 48226
Attn: Steven H. Hilfinger
Facsimile: (313) 223-3598
Such names and addresses may be changed by notice given in accordance with this
Section 10.4.
11.5 Entire Agreement. This Agreement (including the Company Disclosure
Schedule, and the Exhibits attached hereto, all of which are a part hereof) and
the Confidentiality Agreement contain the entire understanding of the parties
hereto and hereto with respect to the subject matter contained herein and
therein, supersede and cancel all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions contemplated by this Agreement other than those set
forth herein or made hereunder.
42
<PAGE> 47
11.6 Disclosure Schedule. The Disclosure Schedule, dated the date
hereof, delivered by the Company to Acquiror (the "Company Disclosure Schedule")
are incorporated into this Agreement by reference and made a part hereof.
Nothing disclosed in the Company Disclosure Schedule shall be deemed to be an
admission that such matters are material or are required to be disclosed herein.
Certain immaterial items or items that are not entirely responsive to
the information required in a Schedule may be included in various Schedules as
further clarification or assistance to the parties in understanding the business
and operations of the parties or in consummating the transactions contemplated
herein.
11.7 Headings; References. The article, Section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. All references
herein to "Articles", "Sections" or "Exhibits" shall be deemed to be references
to Articles or Sections hereof or Exhibits hereto unless otherwise indicated.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original, but all of
which shall constitute one and the same original.
11.9 Parties in Interest; Assignment. Neither this Agreement nor any of
the rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Subject
to the preceding sentence this agreement shall inure to the benefit of and be
binding upon the Company, Acquiror and Merger Sub and shall inure to the sole
benefit of the Company Acquiror and Merger Sub and their respective successors
and permitted assigns. Except as set forth in Sections 8.6 nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies under or by reason of this Agreement.
11.10 Severability; Enforcement. Except to the extent that the
application of this Section 11.10 would have a Material Adverse Effect with
respect to Acquiror or the Company, the invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, each party agrees that a court of
competent jurisdiction may enforce such restriction to the maximum extent
permitted by law, and each party hereby consents and agrees
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<PAGE> 48
that such scope may be judicially modified accordingly in any proceeding brought
to enforce such restriction.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
INTERMET CORPORATION
By: /s/ Doretha J. Christoph
----------------------------------
Name: Doretha J. Christoph
Title: V.P. Finance & CFO, Treasurer
IM ACQUISITION CORP.
By: /s/ James W. Rydel
------------------------------------
Name: James W. Rydel
Title: President
SUDBURY, INC.
By: /s/ Jacques R. Sardas
_____________________________________
Name: Jacques R. Sardas
Title: Chairman, Chief Executive Officer,
President and Treasurer
44
<PAGE> 49
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer and provided that Merger Sub shall not be obligated to accept for
payment any shares of Company Common Stock until expiration of all applicable
waiting periods under the H-S-R Act, Merger Sub shall not be required to accept
for payment or pay for, or may delay the acceptance for payment of or payment
for, any tendered shares of Company Common Stock, or may, in its sole
discretion, terminate or amend the Offer as to any shares of Company Common
Stock not then paid for if 7,800,000 shares of Company Common Stock shall not
have been properly and validly tendered pursuant to the Offer and not withdrawn
prior to the expiration of the Offer, or, if on or after November 18, 1996, (or
as to clause (j) below at anytime) and at or before the time of payment for any
of such shares of Company Common Stock (whether or not any shares of Company
Common Stock have theretofore been accepted for payment), any of the following
events shall occur:
(a) there shall have occurred (i) any general suspension of
trading in securities on the NYSE or in the over-the-counter market,
(ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) a commencement
or escalation of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States,
(iv) any limitation (whether or not mandatory) by any governmental or
regulatory authority, agency, commission or other entity, domestic or
foreign ("Governmental Entity"), on, or any other event which might
affect, the extension of credit by banks or other lending institutions,
or (v) or in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening
thereof;
(b) the Company shall have breached or failed to perform in
any material respect any of its obligations, covenants or agreements
under the Merger Agreement or any representation or warranty of the
Company set forth in the Merger Agreement shall have been inaccurate or
incomplete in any material respect when made or thereafter shall become
inaccurate or incomplete in any material respect except (i) for changes
contemplated by the Merger Agreement and (ii) those representations or
warranties that address matters only as of a particular date which are
true and correct as of such date.
(c) there shall be instituted or pending any action,
litigation, proceeding, investigation or other application
(hereinafter, an "Action"), (including a worsening of any exsiting
Action) before any United States court or other Governmental Entity by
any United States Governmental Entity: (i) challenging the acquisition
by Acquiror or Merger Sub of shares of Company Common Stock, seeking to
restrain or prohibit the consummation of the transactions contemplated
by the Offer or the Merger seeking to obtain any damages which damages
are material to the Company and its Subsidiaries taken as a whole; (ii)
seeking to prohibit, or impose any material limitations on, Acquiror's
or Merger Sub's ownership or operation of all the Company's business or
assets or to compel Acquiror or Merger Sub to dispose of or hold
separate all or any portion of the Company's business or assets
(including the business or assets of its Subsidiaries) as a result of
the transactions contemplated by the Offer of the Merger which
limitations would have a material adverse effect with respect to the
value of the Company and its Subsidiaries taken as a whole to Acquiror;
(iii) seeking to make the acceptance for payment, purchase of, or
payment for, some or all of the shares of
<PAGE> 50
Company Common Stock illegal or render Merger Sub unable to, or result
in a material delay in, or materially restrict, the ability of Merger
Sub to accept for payment, purchase or pay for some or all of the
shares of Company Common Stock; (iv) seeking to impose material
limitations on the ability of Acquiror or Merger Sub effectively to
acquire or hold or to exercise full rights of ownership of the shares
of Company Common Stock including, without limitation, the right to
vote the shares of Company Common Stock purchased by them on an equal
basis with all other shares of Company Common Stock on all matters
properly presented to the stockholders; or (v) that in any event is
reasonably likely to have a material adverse effect on the financial
condition, properties, business or operations of the Company and its
Subsidiaries taken as a whole or the value of the shares of Company
Common Stock to Acquiror or Merger Sub as a result of consummation of
the transactions contemplated by the Offer and the Merger;
(d) any statute, rule, regulation, order or injunction shall
be enacted, promulgated, entered, enforced or deemed or become
applicable to the Offer or the Merger, or any other action shall have
been taken, proposed or threatened, by any United States court or other
Governmental Entity other than the application to the Offer or the
Merger of waiting periods under the H-S-R Act, that, directly or
indirectly, can reasonably be expected to result in any of the effects
of, or have any of the consequences sought to be obtained or achieved
in, any Action referred to in clauses (i) through (v) or paragraph (c)
above;
(e) a tender or exchange offer for some portion or all of the
shares of Company Common Stock shall have been commenced or publicly
proposed to be made by another person (including the Company or its
subsidiaries), or it shall have been publicly disclosed that (i) any
person (including the Company or its Subsidiaries), entity or "group"
(as defined in Section 13(d) of the Exchange Act and the rules
promulgated thereunder), other than employees of the Company through
exercise of Options, shall have become the beneficial owner (as defined
in Section 13(d) of the Exchange Act and the rules promulgated
thereunder) of more than 20% of the shares of Company Common Stock; or
(ii) any person, entity or group shall have entered into a definitive
agreement or an agreement in principle with respect to an acquisition
proposal with or involving the Company;
(f) any change shall have occurred in the financial condition,
properties, businesses or results of operations of the Company and any
of its Subsidiaries that is or is reasonably likely to be materially
adverse to the Company and its Subsidiaries taken as a whole;
(g) the Board of Directors of the Company (or a special
committee thereof) shall have amended, modified or withdrawn its
recommendation of the Offer or the Merger, or shall have failed to
publicly reconfirm such recommendation upon request by Acquiror or
Merger Sub, or shall have endorsed, approved or recommended any other
Acquisition Proposal, or shall have resolved to do any of the
foregoing;
(h) the Merger Agreement shall have been terminated by the
Company or Acquiror or Merger Sub in accordance with its terms or
Acquiror or Merger Sub shall have reached an agreement or understanding
in writing with the Company providing for
<PAGE> 51
termination or amendment of the Offer or delay in payment for the
shares of Company Common Stock;
(i) any Action is instituted or pending by a non-governmental
person or entity (or there shall be a worsening of an existing Action)
which, in the reasonable judgment of Acquiror, has a reasonable
likelihood of success, and if successful on the merits, is more likely
than not to have a material adverse effect on the financial condition,
properties, business or operations of the Company and its Subsidiaries
taken as a whole or the value of the shares of Company Common Stock to
Acquiror as a result of the consummation of the transactions
contemplated by the Offer and the Merger; or
(j) if there has been any (y) Release of Hazardous Substances
in, on, under or affecting any properties currently or formerly owned
or operated by the Company or any of its Subsidiaries in violation of,
or as would reasonably be anticipated to result in liability under,
applicable Environmental Laws or (z) disposal of Hazardous Substances
or any other substance in a manner that has led to, or could reasonably
be anticipated to lead to, a Release in violation of applicable
Environmental Laws except, in either case, as disclosed on Schedule 5.6
of the Company Disclosure Schedules and except in either case for those
which, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect on the Company,
which, in the sole judgment of Acquiror and Merger Sub, in any such case, and
regardless of the circumstances (including any action or inaction by Acquiror or
Merger Sub giving rise to any such conditions, makes it inadvisable to proceed
with the Offer and/or with such acceptance for payment of or payment for shares
of Company Common Stock.
The foregoing conditions are for the sole benefit of Acquiror and
Merger Sub and may be asserted by Acquiror or Merger Sub regardless of the
circumstances (including any action or inaction by Acquiror or Merger Sub)
giving rise to such condition or may be waived by Acquiror or Merger Sub, by
express and specific action to that effect, in whole or in part at any time and
from time to time in its sole discretion.
<PAGE> 1
EXECUTION COUNTERPART
THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of November 14, 1996
among
INTERMET CORPORATION,
THE LENDERS LISTED HEREIN,
and
SUNTRUST BANK, ATLANTA
as Agent
and
NBD BANK
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
as Co-Agents
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I. DEFINITIONS; CONSTRUCTION.................................................. 2
Section 1.01. Definitions......................................................................... 2
Section 1.02. Accounting Terms and Determination.................................................. 19
Section 1.03. Other Definitional Terms............................................................ 19
Section 1.04. Exhibits and Schedules.............................................................. 20
ARTICLE II. SYNDICATED LOANS, BID RATE LOANS AND
LETTERS OF CREDIT.......................................................... 20
Section 2.01. Commitments; Use of Proceeds........................................................ 20
Section 2.02. Notes; Repayment of Principal....................................................... 21
Section 2.03. Voluntary Reduction of Commitments.................................................. 21
Section 2.04. Letter of Credit Facility........................................................... 21
Section 2.05. Notice of Issuance of Letter of Credit; Agreement to Issue.......................... 21
Section 2.06. Payment of Amounts Drawn Under Letters of Credit.................................... 22
Section 2.07. Payment by Lenders.................................................................. 23
Section 2.08. Bid Rate Loans...................................................................... 24
ARTICLE III. GENERAL LOAN AND LETTER OF CREDIT TERMS.................................... 26
Section 3.01. Funding Notices..................................................................... 26
Section 3.02. Disbursement of Funds............................................................... 27
Section 3.03. Interest............................................................................ 28
Section 3.04. Interest Periods.................................................................... 30
Section 3.05. Fees ........................................................................... 30
Section 3.06. Voluntary Prepayments of Borrowings................................................. 31
Section 3.07. Payments, etc....................................................................... 32
Section 3.08. Interest Rate Not Ascertainable, etc................................................ 33
Section 3.09. Illegality.......................................................................... 34
Section 3.10. Increased Costs..................................................................... 35
Section 3.11. Lending Offices..................................................................... 36
Section 3.12. Funding Losses...................................................................... 37
Section 3.13. Assumptions Concerning Funding of Eurodollar Advances............................... 37
Section 3.14. Apportionment of Payments........................................................... 38
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
Section 3.15. Sharing of Payments, Etc............................................................ 38
Section 3.16. Benefits to Guarantors.............................................................. 38
Section 3.17. Limitation on Certain Payment Obligations........................................... 38
Section 3.18. Letter of Credit Obligations Absolute............................................... 39
Section 3.19. Failure to Maintain Minimum Required Rating......................................... 40
ARTICLE IV. CONDITIONS TO BORROWINGS................................................... 40
Section 4.01. Conditions Precedent to Initial Loans and Letters of Credit......................... 40
Section 4.02. Conditions to All Loans and Letters of Credit....................................... 42
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................. 43
Section 5.01. Corporate Existence; Compliance with Law............................................ 43
Section 5.02. Corporate Power; Authorization...................................................... 44
Section 5.03. Enforceable Obligations............................................................. 44
Section 5.04. No Legal Bar........................................................................ 44
Section 5.05. No Material Litigation or Investigations............................................ 44
Section 5.06. Investment Company Act, Etc......................................................... 45
Section 5.07. Margin Regulations.................................................................. 45
Section 5.08. Compliance with Environmental Laws.................................................. 45
Section 5.09. Insurance........................................................................... 46
Section 5.10. No Default.......................................................................... 46
Section 5.11. No Burdensome Restrictions.......................................................... 46
Section 5.12. Taxes ........................................................................... 46
Section 5.13. Subsidiaries........................................................................ 46
Section 5.14. Financial Statements................................................................ 46
Section 5.15. ERISA............................................................................... 47
Section 5.16. Patents, Trademarks, Licenses, Etc.................................................. 48
Section 5.17. Ownership of Property............................................................... 48
Section 5.18. Financial Condition................................................................. 49
Section 5.19. Labor Matters....................................................................... 49
Section 5.20. Payment or Dividend Restrictions.................................................... 49
Section 5.21. Disclosure.......................................................................... 49
ARTICLE VI. AFFIRMATIVE COVENANTS...................................................... 50
Section 6.01. Corporate Existence, Etc............................................................ 50
Section 6.02. Compliance with Laws, Etc........................................................... 50
Section 6.03. Payment of Taxes and Claims, Etc.................................................... 50
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
Section 6.04. Keeping of Books.................................................................... 50
Section 6.05. Visitation, Inspection, Etc......................................................... 50
Section 6.06. Insurance; Maintenance of Properties................................................ 51
Section 6.07. Reporting Covenants................................................................. 51
Section 6.08. Financial Covenants................................................................. 55
Section 6.09. Notices Under Certain Other Indebtedness............................................ 55
Section 6.10. Additional Credit Parties and Collateral............................................ 56
Section 6.11. Amendment to Note Purchase Agreement and
Intercreditor Agreement............................................................. 56
ARTICLE VII. NEGATIVE COVENANTS......................................................... 56
Section 7.01. Indebtedness........................................................................ 56
Section 7.02. Liens ........................................................................... 57
Section 7.03. Mergers, Acquisitions, Divestitures................................................. 58
Section 7.04. Asset Sales......................................................................... 59
Section 7.05. Dividends, Etc...................................................................... 61
Section 7.06. Investments, Loans, Etc............................................................. 61
Section 7.07. Sale and Leaseback Transactions..................................................... 62
Section 7.08. Transactions with Affiliates........................................................ 62
Section 7.09. Prepayments of Subordinated Debt in Violation Thereof............................... 63
Section 7.10. Changes in Business................................................................. 63
Section 7.11. Limitation on Payment Restrictions Affecting Consolidated
Companies........................................................................... 63
Section 7.12. Actions Under Certain Documents..................................................... 63
ARTICLE VIII. EVENTS OF DEFAULT.......................................................... 64
Section 8.01. Payments............................................................................ 64
Section 8.02. Covenants Without Notice............................................................ 64
Section 8.03. Other Covenants..................................................................... 64
Section 8.04. Representations..................................................................... 64
Section 8.05. Non-Payments of Other Indebtedness.................................................. 64
Section 8.06. Defaults Under Other Agreements..................................................... 64
Section 8.07. Bankruptcy.......................................................................... 65
Section 8.08. ERISA............................................................................... 65
Section 8.09. Money Judgment...................................................................... 66
Section 8.10. Ownership of Credit Parties and Pledged Entities.................................... 66
Section 8.11. Change in Control of Intermet....................................................... 66
Section 8.12. Default Under Other Credit Documents................................................ 67
Section 8.13. Attachments......................................................................... 67
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE IX. THE AGENT AND CO-AGENTS.................................................... 68
Section 9.01. Appointment of Agent................................................................ 68
Section 9.02. Authorization of Agent with Respect to the Security Documents....................... 68
Section 9.03. Nature of Duties of Agent........................................................... 69
Section 9.04. Lack of Reliance on the Agent....................................................... 69
Section 9.05. Certain Rights of the Agent......................................................... 69
Section 9.06. Reliance by Agent................................................................... 70
Section 9.07. Indemnification of Agent............................................................ 70
Section 9.08. The Agent in its Individual Capacity................................................ 70
Section 9.09. Holders of Notes.................................................................... 70
Section 9.10. Successor Agent..................................................................... 71
Section 9.11. Co-Agents........................................................................... 71
ARTICLE X. MISCELLANEOUS.............................................................. 71
Section 10.01. Notices............................................................................. 71
Section 10.02. Amendments, Etc..................................................................... 72
Section 10.03. No Waiver; Remedies Cumulative...................................................... 72
Section 10.04. Payment of Expenses, Etc............................................................ 72
Section 10.05. Right of Setoff..................................................................... 74
Section 10.06. Benefit of Agreement................................................................ 75
Section 10.07. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial .................... 77
Section 10.08. Independent Nature of Lenders' Rights............................................... 78
Section 10.09. Counterparts........................................................................ 78
Section 10.10. Effectiveness; Survival............................................................. 78
Section 10.11. Severability........................................................................ 79
Section 10.12. Independence of Covenants........................................................... 79
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax Laws............................ 79
Section 10.14. Headings Descriptive; Entire Agreement.............................................. 79
</TABLE>
iv
<PAGE> 6
SCHEDULES
<TABLE>
<CAPTION>
<S> <C>
SCHEDULE 5.01 Organization and Ownership of Subsidiaries
SCHEDULE 5.05 Certain Pending and Threatened Litigation
SCHEDULE 5.08 Environmental Matters
SCHEDULE 5.11 Burdensome Restrictions
SCHEDULE 5.12 Tax Filings and Payments
SCHEDULE 5.15 Employee Benefit Matters
SCHEDULE 5.16 Patent, Trademark, License, and Other Intellectual Property
Matters
SCHEDULE 5.17 Ownership of Properties
SCHEDULE 5.20 Dividend Restrictions
SCHEDULE 5.21 Labor and Employment Matters
SCHEDULE 6.08 Financial Covenant Calculations Second Quarter 1996
SCHEDULE 7.06 Existing Investments
SCHEDULE 8.01 Existing Indebtedness
SCHEDULE 8.02 Existing Liens
EXHIBITS
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Form of Bid Facility Note
EXHIBIT C - Form of Letter of Credit Application
EXHIBIT D - Bid Request
EXHIBIT E - Bid Request Invite
EXHIBIT F - Bid Rate Bid
EXHIBIT G - Bid Rate Acceptance/Rejection
EXHIBIT H - Form of Amended and Restated Subsidiary Guaranty
EXHIBIT I - Form of Closing Certificate
EXHIBIT J-1 - Form of Opinion of Dickinson, Wright, Moon, Van Dusen
& Freeman
EXHIBIT J-2 - Form of Opinion of Kilpatrick & Cody
EXHIBIT K - Form of Assignment and Acceptance Agreement
EXHIBIT L - Form of Compliance Certificate
</TABLE>
v
<PAGE> 7
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT made and
entered into as of November 14, 1996, by and among INTERMET CORPORATION, a
Georgia corporation ("Intermet"), SUNTRUST BANK, ATLANTA (formerly known as
Trust Company Bank), a banking corporation organized under the laws of the State
of Georgia ("SunTrust"), the other banks and lending institutions listed on the
signature pages hereof, and any assignees of SunTrust, or such other banks and
lending institutions which become "Lenders" as provided herein (SunTrust, and
such other banks, lending institutions, and assignees referred to collectively
herein as the "Lenders"), SUNTRUST BANK, ATLANTA, in its capacity as agent for
the Lenders and each successor agent for such Lenders as may be appointed from
time to time pursuant to Article IX hereof (the "Agent"), NBD BANK ("NBD") and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("First Union"), in their respective
capacities as co-agents for the Lenders (the "Co-Agents");
W I T N E S S E T H:
WHEREAS, Intermet, the Agent, the Lenders and certain other
financial institutions entered into that certain Credit Agreement dated as of
August 31, 1992, as amended and restated pursuant to that certain Amended and
Restated Credit Agreement dated as of August 21, 1995 as further amended and
restated pursuant to that Second Amended and Restated Credit Agreement dated as
of February 23, 1996 (as amended up to the date hereof, the "Prior Credit
Agreement") providing certain credit facilities to Intermet;
WHEREAS, Intermet has requested, and the Agent, the
Co-Agents and the Lenders have agreed, to extend certain of the credit
facilities provided in the Prior Credit Agreement, to amend the interest rate
and certain other provisions thereof and to make certain other amendments as set
forth herein;
WHEREAS, the parties wish to amend and restate the Prior
Credit Agreement on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, Intermet, the Lenders, the Agent and the
Co-Agents agree, upon the terms and subject to the conditions set forth herein
as follows:
<PAGE> 8
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms
defined herein, the following terms used herein shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of the
terms defined):
"Acquisition" shall mean any transaction, or any series of
related transactions, by which Intermet and/or any of its Subsidiaries directly
or indirectly (a) acquires any ongoing business or all or substantially all of
the assets of any Person or division thereof, whether through purchase of
assets, merger or otherwise, (b) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a majority
in ordinary voting power of the securities of a Person which have ordinary
voting power for the election of directors or (c) otherwise acquires control of
a 50% or more ownership interest in any such Person.
"Adjusted LIBO Rate" shall mean, with respect to each
Interest Period for a Eurodollar Advance, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Adjusted LIBO Rate = LIBOR
-------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Advance" shall mean any principal amount advanced and
remaining outstanding at any time under (i) the Syndicated Loans, which Advances
shall be made or outstanding as Base Rate Advances, Overnight Rate Advances or
Eurodollar Advances, as the case may be, and (ii) the Bid Rate Loans, which
Advances shall be made or outstanding as Bid Rate Advances.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indi-
2
<PAGE> 9
rectly, of the power to direct or cause the direction of the management and
policies of that Person.
