EXHIBIT 10.1
R2 INVESTMENTS, LDC STANFIELD CAPITAL PARTNERS LLC
August 4, 2005
INTERMET Corporation
5445 Corporate Drive, Suite 200
Troy, Michigan 48098
Attention: Gary F. Ruff
President and Chief Executive Officer
Ladies and Gentlemen:
The undersigned, on behalf of one or more of their related or associated
entities to be designated by them (collectively, the "Initial Committed
Purchasers"), in accordance with the terms and subject to the conditions set
forth in this amended commitment letter and the amended restructuring term sheet
attached hereto as Annex "A" (the "Term Sheet"), the terms and conditions of
which are incorporated by reference herein (collectively, the "Commitment
Letter"), are pleased to provide, on a standby basis:
(a) a commitment to INTERMET Corporation ("Intermet") to purchase
7,500,000 shares of the common stock (the "New Common Stock") of Reorganized
Intermet, at a purchase price of $10.00 per share, in accordance with the terms
and subject to the conditions set forth in the Term Sheet opposite the caption
"Private Placement Purchase Agreement" (the "Private Placement Backstop
Investment"); and
(b) a commitment to Intermet to purchase the Cash-Out Shares, at a
purchase price of $10.00 per share, in accordance with the terms and subject to
the conditions set forth in the Term Sheet opposite the captions "Cash-Out
Purchase Agreement" and "Unsecured Claims" (the "Cash-Out Backstop Investment"
and, together with the Private Placement Backstop Investment, the "Backstop
Investment").
Capitalized terms used in this Commitment Letter and not defined herein
shall have the meanings assigned to such terms in the Term Sheet.
The proceeds of the Backstop Investment are to be used by the Reorganized
Company for general working capital and corporate purposes and to make certain
specified payments in connection with and to facilitate the consummation of a
plan of reorganization (the "Plan") that shall be filed by the Company with the
United States Bankruptcy Court for the Eastern District of Michigan, Southern
Division (the "Bankruptcy Court"), in connection with the Company's chapter 11
proceedings (the "Chapter 11 Cases") initiated pursuant to chapter 11 of title
11 of the United States Code, 11 U.S.C. Sections 101-1330, as amended (the
"Bankruptcy Code"). The Plan shall be in form and substance consistent with the
terms and conditions of this Commitment Letter.
The Initial Committed Purchasers are willing to provide the Backstop
Investment, on a several but not joint basis, to Reorganized Intermet,
substantially on the terms and conditions set forth in this Commitment Letter.
Intermet Corporation
August 4, 2005
Page 2
The aggregate purchase price (the "Purchase Price") for the foregoing
shares of New Common Stock will be payable in cash, by wire transfer of
immediately available funds, to Reorganized Intermet on the Effective Date.
In accordance with the terms and subject to the conditions set forth in
this Commitment Letter:
(a) R2 Investments, LDC, on behalf of one or more of its related or
associated entities to be designated by it (collectively, "R2 Investments"),
shall be obligated to purchase 50% of the shares of New Common Stock issued by
Reorganized Intermet in connection with the Private Placement Backstop
Investment, and 50% of the shares of New Common Stock issued by Reorganized
Intermet in connection with the Cash-Out Backstop Investment; and
(b) Stanfield Capital Partners, on behalf of one or more of its related or
associated entities to be designated by it (collectively, "Stanfield Capital"),
shall be obligated to purchase 50% of the shares of New Common Stock issued by
Reorganized Intermet in connection with the Private Placement Backstop
Investment, and 50% of the shares of New Common Stock issued by Reorganized
Intermet in connection with the Cash-Out Backstop Investment.
Neither of the Initial Committed Purchasers shall be obligated to pay or
fund any part of the other Initial Committed Purchaser's portion of the Purchase
Price.
Set forth in detail in the Term Sheet are: (a) the conditions precedent to
the obligations of the Initial Committed Purchasers to make the Backstop
Investment; and (b) the provisions relating to the obligation of Intermet to pay
the Commitment Amount and the Reimbursable Expenses.
Each of the Initial Committed Purchaser's commitment to make the Backstop
Investment is subject to, among other things, the satisfaction (or the written
waiver by each of the Initial Committed Purchasers) of the conditions precedent
set forth in the Term Sheet opposite the caption "Initial Committed Purchasers
Conditions Precedent".
The definitive investment documents, including, without limitation, the
Restructuring Documents (collectively, the "Definitive Investment Documents")
shall contain representations, warranties, and covenants customarily included in
subscription and related agreements for similar standby underwriting investments
or financings.
On the Effective Date, Reorganized Intermet and the Initial Committed
Purchasers shall enter into the Registration Rights Agreement. A summary of the
terms and conditions of the Registration Rights Agreement is set forth on Annex
"B" to this Commitment Letter.
On the Effective Date, Reorganized Intermet will complete the Key
Employees Rights Offering, in connection with which the Key Employees shall be
afforded the opportunity to purchase, on a pro rata basis, up to 181,249 shares
of New Common Stock, at a purchase price of $10.00 per share. The names of the
Key Employees and the number of shares of New Common
Intermet Corporation
August 4, 2005
Page 3
Stock that may be purchased by each Key Employee are set forth on Annex "C" to
this Commitment Letter.
Upon reasonable notice and during normal business hours, Intermet will
afford the Initial Committed Purchasers and their counsel, accountants and other
representatives (collectively, the "Representatives") full and complete access
to the books, records and properties of the Company and the opportunity to
discuss the business, affairs and finances of the Company with the officers,
employees, accountants, attorneys and representatives of the Company in order to
enable the Initial Committed Purchasers and their Representatives to make such
investigations of the Company and its business as they deem reasonably
appropriate. Intermet agrees that it will cause the officers and employees of
the Company, and will request their respective legal counsel and accountants, to
cooperate so that the Initial Committed Purchasers can complete such review,
including promptly disclosing to the Initial Committed Purchasers any material
facts known to such parties which have resulted in, or could be expected to
result in, a Material Adverse Change.
Excluding any Indemnity Claim