"Agent" shall mean SunTrust Bank, Atlanta, formerly known as
Trust Company Bank, a Georgia banking corporation and any successor agent
appointed pursuant to Section 9.10 hereof.
"Agreement" shall mean this Third Amended and Restated
Credit Agreement, as amended, modified, restated, or supplemented from time to
time.
"Applicable Commitment Percentage" shall mean, with respect
to the period commencing on the Closing Date and continuing through December 31,
1996, fifteen basis points (0.15%) per annum, and with respect to each fiscal
quarter thereafter, the percentage determined for such fiscal quarter from the
chart set forth below based on Intermet's ratio of Funded Debt to Consolidated
EBITDA determined as of the end of each fiscal quarter, with any change to the
Applicable Commitment Percentage to be immediately effective on the first day of
the second fiscal quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED APPLICABLE
EBITDA RATIO COMMITMENT PERCENTAGE
- ------------ ---------------------
<S> <C>
Greater than or Equal to
3.0:1.0 .30%
Less than 3.0:1.0 and
Greater than or Equal to
2.75:1.0 .25%
Less than 2.75:1.0 and
Greater than or Equal to
2.50:1.0 .225%
Less than 2.50:1.0 and
Greater than or Equal to
2.25:1.00 .20%
Less than 2.25:1.0 but
Greater than or Equal to
2.0:1.0 .175%
</TABLE>
3
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C>
Less than 2.0:1.0 .15%
</TABLE>
provided, however, if Intermet fails to deliver its financial statements for
such second preceding fiscal quarter pursuant to Section 6.07 prior to the first
day of the then-current fiscal quarter, the Applicable Commitment Percentage
during such current fiscal quarter shall be .30%.
"Applicable Margin" shall mean, with respect to all
outstanding Eurodollar Advances and Letter of Credit Obligations through
December 31, 1996, one-half of one percent (0.50%) per annum, and with respect
to all outstanding Eurodollar Advances and Letter of Credit Obligations during
each fiscal quarter thereafter, the percentage determined for such fiscal
quarter from the chart set forth below based on Intermet's ratio of Funded Debt
to Consolidated EBITDA determined as of the end of each fiscal quarter, with any
change to the Applicable Margin to be immediately effective on the first day of
the second fiscal quarter thereafter:
<TABLE>
<CAPTION>
FUNDED DEBT TO
CONSOLIDATED APPLICABLE
EBITDA RATIO MARGIN
- ------------ ------
<S> <C>
Greater than or Equal to
3.0:1.0 1.25%
Less than 3.0:1.0 and
Greater than or Equal to
2.75:1.0 1.00%
Less than 2.75:1.0 and
Greater than or Equal to
2.50:1.0 .875%
Less than 2.50:1.0 and
Greater than or Equal to
2.25:1.00 .75%
Less than 2.25:1.0 but
Greater than or Equal to
2.0:1.0 .625%
Less than 2.0:1.0 .50%
</TABLE>
provided, however, if Intermet fails to deliver its financial statements for
such second preceding fiscal quarter pursuant to Section 6.07 prior to the first
day of the then-current fiscal quarter, the Applicable Margin with respect to
Eurodollar Advances and Letter of Credit Obligations during
4
<PAGE> 11
such current fiscal quarter shall be 1.25%. By way of example, as of the first
day of the fourth fiscal quarter of Intermet, the Applicable Margin with respect
to Eurodollar Advances and Letter of Credit Obligations outstanding hereunder
shall be calculated based upon the ratio of Funded Debt to Consolidated EBITDA
of Intermet reported for the second fiscal quarter of such fiscal year of
Intermet.
"Asset Sale" shall mean any sale or other disposition (or a
series of related sales or other dispositions), including without limitation,
loss, damage, destruction or taking, by any Consolidated Company to any Person
other than a Consolidated Company, of any property or asset (including capital
stock but excluding the issuance and sale by Intermet of its own capital stock)
having an aggregate Asset Value in excess of $500,000, other than sales or other
dispositions made in the ordinary course of business of any Consolidated
Company.
"Asset Value" shall mean, with respect to any property or
asset of any Consolidated Company as of any particular date, an amount equal to
the greater of (i) the then book value of such property or asset as established
in accordance with GAAP, and (ii) the then fair market value of such property or
asset as determined in good faith by such Consolidated Company.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee in accordance with
the terms of this Agreement and substantially in the form of Exhibit K.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. Section 101 et seq.).
"Base Rate" shall mean the higher of (with any change in the
Base Rate to be effective as of the date of change of either of the following
rates):
(a) the rate which the Agent publicly announces
from time to time to be its prime lending rate, as in effect from time
to time, and
(b) the Federal Funds Rate, as in effect from time
to time, plus one-half of one percent (0.50%) per annum.
The Agent's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate charged to customers; the Agent may make
commercial loans or other loans at rates of interest at, above or below the
Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or
outstanding as (i) a Syndicated Loan bearing interest based on the Base Rate, or
(ii) an Advance bearing interest at
5
<PAGE> 12
the rate agreed upon between Intermet and the Lenders pursuant to Section 3.08,
Section 3.09 or Section 3.10.
"Bid Accept/Reject Letter" shall mean a notification made by
Intermet pursuant to Section 2.08 substantially in the form of Exhibit G.
"Bid Facility Note" shall mean a promissory note of Intermet
payable to the order of any Lender, in substantially the form of Exhibit B
hereto, evidencing the maximum aggregate principal indebtedness of Intermet to
such Lender with respect to outstanding Bid Rate Advances made by such Lender
pursuant to this Agreement, either as originally executed or as it may be from
time to time supplemented, modified, amended, renewed or extended.
"Bid Rate" shall mean, as to any Bid Rate Bid made by a
Lender pursuant to Section 2.08, the fixed rate of interest per annum offered by
the Lender making the Bid Rate Bid for the relevant Interest Period.
"Bid Rate Advance" shall mean an Advance made by a Lender to
Intermet pursuant to the bidding procedure described in Section 2.08.
"Bid Rate Bid" shall mean an offer by a Lender to make a Bid
Rate Loan pursuant to Section 2.08.
"Bid Rate Loan" shall mean a Borrowing made up of Advances
by all of those Lenders whose Bid Rate Bids have been accepted by Intermet
pursuant to the same Bid Request under the bidding procedure described in
Section 2.08 for the same Interest Period and interest rate (with the
understanding that two Bid Rate Loans may be made pursuant to a single Bid
Request).
"Bid Request" shall mean a request made by Intermet pursuant
to Section 2.08 substantially in the form of Exhibit D.
"Borrowing" shall mean the incurrence by Intermet under any
Facility of Advances of one Type concurrently having the same Interest Period or
the continuation or conversion of an existing Borrowing or Borrowings in whole
or in part.
"Business Day" shall mean:
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are required or authorized to close in Atlanta,
Georgia or New York, New York; and
6
<PAGE> 13
(b) relative to the making, continuing, prepaying or
repaying of any Eurodollar Advances, any day on which trading is carried on by
and between banks in deposits of Dollars in the London interbank market.
"Change in Control Provision" shall mean any term or
provision contained in any indenture, debenture, note, or other agreement or
document evidencing or governing Indebtedness of Intermet evidencing debt or a
commitment to extend loans in excess of $5,000,000 which requires, or permits
the holder(s) of such Indebtedness of Intermet to require that such Indebtedness
of Intermet be redeemed, repurchased, defeased, prepaid or repaid, either in
whole or in part, or the maturity of such Indebtedness of Intermet to be
accelerated in any respect, as a result of a change in ownership of the capital
stock of Intermet or voting rights with respect thereto.
"Closing Date" shall mean the date on or before November 14,
1996 on which the initial Loans are made or deemed to have been made hereunder
and the conditions set forth in Section 4.01 are satisfied or waived in
accordance with Section 10.02.
"Columbus Neunkirchen" shall mean Columbus Neunkirchen
Foundry, GmbH, a German company with limited liability and an indirect,
wholly-owned Subsidiary of Intermet.
"Commitment" shall mean, for any Lender at any time, the
amount of such commitment set forth opposite such Lender's name on the signature
pages hereof, as the same may be increased or decreased from time to time as a
result of any reduction thereof pursuant to Section 2.03, any assignment thereof
pursuant to Section 10.06, or any amendment thereof pursuant to Section 10.02.
"Consolidated Companies" shall mean, collectively, Intermet
and all of its Subsidiaries.
"Consolidated EBIT" shall mean, for any fiscal period of
Intermet, an amount equal to (A) the sum for such fiscal period of Consolidated
Net Income (Loss) and, to the extent deducted in determining such Consolidated
Net Income (Loss), provisions for (i) taxes based on income and (ii)
Consolidated Interest Expense, minus (B) any items of gain (or plus any items of
loss) which were included in determining such Consolidated Net Income (Loss) and
were (x) not realized in the ordinary course of business (whether or not
classified as "ordinary" by GAAP), (y) the result of any sale of assets, or (z)
resulting from minority investments, together in the case of (x), (y) or (z),
any related provision for taxes included in Consolidated Net Income (Loss) with
respect thereto, plus (C) without duplication, the sum of the following items to
the extent not included in Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any
Person which became
7
<PAGE> 14
a Subsidiary during such period (a "New Subsidiary");
(2) the net income (or net loss) derived during such period
from any assets acquired by any Consolidated Company during such period
("New Assets"); and
(3) the sum of the following items to the extent deducted in
determining net income of any New Subsidiary or derived from any New
Assets during such period: (x) taxes based on income, (y) Consolidated
Interest Expense, and (z) any items of gain (or plus any items of loss)
which were included in determining such net income and were (aa) not
realized in the ordinary course of business (whether or not classified
as "ordinary" by GAAP), (bb) the result of any sale of assets, or (cc)
resulting from minority investments, together in the case of (aa), (bb)
or (cc), any related provision for taxes included in such net income
with respect thereto;
minus (D) the sum of the following items to the extent included in determining
Consolidated Net Income (Loss) for such period:
(1) the net income (or net loss) for such period of any
Person which ceased to be a Subsidiary (other than due to merger or
consolidated with another Consolidated Company) during such period (an
"Old Subsidiary");
(2) the net income (or net loss) derived during such period
from any assets sold or otherwise disposed of by any Consolidated
Company during such period ("Old Assets"); and
(3) the sum of the following items to the extent deducted in
determining net income of any Old Subsidiary or derived from any Old
Assets during such period: (x) taxes based on income, (y) Consolidated
Interest Expense, and (z) any items of gain (or plus any items of loss)
which were included in determining such net income and were (aa) not
realized in the ordinary course of business (whether or not classified
as "ordinary" by GAAP), (bb) the result of any sale of assets, or (cc)
resulting from minority investments, together in the case of (aa), (bb)
or (cc), any related provision for taxes included in such net income
with respect thereto.
For purposes of calculating any financial definitions based upon Consolidated
EBIT, the addition or subtraction of any other financial definitions to or from
Consolidated EBIT shall be calculated with appropriate adjustment for New
Subsidiaries, New Assets, Old Subsidiaries and Old Assets as is consistent with
this definition.
"Consolidated EBITDA" shall mean for any fiscal period of
Intermet, an amount equal to the sum of Consolidated EBIT plus depreciation and
amortization expense to the extent deducted in determining Consolidated Net
Income (Loss), determined on a consolidated basis in accordance with GAAP.
8
<PAGE> 15
"Consolidated EBITR" shall mean, for any fiscal period of
Intermet, an amount equal to the sum of Consolidated EBIT plus Consolidated
Rental Expense for such period.
"Consolidated Interest Expense" shall mean, for any fiscal
period of Intermet, total interest expense of the Consolidated Companies
(including without limitation, interest expense attributable to capitalized
leases in accordance with GAAP, all commissions, discounts and other fees and
charges owed with respect to bankers acceptance financing, and total interest
expense (whether shown as interest expense or as loss and expenses on sale of
receivables) under a receivables purchase facility) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period of Intermet, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period (taken as a single accounting period)
determined in conformity with GAAP, but excluding therefrom (to the extent
otherwise included therein) (i) any income or loss of any Person accrued prior
to the date such Person becomes a Subsidiary of Intermet or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company, and (ii) the income of
any Consolidated Company to the extent that the declaration or payment of
dividends or similar distributions by such Consolidated Company of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation.
"Consolidated Net Worth" shall mean, as of any date of
determination, Shareholders' Equity of Intermet.
"Consolidated Rental Expense" shall mean, for any fiscal
period of Intermet, the operating lease expense of the Consolidated Companies
determined in accordance with GAAP for leases with an initial term greater than
one year, as disclosed in the notes to Intermet's consolidated financial
statements of the Consolidated Companies, determined on a consolidated basis in
accordance with GAAP.
"Contractual Obligation" of any Person shall mean any
provision of any security issued by such Person or of any agreement, instrument
or undertaking under which such Person is obligated or by which it or any of the
property owned by it is bound.
"Credit Documents" shall mean, collectively, this Agreement,
the Notes, the Letters of Credit, the Guaranty Agreements, the Pledge
Agreements, and all other Security Documents, if any.
"Credit Parties" shall mean, collectively, each of Intermet,
the Guarantors, and every other Person who from time to time executes a Security
Document with respect to all or any portion of the Obligations.
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"Default" shall mean any condition or event which, with
notice or lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean
lawful money of the United States of America.
"Eligible Assignee" shall mean (i) a commercial bank
organized under the laws of the United States, or any state thereof, having
total assets in excess of $1,000,000,000 or any commercial finance or asset
based lending Affiliate of any such commercial bank and (ii) any Lender, in each
case, which has the Minimum Required Rating, unless otherwise agreed by the
Agent.
"Environmental Laws" shall mean all federal, state, local
and foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect (including,
without limitation, those with respect to asbestos or asbestos containing
material or exposure to asbestos or asbestos containing material), relating to
pollution or protection of the environment and relating to public health and
safety, relating to (i) emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law into the environment (including without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any Hazardous Substance, petroleum including
crude oil or any fraction thereof, any petroleum product or other waste,
chemicals or substances regulated by any Environmental Law, and (iii)
underground storage tanks and related piping, and emissions, discharges and
releases or threatened releases therefrom, such Environmental Laws to include,
without limitation (i) the Clean Air Act (42 U.S.C. Section 7401 et seq.), (ii)
the Clean Water Act (33 U.S.C. Section 1251 et seq.), (iii) the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), (iv) the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), (v) the Comprehensive
Environmental Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. Section 9601 et seq.),
and (vi) all applicable national and local laws or regulations with respect to
environmental control (including applicable laws of the Federal Republic of
Germany or any applicable international agreements).
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person,
each trade or business (whether or not incorporated) which is a member of a
group of which that Person is a member and which is under common control within
the meaning of the regulations promulgated under Section 414 of the Tax Code.
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"Eurodollar Advance" shall mean an Advance made or
outstanding as a Syndicated Loan bearing interest based on the Adjusted LIBO
Rate.
"Event of Default" shall have the meaning provided in
Article VIII.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and any successor statute thereto.
"Executive Officer" shall mean with respect to any Person,
the President, Chief Executive Officer, Vice Presidents, Chief Financial
Officer, Treasurer, Secretary and any Person holding comparable offices or
duties.
"Facility" or "Facilities" shall mean the Commitments, or
the Bid Rate subfacility or the Letter of Credit facility, as the context may
indicate.
"Federal Funds Rate" shall mean for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate
is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
"Fixed Charge Coverage Ratio" shall mean, as of the last day
of any fiscal quarter of Intermet, the ratio of (A) Consolidated EBITR to (B)
the sum of the amounts of (i) Consolidated Interest Expense, and (ii)
Consolidated Rental Expense, in each case, calculated with respect to the
immediately preceding four fiscal quarters ending on such date.
"Foreign Plan" shall mean any pension, profit sharing,
deferred compensation, or other employee benefit plan, program or arrangement
maintained by any Foreign Subsidiary which, under applicable local law, is
required to be funded through a trust or other funding vehicle, but shall not
include any benefit provided by a foreign government or its agencies.
"Foreign Subsidiary" shall mean each Consolidated Company
that is organized under the laws of a jurisdiction other than the United States
of America or any State thereof.
"Funded Debt" shall mean all Indebtedness for money
borrowed, Indebtedness evidenced or secured by purchase money Liens, capitalized
leases, conditional sales contracts and similar title retention debt
instruments, whether designated as long term or current debt under GAAP. The
calculation of Funded Debt shall include (i) all Funded Debt of the
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Consolidated Companies, plus (ii) all Funded Debt of other Persons to the extent
guaranteed by a Consolidated Company, to the extent supported by a letter of
credit issued for the account of a Consolidated Company, or as to which and to
the extent which a Consolidated Company or its assets otherwise have become
liable for payment thereof, plus (iii) the redemption amount with respect to the
stock of any Consolidated Company required to be redeemed during the next
succeeding twelve months.
"GAAP" shall mean generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guarantors" shall mean, collectively, Lynchburg Foundry
Company, Ironton Iron, Inc., Northern Castings Corporation, Intermet
International, Inc., New River Castings Company, Alexander City Castings
Company, Inc. and all other domestic Subsidiaries formed or acquired after the
Closing Date unless otherwise agreed by the Required Lenders pursuant to Section
6.10.
"Guaranty" shall mean any contractual obligation, contingent
or otherwise, of a Person with respect to any Indebtedness or other obligation
or liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreements" shall mean, collectively, the Amended
and Restated Guaranty Agreement, dated as of even date herewith, executed by
each of the Guarantors in favor of the Lenders and the Agent, substantially in
the form of Exhibit H as the same may be amended, restated or supplemented from
time to time.
"Hazardous Substances" shall have the meaning assigned to
that term in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of
1986.
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"Indebtedness" of any Person shall mean, without duplication
(i) all obligations of such Person which in accordance with GAAP would be shown
on the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase price
of property or services, and obligations evidenced by bonds, debentures, notes
or other similar instruments); (ii) all rental obligations under leases required
to be capitalized under GAAP; (iii) all Guaranties of such Person (including
contingent reimbursement obligations under undrawn letters of credit); (iv)
Indebtedness of others secured by any Lien upon property owned by such Person,
whether or not assumed; and (v) obligations or other liabilities under currency
contracts, interest rate hedging contracts, or similar agreements or com
binations thereof to the extent required to be disclosed in accordance with
GAAP.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of December 11, 1992 by and among the Lenders
and The Prudential Insurance Company of America, as amended by that certain
First Amendment to Intercreditor Agreement dated as of August 21, 1995, as
further amended by that certain Second Amendment to Intercreditor Agreement,
dated as of February 23, 1996, as hereafter further amended, modified or
supplemented.
"Interest Period" shall mean (i) as to any Eurodollar
Advances, the interest period selected by Intermet pursuant to Section 3.04(a)
hereof, and (ii) as to any Bid Rate Ad vances, the interest period requested by
Intermet and agreed to by the participating Lenders pursuant to Section 3.04(b)
hereof.
"Intermet" shall mean Intermet Corporation, a Georgia
corporation, its successors and permitted assigns.
"Investment" shall mean, when used with respect to any
Person, any direct or indirect advance, loan or other extension of credit (other
than the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person, in each case, other than an Acquisition. Each Investment shall
be valued as of the date made; provided that any Investment or portion of an
Investment consisting of Debt shall be valued at the outstanding principal
balance thereof as of the date of determination.
"Lender" or "Lenders" shall mean SunTrust, the other banks
and lending institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 10.06(c).
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"Lending Office" shall mean for each Lender the office such
Lender may designate in writing from time to time to Intermet and the Agent with
respect to each Type of Loan.
"Letter of Credit Fee" shall have the meaning set forth in
Section 3.05(b).
"Letters of Credit" shall mean the letters of credit issued
pursuant to Article II hereof by the Agent for the account of Intermet pursuant
to the Commitments.
"Letter of Credit Obligations" shall mean, with respect to
Letters of Credit, as at any date of determination, the sum of (a) the maximum
aggregate amount which at such date of determination is available to be drawn by
the beneficiaries thereof (assuming the conditions for drawing thereunder have
been met) under all Letters of Credit then outstanding, plus (b) the aggregate
amount of all drawings under Letters of Credit honored by the Agent not
theretofore reimbursed by Intermet.
"Leverage Ratio" shall mean, as of any date of
determination, the ratio, expressed as a percentage, of Funded Debt to Total
Capitalization for the Consolidated Companies.
"LIBOR" shall mean, for any Interest Period, with respect to
Eurodollar Advances under the Commitments, the offered rate for deposits in
Dollars, for a period comparable to the Interest Period and in an amount
comparable to the Agent's portion of such Advances, appearing on Telerate Page
3750 as of 11:00 AM (London, England time) on the day that is two Business Days
prior to the first day of the Interest Period. If two or more of such rates
appear on such Telerate Page, the rate shall be the arithmetic mean of such
rates. If the foregoing rate is unavailable from Telerate for any reason, then
such rate shall be determined by the Agent from the Reuters Screen LIBO Page or,
if such rate is also unavailable on such service, then on any other interest
rate reporting service of recognized standing designated in writing by the Agent
to Intermet and the other Lenders; in any such case rounded, if necessary, to
the next higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest,
lien, charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Syndicated Loans and
the Bid Rate Loans.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.
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"Margin Stock" shall have the meaning set forth in the
Margin Regulations.
"Materially Adverse Effect" shall mean any materially
adverse change in (i) the business, results of operations, financial condition,
assets or prospects of the Consolidated Companies, taken as a whole, (ii) the
ability of Intermet to perform its obligations under this Agreement, (iii) the
ability of the other Credit Parties (taken as a whole) to perform their
respective obligations under the Credit Documents, or (iv) the perfection or
priority of the Liens granted in favor of the Agent pursuant to the Security
Documents.
"Maturity Date" shall mean the earlier of (i) November 14,
1999, and (ii) the date on which all amounts outstanding under this Agreement
have been declared or have automatically become due and payable pursuant to the
provisions of Article VIII.
"Minimum Required Rating" shall mean (i) from Moody's, a
long-term deposit rating of A1 or higher (or comparable rating in the event
Moody's hereafter modifies its rating system for long-term deposits of
commercial banks), and (ii) from S&P, a long-term deposit rating of A+ or higher
(or comparable rating in the event S&P hereafter modifies its rating system for
long-term deposits of commercial banks).
"Moody's" shall mean Moody's Investors Service, Inc., and
its successors and assigns.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Fixed Assets" shall mean, as of any date of
determination, the net property, plant and equipment of the Consolidated
Companies determined in accordance with GAAP and as reflected on the balance
sheet of Intermet.
"Note Purchase Agreement" shall mean that certain Amended
and Restated Note Purchase Agreement dated as of March 21, 1996, by and between
Intermet and The Prudential Insurance Company of America, as amended, modified
or supplemented.
"Notes" shall mean, collectively, the Revolving Credit Notes
and the Bid Facility Notes.
"Notice of Borrowing" shall have the meaning provided in
Section 3.01(a)(i).
"Notice of Continuation/Conversion" shall have the meaning
provided in Section 3.01(b)(i).
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"Obligations" shall mean all amounts owing to the Agent or
any Lender pursuant to the terms of this Agreement or any other Credit Document,
including without limitation, all Loans (including all principal and interest
payments due thereunder), all Letter of Credit Obligations, fees, expenses,
indemnification and reimbursement payments, indebtedness, liabilities, and
obligations of the Credit Parties, direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising, together with all
renewals, extensions, modifications or refinancings thereof.
"Overnight Advances" shall mean Advances hereunder bearing
interest based upon the Overnight Rate.
"Overnight Rate" shall mean the rate per annum determined by
the Agent in good faith as of 11:00 A.M. (local time for the Agent) on each
Business Day to be the rate at which overnight loans are made available to the
Agent by the Federal Reserve Bank of Atlanta, with such rate to remain in effect
until redetermined by the Agent on the next Business Day.
"Payment Office" shall mean the office specified as the
"Payment Office" for the Agent on the signature page of the Agent, or such other
location as to which the Agent shall have given written notice to Intermet and
the Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
or any successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted
by Section 7.02.
"Person" shall mean any individual, limited liability
company, partnership, firm, corporation, association, joint venture, trust or
other entity, or any government or political subdivision or agency, department
or instrumentality thereof.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined benefit
pension plan, profit sharing plan, money purchase pension plan, savings or
thrift plan, stock bonus plan, employee stock ownership plan, Multiemployer
Plan, or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits, but shall exclude any Foreign Plan.
"Pledge Agreement" shall mean, collectively, any pledge
agreement providing for the grant of first priority Liens on the Pledged Stock.
"Pledged Stock" shall mean, collectively, 49% of the issued
and outstanding capital stock, together with all warrants, stock options, and
other purchase and conversion rights with respect to such capital stock, of all
Subsidiaries that are Foreign Subsidiaries directly owned by Intermet and/or
owned by one or more other Subsidiaries organized in the United States
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(other than Columbus Neunkirchen, Intermet Machining GmbH, and Intermet Holding
Deutschland GmbH).
"Prior Credit Agreement" shall have the meaning set forth in
the recitals hereof.
"Pro Rata Share" shall mean, with respect to Commitments,
each Syndicated Loan and all Letters of Credit to be made by and each payment
(including, without limitation, any payment of principal, interest or fees) to
be made to each Lender, the percentage designated as such Lender's Pro Rata
Share of such Commitments, set forth under the name of such Lender on the
respective signature page for such Lender, as such percentage may change based
upon amendments and assignments hereunder.
"Prudential" shall mean The Prudential Insurance Company of
America.
"Rating Agencies" shall mean, collectively, Moody's and S&P.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.
"Required Lenders" shall mean at any time prior to the
termination of the Commitments, Lenders holding at least 66-2/3% of the then
aggregate amount of the Commitments, or, following the termination of the
Commitments hereunder, Lenders holding at least 66-2/3% of the sum of the
aggregate outstanding Loans and Letter of Credit Obligations.
"Requirement of Law" for any person shall mean the articles
or certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reuters Screen" shall mean, when used in connection with
any designated page and LIBOR, the display page so designated on the Reuters
Monitor Money Rates Service (or such other page as may replace that page on that
service for the purpose of displaying rates comparable to LIBOR).
"Revolving Credit Notes" shall mean, collectively, the
promissory notes evidencing the Syndicated Loans in the form attached hereto as
Exhibit A, either as originally executed or as hereafter amended, modified or
substituted.
"S&P" shall mean Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc.
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"Security Documents" shall mean, collectively, the Guaranty
Agreements, the Pledge Agreements, and each other guaranty agreement, mortgage,
deed of trust, security agreement, pledge agreement, or other security or
collateral document guaranteeing or securing the Obligations, as the same may be
amended, restated, or supplemented from time to time.
"Shareholders' Equity" shall mean, with respect to any
Person as at any date of determination, shareholders' equity of such Person
determined on a consolidated basis in conformity with GAAP.
"Solvent" shall mean, as to Intermet or any Guarantor at any
time, that (i) each of the fair value and the present fair saleable value of
such Person's assets (including any rights of subrogation or contribution to
which such Person is entitled, under any of the Loan Documents or otherwise) is
greater than such Person's debts and other liabilities (including contingent,
unmatured and unliquidated debts and liabilities) and the maximum estimated
amount required to pay such debts and liabilities as such debts and liabilities
mature or otherwise become payable; (ii) such Person is able and expects to be
able to pay its debts and other li abilities (including, without limitation,
contingent, unmatured and unliquidated debts and liabilities) as they mature;
and (iii) such Person does not have unreasonably small capital to carry on its
business as conducted and as proposed to be conducted.
"Subordinated Debt" shall mean other Indebtedness of
Intermet subordinated to all obligations of Intermet or any other Credit Party
arising under this Agreement, the Notes, and the Guaranty Agreements on terms
and conditions satisfactory in all respects to the Agent and the Required
Lenders, including without limitation, with respect to interest rates, payment
terms, maturities, amortization schedules, covenants, defaults, remedies, and
subordination provisions, as evidenced by the written approval of the Agent and
Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships, joint
ventures, and associations) regardless of its jurisdiction of organization or
formation, at least a majority of the total combined voting power of all classes
of voting stock or other ownership interests of which shall, at the time as of
which any determination is being made, be owned by such Person, either directly
or indirectly through one or more other Subsidiaries.
"Syndicated Loans" shall mean, collectively, all outstanding
Loans made to Intermet by the Lenders pursuant to Section 2.01 hereof.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies,
imposts, duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social
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security and franchise taxes now or hereafter imposed or levied by the United
States, or any state, local or foreign government or by any department, agency
or other political subdivision or taxing authority thereof or therein and all
interest, penalties, additions to tax and similar liabilities with respect
thereto.
"Telerate" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Total Assets" shall mean the total assets of the
Consolidated Companies, determined in accordance with GAAP.
"Total Capitalization" shall mean, as of any date of
determination, the sum of Funded Debt and Consolidated Net Worth of the
Consolidated Companies.
"Total Sales" shall mean, for any period of determination,
the total revenues of the Consolidated Companies, determined in accordance with
GAAP.
"Type" of Borrowing shall mean a Borrowing consisting of
Base Rate Advances, Overnight Rate Advances or Eurodollar Advances.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared, and all
financial records shall be maintained in accordance with, GAAP, except that
financial records of Foreign Subsidiaries may be maintained in accordance with
generally accepted accounting principles in effect from time to time in the
jurisdiction of organization of such Foreign Subsidiary; provided, however, that
compliance with the financial covenants and calculations set forth in Section
6.08, Article VII, and elsewhere herein, and in the definitions used in such
covenants and calculations, shall be calculated, made and applied in accordance
with GAAP and such generally accepted accounting principles in such foreign
jurisdictions, as the case may be, as in effect on the date of this Agreement
applied on a basis consistent with the preparation of the financial statements
referred to in Section 5.14 unless and until Intermet and the Required Lenders
enter into an agreement with respect thereto in accordance with Section 10.13.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article, Section, Schedule, Exhibit and like references are
to this Agreement unless otherwise specified.
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Any of the terms defined in Section 1.01 may, unless the context otherwise
requires, be used in the singular or the plural depending on the reference.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules attached hereto are by reference made a part hereof.
ARTICLE II.
SYNDICATED LOANS, BID RATE LOANS AND LETTERS OF CREDIT
SECTION 2.01. COMMITMENTS; USE OF PROCEEDS.
(a) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make to Intermet from time to time on and
after the Closing Date, but prior to the Maturity Date, Syndicated Loans in an
aggregate amount outstanding at any time not to exceed such Lender's Commitment
minus such Lender's Pro Rata Share of the Letter of Credit Obligations, subject,
however, to the conditions that (i) at no time shall the sum of the (x) the
outstanding principal amount of all Syndicated Loans, plus (y) the outstanding
principal amount of all Bid Rate Loans, plus (z) the outstanding Letter of
Credit Obligations, exceed the sum of the Commitments, (ii) at no time shall the
sum of the outstanding principal amount of Syndicated Loans comprised of
Overnight Rate Advances exceed $30,000,000, and (iii) at all times shall the
outstanding principal amount of the Syndicated Loans of each Lender equal the
product of each Lender's Pro Rata Share of the Commitments multiplied by the
aggregate outstanding amount of the Syndicated Loans. In addition, at no time
shall the outstanding principal amount of the Bid Rate Loans outstanding under
this Agreement exceed $100,000,000. Intermet shall be entitled to repay and
reborrow Syndicated Loans in accordance with the provisions hereof.
(b) Each Syndicated Loan shall, at the option of Intermet,
be made or continued as, or converted into, part of one or more Borrowings that
shall consist entirely of Base Rate Advances, Eurodollar Advances, or subject to
the limitation set forth in subsection (a) above, Overnight Rate Advances. The
aggregate principal amount of each Borrowing of Syndicated Loans shall be not
less than $5,000,000 or a greater integral multiple of $1,000,000, provided that
each Borrowing of Syndicated Loans comprised of Base Rate Advances or Overnight
Rate Advances shall be not less than $1,000,000 or a greater integral multiple
of $100,000. At no time shall the number of outstanding Borrowings comprised of
Eurodollar Advances exceed twelve.
(c) The proceeds of Loans shall be used solely for the
following purposes:
(i) On the Closing Date all amounts outstanding
pursuant to the Prior Credit Agreement and the letters of credit issued
thereunder shall be deemed to be outstanding hereunder and the Lenders
shall make and receive such payments as the
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Agent shall direct to pay out the exiting lenders under the Prior
Credit Agreement and to adjust the Pro Rata Shares of the Lenders to
reflect the terms of this Agreement; and
(ii) All other amounts shall be used as working
capital and for other general corporate purposes, including
Acquisitions, Investments, the repayment of Indebtedness and the
funding of capital expenditures of the Consolidated Companies.
SECTION 2.02. NOTES; REPAYMENT OF PRINCIPAL.
(a) Intermet's obligations to pay the principal of, and
interest on, the Syndicated Loans to each Lender shall be evidenced by the
records of the Agent and such Lender and by the Revolving Credit Note payable to
such Lender (or the assignor of such Lender) completed in conformity with this
Agreement.
(b) All outstanding principal amounts under the Commitments
shall be due and payable in full on the Maturity Date.
SECTION 2.03. VOLUNTARY REDUCTION OF COMMITMENTS. Upon at
least three (3) Business Days' prior telephonic notice (promptly confirmed in
writing) to the Agent, Intermet shall have the right, without premium or
penalty, to terminate the unutilized Commitments, in part or in whole, provided
that (i) any such termination shall apply to proportionately and permanently
reduce the Commitments of each of the Lenders, and (ii) any partial termination
pursuant to this Section 2.03 shall be in an amount of at least $5,000,000 and
integral multiples of $1,000,000.
SECTION 2.04. LETTER OF CREDIT FACILITY. Subject to, and
upon the terms and conditions set forth herein, Intermet may request, in
accordance with the provisions of this Section 2.04 and Section 2.05 and the
other terms of this Agreement, that on and after the Closing Date but prior to
the Maturity Date, the Agent issue a Letter or Letters of Credit for the account
of Intermet; provided that the application for such Letters of Credit issued by
the Agent shall be in the form substantially identical to Exhibit C attached
hereto, provided further that (i) no Letter of Credit shall have an expiration
date that is later than one year after the date of issuance thereof (provided
that a Letter of Credit may provide that it is extendible for consecutive one
year periods); (ii) in no event shall any Letter of Credit issued by the Agent
have an expiration date (or be extended so that it will expire) later than the
Maturity Date; and (iii) Intermet shall not request that the Agent issue any
Letter of Credit, if, after giving effect to such issuance, the sum of the
aggregate Letter of Credit Obligations plus the aggregate outstanding principal
amount of the Syndicated Loans plus the aggregate outstanding principal amount
of the Bid Rate Loans would exceed the Commitments.
SECTION 2.05. NOTICE OF ISSUANCE OF LETTER OF CREDIT;
AGREEMENT TO ISSUE.
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(a) Whenever Intermet desires the issuance of a Letter of
Credit, it shall, in addition to any application and documentation procedures
required by the Agent for the issuance of such Letter of Credit, deliver to the
Agent a written notice no later than 11:00 AM (local time for the Agent) at
least five (5) days in advance of the proposed date of issuance and the Agent
shall promptly forward a copy of such notice to each of the Lenders. Each such
notice shall specify (i) the proposed date of issuance (which shall be a
Business Day); (ii) the face amount of the Letter of Credit; (iii) the
expiration date of the Letter of Credit; and (iv) the name and address of the
beneficiary with respect to such Letter of Credit and shall attach a precise
description of the documentation and a verbatim text of any certificate to be
presented by the beneficiary of such Letter of Credit which would require the
Agent to make payment under the Letter of Credit, provided that the Agent may
require changes in any such documents and certificates in accordance with its
customary letter of credit practices, and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made thereunder on
the same Business Day that such draft is presented if such presentation is made
after 11:00 AM (Atlanta, Georgia time). In determining whether to pay any draft
under any Letter of Credit, the Agent shall be responsible only to determine
that the documents and certificate required to be delivered under its Letter of
Credit have been delivered, and that they comply on their face with the
requirements of the Letter of Credit. Promptly after receiving the notice of
issuance of a Letter of Credit, the Agent shall notify each Lender of such
Lender's respective participation therein, determined in accordance with its
respective Pro Rata Share of the Commitments.
(b) The Agent agrees, subject to the terms and conditions
set forth in this Agreement, to issue for the account of Intermet a Letter of
Credit in a face amount equal to the face amount requested under paragraph (a)
above, following its receipt of a notice required by Section 2.05(a).
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Agent a
participation in such Letter of Credit and any drawing thereunder in an amount
equal to such Lender's Pro Rata Share of the Commitments multiplied by the face
amount of such Letter of Credit. Upon issuance and amendment or extension of any
Letter of Credit, the Agent shall provide a copy of each such Letter of Credit
issued, amended or extended hereunder to each of the Lenders.
(c) As of the Closing Date, each of the Letters of Credit
set forth on Schedule 7.01 shall be deemed to have been issued by the Agent in
accordance with the terms hereof, each of the Lenders shall be deemed to have
purchased a participation in such Letters of Credit in an amount equal to such
Lender's Pro Rata Share of the Commitments multiplied by the face amount
thereof, and such Letters of Credit shall be governed by the terms hereof.
SECTION 2.06. PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT.
(a) In the event of any request for a drawing under any
Letter of Credit by the beneficiary thereof, the Agent shall notify Intermet and
the Lenders on or before the date on which the Agent intends to honor such
drawing, and Intermet shall reimburse the Agent on
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the day on which such drawing is honored in an amount, in same day funds, equal
to the amount of such drawing.
(b) Notwithstanding any provision of this Agreement to the
contrary, to the extent that any Letter of Credit or portion thereof remains
outstanding on the Maturity Date, for any reason whatsoever, the parties hereto
hereby agree that the beneficiary or beneficiaries thereof shall be deemed to
have made a drawing of all available amounts pursuant to such Letters of Credit
on the Maturity Date which amount shall be held by the Agent as cash collateral
for its remaining obligations pursuant to such Letters of Credit.
(c) As between Intermet and the Agent, Intermet assumes all
risk of the acts and omissions of, or misuse of, the Letters of Credit issued by
the Agent, by the respective beneficiaries of such Letters of Credit, other than
losses resulting from the gross negligence and willful misconduct of the Agent.
In furtherance and not in limitation of the foregoing but subject to the
exception for the Agent's gross negligence or willful misconduct set forth
above, the Agent shall not be responsible (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of such Letters of
Credit, even if it should in fact prove to be in any or all respects
insufficient, inaccurate, fraudulent or forged or otherwise invalid; (ii) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof in whole or in part which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with the conditions required in
order to draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, telecopy or otherwise; (v) for good faith errors in
interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any such Letter of Credit; and (viii) for
any consequences arising from causes beyond the control of the Agent.
SECTION 2.07. PAYMENT BY LENDERS. In the event that Intermet
shall fail to reimburse the Agent as provided in Section 2.06, the Agent shall
promptly notify each Lender of the unreimbursed amount of such drawing and of
such Lender's respective participation therein. Each Lender shall make available
to the Agent an amount equal to its respective participation, in Dollars and in
immediately available funds, at the office of the Agent specified in such notice
not later than 1:00 P.M. (Atlanta, Georgia time) on the Business Day after the
date notified by the Agent and such amount shall be deemed to be outstanding
hereunder as a Base Rate Loan. Each Lender shall be obligated to make such Base
Rate Loan hereunder regardless of whether the conditions precedent in Article IV
are satisfied and regardless of whether such Base Rate Loan complies with the
minimum borrowing requirements hereunder. In the event that any such
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Lender fails to make available to the Agent the amount of such Lender's
participation in such Letter of Credit, the Agent shall be entitled to recover
such amount on demand from such Lender together with interest as provided for in
Section 3.02. The Agent shall distribute to each Lender which has paid all
amounts payable under this Section with respect to any Letter of Credit, such
Lender's Pro Rata Share of all payments received by the Agent from Intermet in
reimbursement of drawings honored by the Agent under such Letter of Credit when
such payments are received.
SECTION 2.08 BID RATE LOANS. Subject to the terms and
conditions hereof, Intermet may request, and each Lender, in its sole
discretion, may agree to make Bid Rate Advances in accordance with the following
procedure; provided, that, (x) at no time shall the sum of the aggregate
outstanding principal amount of the Bid Rate Loans exceed $100,000,000, and (y)
at no time shall the sum of the outstanding principal amount of the Loans plus
the Letter of Credit Obligations exceed the sum of Commitments:
(a) In order to request Bid Rate Bids, Intermet shall
telecopy to the Agent a duly completed Bid Request in the form of Exhibit D
attached hereto (which may request not more than two Bid Rate Bids), to be
received by the Agent not later than 11:00 a.m. (local time for the Agent) time,
on the Business Day of the proposed Bid Rate Loan or Loans; provided that, such
Bid Request shall not be deemed to have been received by the Agent in a timely
manner unless Intermet shall also have notified the Agent by telephone
(excluding voice mail notification) of such Bid Request by the time specified
above. A Bid Request that does not conform substantially to the format of
Exhibit D may be rejected in the Agent's sole discretion, and the Agent shall
notify Intermet of such rejection by telecopy not later than 12:00 noon
(Atlanta, Georgia time) on the date of receipt. Such request shall in each case
refer to this Agreement and specify (i) the date of such Borrowing or Borrowings
(which shall be a Business Day) and (ii) the aggregate principal amount thereof
which shall be in a minimum principal amount of $1,000,000 and in an integral
multiple of $100,000, and (iii) the Interest Period with respect thereto.
Promptly after its receipt of a Bid Request that is not rejected as aforesaid,
the Agent shall invite by telecopy (substantially in the form set forth in
Exhibit E attached hereto) the Lenders to bid, on the terms and conditions of
this Agreement, to make Bid Rate Advances pursuant to the Bid Request.
(b) Each Lender may, in its sole discretion, make one or
more Bid Rate Bids (but not more than two) to Intermet responsive to a Bid
Request. Each Bid Rate Bid by a Lender must be received by the Agent via
telecopy, substantially in the form of Exhibit F attached hereto, not later than
12:00 noon (local time for the Agent) on the Business Day of the proposed Bid
Rate Loan. Multiple bids (not to exceed two per Lender) will be accepted by the
Agent. Bid Rate Bids that do not conform substantially to the format of Exhibit
F may be rejected by the Agent acting in consultation with Intermet, and the
Agent shall notify the Lender making such nonconforming bid of such rejection as
soon as practicable. Each Bid Rate Bid shall refer to this Agreement and specify
(i) the principal amount (which shall be in a minimum principal amount of
$1,000,000 and in an integral multiple of $100,000 and which may equal the
entire principal amount of the Bid Rate Loan requested by Intermet) of the Bid
Rate Advance or
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Advances that the Lender is willing to make to Intermet, (ii) the Bid Rate or
Rates at which the Lender is prepared to make the Bid Rate Advance or Advances,
and (iii) the Interest Period and the last day thereof. If any Lender shall
elect not to make a Bid Rate Bid, such Lender shall so notify the Agent via
telecopy by the time specified above for submitting a Bid Rate Bid; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Bid Rate Advance as part of such Bid Rate
Loan. A Bid Rate Bid submitted by a Lender pursuant to this paragraph (b) shall
be irrevocable (absent manifest error).
(c) The Agent shall promptly notify Intermet by telecopy of
all the Bid Rate Bids made, the Bid Rate and the principal amount of each Bid
Rate Advance in respect of which a Bid Rate Bid was made and the identity of the
Lender that made each bid. The Agent shall send a copy of all Bid Rate Bids to
Intermet for its records as soon as practicable after completion of the bidding
process set forth in this Section 2.08.
(d) Intermet may, in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any Bid
Rate Bid referred to in paragraph (c) above. Intermet shall notify the Agent by
telephone, confirmed by telecopy in the form of a Bid Accept/Reject Letter,
whether and to what extent it has decided to accept or reject any of or all the
bids referred to in paragraph (c) above not later than 12:30 p.m. (local time
for the Agent) on the Business Day of the proposed Bid Loan; provided, however,
that (i) the failure by Intermet to give such notice shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above, (ii) Intermet
shall not accept a bid made at a particular Bid Rate if Intermet has decided to
reject a bid made at a lower Bid Rate, (iii) the aggregate amount of the Bid
Rate Bids accepted by Intermet shall not exceed the principal amount specified
in the Bid Request, (iv) if Intermet shall accept a bid or bids made at a
particular Bid Rate but the amount of such bid or bids shall cause the total
amount of bids to be accepted by Intermet to exceed the amount specified in the
Bid Request, then Intermet shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Bid Request less the amount of all
other Bid Rate Bids accepted with respect to such Bid Request, which acceptance,
in the case of multiple bids at the same Bid Rate, shall be made pro rata in
accordance with the amount of each such bid at such Bid Rate, and (v) except
pursuant to clause (iv) above, no bid shall be accepted for a Bid Rate Loan
unless such Bid Rate Loan is in a minimum principal amount of $1,000,000 and an
integral multiple of $100,000; provided further, however, that if a Bid Loan
must be in an amount less than $1,000,000 because of the provisions of clause
(iv) above, such Bid Loan may be for a minimum of $500,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Bid Rate pursuant to clause (iv) the
amounts shall be rounded to integral multiples of $500,000 in a manner which
shall be in the discretion of Intermet. A notice given by Intermet pursuant to
this paragraph (d) shall be irrevocable.
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(e) The Agent shall promptly notify each bidding Lender
whether or not its Bid Rate Bid has been accepted (and if so, in what amount and
at what Bid Rate) and shall notify each Lender as to the amount, Interest Period
and Bid Rate of each Bid Rate Bid accepted by Intermet by telecopy sent by the
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Bid Rate Loan in respect of
which its bid has been accepted.
(f) Intermet shall not submit a Bid Request more than twice
in any seven day period.
(g) If the Agent shall elect to submit a Bid Rate Bid in its
capacity as a Lender, it shall submit such bid directly to Intermet one half of
an hour earlier than the earliest time at which the other Lenders are required
to submit their bids to the Agent pursuant to paragraph (b) above.
(h) Each Lender participating in any Bid Rate Loan shall
make its Bid Rate Advance available to the Agent on the date specified in the
Bid Request at the time and in the manner and subject to the provisions
specified in Section 3.02.
(i) The Bid Rate Advances of each Lender shall be evidenced
by its Bid Facility Note and shall be due and payable in full on the Maturity
Date unless sooner accelerated pursuant to Article VIII hereof.
ARTICLE III.
GENERAL LOAN AND LETTER OF CREDIT TERMS
SECTION 3.01. FUNDING NOTICES.
(a) (i) Whenever Intermet desires to obtain a Syndicated
Loan with respect to the Commitments (other than one resulting from a conversion
or continuation pursuant to Section 3.01(b)(i)), it shall give the Agent prior
written notice (or telephonic notice promptly confirmed in writing) of such
Borrowing (a "Notice of Borrowing"), such Notice of Borrowing to be given prior
to 11:00 AM (local time for the Agent) at its Payment Office (x) three Business
Days prior to the requested date of such Borrowing in the case of Eurodollar
Advances, and (y) on the date of such Borrowing (which shall be a Business Day)
in the case of a Borrowing consisting of Overnight Rate Advances or Base Rate
Advances. Notices received after 11:00 AM shall be deemed received on the next
Business Day. Each Notice of Borrowing shall be irrevocable and shall specify
the aggregate principal amount of the Borrowing, the date of Borrowing (which
shall be a Business Day), and whether the Borrowing is to consist of Base Rate
Advances, Overnight Rate Advances or Eurodollar Advances and (in the case of
Eurodollar Advances) the Interest Period to be applicable thereto.
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(ii) Whenever Intermet desires to obtain a Bid
Rate Loan, it shall notify the Agent in accordance with the procedure set forth
in Section 2.08 hereof.
(b) (i) Whenever Intermet desires to convert all or a
portion of an outstanding Borrowing under the Commitments, which Borrowing
consists of Base Rate Advances, Overnight Rate Advances or Eurodollar Advances,
into one or more Borrowings consisting of Advances of another Type, or to
continue outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, it shall give the Agent at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each such
Borrowing to be converted into or continued as Eurodollar Advances. Such notice
(a "Notice of Conversion/Continuation") shall be given prior to 11:00 AM (local
time for the Agent) on the date specified at the Payment Office of the Agent.
Each such Notice of Conversion/Continuation shall be irrevocable and shall
specify the aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation, whether the Advances are
being converted into or continued Eurodollar Advances and, if so, the Interest
Period applicable thereto. If, upon the expiration of any Interest Period in
respect of any Borrowing, Intermet shall have failed to deliver the Notice of
Conversion/Continuation, Intermet shall be deemed to have elected to convert or
continue such Borrowing to a Borrowing consisting of Base Rate Advances. So long
as any Executive Officer of Intermet has knowledge that any Default or Event of
Default shall have occurred and be continuing, no Borrowing may be converted
into or continued as (upon expiration of the current Interest Period) Eurodollar
Advances unless the Agent and each of the Lenders shall have otherwise consented
in writing. No conversion of any Borrowing of Eurodollar Advances shall be
permitted except on the last day of the Interest Period in respect thereof.
(ii) Upon the expiration of the applicable
Interest Period with respect to Bid Rate Loans, Intermet shall repay such Loan
in full in accordance with the terms hereof.
(c) Without in any way limiting Intermet's obligation to
confirm in writing any telephonic notice, the Agent may act without liability
upon the basis of telephonic notice be lieved by the Agent in good faith to be
from Intermet prior to receipt of written confirmation. In each such case,
Intermet hereby waives the right to dispute the Agent's record of the terms of
such telephonic notice.
(d) The Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile transmission
of the matters covered by the notices given to the Agent pursuant to this
Section 3.01 with respect to the Commitments.
SECTION 3.02. DISBURSEMENT OF FUNDS.
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(a) No later than 12:00 Noon (local time for the Agent) on
the date of each Syndicated Loan pursuant to the Commitments (other than one
resulting from a conversion or continuation pursuant to Section 3.01(b)(i)),
each Lender will make available its Pro Rata Share of such Syndicated Loan in
immediately available funds at the Payment Office of the Agent. The Agent will
make available to Intermet the aggregate of the amounts (if any) so made
available by the Lenders to the Agent in a timely manner by crediting such
amounts to Intermet's demand deposit account maintained with the Agent or at
Intermet's option, effecting a wire transfer of such amounts to an account
specified by Intermet, by the close of business on such Business Day. In the
event that the Lenders do not make such amounts available to the Agent by the
time prescribed above, but such amount is received later that day, such amount
may be credited to Intermet in the manner described in the preceding sentence on
the next Business Day (with interest on such amount to begin accruing hereunder
on such next Business Day).
(b) No later than 3:00 P.M. (local time for the Agent) on
the date of each Bid Rate Loan, the Lenders participating in such Bid Rate Loan
will make available the amount of its Bid Rate Advance in immediately available
funds at the Payment Office of the Agent on the date of such Bid Rate Loan.
(c) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent such Lender's portion of the Borrowing to be made on such
date, the Agent may assume that such Lender has made such amount available to
the Agent on such date and the Agent may make available to Intermet a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Lender on the date of Borrowing, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify Intermet, and Intermet shall immediately pay such
corresponding amount to the Agent together with interest at the rate specified
for the Borrowing. Nothing in this subsection shall be deemed to relieve any
Lender from its obligation to fund its Commitment or Bid Rate Loans hereunder or
to prejudice any rights which Intermet may have against any Lender as a result
of any default by such Lender hereunder.
(d) All Syndicated Loans under the Commitments shall be
loaned by the Lenders on the basis of their Pro Rata Share of the Commitments.
All Bid Rate Loans shall be loaned by the Lenders participating therein in
accordance with their respective pro rata shares thereof as determined in
accordance with Section 2.08 with respect to each Bid Loan. No Lender shall be
responsible for any default by any other Lender in its obligations hereunder,
and each Lender shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Commitments
or Bid Rate Loans hereunder.
SECTION 3.03. INTEREST.
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(a) Intermet agrees to pay interest in respect of all unpaid
principal amounts of Syndicated Loans from the respective dates such principal
amounts were advanced to maturity (whether by acceleration, notice of prepayment
or otherwise) at rates per annum equal to the applicable rates indicated below:
(i) For Base Rate Advances--The Base Rate in
effect from time to time;
(ii) For Eurodollar Advances--The relevant
Adjusted LIBO Rate plus the Applicable Margin; or
(iii) For Overnight Rate Advances -- The relevant
Overnight Rate plus one and one-half of one percent (1.5%) per annum;
(b) Intermet agrees to pay interest in respect of all unpaid
principal amounts of the Bid Rate Loans made to Intermet from the respective
dates such principal amounts were advanced to maturity (whether by acceleration,
notice of prepayment or otherwise) at the Bid Rate established for such Loan
pursuant to Section 2.08;
(c) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Loans, and all other overdue
amounts owing hereunder, shall bear interest from each date that such amounts
are overdue:
(i) in the case of overdue principal and interest
with respect to all Loans outstanding as Eurodollar Advances and Bid
Rate Advances, at the rate otherwise applicable for the then-current
Interest Period plus an additional two percent (2.0%) per annum;
thereafter at the rate in effect for Base Rate Advances plus an
additional two percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest
with respect to all other Loans outstanding as Base Rate Advances and
Overnight Rate Advances, and all other Obligations hereunder (other
than Loans), at a rate equal to the applicable Base Rate plus an
additional two percent (2.0%) per annum;
(d) Interest on each Loan shall accrue from and including
the date of such Loan to but excluding the date of any repayment thereof;
provided that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. Interest on all Base Rate Advances and Overnight
Rate Advances shall be payable quarterly in arrears on the last calendar day of
each calendar quarter of Intermet in each year. Interest on all outstanding
Eurodollar Advances and Bid Rate Advances shall be payable on the last day of
each Interest Period applicable thereto, and, in the case of Interest Periods in
excess of three months (in the
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case of Eurodollar Advances and Bid Rate Advances), on each day which occurs
every 3 months, as the case may be, after the initial date of such Interest
Period. Interest on all Loans shall be payable on any conversion of any Advances
comprising such Loans into Advances of another Type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of prepayment or
otherwise) and, after maturity, on demand; and
(e) The Agent, upon determining the Adjusted LIBO Rate for
any Interest Period, shall promptly notify by telephone (confirmed in writing)
or in writing Intermet and the other Lenders. Any such determination shall,
absent manifest error, be final, conclusive and binding for all purposes.
SECTION 3.04. INTEREST PERIODS.
(a) In connection with the making or continuation of, or
conversion into, each Borrowing of Eurodollar Advances, Intermet shall select an
Interest Period to be applicable to such Eurodollar Advances, which Interest
Period shall be either a 1, 2, 3 or 6 month period.
(b) In connection with the making of each Bid Rate Loan,
Intermet shall request an Interest Period to be applicable thereto, which
Interest Period shall be for a minimum of seven (7) days and a maximum of ninety
(90) days, which request may be accepted or rejected by the Lenders as provided
in Section 2.08 hereof.
(c) Notwithstanding paragraphs (a) or (b) above:
(i) The initial Interest Period for any Borrowing
of Eurodollar Advances shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing consisting of
Advances of another Type) and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the
next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any Interest
Period in respect of Eurodollar Advances would otherwise expire on a
day that is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar
Advances which begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period shall, subject to part (iv) below, expire on the last Business
Day of such calendar month; and
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(iv) No Interest Period with respect to the Loans
shall extend beyond the Maturity Date.
SECTION 3.05. FEES.
(a) Intermet shall pay to the Agent, for the account of and
distribution of the respective Pro Rata Share to each Lender (subject to the
last sentence hereof), a commitment fee (the "Commitment Fee") for the period
commencing on the Closing Date to and including the Maturity Date, computed at a
rate equal to the Applicable Commitment Percentage per annum multiplied by the
average daily unused portion of the Commitments of the Lenders, such fee being
payable quarterly in arrears on the date which is five days following the last
day of each fiscal quarter of Intermet and on the Maturity Date. For purposes of
calculating the Commitment Fee, Bid Rate Loans shall be considered a usage of
the Commitments only with respect to the Lenders participating therein and only
to the extent of such Lenders' actual participation therein. Outstanding Letter
of Credit Obligations shall be considered usage of the Commitments.
(b) Intermet agrees to pay to the Agent, for the account of
the Lenders, a letter of credit fee equal to the Applicable Margin applicable to
Eurodollar Advances multiplied by the daily average amount of Letter of Credit
Obligations (the "Letter of Credit Fee"). The Letter of Credit Fee shall be
payable by Intermet quarterly, in arrears, on the date which is five days
following the last day of each fiscal quarter of Intermet, and on the Maturity
Date.
(c) Intermet shall pay to the Agent such fees for its
administrative services in the respective amounts and on the dates as previously
agreed in writing by Intermet with the Agent.
SECTION 3.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) Intermet may, at its option, prepay Borrowings
consisting of Base Rate Advances, Bid Rate Advances and Overnight Rate Advances
at any time in whole, or from time to time in part, in amounts aggregating
$100,000 or any greater integral multiple of $100,000, by paying the principal
amount to be prepaid together with interest accrued and unpaid thereon to the
date of prepayment, together with, in the case of Bid Rate Advances, all
compensation payments pursuant to Section 3.12 if such prepayment is made on a
date other than the last day of the Interest Period applicable thereto. Those
Borrowings consisting of Eurodollar Advances may be prepaid, at Intermet's
option, in whole, or from time to time in part, in amounts aggregating
$1,000,000 or any greater integral multiple of $100,000, by paying the principal
amount to be prepaid, together with interest accrued and unpaid thereon to the
date of prepayment, and all compensation payments pursuant to Section 3.12 if
such prepayment is made on a date other than the last day of an Interest Period
applicable thereto. Each such optional prepayment shall be applied in accordance
with Section 3.06(c) below.
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(b) Intermet shall give written notice (or telephonic notice
confirmed in writing) to the Agent of any intended prepayment of the Loans (i)
prior to 12:00 Noon (local time for the Agent), on the date of any prepayment of
Base Rate Advances, Overnight Rate Advances and Bid Rate Advances and (ii) not
less than three Business Days prior to any prepayment of Eurodollar Advances.
Such notice, once given, shall be irrevocable. Upon receipt of such notice of
prepayment, the Agent shall promptly notify each Lender of the contents of such
notice and of such Lender's share of such prepayment (provided that notices of
prepayments of Bid Rate Loans shall only be given to the Lenders participating
therein).
(c) Intermet, when providing notice of prepayment pursuant
to Section 3.06(b), may designate the Types of Advances and the specific
Borrowing or Borrowings which are to be prepaid provided that each prepayment
made pursuant to a single Borrowing shall be applied pro rata among the Advances
comprising such Borrowing. In the absence of a designation by Intermet, the
Agent shall, subject to the foregoing, make such designation in its sole
discretion. All voluntary prepayments shall be applied to the payment of
interest on the Borrowings prepaid before application to principal.
SECTION 3.07. PAYMENTS, ETC.
(a) Except as otherwise specifically provided herein, all
payments under this Agreement and the other Credit Documents, other than the
payments specified in clause (ii) below, shall be made without defense, set-off
or counterclaim to the Agent not later than 1:00 PM (local time for the Agent)
on the date when due and shall be made in Dollars in immediately available funds
at its Payment Office.
(b) (i) All such payments shall be made free and clear of
and without deduction or withholding for any Taxes in respect of this Agreement,
the Notes or other Credit Documents, or any payments of principal, interest,
fees or other amounts payable hereunder or thereunder (but excluding, except as
provided in paragraph (iii) hereof, any Taxes imposed on the overall net income
of the Lenders pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any Taxes are so levied or imposed, Intermet agrees (A) to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other Credit
Documents, after withholding or deduction for or on account of any such Taxes
(including additional sums payable under this Section 3.07), will not be less
than the full amount provided for herein had no such deduction or withholding
been required, (B) to make such withholding or deduction and (C) to pay the full
amount deducted to the relevant authority in accordance with applicable law.
Intermet will furnish to the Agent and each Lender, within 30 days after the
date the payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by Intermet. Intermet will
indemnify and hold harmless the Agent and each Lender and reimburse the Agent
and each Lender upon written request for the amount of any Taxes so levied or
imposed and paid by the Agent or Lender and any liability (including penalties,
interest and expenses) arising therefrom
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or with respect thereto, whether or not such Taxes were correctly or illegally
asserted. A certificate as to the amount of such payment by such Lender or the
Agent, absent manifest error, shall be final, conclusive and binding for all
purposes.
(ii) Each Lender that is organized under the laws
of any jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to Intermet and the
Agent, prior to the time it becomes a Lender hereunder, two copies of either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Lender claims entitlement to
complete exemption from or reduced rate of U.S. Federal withholding tax on
interest paid by Intermet hereunder) and to provide to Intermet and the Agent a
new Form 4224 or Form 1001 or any successor forms thereto if any previously
delivered form is found to be incomplete or incorrect in any material respect or
upon the obsolescence of any previously delivered form; provided, however, that
no Lender shall be required to furnish a form under this paragraph (ii) if it is
not entitled to claim an exemption from or a reduced rate of withholding under
applicable law. A Lender that is not entitled to claim an exemption from or a
reduced rate of withholding under applicable law, promptly upon written request
of Intermet, shall so inform Intermet in writing.
(iii) Intermet shall also reimburse the Agent and
each Lender, upon written request, for any Taxes imposed (including, without
limitation, Taxes imposed on the overall net income of the Agent or Lender or
its applicable Lending Office pursuant to the laws of the jurisdiction in which
the principal executive office or the applicable Lending Office of the Agent or
Lender is located) as the Agent or Lender shall determine are payable by the
Agent or Lender in respect of amounts paid by or on behalf of Intermet to or on
behalf of the Agent or Lender pursuant to paragraph (i) hereof.
(c) Subject to Section 3.04(ii), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable (to the extent computed on the basis of days
elapsed), except that interest on Base Rate Advances shall be computed on the
basis of a year of 365/366 days for the actual number of days. Interest on Base
Rate Advances shall be calculated based on the Base Rate from and including the
date of such Loan to but excluding the date of the repayment or conversion
thereof. Interest on Eurodollar Advances and Bid Rate Advances shall be
calculated as to each Interest Period from and including the first day thereof
to but excluding the last day thereof. Each determination by the Agent of an
interest rate
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or fee hereunder shall be made in good faith and, except for manifest error,
shall be final, con clusive and binding for all purposes.
(e) Payment by Intermet to the Agent in accordance with the
terms of this Agreement shall, as to Intermet, constitute payment to the Lenders
under this Agreement.
SECTION 3.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the
event that the Agent shall have determined (which determination shall be made in
good faith and, absent mani fest error, shall be final, conclusive and binding
upon all parties) that on any date for determining the Adjusted LIBO Rate for
any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market, or the Agent's position in such
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted LIBO Rate
then, and in any such event, the Agent shall forthwith give notice (by telephone
confirmed in writing) to Intermet and to the Lenders, of such determination and
a summary of the basis for such determination. Until the Agent notifies Intermet
that the circumstances giving rise to the suspension described herein no longer
exist, the obligations of the Lenders to make or permit portions of the Loans to
remain outstanding past the last day of the then current Interest Periods as
Eurodollar Advances shall be suspended, and such affected Advances shall bear
interest at the Base Rate (or at such other rate of interest per annum as
Intermet and each of the Agent and the Lenders shall have agreed to in writing).
SECTION 3.09. ILLEGALITY.
(a) In the event that any Lender shall have determined
(which determination shall be made in good faith and, absent manifest error,
shall be final, conclusive and binding upon all parties) at any time that the
making or continuance of any Eurodollar Advance has become unlawful by
compliance by such Lender in good faith with any applicable law, governmental
rule, regulation, guideline or order (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful), then, in any such
event, the Lender shall give prompt notice (by telephone confirmed in writing)
to Intermet and to the Agent of such determination and a summary of the basis
for such determination (which notice the Agent shall promptly transmit to the
other Lenders).
(b) Upon the giving of the notice to Intermet referred to in
subsection (a) above, (i) Intermet's right to request and such Lender's
obligation to make Eurodollar Advances shall be immediately suspended, and such
Lender shall make an Advance as part of the requested Borrowing of Eurodollar
Advances, bearing interest at the Base Rate (or at such other rate of interest
per annum as Intermet and each of the Agent and the Lenders shall have agreed to
in writing), which Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing, and (ii) if the affected Eurodollar Advance
or Advances are then outstanding, Intermet shall immediately, or if permitted by
applicable law, no later than the date permitted thereby, upon at least one
Business Day's written notice to the Agent and the affected Lender, convert each
such Advance into an Advance or Advances of a different Type with an Interest
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Period ending on the date on which the Interest Period applicable to the
affected Eurodollar Advances expires, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 3.09(b).
(c) Notwithstanding any other provision contained in this
Agreement, the Agent shall not be obligated to issue any Letter of Credit, nor
shall any Lender be obligated to purchase its participation in any Letter of
Credit to be issued hereunder, if the issuance of such Letter of Credit or
purchase of such participation shall have become unlawful or prohibited by
compliance by Agent or such Lender in good faith with any law, governmental
rule, guideline, request, order, injunction, judgment or decree (whether or not
having the force of law); provided that in the case of the obligation of a
Lender to purchase such participation, such Lender shall have notified the Agent
to such effect at least three (3) Business Days' prior to the issuance thereof
by the Agent, which notice shall relieve the Agent of its obligation to issue
such Letter of Credit pursuant to Section 2.04 and Section 2.05 hereof.
SECTION 3.10. INCREASED COSTS.
(a) (i) If, by reason of (x) after the date hereof, the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law):
(1) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect to its
Eurodollar Advances, Letter of Credit Obligations or its obligation to
make Eurodollar Advances or to issue Letters of Credit, or the basis of
taxation of payments to any Lender of the principal of or interest on
its Eurodollar Advances or its obligation to make Eurodollar Advances
or to issue Letters of Credit shall have changed (except for changes in
the tax on the overall net income of such Lender or its applicable
Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or applicable Lending Office is located); or
(2) any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender's applicable
Lending Office shall be imposed or deemed applicable or any other
condition affecting its Eurodollar Advances, Letter of Credit
Obligations or its obligation to make Eurodollar Advances shall be
imposed on any Lender or its applicable Lending Office or the London
interbank market;
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and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances or
Letters of Credit (except to the extent already included in the determination of
the applicable Adjusted LIBO Rate), or there shall be a reduction in the amount
received or receivable by such Lender or its applicable Lending Office, then
Intermet shall from time to time (subject, in the case of certain Taxes, to the
applicable provisions of Section 3.07(b)), or
(ii) in the event that any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy not currently in effect or fully applicable as
of the Closing Date, or any change therein or in the interpretation or
application thereof after the Closing Date, or compliance by such Lender with
any request or directive regarding capital adequacy not currently in effect or
fully applicable as of the Closing Date (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) from a central
bank or governmental authority or body having jurisdiction, does or shall have
the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such law, treaty, rule, regulation, guideline or
order, or such change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material;
then, in the case of (i) or (ii) above, upon written notice from and demand by
such Lender on Intermet (with a copy of such notice and demand to the Agent),
Intermet shall pay to the Agent for the account of such Lender within five
Business Days after the date of such notice and demand, additional amounts
sufficient to indemnify such Lender against such increased cost or reduced
yield. A certificate as to the amount of such increased cost or reduced yield
submitted to Intermet and the Agent by such Lender in good faith and accompanied
by a statement prepared by such Lender describing in reasonable detail the basis
for and calculation of such increased cost, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent that at any time,
because of the circumstances described in clauses (x) or (y) in Section 3.10(a)
or any other circumstances beyond such Lender's reasonable control arising after
the date of this Agreement affecting such Lender or the London interbank market
or such Lender's position in such markets, the Adjusted LIBO Rate as determined
by the Agent, will not adequately and fairly reflect the cost to such Lender of
funding its Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by
telephone confirmed in writing) to Intermet and to the other Lenders of
such advice;
(ii) Intermet's right to request and such Lender's
obligation to make or permit portions of the Loans to remain
outstanding past the last day of the then current Interest Periods as
Eurodollar Advances shall be immediately suspended; and
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(iii) such Lender shall make an Advance as part of
the requested Borrowing of Eurodollar Advances, as the case may be,
bearing interest at the Base Rate (or at such other rate of interest
per annum as Intermet and each of the Agent and the Lenders shall have
agreed to in writing), which Base Rate Advance shall, for all other
purposes, be considered part of such Borrowing.
SECTION 3.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by Intermet, it
will use reasonable efforts (subject to overall policy considerations of such
Lender) to designate an alternate Lending Office with respect to any of its
Eurodollar Advances affected by the matters or circumstances described in
Sections 3.07(b), 3.08, 3.09 or 3.10 to reduce the liability of Intermet or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender, which determination
if made in good faith, shall be conclusive and binding on all parties hereto.
Nothing in this Section 3.11 shall affect or postpone any of the obligations of
Intermet or any right of any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) issues a public announcement with respect
to the closing of its lending offices in the United States such that any
withholdings or deductions and additional payments with respect to Taxes may be
required to be made by Intermet thereafter pursuant to Section 3.07(b), such
Lender shall use reasonable efforts to furnish Intermet notice thereof as soon
as practicable thereafter; provided, however, that no delay or failure to
furnish such notice shall in any event release or discharge Intermet from its
obligations to such Lender pursuant to Section 3.07(b) or otherwise result in
any liability of such Lender.
SECTION 3.12. FUNDING LOSSES. Intermet shall compensate each
Lender, upon its written request to Intermet (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Advances or Bid
Rate Advances, in either case to the extent not recovered by such Lender in
connection with the re-employment of such funds and including loss of
anticipated profits), which the Lender may sustain: (i) if for any reason (other
than a default by such Lender) a borrowing of, or conversion to or continuation
of, Eurodollar Advances or Bid Rate Advances to Intermet does not occur on the
date specified therefor in a Notice of Borrowing, Bid Request or Notice of
Conversion/Continuation, (whether or not withdrawn), (ii) if any repayment
(including mandatory prepayments and any conversions pursuant to Section
3.09(b)) of any Eurodollar Advances or Bid Rate Advances by Intermet occurs on a
date which is not the last day of an Interest Period applicable thereto, or
(iii) if, for
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any reason, Intermet defaults in its obligation to repay its Eurodollar Advances
when required by the terms of this Agreement.
SECTION 3.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR
ADVANCES. Calculation of all amounts payable to a Lender under this Article III
shall be made as though that Lender had actually funded its relevant Eurodollar
Advances through the purchase of deposits in the relevant market bearing
interest at the rate applicable to such Eurodollar Advances in an amount equal
to the amount of the Eurodollar Advances and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar Advances
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided however, that each Lender may fund each
of its Eurodollar Advances in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
Article III.
SECTION 3.14. APPORTIONMENT OF PAYMENTS. Aggregate principal
and interest payments in respect of Loans and payments in respect of Letter of
Credit Fees and Commitment Fees shall be apportioned among all outstanding
Commitments, Letter of Credit Obligations and Loans to which such payments
relate, proportionately to the Lenders' respective pro rata portions of such
Commitments and outstanding Loans and Letter of Credit Obligations. The Agent
shall promptly distribute to each Lender at its Payment Office set forth beside
its name on the appropriate signature page hereof or such other address as any
Lender may request its share of all such payments received by the Agent.
SECTION 3.15. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment or reduction (including, without limitation, any amounts
received as adequate protection of a deposit treated as cash collateral under
the Bankruptcy Code) of the Obligations (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its pro rata
portion of payments or reductions on account of such obligations obtained by all
the Lenders (other than, prior to the termination of the Commitments, payments
of principal, interest and fees with respect to the Bid Rate Loans which are
payable solely to the Lenders participating therein), such Lender shall
forthwith (i) notify each of the other Lenders and Agent of such receipt, and
(ii) purchase from the other Lenders such participations in the affected
obligations as shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided that if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing Lender or
additional costs are incurred, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery or such additional costs, but
without interest unless the Lender obligated to return such funds is required to
pay interest on such funds. Intermet agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 3.15 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Intermet in the amount of such participation.
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SECTION 3.16. BENEFITS TO GUARANTORS. In consideration of
the execution and delivery by the Guarantors of the Guaranty Agreement, Intermet
agrees, subject to the terms hereof, to make extensions of credit hereunder
available to the Guarantors.
SECTION 3.17. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS.
(a) Each Lender or Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Section 3.07 no later
than 90 days after the earlier of (i) the date on which such Lender or Agent
makes payment of such Taxes, and (ii) the date on which the relevant taxing
authority or other governmental authority makes written demand upon such Lender
or Agent for payment of such Taxes.
(b) Each Lender or Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Sections 3.12 and 3.13
no later than 90 days after the event giving rise to the claim for
indemnification or compensation occurs.
(c) Each Lender or Agent shall make written demand on
Intermet for indemnification or compensation pursuant to Sections 3.09 no later
than 90 days after such Lender or Agent receives actual notice or obtains actual
knowledge of the promulgation of a law, rule, order or interpretation or
occurrence of another event giving rise to a claim pursuant to such sections.
(d) In the event that the Lenders or Agent fail to give
Intermet notice within the time limitations prescribed in (a) or (b) above,
Intermet shall not have any obligation to pay such claim for compensation or
indemnification. In the event that any Lender or Agent fails to give Intermet
notice within the time limitation prescribed in (c) above, Intermet shall not
have any obligation to pay any amount with respect to claims accruing prior to
the ninetieth day preceding such written demand.
SECTION 3.18. LETTER OF CREDIT OBLIGATIONS ABSOLUTE. The
obligation of Intermet to reimburse the Agent for drawings made under Letters of
Credit issued for the account of Intermet and the Lenders' obligation to honor
their participations purchased therein shall be unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including without limitation, the following circumstances:
(a) Any lack of validity or enforceability of any Letter of
Credit;
(b) The existence of any claim, set-off, defense or other
right which Intermet or any Subsidiary or Affiliate of Intermet may have at any
time against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such beneficiary or transferee may be acting),
any Lender or any other Person, whether in connection with this
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Agreement, the transactions contemplated herein or any unrelated transaction
(including without limitation any underlying transaction between Intermet or any
of its Subsidiaries and Affiliates and the beneficiary for which such Letter of
Credit was procured); provided that nothing in this Section shall affect the
right of Intermet to seek relief against any beneficiary, transferee, Lender or
any other Person in any action or proceeding or to bring a counterclaim in any
suit involving such Persons;
(c) Any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect;
(d) Payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit;
(e) Any other circumstance or happening whatsoever which is
similar to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall
have occurred and be continuing.
Nothing in this Section 3.18 shall prevent an action against the Agent for its
gross negligence or willful misconduct in honoring drafts under the Letters of
Credit.
SECTION 3.19. FAILURE TO MAINTAIN MINIMUM REQUIRED RATING.
If any Lender has either (a) had its long-term deposit rating reduced below the
Minimum Required Rating by either Rating Agency, or (b) in the case of a Lender
that is a party to this Agreement on the Closing Date and has, on such date, a
long-term deposit rating from the Rating Agencies below the applicable Minimum
Required Rating, such Lender has received from either Rating Agency a reduction
in its long-term deposit rating from the rating in effect on the Closing Date,
such Lender, will, upon the request of the Agent, assign its Commitment and all
of its right, title and interest in and to any Letters of Credit or Loans
outstanding thereunder, to an Eligible Assignee designated by the Agent and
acceptable to Intermet in accordance with the terms of this Agreement.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Intermet
and the obligation of the Agent to issue Letters of Credit for the account of
Intermet hereunder is subject to the satisfaction of the following conditions:
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SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL LOANS AND
LETTERS OF CREDIT. On the Closing Date, all obligations of Intermet hereunder
incurred prior to such date (including, without limitation, Intermet's
obligations to reimburse the reasonable fees and expenses of counsel to the
Agent and any fees and expenses payable to the Agent, the Co-Agents, the Lenders
and their Affiliates as previously agreed with Intermet), shall have been paid
in full, and the Agent shall have received the following, in form and substance
reasonably satisfactory in all respects to the Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly executed Revolving Credit Notes evidencing the
Commitments and the duly executed Bid Facility Notes;
(c) the duly executed Guaranty Agreement;
(d) certificate of Intermet in substantially the form of
Exhibit I attached hereto and appropriately completed;
(e) certificates of the Secretary or Assistant Secretary of
each of the Credit Parties (or, in the case of any Foreign Subsidiary, a
comparable company officer) attaching and certifying copies of the resolutions
of the boards of directors (or, in the case of any Foreign Subsidiary, the
comparable governing body of such entity) of the Credit Parties, authorizing as
applicable (i) the execution, delivery and performance of the Credit Documents,
and (ii) the granting of the pledges and security interests granted pursuant to
the Pledge Agreements;
(f) certificates of the Secretary or an Assistant Secretary
of each of the Credit Parties (or, in the case of any Foreign Subsidiary, a
comparable company officer) certifying (i) the name, title and true signature of
each officer of such entities executing the Credit Documents, and (ii) the
bylaws or comparable governing documents of such entities;
(g) certified copies of the certificate or articles of
incorporation of each Credit Party (or comparable organizational document of
each Foreign Subsidiary) certified by the Secretary of State or the Secretary or
Assistant Secretary of such Credit Party, together with certificates of good
standing or existence, as may be available from the Secretary of State (or
comparable office or registry for each Foreign Subsidiary) of the jurisdiction
of incorporation or organization of such Credit Party;
(h) copies of all documents and instruments, including all
consents, authorizations and filings, required or advisable under any
Requirement of Law or by any material Contractual Obligation of the Credit
Parties, in connection with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other documents to be
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executed and delivered hereunder, and such consents, authorizations, filings and
orders shall be in full force and effect and all applicable waiting periods
shall have expired;
(i) an internally prepared draft of Intermet's consolidated
financial statements for the fiscal period ending June 30, 1996, certified by
the chief financial officer of Intermet;
(j) notice to, and acknowledgment by, the exiting lenders
pursuant to the Prior Credit Agreement to accept payment in full of all
obligations outstanding under the Prior Credit Agreement;
(k) certificates, reports and other information as the Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from matters relating to employees of the Consolidated Companies, including
employee relations, collective bargaining agreements, Plans, Foreign Plans, and
other compensation and employee benefit plans;
(l) certificates, reports, environmental audits and
investigations, and other information as the Agent may reasonably request from
any Consolidated Company in order to satisfy the Lenders as to the absence of
any material liabilities or obligations arising from environmental and employee
health and safety exposures to which the Consolidated Companies may be subject,
and the plans of the Consolidated Companies with respect thereto;
(m) certificates, reports and other information as the Agent
may reasonably request from any Consolidated Company in order to satisfy the
Lenders as to the absence of any material liabilities or obligations arising
from litigation (including without limitation, products liability and patent
infringement claims) pending or threatened against the Consolidated Companies;
(n) a summary, set forth in format and detail reasonably
acceptable to the Agent, of the types and amounts of insurance (property and
liability) maintained by the Consolidated Companies;
(o) the favorable opinion of Dickinson, Wright, Moon, Van
Dusen & Freeman, counsel to the Credit Parties, substantially in the form of
Exhibit J-1 addressed to the Agent, the Co-Agents and each of the Lenders and
the favorable opinion of Kilpatrick & Cody, special Georgia counsel to the
Credit Parties, substantially in the form of Exhibit J-2 addressed to the Agent,
the Co-Agents and each of the Lenders;
(p) consent from Prudential to the execution and delivery of
this Agreement in form and substance satisfactory to the Agent and the Required
Lenders; and
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(q) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and enforceability of the
Credit Documents shall be reason ably satisfactory in form and substance to the
Required Lenders.
SECTION 4.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.
At the time of the making of all Loans and the issuance of any Letter of Credit
(before as well as after giving effect to such Loans or Letters of Credit and to
the proposed use of the proceeds thereof), the following conditions shall have
been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Intermet contained
herein shall be true and correct in all material respects with the same effect
as though such representations and warranties had been made on and as of the
date of such Loans;
(c) since the date of the most recent financial statements
of the Consolidated Companies described in Section 5.14, there shall have been
no change which has had or could reasonably be expected to have a Materially
Adverse Effect (whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 6.07);
(d) there shall be no action or proceeding instituted or
pending before any court or other governmental authority or, to the knowledge of
Intermet, threatened (i) which reasonably could be expected to have a Materially
Adverse Effect, or (ii) seeking to prohibit or restrict one or more Credit
Party's ownership or operation of any portion of its business or assets, or to
compel one or more Credit Party to dispose of or hold separate all or any
portion of its businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material portion of the
total businesses or assets of the Consolidated Companies; and
(e) the Loans to be made and the use of proceeds thereof or
the Letters of Credit to be issued, as the case may be, shall not contravene,
violate or conflict with, or involve the Agent or any Lender in a violation of,
any law, rule, injunction, or regulation, or determination of any court of law
or other governmental authority applicable to Intermet.
Each request for a Borrowing and the acceptance by Intermet
of the proceeds thereof and each request for the issuance of a Letter of Credit
shall constitute a representation and warranty by Intermet, as of the date of
the Loans comprising such Borrowing or the date of the issuance of such Letter
of Credit, that the applicable conditions specified in Sections 4.01 and 4.02
have been satisfied or waived in writing.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Intermet (as to itself and all other Consolidated Companies)
represents and warrants as follows:
SECTION 5.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Except as set forth on Schedule 5.01(a), each of the Consolidated Companies
(other than the German Subsidiaries set forth in the next sentence) is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Each of Columbus Neunkirchen,
Intermet Machining GmbH and Intermet Holding Deutschland GmbH is a German
company with limited liability duly organized, validly existing and in good
standing under the laws of Germany. Each of the Consolidated Companies (i) has
the corporate power and authority and the legal right to own and operate its
property and to conduct its business, (ii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership of property or the conduct of its business requires such
qualification, and (iii) is in compliance with all Requirements of Law, except
where the failure to duly qualify or to comply with applicable Requirements of
Law would not have a Materially Adverse Effect. The jurisdiction of
incorporation or organization, and the ownership of all issued and outstanding
capital stock, for each Subsidiary as of the date of this Agreement is
accurately described on Schedule 5.01.
SECTION 5.02. CORPORATE POWER; AUTHORIZATION. Each of the
Credit Parties has the corporate power and authority to make, deliver and
perform the Credit Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of such
Credit Documents. No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is required in
connection with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit
Documents, other than such consents, authorizations or filings which have been
made or obtained (other than routine filings with the Securities and Exchange
Commission).
SECTION 5.03. ENFORCEABLE OBLIGATIONS. This Agreement has
been duly executed and delivered, and each other Credit Document will be duly
executed and delivered, by the respective Credit Parties, and this Agreement
constitutes, and each other Credit Document when executed and delivered will
constitute, legal, valid and binding obligations of the Credit Parties,
respectively, enforceable against the Credit Parties in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
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SECTION 5.04. NO LEGAL BAR. The execution, delivery and
performance by the Credit Parties of the Credit Documents will not violate any
Requirement of Law or cause a breach or default under any of their respective
Contractual Obligations.
SECTION 5.05. NO MATERIAL LITIGATION OR INVESTIGATIONS.
Except as set forth on Schedule 5.05 or in any notice furnished to the Lenders
pursuant to Section 6.07(g) at or prior to the respective times the
representations and warranties set forth in this Section 5.05 are made or deemed
to be made hereunder, no litigation, investigations or proceedings of or before
any courts, tribunals, arbitrators or governmental authorities are pending or,
to the knowledge of Intermet, threatened by or against any of the Consolidated
Companies, or against any of their respective properties or revenues, existing
or future (a) with respect to any Credit Document, or any of the transactions
contemplated hereby or thereby, or (b) which, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
SECTION 5.06. INVESTMENT COMPANY ACT, ETC. None of the
Consolidated Companies is an "investment company" or a company "controlled" by
an "investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended). None of the Consolidated Companies
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, or any foreign, federal or local statute or regulation
limiting its ability to incur indebtedness for money borrowed, guarantee such
indebtedness, or pledge its assets to secure such indebtedness, as contemplated
hereby or by any other Credit Document.
SECTION 5.07. MARGIN REGULATIONS. No part of the proceeds of
any of the Loans will be used for any purpose which violates, or which would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 5.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) Except as set forth on Schedule 5.08 attached hereto,
the Consolidated Companies have received no notices of claims or potential
liability under, and are in compliance with, all applicable Environmental Laws,
where such claims and liabilities under, and failures to comply with, such
statutes, regulations, rules, ordinances, laws or licenses, would reasonably be
expected to result in penalties, fines, claims or other liabilities to the
Consolidated Companies in amounts in excess of five percent (5%) of Consolidated
Net Worth, either individually or in the aggregate.
(b) Except as set forth on Schedule 5.08 attached hereto,
none of the Consolidated Companies has received any notice of violation, or
notice of any action, either judicial or administrative, from any governmental
authority (whether United States or foreign) relating to the actual or alleged
violation of any Environmental Law, including, without
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limitation, any notice of any actual or alleged spill, leak, or other release of
any Hazardous Substance, waste or hazardous waste by any Consolidated Company or
its employees or agents, or as to the existence of any contamination on any
properties owned by any Consolidated Company, where any such violation, spill,
leak, release or contamination would reasonably be expected to result in
penalties, fines, claims or other liabilities to the Consolidated Companies in
amounts in excess of five percent (5%) of Consolidated Net Worth, either
individually or in the aggregate.
(c) Except as set forth on Schedule 5.08 attached hereto,
the Consolidated Companies have obtained all necessary governmental permits,
licenses and approvals which are material to the operations conducted on their
respective properties, including without limitation, all required material
permits, licenses and approvals for (i) the emission of air pollutants or
contaminants, (ii) the treatment or pretreatment and discharge of waste water or
storm water, (iii) the treatment, storage, disposal or generation of hazardous
wastes, (iv) the withdrawal and usage of ground water or surface water, and (v)
the disposal of solid wastes.
SECTION 5.09. INSURANCE. The Consolidated Companies
currently maintain insurance with respect to their respective properties and
businesses, with financially sound and reputable insurers, having coverages
against losses or damages of the kinds customarily insured against by reputable
companies in the same or similar businesses, such insurance being in amounts no
less than those amounts which are customary for such companies under similar
circumstances. The Consolidated Companies have paid all material amounts of
insurance premiums now due and owing with respect to such insurance policies and
coverages, and such policies and coverages are in full force and effect.
SECTION 5.10. NO DEFAULT. None of the Consolidated Companies
is in default under or with respect to any Contractual Obligation in any respect
which is having or is reasonably expected to have a Materially Adverse Effect.
SECTION 5.11. NO BURDENSOME RESTRICTIONS. Except as set
forth on Schedule 5.11 or in any notice furnished to the Lenders pursuant to
Section 6.07 at or prior to the respective times the representations and
warranties set forth in this Section 5.11 are made or deemed to be made
hereunder, none of the Consolidated Companies is a party to or bound by any
Contractual Obligation or Requirement of Law which has had or would reasonably
be expected to have a Materially Adverse Effect.
SECTION 5.12. TAXES. Except as set forth on Schedule 5.12,
each of the Consolidated Companies has filed or caused to be filed all
declarations, reports and tax returns which are required to have been filed, and
has paid all taxes, custom duties, levies, charges and similar contributions
("taxes" in this Section 5.12) shown to be due and payable on said returns or on
any assessments made against it or its properties, and all other taxes, fees or
other charges imposed on it or any of its properties by any governmental
authority (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and
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with respect to which reserves in conformity with GAAP have been provided in its
books); and no tax liens have been filed and, to the knowledge of Intermet, no
claims are being asserted with respect to any such taxes, fees or other charges.
SECTION 5.13. SUBSIDIARIES. Except as disclosed on Schedule
5.01 or in any notice given to the Lenders pursuant to Section 6.07 at or prior
to the respective times this representation and warranty is made or deemed to be
made hereunder, Intermet has no Subsidiaries and neither Intermet nor any
Subsidiary is a joint venture partner or general partner in any partnership.
SECTION 5.14. FINANCIAL STATEMENTS. Intermet has furnished
to the Agent and the Lenders (i) the audited consolidated balance sheet as of
December 31, 1995 of Intermet and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year then ended, including in
each case the related schedules and notes, (ii) the unaudited balance sheet of
Intermet presented on a consolidated basis as at the end of the second fiscal
quarter of 1996, and the related unaudited consolidated statements of income,
shareholders' equity and cash flows presented on a consolidated basis for the
year-to-date period then ended, setting forth in each case in comparative form
the figures for the corresponding quarter of Intermet's previous fiscal year.
The foregoing financial statements fairly present in all material respects the
consolidated financial condition of Intermet as at the dates thereof and results
of operations for such periods in conformity with GAAP consistently applied
(subject, in the case of the quarterly financial statements, to normal year-end
audit adjustments and the absence of certain footnotes). The Consolidated
Companies taken as a whole do not have any material contingent obligations,
contingent liabilities, or material liabilities for known taxes, long-term
leases or unusual forward or long-term commitments not reflected in the
foregoing financial statements or the notes thereto. Since December 31, 1995,
there have been no changes with respect to the Consolidated Companies which has
had or would reasonably be expected to have a Materially Adverse Effect.
SECTION 5.15. ERISA. Except as disclosed on Schedule 5.15 or
in any notice furnished to the Lenders pursuant to Section 6.07 at or prior to
the respective times the representations and warranties set forth in this
Section 5.15 are made or deemed to be made hereunder:
(a)(1) Identification of Plans. (A) None of the Consolidated
Companies nor any of their respective ERISA Affiliates maintains or contributes
to, or has during the past two years maintained or contributed to, any Plan that
is subject to Title IV of ERISA, and (B) none of the Consolidated Companies
maintains or contributes to any Foreign Plan;
(2) Compliance. Each Plan and each Foreign Plan maintained
by the Consolidated Companies have at all times been maintained, by their terms
and in operation, in compliance with all applicable laws, and the Consolidated
Companies are subject to no tax or penalty with respect to any Plan of such
Consolidated Company or any ERISA Affiliate thereof,
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including without limitation, any tax or penalty under Title I or Title IV of
ERISA or under Chapter 43 of the Tax Code, or any tax or penalty resulting from
a loss of deduction under Sections 404, or 419 of the Tax Code, where the
failure to comply with such laws, and such taxes and penalties, together with
all other liabilities referred to in this Section 5.15 (taken as a whole), would
in the aggregate have a Materially Adverse Effect;
(3) Liabilities. The Consolidated Companies are subject to
no liabilities (including withdrawal liabilities) with respect to any Plans or
Foreign Plans of such Consolidated Companies or any of their ERISA Affiliates,
including without limitation, any liabilities arising from Titles I or IV of
ERISA, other than obligations to fund benefits under an ongoing Plan and to pay
current contributions, expenses and premiums with respect to such Plans or
Foreign Plans, where such liabilities, together with all other liabilities
referred to in this Section 5.15 (taken as a whole), would in the aggregate have
a Materially Adverse Effect;
(4) Funding. The Consolidated Companies and, with respect to
any Plan which is subject to Title IV of ERISA, each of their respective ERISA
Affiliates, have made full and timely payment of all amounts (A) required to be
contributed under the terms of each Plan and applicable law, and (b) required to
be paid as expenses (including PBGC or other premiums) of each Plan, where the
failure to pay such amounts (when taken as a whole, including any penalties
attributable to such amounts) would have a Materially Adverse Effect. No Plan
subject to Title IV of ERISA has an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA, determined as if such Plan terminated
on any date on which this representation and warranty is deemed made, in any
amount which, together with all other liabilities referred to in this Section
5.15 (taken as a whole), would have a Materially Adverse Effect if such amount
were then due and payable. The Consolidated Companies are subject to no
liabilities with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this Section 5.15
(taken as a whole), would have a Materially Adverse Effect if such amounts were
then due and payable.
(b) With respect to any Foreign Plan, reasonable reserves
have been established in accordance with prudent business practice or where
required by ordinary accounting practices in the jurisdiction where the Foreign
Subsidiary maintains its principal place of business or in which the Foreign
Plan is maintained. The aggregate unfunded liabilities, after giving effect to
any reserves for such liabilities, with respect to such Foreign Plans, together
with all other liabilities referred to in this Section 5.15 (taken as a whole),
would not have a Materially Adverse Effect.
SECTION 5.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as
set forth on Schedule 5.16 or in any notice furnished to the Lenders pursuant to
Section 6.07 at or prior to the respective times the representations and
warranties set forth in this Section 5.16 are made or deemed to be made
hereunder, (i) the Consolidated Companies have obtained and hold in full force
and effect all material patents, trademarks, service marks, trade names,
copyrights, licenses and other such rights, free from burdensome restrictions,
which are necessary for the operation of
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their respective businesses as presently conducted, and (ii) to the best of
Intermet's knowledge, no product, process, method, service or other item
presently sold by or employed by any Consolidated Company in connection with
such business infringes any patents, trademark, service mark, trade name,
copyright, license or other right owned by any other person and there is not
presently pending, or to the knowledge of Intermet, threatened, any claim or
litigation against or affecting any Consolidated Company contesting such
Person's right to sell or use any such product, process, method, substance or
other item where the result of such failure to obtain and hold such benefits or
such infringement would have a Materially Adverse Effect.
SECTION 5.17. OWNERSHIP OF PROPERTY. Except as set forth on
Schedule 5.17, (i) each Consolidated Company that is not a Foreign Subsidiary
has good and marketable fee simple title to or a valid leasehold interest in all
of its real property and good title to, or a valid leasehold interest in, all of
its other property, and (ii) each Foreign Subsidiary owns or has a valid
leasehold interest in all of its real property and owns or has a valid leasehold
interest in, all of its other properties, in the case of clauses (i) and (ii) as
such properties are reflected in the con solidated balance sheet of the
Consolidated Companies as of December 31, 1995 referred to in Section 5.14,
other than properties disposed of in the ordinary course of business since such
date or as otherwise permitted by the terms of this Agreement, subject to no
Lien or title defect of any kind, except Liens permitted hereby and title
defects not constituting material impairments in the intended use for such
properties. The Consolidated Companies enjoy peaceful and undisturbed possession
under all of their respective leases.
SECTION 5.18. FINANCIAL CONDITION. On the Closing Date and
after giving effect to the transactions contemplated by this Agreement and the
other Credit Documents, including without limitation, the use of the proceeds of
the Loans as provided in Sections 2.01, each of the Credit Parties is Solvent.
SECTION 5.19. LABOR MATTERS. Since December 31, 1995, the
Consolidated Companies have experienced no strikes, labor disputes, slow downs
or work stoppages due to labor disagreements which have had, or would reasonably
be expected to have, a Materially Adverse Effect, and, to the best knowledge of
Intermet, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company which if they occurred, would
reasonably be expected to have a Materially Adverse Effect. Since December 31,
1992, the hours worked and payment made to employees of the Consolidated
Companies have not been in violation in any material respect of the Fair Labor
Standards Act (in the case of Consolidated Companies that are not Foreign
Subsidiaries) or any other applicable law dealing with such matters. All
payments due from the Consolidated Companies, or for which any claim may be made
against the Consolidated Companies, on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as liabilities on
the books of the Consolidated Companies in all jurisdictions where the failure
to pay or accrue such liabilities
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would reasonably be expected to exceed five percent (5%) of Consolidated Net
Worth of Intermet in the aggregate.
SECTION 5.20. PAYMENT OR DIVIDEND RESTRICTIONS. Except as
set forth in Section 7.05 or described on Schedule 5.20 or as expressly
permitted by the terms of this Agreement, none of the Consolidated Companies is
party to or subject to any agreement or understanding restricting or limiting
the payment of any dividends or other distributions by any such Consolidated
Company.
SECTION 5.21. DISCLOSURE. No representation or warranty
contained in this Agreement (including the Schedules attached hereto) or in any
other document furnished from time to time pursuant to the terms of this
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein not misleading in any material respect as of the date made or
deemed to be made. Except as may be set forth herein (including the Schedules
attached hereto) or in any notice furnished to the Lenders pursuant to Section
6.07 at or prior to the respective times the representations and warranties set
forth in this Section 5.21 are made or deemed to be made hereunder, there is no
fact known to Intermet which is having, or is reasonably expected to have, a
Materially Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any
Note shall remain unpaid or any Letter of Credit shall remain outstanding,
Intermet will (unless waived in writing by the Required Lenders):
SECTION 6.01. CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
corporate existence (except for mergers, divestitures and consolidations
permitted pursuant to Section 7.03), its material rights, franchises, and
licenses, and its material patents and copyrights (for the scheduled duration
thereof), trademarks, trade names, and service marks, necessary or desirable in
the normal conduct of its business, and its qualification to do business as a
foreign corporation in all jurisdictions where it conducts business or other
activities making such qualification necessary, where the failure to be so
qualified would reasonably be expected to have a Materially Adverse Effect.
SECTION 6.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause
each of its Subsidiaries to comply with all Requirements of Law (including,
without limitation, the Environmental Laws) and Contractual Obligations
applicable to or binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be expected to
have a Materially Adverse Effect (with the express understanding that
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with respect to noncompliance with Requirements of Laws, liabilities from
noncompliance involving amounts equal to or in excess of five percent (5%) of
Consolidated Net Worth in the aggregate shall be deemed to have a Materially
Adverse Effect).
SECTION 6.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and
cause each of its Subsidiaries to pay, (i) all taxes, assessments and
governmental charges imposed upon it or upon its property, and (ii) all claims
(including, without limitation, claims for labor, materials, supplies or
services) which might, if unpaid, become a Lien upon its property, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and adequate reserves are maintained with respect
thereto.
SECTION 6.04. KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business
transactions.
SECTION 6.05. VISITATION, INSPECTION, ETC. Permit, and cause
each of its Subsidiaries to permit, any representative of the Agent or any
Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such reasonable times
and as often as the Agent or such Lender may reasonably request after reasonable
prior notice to Intermet; provided, however, that at any time following the
occurrence and during the continuance of a Default or an Event of Default, no
prior notice to Intermet shall be required.
SECTION 6.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially
sound and reputable insurers, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance to be of such types and in such
amounts as are customary for such companies under similar circumstances;
provided, however, that in any event Intermet shall use its best efforts to
maintain, or cause to be maintained, insurance in amounts and with coverages not
materially less favorable to any Consolidated Company as in effect on the date
of this Agreement, except where the costs of maintaining such insurance would,
in the judgment of both Intermet and the Agent, be excessive.
(b) Cause, and cause each of the Consolidated Companies to
cause, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, settlements and improvements thereof, all as in the
judgment of Intermet may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that
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nothing in this Section 6.06 shall prevent Intermet from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of Intermet, desirable in the conduct of its business or the
business of any Consolidated Company.
SECTION 6.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of Intermet,
balance sheets of the Consolidated Companies as at the end of such
year, presented on a consolidated basis, and the related statements of
income, and cash flows of the Consolidated Companies for such fiscal
year, presented on a consolidated basis, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and accompanied by a report thereon of Ernst & Young,
L.L.P. or other independent public accountants of comparable recognized
national standing, which such report shall be unqualified as to going
concern and scope of audit and shall state that such financial
statements present fairly in all material respects the financial
condition as at the end of such fiscal year on a consolidated basis,
and the results of operations and statements of cash flows of the
Consolidated Companies for such fiscal year in accordance with GAAP and
that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the end of each fiscal quarter of
Intermet (other than the fourth fiscal quarter), balance sheets of the
Consolidated Companies as at the end of such quarter presented on a
consolidated basis and the related statements of income, shareholders'
equity, and cash flows of the Consolidated Companies for such fiscal
quarter and for the portion of Intermet's fiscal year ended at the end
of such quarter, presented on a consolidated basis setting forth in
each case in comparative form the figures for the corresponding quarter
and the corresponding portion of Intermet's previous fiscal year, all
in reasonable detail and certified by the chief financial officer or
principal accounting officer of Intermet that such financial statements
fairly present in all material respects the financial condition of the
Consolidated Companies as at the end of such fiscal quarter on a
consolidated basis, and the results of operations and statements of
cash flows of the Consolidated Companies for such fiscal quarter and
such portion of Intermet's fiscal year, in accordance with GAAP
consistently applied (subject to normal year-end audit adjustments and
the absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b)
above, a certificate substantially in the form of Exhibit L attached
hereto of the president, chief executive officer, chief financial
officer or principal accounting officer of Intermet (i) to the effect
that, based upon a review of the activities of the Consolidated
Companies and such financial
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statements during the period covered thereby, there exists no Event of
Default and no Default under this Agreement, or if there exists an
Event of Default or a Default hereunder, specifying the nature thereof
and the proposed response thereto, and (ii) demonstrating in reasonable
detail compliance as at the end of such fiscal year or such fiscal
quarter with Section 6.08 and Sections 7.01 through 7.06;
(d) Auditor's No Default Certificate. Together with the
financial statements required pursuant to subsection (a) above, a
certificate of the accountants who prepared the report referred to
therein, to the effect that, based upon their audit, there exists no
Default or Event of Default under this Agreement, or if there exists a
Default or Event of Default hereunder, specifying the nature thereof;
(e) Annual Budget. No later than 30 days prior to the
beginning of each fiscal year, an annual financial plan and forecasted
balance sheets and statements of income and cash flows for the current
fiscal year for the Consolidated Companies presented on a consolidated
basis;
(f) Notice of Default. Promptly after any Executive Officer
of Intermet has notice or knowledge of the occurrence of an Event of
Default or a Default, a certificate of the chief financial officer or
principal accounting officer of Intermet specifying the nature thereof
and the proposed response thereto;
(g) Litigation and Investigations. Promptly after (i) the
occurrence thereof, notice of the institution of or any material
adverse development in any material action, suit or proceeding or any
governmental investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body, agency or
official, against any Consolidated Company, or any material property of
any thereof, or (ii) actual knowledge thereof, notice of the threat of
any such action, suit, proceeding, investigation or arbitration;
(h) Environmental Notices. Promptly after receipt thereof,
notice of any actual or alleged violation, or notice of any action,
claim or request for information, either judicial or administrative,
from any governmental authority relating to any actual or alleged
claim, notice of potential responsibility under or violation of any
Environmental Law, or any actual or alleged spill, leak, disposal or
other release of any waste, petroleum product, or hazardous waste or
Hazardous Substance by any Consolidated Company which could result in
penalties, fines, claims or other liabilities to any Consolidated
Company in amounts in excess of $1,000,000;
(i) ERISA. (A)(i) Promptly after the occurrence thereof with
respect to any Plan of any Consolidated Company or any ERISA Affiliate
thereof, or any trust
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established thereunder, notice of (A) a "reportable event" described in
Section 4043 of ERISA and the regulations issued from time to time
thereunder (other than a "reportable event" not subject to the
provisions for 30-day notice to the PBGC under such regulations), or
(B) any other event which could subject any Consolidated Company to any
tax, penalty or liability under Title I or Title IV of ERISA or Chapter
43 of the Tax Code, or any tax or penalty resulting from a loss of
deduction under Sections 404 or 419 of the Tax Code, or any tax,
penalty or liability under any Requirement of Law applicable to any
Foreign Plan, where any such taxes, penalties or liabilities exceed or
could exceed $1,000,000 in the aggregate;
(ii) Promptly after such notice must be provided
to the PBGC, or to a Plan participant, beneficiary or alternative
payee, any notice required under Section 101(d), 302(f)(4), 303, 307,
4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under Section 401(a)(29) or
412 of the Tax Code with respect to any Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received
by any Consolidated Company or any ERISA Affiliate thereof concerning
the intent of the PBGC or any other governmental authority to terminate
a Plan of such Company or ERISA Affiliate thereof which is subject to
Title IV of ERISA, to impose any liability on such Company or ERISA
Affiliate under Title IV of ERISA or Chapter 43 of the Tax Code;
(iv) Upon the request of the Agent, promptly upon
the filing thereof with the Internal Revenue Service ("IRS") or the
Department of Labor ("DOL"), a copy of IRS Form 5500 or annual report
for each Plan of any Consolidated Company or ERISA Affiliate thereof
which is subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and
complete copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any
Consolidated Company from the IRS, PBGC or DOL, (B) any reports filed
with the IRS, PBGC or DOL with respect to a Plan of the Consolidated
Companies or any ERISA Affiliate thereof, or (C) a current statement of
withdrawal liability for each Multiemployer Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(B) Promptly upon any Consolidated Company
becoming aware thereof, notice that (i) any material contributions to
any Foreign Plan have not been made by the required due date for such
contribution and such default cannot immediately be remedied, (ii) any
Foreign Plan is not funded to the extent required by the law of the
jurisdiction whose law governs such Foreign Plan based on the actuarial
assumptions reasonably used at any time, or (iii) a material change is
anticipated to any Foreign Plan that may have a Materially Adverse
Effect.
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(j) Liens. Promptly upon any Consolidated Company becoming
aware thereof, notice of the filing of any federal statutory Lien, tax
or other state or local government Lien or any other Lien affecting
their respective properties, other than those Liens expressly permitted
by Section 7.02;
(k) Public Filings, Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements,
annual, quarterly and special reports, proxy statements and notices
sent or made available generally by Intermet to its public security
holders, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them with any
securities exchange, and of all press releases and other statements
made available generally to the public containing material developments
in the business or financial condition of Intermet and the other
Consolidated Companies;
(l) Burdensome Restrictions, Etc. Promptly upon the
existence or occurrence thereof, notice of the existence or occurrence
of (i) any Contractual Obligation or Requirement of Law described in
Section 5.11, (ii) failure of any Consolidated Company to hold in full
force and effect those material trademarks, service marks, patents,
trade names, copyrights, licenses and similar rights necessary in the
normal conduct of its business, and (iii) any strike, labor dispute,
slow down or work stoppage as described in Section 5.19;
(m) New Subsidiaries. Within 30 days after the formation or
acquisition of any Subsidiary, or any other event resulting in the
creation of a new Subsidiary, or the domestication of any Foreign
Subsidiary, notice of the formation or acquisition of such Subsidiary
or such occurrence, including a description of the assets of such
entity, the activities in which it will be engaged, and such other
information as the Agent may request; and
(n) Other Information. With reasonable promptness, any other
information provided under the Note Purchase Agreement and such other
information about the Consolidated Companies as the Agent or any Lender
may reasonably request from time to time.
SECTION 6.08. FINANCIAL COVENANTS.
(a) Fixed Charge Coverage Ratio. Maintain as of the last day
of each fiscal quarter, a Fixed Charge Coverage Ratio equal to or greater than
2.0:1.0.
(b) Leverage Ratio. Maintain as of the last day of each
fiscal quarter, a maximum Leverage Ratio of less than or equal to 60%; provided
that in the event that Intermet
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consummates an Acquisition after the Closing Date which affects its compliance
with this subsection (b), the maximum Leverage Ratio permitted hereunder shall
be 72.5% for each of the fiscal quarters ending during the twelve-month period
immediately succeeding such Acquisition and the maximum Leverage Ratio permitted
hereunder shall be reduced to 60% on the next fiscal quarter end thereafter and
shall remain a maximum ratio of 60% regardless of any other Acquisitions
occurring thereafter.
(c) Funded Debt to Consolidated EBITDA. Maintain as of the
last day of each fiscal quarter, a maximum ratio of Funded Debt to Consolidated
EBITDA calculated for the immediately preceding four fiscal quarters of less
than or equal to 3.5:1.0.
(d) Second Fiscal Quarter 1996 Calculations. Schedule 6.08
sets forth the calculation of the financial covenant amounts, ratios, and
percentages required by paragraphs (a) through (c) of this Section 6.08
calculated as of June 30, 1996.
SECTION 6.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS.
Immediately upon its receipt thereof, Intermet shall furnish the Agent a copy of
any notice received by it or any other Consolidated Company from the holder(s)
of Indebtedness of the Consolidated Companies (or from any trustee, agent,
attorney, or other party acting on behalf of such holder(s)) in an amount which,
in the aggregate, exceeds $5,000,000, where such notice states or claims (i) the
existence or occurrence of any default or event of default with respect to such
Indebtedness under the terms of any indenture, loan or credit agreement,
debenture, note, or other document evidencing or governing such Indebtedness, or
(ii) the existence or occurrence of any event or condition which requires or
permits holder(s) of any Indebtedness to exercise rights under any Change in
Control Provision.
SECTION 6.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL.
Unless the Required Lenders otherwise agree, promptly after (i) the formation or
acquisition (provided that nothing in this Section shall be deemed to authorize
the acquisition of any entity not otherwise permitted hereunder) of any
Subsidiary not listed on Schedule 5.01 (unless such Subsidiary holds no assets
and conducts no business), (ii) the domestication of any Foreign Subsidiary, or
(iii) the oc currence of any other event creating a new Subsidiary, Intermet
shall execute and deliver, and cause to be executed and delivered (x) in the
case of Foreign Subsidiary, if, in the reasonable opinion of Intermet's
accountants, delivery of a Guaranty Agreement would cause Intermet to be subject
to tax on the undistributed earnings and profits of such Subsidiary pursuant to
Subpart F of Part III, Subchapter N of the Internal Revenue Code, a Pledge
Agreement with respect to 49% of the capital stock of such Subsidiary if it is a
Foreign Subsidiary directly owned by Intermet or a Subsidiary that is not, and
is not directly or indirectly controlled by, a Foreign Subsidiary, and (y) a
Guaranty Agreement from each such Subsidiary that is not a Foreign Subsidiary
whose stock has been pledged to the extent and in accordance with subsection (x)
hereof, together with related documents with respect to such new Subsidiary (or
the pledgor of its stock) of the kind described in Section 4.01 (e), (f), (g),
(h) and (o), all in form and substance satisfactory to the Agent and the
Required Lenders.
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SECTION 6.11. AMENDMENT TO NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT. Promptly, and in any event within sixty (60) days after
the Closing Date, deliver, or cause to be delivered to the Agent in form and
substance satisfactory to the Agent and the Required Lenders, (i) an amendment
to the Note Purchase Agreement conforming the representations and warranties,
covenants, events of default and financial definitions used therein to the terms
of this Agreement, and (ii) a duly executed amendment to the Intercreditor
Agreement evidencing the modifications made herein.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any
Note shall remain unpaid or any Letter of Credit Obligation shall remain
outstanding, Intermet will not and will not permit any Subsidiary to (unless
waived in writing by the Required Lenders):
SECTION 7.01. INDEBTEDNESS. Create, incur, assume or suffer
to exist any Indebtedness, other than:
(a) Indebtedness under this Agreement and otherwise
outstanding on the Closing Date as set forth on Schedule 7.01 attached
hereto;
(b) unsecured current liabilities (other than liabilities
for borrowed money or liabilities evidenced by promissory notes, bonds
or similar instruments) incurred in the ordinary course of business;
(c) Indebtedness of Intermet pursuant to the Note Purchase
Agreement and secured by Liens which are pari passu with Liens on such
collateral in favor of the Lenders securing the Obligations hereunder
and governed by the terms of the Intercreditor Agreement;
(d) Investments in the form of intercompany loans permitted
by Sections 7.06(a) hereof;
(e) Subordinated Debt which is unsecured and approved as to
terms and conditions by the Agent and the Required Lenders;
(f) Indebtedness of a Person which is acquired by or
consolidated with a Consolidated Company as long as such Indebtedness
is not obtained in contemplation of such acquisition;
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(g) purchase money Indebtedness to the extent secured by a
Lien permitted pursuant to Section 7.02(f); and
(h) additional Indebtedness of Intermet which is pari passu
in all material respects with the Obligations, without limiting the
foregoing, such Indebtedness will not have the benefit of any security
or guaranties not benefitting the Obligations and will have
representations and warranties, covenants, events of default and
conditions to borrowing which are not more restrictive than the
provisions of this Agreement.
SECTION 7.02. LIENS. Create, incur, assume or suffer to
exist any Lien on any of its property now owned or hereafter acquired to secure
any Indebtedness other than:
(a) Liens existing on the Closing Date and disclosed on
Schedule 7.02 and Liens in favor of the Agent and/or the Lenders to
secure the Obligations;
(b) Liens for taxes not yet due, and Liens for taxes or
Liens imposed by ERISA which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained;
(d) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(e) Liens permitted by Section 7.01(c) and (h);
(f) to the extent that, on any date of determination, the
value of Margin Stock of Intermet and its Subsidiaries, whether now
owned or hereafter acquired, in the aggregate exceeds twenty-five
percent (25%) of the value of the total assets of Intermet and its
Subsidiaries on such date which assets are subject to the restrictions
of this Section 7.2, Liens encumbering such excess Margin Stock; and
(g) Liens (other than those permitted by paragraphs (a)
through (f) of this Section 7.02) encumbering assets having an Asset
Value not greater than five percent (5%) of Consolidated Net Worth of
Intermet in the aggregate at any one time.
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SECTION 7.03. MERGERS, ACQUISITIONS, DIVESTITURES.
(a) Merge or consolidate with any other Person, except that
the foregoing restrictions shall not be applicable to:
(i) mergers or consolidations of (x) any
Subsidiary with any other Subsidiary which is a Guarantor or (y) any
Subsidiary with Intermet; or
(ii) mergers or consolidations which result in
Acquisitions of Persons engaged in businesses in which Intermet is
engaged on the Closing Date or substantially related thereto and as
otherwise permitted by Section 7.10 of this Agreement where the
surviving corporation is a wholly-owned Subsidiary of Intermet (or will
become a wholly-owned Subsidiary within six (6) months of the such
Acquisition) and such Acquisition is in compliance with subsection (c)
hereof;
provided that before and after giving effect to any such merger or
consolidations, (w) Intermet is in compliance with Section 6.08 hereof (as
demonstrated by delivery of pro forma financial covenants calculations prepared
in compliance with clause (c) hereof); (x) no other Default or Event of Default
exists hereunder; (y) in the event of such merger or consolidation, the
surviving Person is a Consolidated Company and complies with Section 6.10
hereof, if applicable, and (z) Intermet is the surviving corporation in
connection with any merger or consolidation to which it is a party;
(b) Sell or otherwise dispose of the capital stock of a
Subsidiary of Intermet except as permitted pursuant to Section 7.04(c); or
(c) make or permit any Acquisition other than an Acquisition
of Persons engaged in businesses in which Intermet is engaged on the Closing
Date or substantially related thereto and as otherwise permitted pursuant to
Section 7.10 of this Agreement; provided that:
(i) after giving effect to such Acquisition,
assets comprising such Acquisition are owned by Intermet or
a wholly-owned Subsidiary of Intermet, or, in the case of a
stock purchase, such Person is a wholly-owned Subsidiary of
Intermet or is merged into Intermet or a wholly-owned
Subsidiary of Intermet;
(ii) prior to the consummation of such
Acquisition, Intermet provides to the Lenders calculations
evidencing Intermet's compliance on a pro forma basis with
the financial covenants set forth in Section 6.08 hereof on
the last day of the immediately preceding fiscal quarter of
Intermet, calculated with respect to the immediately
preceding four fiscal quarters of Intermet as if the
Acquisition had been consummated on the first day of such
period;
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(iii) such Acquisition shall have been approved in
advance by a majority of the board of directors of the
seller; and
(iv) no Default or Event of Default shall exist
hereunder or shall result therefrom and Intermet shall
comply with the provisions of Section 6.10 hereof.
SECTION 7.04. ASSET SALES.
Sell, lease or otherwise dispose of its accounts, property, stock of
its Subsidiaries or other assets; provided, however, that the foregoing
restrictions on Asset Sales shall not be applicable to:
(a) sales of inventory in the ordinary course of business;
(b) sales of equipment or other personal property being
replaced by other equipment or other personal property purchased as a
capital expenditure item; or
(c) Asset Sales comprised of stock of Subsidiaries or all or
substantially all of the assets of any Subsidiary where, on the date of
execution of a binding obligation to make such Asset Sale (provided
that if the Asset Sale is not consummated within six (6) months of such
execution, then on the date of consummation of such Asset Sale rather
than on the date of execution of such binding obligation):
(x) after giving effect to the proposed Asset
Sale, the assets which are the subject of the proposed Asset
Sale, together with all other such Asset Sales of the
Consolidated Companies during the immediately preceding four
fiscal quarters of Intermet, did not generate twenty percent
(20%) or more of Consolidated EBITDA during the then most
recently ended four fiscal quarters of Intermet; and
(y) after giving effect to the proposed Asset
Sale, the aggregate Asset Value of all such Asset Sales of
the Consolidated Companies since the Closing Date would not
exceed thirty (30%) of the Net Fixed Assets of Intermet as
determined as of the last day of the most recently ended
fiscal quarter of Intermet; or
(d) Other Asset Sales (other than sales of capital stock of
Subsidiaries or all or substantially all of the assets of any
Subsidiary), where, on the date of execution of a binding obligation to
make such Asset Sale (provided that if the Asset Sale is not
consummated within six (6) months of such execution, then on the date
of consummation of such Asset Sale rather than on the date of execution
of such binding obligation), after
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giving effect to the proposed Asset Sale, the aggregate Asset Value of
all Asset Sales made pursuant to this subparagraph (d) by the
Consolidated Companies since the Closing Date would not exceed ten
percent (10%) of Intermet's Net Fixed Assets as of the last day of the
most recently ended fiscal quarter of Intermet; or
(e) to the extent that, on any date of determination, the
value of Margin Stock of Intermet and its Subsidiaries, whether now
owned or hereafter acquired, in the aggregate exceeds twenty-five
percent (25%) of the total assets of Intermet and its Subsidiaries on
such date which assets are subject to the restriction of this Section
7.04, sales of such excess Margin Stock for fair value where the
proceeds of such sale are held by a Consolidated Company as cash or
invested in cash equivalents such as certificates of deposit, U.S.
government securities, commercial paper with a term of 90 days or less
which is rated A-1/P-1 or other money market instruments;
provided that notwithstanding the foregoing, no transaction pursuant to clauses
(c) or (d) above shall be permitted if any Default or Event of Default exists at
the time of such transaction or would exist as a result of such transaction.
Upon the consummation of the sale of any capital stock of a Subsidiary
pursuant to subsection (c) above, which capital stock is pledged to the Agent
for the benefit of the Lenders, the Agent and the Lenders shall release the Lien
upon such stock upon the request of Intermet, and the Lenders hereby authorize
the Agent to do so.
SECTION 7.05. DIVIDENDS, ETC. Intermet shall not (a) declare
or pay any dividend on any class of its stock, or (b) make any payment to
purchase, redeem, retire or acquire any Subordinated Debt or stock or any
option, warrant, or other right to acquire such Subordinated Debt or stock
(each, a "Restricted Payment"), other than:
(i) dividends payable solely in shares of any
class of its stock; and
(ii) cash dividends declared and paid, and all
other Restricted Payments made, after the Closing Date in an aggregate
amount not to exceed the sum of (x) $25,000,000, plus (y) fifty percent
(50%) of Consolidated Net Income earned during the period commencing on
June 30, 1996 and ending on the last day of the most recently ended
fiscal quarter of Intermet (such period to be treated as one accounting
period taking into account 100% of Consolidated Net Losses during such
period);
provided, however, no such dividend or other Restricted Payment may be declared
or paid pursuant to clause (ii) above unless no Default or Event of Default
exists at the time of such declaration or Restricted Payment, or would exist as
a result of such declaration or Restricted Payment.
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SECTION 7.06. INVESTMENTS, LOANS, ETC. Make, permit or hold
any Investments other than:
(a) Investments in Subsidiaries which are Guarantors under
this Agreement, whether such Subsidiaries are Guarantors on the Closing
Date or become Guarantors in accordance with Section 6.10 after the
Closing Date; provided, however, nothing in this Section 7.06 shall be
deemed to authorize an Investment pursuant to this subsection (a) in
any entity that is not a Guarantor prior to such Investment;
(b) Investments in the following securities:
(i) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States or any
agency thereof, in each case supported by the full faith and credit of
the United States and maturing within one year from the date of
creation thereof;
(ii) commercial paper maturing within one year
from the date of creation thereof rated in the highest grade by a
nationally recognized credit rating agency;
(iii) time deposits maturing within one year from
the date of creation thereof with, including certificates of deposit
issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any
state thereof and has capital, surplus and undivided profits
aggregating at least $500,000,000, including without limitation, any
such deposits in Eurodollars issued by a foreign branch of any such
bank or trust company;
(iv) mid-term notes of corporations existing under
the laws of the United States rated in the highest grade by a
nationally recognized credit rating agency;
(v) municipal "lower floater" bonds rated A or
better (or backed by a letter of credit rated A or better) by a
nationally recognized credit rating agency;
(c) Investments made by Plans and Foreign Plans;
(d) Investments outstanding on the Closing Date and listed
on Schedule 7.06 hereto; and
(e) Investments (other than those permitted by paragraphs
(a) through (d) above), including loans to employees, officers and
other Persons, in an aggregate amount not to exceed five percent (5%)
of Consolidated Net Worth at any one time outstanding; provided that,
Investments in Subsidiaries which are not Guarantors are expressly
prohibited by this Section 7.06.
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SECTION 7.07. SALE AND LEASEBACK TRANSACTIONS. Sell or
transfer any property, real or personal, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which any
Consolidated Company intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES.
(a) Enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or not in the
ordinary course of business, with any Affiliate of any Consolidated Company (but
excluding any Affiliate which is also a Consolidated Company), other than on
terms and conditions substantially as favorable to such Consolidated Company as
would be obtained by such Consolidated Company at the time in a comparable
arm's-length transaction with a Person other than an Affiliate; and
(b) Convey or transfer to any other Person (including any
other Consolidated Company) any real property, buildings, or fixtures used in
the manufacturing or production operations of any Consolidated Company, or
convey or transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default exists or would
exist as a result of such conveyance or transfer.
SECTION 7.09. PREPAYMENTS OF SUBORDINATED DEBT IN VIOLATION
THEREOF. Directly or indirectly, prepay, purchase, redeem, retire, defease or
otherwise acquire, or make any optional payment on account of any principal of,
interest on, or premium payable in connection with any of its Subordinated Debt,
in each case, which is a violation of the subordination provisions of such
Subordinated Debt.
SECTION 7.10. CHANGES IN BUSINESS. Enter into any business
which is substantially different from that presently conducted by the
Consolidated Companies taken as a whole (which includes iron and aluminum
foundry operations and machining); provided that, Intermet and the Consolidated
Companies may make Acquisitions of, and Investments in, (to the extent permitted
by this Agreement) Persons engaged in an unrelated business as long as the total
revenues of such Persons resulting from unrelated businesses (or total revenues
generated by such assets used in unrelated businesses in the case of a purchase
of assets), as determined for the most recently ended four fiscal quarters of
such Person in accordance with GAAP, do not exceed twenty percent (20%) of Total
Sales of the Consolidated Companies for the most recently ended four fiscal
quarters of Intermet.
SECTION 7.11. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
CONSOLIDATED COMPANIES. Create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction on the ability of any
Consolidated Company to (i) pay dividends or
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make any other distributions on such Consolidated Company's stock, or (ii) pay
any indebtedness owed to Intermet or any other Consolidated Company, or (iii)
transfer any of its property or assets to Intermet or any other Consolidated
Company, except any consensual encumbrance or restriction existing under the
Credit Documents or the Pledge Agreement (as defined in the Note Purchase
Agreement) (as originally executed) or as set forth on Schedule 5.20.
SECTION 7.12. ACTIONS UNDER CERTAIN DOCUMENTS.
(a) Without the prior written consent of the Agent and the
Required Lenders, modify, amend or supplement the Note Purchase Agreement to (i)
increase the principal amount of the indebtedness thereunder, (ii) increase the
interest rate thereunder, (iii) modify any requirement of prepayment or
repayment thereunder which would shorten the final maturity or average life of
the indebtedness outstanding thereunder or make the requirement of prepayment
more onerous, or (iv) make any more onerous any other provision thereof.
(b) Without the prior written consent of the Agent and the
Required Lenders, modify, amend or supplement any agreement governing
Subordinated Debt to (i) increase the principal amount of the indebtedness
thereunder, (ii) increase the interest rate thereunder, (iii) modify any
requirement of prepayment or repayment thereunder which would shorten the final
maturity or average life of the indebtedness outstanding thereunder or make the
requirement of prepayment more onerous, (iv) make any more onerous any other
provision thereof, or (v) amend or modify the subordination provisions thereof.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
SECTION 8.01. PAYMENTS. Intermet shall fail to make promptly
when due (including, without limitation, by mandatory prepayment) any principal
payment with respect to the Loans, or Intermet shall fail to make within five
(5) days after the due date thereof any payment of interest, fee or other amount
payable hereunder or any of the Obligations;
SECTION 8.02. COVENANTS WITHOUT NOTICE. Intermet shall fail
to observe or perform any covenant or agreement contained in Sections 6.07(f),
6.08, 6.11, 7.01 through 7.07, 7.09 through 7.12;
SECTION 8.03. OTHER COVENANTS. Intermet shall fail to
observe or perform any covenant or agreement contained in this Agreement, other
than those referred to in Sections 8.01 and 8.02, and, if capable of being
remedied, such failure shall remain unremedied for thirty (30)
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days after the earlier of (i) Intermet's obtaining knowledge thereof, or (ii)
written notice thereof shall have been given to Intermet by Agent or any Lender;
SECTION 8.04. REPRESENTATIONS. Any representation or
warranty made or deemed to be made by Intermet or any other Credit Party or by
any of its officers under this Agreement or any other Credit Document (including
the Schedules attached thereto), or any certificate or other document submitted
to the Agent or the Lenders by any such Person pursuant to the terms of this
Agreement or any other Credit Document, shall be incorrect in any material
respect when made or deemed to be made or submitted;
SECTION 8.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any
Consolidated Company shall fail to make when due (whether at stated maturity, by
acceleration, on demand or otherwise, and after giving effect to any applicable
grace period) any payment of principal of or interest on any Indebtedness (other
than the Obligations) exceeding $5,000,000 in the aggregate;
SECTION 8.06. DEFAULTS UNDER OTHER AGREEMENTS. Any
Consolidated Company shall fail to observe or perform within any applicable
grace period any covenants or agreements contained in any agreements or
instruments relating to any of its Indebtedness exceeding $5,000,000 in the
aggregate, or any other event shall occur if the effect of such failure or other
event is to accelerate, or to permit the holder of such Indebtedness or any
other Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated maturity;
SECTION 8.07. BANKRUPTCY. Intermet or any other Consolidated
Company shall commence a voluntary case concerning itself under the Bankruptcy
Code or applicable foreign bankruptcy laws; or an involuntary case for
bankruptcy is commenced against any Consolidated Company and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar official under applicable foreign bankruptcy laws is appointed for, or
takes charge of, all or any substantial part of the property of any Consolidated
Company; or any Consolidated Company commences proceedings of its own bankruptcy
or to be granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to any Consolidated Company or there is commenced
against any Consolidated Company any such proceeding which remains undismissed
for a period of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Consolidated Company suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Consolidated
Company makes a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall
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state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or any Consolidated Company shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts; or
any Consolidated Company shall by any act or failure to act indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate action
is taken by any Consolidated Company for the purpose of effecting any of the
foregoing;
SECTION 8.08. ERISA. A Plan or Foreign Plan of a
Consolidated Company or a Plan subject to Title IV of ERISA of any of its ERISA
Affiliates:
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the terms of such
Plan or Foreign Plan, Section 412 of the Tax Code or Section 302 of
ERISA for any plan year or a waiver of such standard is sought or
granted with respect to such Plan or Foreign Plan under applicable law,
the terms of such Plan or Foreign Plan or Section 412 of the Tax Code
or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the
subject of termination proceedings under applicable law or the terms of
such Plan or Foreign Plan; or
(iii) shall require a Consolidated Company to
provide security under applicable law, the terms of such Plan or
Foreign Plan, Section 401 or 412 of the Tax Code or Section 306 or 307
of ERISA; or
(iv) results for any reason, in a liability
(including without limitation, withdrawal liability) to a Consolidated
Company under applicable law, the terms of such Plan or Foreign Plan,
or Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other event
a liability to the PBGC (or any similar Person with respect to any Foreign
Plan), a Plan or any other Person that would have a Materially Adverse Effect.
SECTION 8.09. MONEY JUDGMENT. A judgment or order for the
payment of money in excess of $5,000,000 or otherwise having a Materially
Adverse Effect shall be rendered against Intermet or any other Consolidated
Company and such judgment or order shall continue unsatisfied (in the case of a
money judgment) and in effect for a period of 30 days during which execution
shall not be effectively stayed or deferred (whether by action of a court, by
agreement or otherwise);
SECTION 8.10. OWNERSHIP OF CREDIT PARTIES AND PLEDGED
ENTITIES. If Intermet shall at any time fail to own and control one hundred
percent (100%) of the voting stock of any Credit Party or entity whose stock is
pledged to the Lenders, either directly or indirectly through a wholly-owned
Subsidiary of Intermet, except for (x) as a result of any Asset Sale permitted
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pursuant to Section 7.04(c) hereof, and (y) with respect to any Credit Party or
Foreign Subsidiary whose stock is pledged to the Lenders after the Closing Date
where Intermet shall, directly or indirectly, maintain ownership and control of
the percentage of voting stock owned and controlled as of the date such Person
became a Credit Party hereunder or a Foreign Subsidiary or such greater
percentage as shall thereafter be obtained, directly or indirectly by Intermet;
SECTION 8.11. CHANGE IN CONTROL OF INTERMET. (i) Any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) shall become the "beneficial owner(s)" (as defined in said Rule
13d-3) of more than fifty percent (50%) of the shares of the outstanding common
stock of Intermet entitled to vote for members of Intermet's board of directors,
(ii) any event or condition shall occur or exist which, pursuant to the terms of
any Change in Control Provision, requires or permits the holder(s) of
Indebtedness of any Consolidated Company to require that such Indebtedness be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect, or (iii) John
Doddridge or another Person possessing substantially equivalent qualifications,
background, proven record of success in running a public company and ability
shall cease to hold the position and actively carry out the duties of Chairman
of the Board of Directors of Intermet.
SECTION 8.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There
shall exist or occur any "Event of Default" as provided under the terms of any
other Credit Document, or any Credit Document ceases to be in full force and
effect or the validity or enforceability thereof is disaffirmed by or on behalf
of Intermet or any other Credit Party, or at any time it is or becomes unlawful
for Intermet or any other Credit Party to perform or comply with its obligations
under any Credit Document, or the obligations of Intermet or any other Credit
Party under any Credit Document are not or cease to be legal, valid and binding
on Intermet or any such Credit Party or the Agent ceases to hold a perfected
lien on the Pledged Stock subject only to Liens permitted by the terms of this
Credit Agreement; or
SECTION 8.13. ATTACHMENTS. An attachment or similar action
shall be made on or taken against any of the assets of any Consolidated Company
with an Asset Value exceeding $5,000,000 in aggregate and is not removed,
suspended or enjoined within 30 days of the same being made or any suspension or
injunction being lifted;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, with the consent of the Required
Lenders, and upon the written (including telecopied) or telex request of the
Required Lenders, shall, by written notice to Intermet, take any or all of the
following actions, without prejudice to the rights of the Agent, any Lender or
the holder of any Note to enforce its claims against Intermet or any other
Credit Party: (i) declare all Commitments terminated, whereupon the pro rata
Commitments of each Lender shall terminate immediately and any commitment fee
shall forthwith become due and
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payable without any other notice of any kind; and (ii) declare the principal of
and any accrued interest on the Loans, and all other Obligations owing
hereunder, including without limitation, an amount equal to the maximum amount
which would be available at any time to be drawn under all Letters of Credit
then outstanding (whether or not any beneficiary under any Letter of Credit
shall have presented, or shall be entitled at such time to present, the drafts
or other documents required to draw under such Letter of Credit), to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
Intermet; provided, that, if an Event of Default specified in Section 8.07 shall
occur, the result which would occur upon the giving of written notice by the
Agent to any Credit Party, as specified in clauses (i) and (ii) above, shall
occur automatically without the giving of any such notice; and (iii) exercise
any rights or remedies under the Security Documents. As long as any Letter of
Credit shall remain outstanding, any amounts described in clause (ii) above with
respect to Letters of Credit, when received by the Agent, shall be deposited in
a cash collateral account as cash collateral for the obligations of Intermet
under Article II of this Agreement in the event of any drawing under a Letter of
Credit, and upon drawing under any outstanding Letter of Credit in respect of
which the Agent has deposited in the cash collateral account any amounts
described in clause (ii) above, the Agent shall pay such amounts to itself to
reimburse itself for the amount of such drawing.
ARTICLE IX.
THE AGENT AND CO-AGENTS
SECTION 9.01. APPOINTMENT OF AGENT. Each Lender hereby
designates SunTrust as Agent to administer all matters concerning the Loans and
Letters of Credit and to act as herein specified. Each Lender hereby irrevocably
authorizes, and each holder of any Note by the acceptance of a Note shall be
deemed irrevocably to authorize, the Agent to take such actions on its behalf
under the provisions of this Agreement, the other Credit Documents, and all
other instruments and agreements referred to herein or therein, and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through their agents or employees.
SECTION 9.02. AUTHORIZATION OF AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS.
(a) Each Lender hereby authorizes the Agent to enter into
each of the Security Documents substantially in the form attached hereto, and to
take all action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Agent for the benefit of the Agent and the
Lenders and the other beneficiaries thereof upon the terms thereof. The Lenders
further agree that the Agent may assign its rights and obligations under any of
the Security Documents to any affiliate of the Agent or to any trustee, if
necessary or
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appropriate under applicable law, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any
Security Document, the Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Agent under such Security Document, the Agent shall act in respect of such
consent, exercise of remedies, determination or action, as the case may be, with
the consent of and at the direction of the Required Lenders; provided, however,
that no such consent of the Required Lenders shall be required with respect to
any consent, determination or other matter that is, in the Agent's judgment,
ministerial or administrative in nature. In each circumstance where any consent
of or direction from the Required Lenders is required, the Agent shall send to
the Lenders a notice setting forth a description in reasonable detail of the
matter as to which consent or direction is requested and the Agent's proposed
course of action with respect thereto. The Lenders shall endeavor to respond
promptly to such request but in the event the Agent shall not have received a
response from any Lender within five (5) Business Days after such Lender's
receipt of such notice, such Lender shall be deemed not to have agreed to the
course of action proposed by the Agent.
SECTION 9.03. NATURE OF DUTIES OF AGENT. The Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Credit Documents. None of the Agent nor any of its
respective officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The duties
of the Agent shall be ministerial and administrative in nature; the Agent shall
not have by reason of this Agreement a fiduciary relationship in respect of any
Lender; and nothing in this Agreement, express or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Agreement or the other Credit Documents except as expressly set forth
herein.
SECTION 9.04. LACK OF RELIANCE ON THE AGENT.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement, the Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter.
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(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreements, the Pledge Agreement, or any other documents contemplated
hereby or thereby, or the financial condition of the Credit Parties, or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, the Notes, the
Guaranty Agreements, the Pledge Agreements or the other documents contemplated
hereby or thereby, or the financial condition of the Credit Parties, or the
existence or possible existence of any Default or Event of Default; provided,
however, to the extent that the Agent has been advised that a Lender has not
received any information formally delivered to the Agent pursuant to Section
6.07, the Agent shall deliver or cause to be delivered such information to such
Lender.
SECTION 9.05. CERTAIN RIGHTS OF THE AGENT. If the Agent
shall request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in connection with this Agreement, the
Agent shall be entitled to refrain from such act or taking such act, unless and
until the Agent shall have received instructions from the Required Lenders; and
the Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
SECTION 9.06. RELIANCE BY AGENT. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. The Agent may consult with legal
counsel (including counsel for any Credit Party), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 9.07. INDEMNIFICATION OF AGENT. To the extent the
Agent is not reimbursed and indemnified by the Credit Parties, each Lender will
reimburse and indemnify the Agent, ratably according to the respective amounts
of the Loans outstanding under all Facilities (or if no amounts are outstanding,
ratably in accordance with the aggregate Commitments), in either case, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement or the other
Credit Documents; provided that no Lender shall be liable to the Agent for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
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SECTION 9.08. THE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, the Agent shall have the same rights and powers
hereunder as any other Lender or holder of a Note and may exercise the same as
though it were not performing the duties specified herein; and the terms
"Lenders", "Required Lenders", "holders of Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Consolidated Companies or any affiliate of the Consolidated
Companies as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Consolidated Companies for services
in connection with this Agreement and otherwise without having to account for
the same to the Lenders.
SECTION 9.09. HOLDERS OF NOTES. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
SECTION 9.10. SUCCESSOR AGENT.
(a) The Agent may resign at any time by giving written
notice thereof to the Lenders and Intermet and may be removed at any time with
or without cause by the Required Lenders; provided, however, the Agent may not
resign or be removed until a successor Agent has been appointed and shall have
accepted such appointment. Upon any such resignation or re moval, the Required
Lenders shall have the right to appoint a successor Agent subject to Intermet's
prior written approval. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent subject to Intermet's prior written
approval, which shall be a bank which maintains an office in the United States,
or a commercial bank organized under the laws of the United States of America or
any State thereof, or any Affiliate of such bank, having a combined capital and
surplus of at least $100,000,000.
(b) Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article IX shall inure to its
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benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
SECTION 9.11. CO-AGENTS. Each Lender hereby designates NBD
and First Union as the Co-Agents. The Co-Agents, in such capacity, shall have no
duties or obligations whatsoever under this Agreement or any other Credit
Document.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, telecopy or similar teletransmission or writing) and shall be given to
such party at its address or applicable teletransmission number set forth on the
signature pages hereof, or such other address or applicable teletransmission
number as such party may hereafter specify by notice to the Agent and Intermet.
Each such notice, request or other communication shall be effective (i) if given
by telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (iii) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate confirmation is received, or (iv) if given by any other means
(including, without limitation, by air courier), when delivered or received at
the address specified in this Section; provided that notices to the Agent shall
not be effective until received.
SECTION 10.02. AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement or the other Credit Documents, nor consent to
any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by Intermet and the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided that no
amendment, waiver or consent shall, unless in writing and signed by Intermet and
all the Lenders do any of the following: (i) waive any of the conditions
specified in Section 4.01 or 4.02, (ii) increase the Commitments or other
contractual obligations to Intermet under this Agreement, (iii) reduce the
principal of, or interest on, the Notes or any fees hereunder, (iv) postpone any
date fixed for the payment in respect of principal of, or interest on, the Notes
or any fees hereunder, (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number or identity of
Lenders which shall be required for the Lenders or any of them to take any
action hereunder, (vi) agree to release any of the Pledged Stock from the Lien
of the Security Documents to the extent securing the Obligations or to release
any Guarantor from its obligations under any Guaranty Agreement except in
connection with an Asset Sale permitted pursuant to Section 7.04(c) above where
no consent of the Lenders shall be required for such release, (vii) modify the
definition of "Required Lenders," or (viii) modify this Section 10.02.
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Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by Intermet and the Agent in addition to the Lenders required
hereinabove to take such action, affect the rights or duties of the Agent under
this Agreement or under any other Credit Document.
SECTION 10.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Agent, the Co-Agents, any Lender or any holder of a
Note in exercising any right or remedy hereunder or under any other Credit
Document, and no course of dealing between any Credit Party and the Agent, the
Co-Agents, any Lender or the holder of any Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right or remedy hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Agent, the Co-Agents, any
Lender or the holder of any Note would otherwise have. No notice to or demand on
any Credit Party not required hereunder or under any other Credit Document in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agent, the Co-Agents, the Lenders or the holder of any Note to any other or
further action in any circumstances without notice or demand.
SECTION 10.04. PAYMENT OF EXPENSES, ETC. Intermet shall:
(i) whether or not the transactions hereby
contemplated are consummated, pay all reasonable, out-of-pocket costs
and expenses of the Agent in the administration (both before and after
the execution hereof and including reasonable expenses actually
incurred relating to advice of counsel as to the rights and duties of
the Agent and the Lenders with respect thereto) of, and in connection
with the preparation, execution and delivery of, preservation of rights
under, enforcement of, and, after a Default or Event of Default,
refinancing, renegotiation or restructuring of, this Agreement and the
other Credit Documents and the documents and instruments referred to
therein, and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees actually incurred
and disbursements of counsel for the Agent), and in the case of
enforcement of this Agreement or any Credit Document after an Event of
Default, all such reasonable, out-of-pocket costs and expenses
(including, without limitation, the reasonable fees actually incurred
and disbursements of counsel), for any of the Co-Agents and the
Lenders;
(ii) subject, in the case of certain Taxes, to the
applicable provisions of Section 3.07(b), pay and hold each of the
Agent, the Co-Agents and the Lenders harmless from and against any and
all present and future stamp, documentary, and other similar Taxes with
respect to this Agreement, the Notes and any other Credit Documents,
any collateral described therein, or any payments due thereunder, and
save each of the
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Lenders harmless from and against any and all liabilities with respect
to or resulting from any delay or omission to pay such Taxes; and
(iii) indemnify the Agent, the Co-Agents and each
Lender, and their respective officers, directors, employees,
representatives and agents from, and hold each of them harmless
against, any and all costs, losses, liabilities, claims, damages or
expenses incurred by any of them (whether or not any of them is
designated a party thereto) (an "Indemnitee") arising out of or by
reason of any investigation, litigation or other proceeding related to
any actual or proposed use of the proceeds of any of the Loans or any
Credit Party's entering into and performing of the Agreement, the
Notes, or the other Credit Documents, including, without limitation,
the reasonable fees actually incurred and disbursements of counsel
(including foreign counsel) incurred in connection with any such
investigation, litigation or other proceeding; provided, however,
Intermet shall not be obligated to indemnify any Indemnitee for any of
the foregoing arising out of such Indemnitee's gross negligence or
willful misconduct;
(iv) In addition to amounts payable elsewhere
provided in this Agreement, without duplication, indemnify, pay and
save the Agent harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and reasonable expenses
(including reasonable attorney's fees and disbursements) which the
Agent may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit for the account of
Intermet, other than as a result of the gross negligence or willful
misconduct of the Agent; (ii) the failure of the Agent to honor a
drawing under any Letter of Credit due to any act or omission (whether
rightful or wrongful) of any present or future de jure or de facto
government or governmental authority; or (iii) any confirmation of any
Letter of Credit obtained by the Agent with the consent of Intermet;
(v) without limiting the indemnities set forth
above, indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response, abatement,
cleanup, investigative, closure and monitoring costs), losses, claims
(including claims for contribution or indemnity and including the cost
of investigating or defending any claim and whether or not such claim
is ultimately defeated, and whether such claim arose before, during or
after any Credit Party's ownership, operation, possession or control of
its business, property or facilities or before, on or after the date
hereof, and including also any amounts paid incidental to any
compromise or settlement by the Indemnitee or Indemnitees to the
holders of any such claim), lawsuits, liabilities, obligations,
actions, judgments, suits, disbursements, encumbrances, liens, damages
(including without limitation damages for contamination or destruction
of natural resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the reasonable
fees actually incurred, other charges and disbursements of counsel in
connection therewith) incurred, suffered or sustained by that
Indemnitee based upon, arising under or relating to Environmental Laws
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based on, arising out of or relating to in whole or in part, the
existence or exercise of any rights or remedies by any Indemnitee under
this Agreement, any other Credit Document or any related documents (but
excluding those incurred, suffered or sustained by any Indemnitee as a
result of any action taken by or on behalf of the Lenders with respect
to any Subsidiary of Intermet (or the assets thereof) owned or
controlled by the Lenders, the Agent, the Co-Agents, or their nominees
or designees, as a result of their acquisition of Pledged Stock
pursuant to exercise of remedies under the Pledge Agreements).
If and to the extent that the obligations of Intermet under this Section 10.04
are unenforceable for any reason, Intermet hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
SECTION 10.05. RIGHT OF SETOFF. In addition to and not in
limitation of all rights of offset that any Lender or other holder of a Note may
have under applicable law, each Lender or other holder of a Note shall, upon the
occurrence of any Event of Default and whether or not such Lender or such holder
has made any demand or any Credit Party's obligations are matured, have the
right to appropriate and apply to the payment of any Credit Party's obligations
hereunder and under the other Credit Documents, all deposits of any Credit Party
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Lender or other holder to any Credit Party, whether or not related to this
Agreement or any transaction hereunder. Each Lender shall promptly notify
Intermet of any offset hereunder.
SECTION 10.06. BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that Intermet may not assign or transfer any of its
interest hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or
for the account of, any of its branch offices or the office of an Affiliate of
such Lender.
(c) Each Lender may assign all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of any of its Commitments, Letter of Credit Obligations and the Loans at
the time owing to it and the Notes held by it) to any Eligible Assignee;
provided, however, that (i) the Agent and Intermet must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld)
unless such assignment is to an Affiliate of the assigning Lender or, in the
case of Intermet, unless an Event of Default has occurred and is continuing,
(ii) the amount of the Commitments or Loans or Letter of Credit Obligations, of
the assigning Lender subject to each assignment (determined as of the
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date the assignment and acceptance with respect to such assignment is delivered
to the Agent) shall not be less than $5,000,000, (iii) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with a Note or Notes subject to such assignment and, unless such
assignment is to an Affiliate of such Lender, a processing and recordation fee
of $2500, and (iv) the assignee must execute and deliver a confirmation of its
acceptance of the terms and conditions of the Intercreditor Agreement to the
other parties to the Intercreditor Agreement in accordance with Section 10(g)
thereof. Intermet shall not be responsible for such processing and recordation
fee or any costs or expenses incurred by any Lender or the Agent in connection
with such assignment. From and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement.
Notwithstanding the foregoing, the assigning Lender must retain after the
consummation of such Assignment and Acceptance, a minimum aggregate amount of
Commitments, the Loans and the Letter of Credit Obligations, as the case may be,
of $20,000,000 (unless the Lender is assigning its entire Commitment); provided,
however, no such minimum amount shall be required with respect to any such
assignment made at any time there exists an Event of Default hereunder. Within
five (5) Business Days after receipt of the notice and the Assignment and
Acceptance, Intermet, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes to the
order of such assignee in a principal amount equal to the applicable Commitments
assumed by it pursuant to such Assignment and Acceptance and new Note or Notes
to the assigning Lender in the amount of its retained Commitment or Commitments.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
date of the surrendered Note or Notes which they replace, and shall otherwise be
in substantially the form attached hereto.
(d) Each Lender may, without the consent of Intermet or the
Agent, sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments, the Letter of Credit Obligations and the Loans owing
to it and the Notes held by it), provided, however, that (i) no Lender may sell
a participation in its aggregate Commitments (after giving effect to any
permitted assignment hereof) in an amount in excess of fifty percent (50%) of
such aggregate Commitments, provided, however, sales of participations to an
Affiliate of such Lender shall not be included in such calculation; provided,
however, no such maximum amount shall be applicable to any such participation
sold at any time there exists an Event of Default hereunder, (ii) such Lender's
obligations under this Agreement shall remain unchanged, (iii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and (iv) the participating bank or other entity shall not be
entitled to the benefit (except through its selling Lender) of the cost
protection provisions contained in Article III of this Agreement, and (v)
Intermet and the Agent and other Lenders shall continue to deal solely and
directly with each Lender in connection with such Lender's rights and
obligations under this Agreement and the other Credit Documents, and such Lender
shall retain the sole right to enforce
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the obligations of Intermet relating to the Loans and to approve any amendment,
modification or waiver of any provisions of this Agreement. Any Lender selling a
participation hereunder shall provide prompt written notice to Intermet of the
name of such participant.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Intermet or the other Consolidated
Companies furnished to such Lender by or on behalf of Intermet or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the purpose of making any necessary credit
judgments with respect to this credit facility and not to use the information in
any manner prohibited by any law, including without limitation, the securities
laws of the United States. The proposed participant or assignee shall agree not
to disclose any of such information except (i) to directors, employees, auditors
or counsel to whom it is necessary to show such information, each of whom shall
be informed of the confidential nature of the information, (ii) in any statement
or testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Intermet and the Agent unless
otherwise prohibited by the subpoena, order or law), and (iii) upon the request
or demand of any regulatory agency or authority with proper jurisdiction. The
proposed participant or assignee shall further agree to return all documents or
other written material and copies thereof received from any Lender, the Agent or
Intermet relating to such confidential information unless otherwise properly
disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of
its rights in this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release the Lender from any of its
obligations hereunder.
(g) If (i) any Taxes referred to in Section 3.07(b) have
been levied or imposed so as to require withholdings or deductions by Intermet
and payment by Intermet of ad ditional amounts to any Lender as a result
thereof, (ii) any Lender shall make demand for payment of increased costs or
reduced rate of return pursuant to Section 3.10 or any Lender determines that
LIBOR is unascertainable or illegal pursuant to Section 3.08 or Section 3.09, or
any Lender makes a claim for increased costs or determines that its
participation in any Letter of Credit is illegal pursuant to Section 3.09, or
(iii) any Lender shall decline to consent to a modification or waiver of the
terms of this Agreement or the other Credit Documents requested by Intermet,
then and in such event, upon request from Intermet delivered to such Lender and
the Agent, such Lender shall assign, in accordance with the provisions of
Section 10.06(c), all of its rights and obligations under this Agreement and the
other Credit Documents to another Lender or an Eligible Assignee selected by
Intermet, in consideration for the payment by such assignee to the Lender of the
principal of, and interest on, the outstanding Loans accrued to the date of such
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assignment, and the assumption of such Lender's Commitment hereunder, together
with any and all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such assignment;
provided, however, Lenders subject to this Section 10.06 shall be treated in a
substantially identical manner.
SECTION 10.07. GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR
COURT OF FULTON COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR
OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, INTERMET HEREBY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY,
AND INTERMET HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) INTERMET HEREBY IRREVOCABLY DESIGNATES CSC/PRENTICE
HALL, INC., AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND ON
BEHALF OF INTERMET, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO INTERMET AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, BUT THE FAILURE OF INTERMET TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. INTERMET FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL,
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POSTAGE PREPAID, TO INTERMET AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, any
Co-Agent, any Lender, any holder of a Note or any Credit Party to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Intermet in any other jurisdiction.
SECTION 10.08. INDEPENDENT NATURE OF LENDERS' RIGHTS. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights pursuant to this Agreement and its Notes, and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date (the
"Effective Date") on which all of the parties hereto shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the same
to the Agent pursuant to Section 10.01 or, in the case of the Lenders, shall
have given to the Agent written or telex notice (actually received) that the
same has been signed and mailed to them.
(b) The obligations of Intermet under Sections 3.07(b),
3.12, 3.10, 3.13, 10.04 and 10.15 hereof shall survive the payment in full of
the Notes and all other Obligations after the Maturity Date. All representations
and warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the other Credit Documents, and such other agree
ments and documents, the making of the Loans hereunder, and the execution and
delivery of the Notes.
SECTION 10.11. SEVERABILITY. In case any provision in or
obligation under this Agreement or the other Credit Documents shall be invalid,
illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
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SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation of, another
covenant, shall not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
SECTION 10.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR
OR TAX LAWS. If (i) any preparation of the financial statements referred to in
Section 6.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accounts (or successors
thereto or agencies with similar functions) (other than changes mandated by FASB
106) result in a material change in the method of calculation of financial
covenants, standards or terms found in this Agreement, (ii) there is any change
in Intermet's fiscal quarter or fiscal year, or (iii) there is a material change
in federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement, Intermet and the Required Lenders agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating any of the Consolidated
Companies' financial condition shall be the same after such changes as if such
changes had not been made. Unless and until such provisions have been so
amended, the provisions of this Agreement shall govern.
SECTION 10.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The
headings of the several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement. This Agreement, the other Credit Documents,
and the agreements and documents required to be delivered pursuant to the terms
of this Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all prior
agreements, representations and understandings related to such subject matters.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and to be delivered in Atlanta, Georgia, by their
duly authorized officers as of the day and year first above written.
Address for Notices: INTERMET CORPORATION
5445 Corporate Drive By: /s/ Doretha J. Christoph
Suite 20 ___________________________________
Troy, Michigan 48098 Doretha J. Christoph
Vice President-Finance
Attn: Doretha J. Christoph
Telephone: (810) 952-2500 Attest: /s/ James W. Rydel
Telecopy: (810) 952-2501 -------------------------------
James W. Rydel
Secretary
[CORPORATE SEAL]
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Address for Notices: SUNTRUST BANK, ATLANTA,
AS AGENT
One Park Place, N.E.
Atlanta, Georgia 30303 By: /s/ C. Wes Burton, Jr.
Attention: C. Wes Burton, Jr. -----------------------------------
C. Wes Burton, Jr.
Vice President
Telex No.: 542210
Answerback: TRUSCO INT ATL
Telecopy No.: 404/588-8833 By: /s/ Rainer C. Zeck
-------------------------------------
Name: Rainer C. Zeck
------------------------------
Title: Vice President
Payment Office: ------------------------------
One Park Place, N.E.
Atlanta, Georgia 30303
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Address for Notices: SUNTRUST BANK, ATLANTA
One Park Place, N.E.
Atlanta, Georgia 30303 By: /s/ C. Wes Burton, Jr.
Attention: C. Wes Burton, Jr. -----------------------------------
Telex No.: 542210 C. Wes Burton, Jr.
Vice President
Answerback: TRUSCO INT ATL
Telecopy No.: 404/588-8833 By: /s/ Rainer C. Zeck
-----------------------------------
Name: Rainer C. Zeck
-----------------------------
Title: Vice President
-----------------------------
Lending Office and Payment Office:
One Park Place, N.E.
Atlanta, Georgia 30303
COMMITMENT: $100,000,000
PRO RATA SHARE OF
COMMITMENTS: 50%
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Address for Notices: NBD BANK, INDIVIDUALLY AND AS CO-AGENT
611 Woodward Avenue
Detroit, Michigan 48226 By: /s/ William C. Goodhue
Attention: William C. Goodhue __________________________________
Vice President
Name: William C. Goodhue
___________________________
Title: Vice President
____________________________
Telex No.: 164177
Answerback: NATIONSBANK DET
Telecopy No.: (313) 226-0855
Lending Office and Payment Office:
611 Woodward Avenue
Detroit, Michigan 48226
COMMITMENT: $50,000,000
PRO RATA SHARE OF
COMMITMENTS: 25%
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Address for Notices: FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, INDIVIDUALLY
AND AS CO-AGENT
One First Union Center
TW-19
Charlotte, NC 28288-0745 By: /s/ Mark M. Harden
__________________________________
Attn: Glenn Edwards Mark M. Harden
Vice President
Telex No.:
Answerback:
Telecopy: (703) 374-2802
Lending Office and Payment Office:
One First Union Center, TW19
Charlotte, NC 28288-0745
COMMITMENT: $50,000,000
PRO RATA SHARE OF
COMMITMENTS: 25%
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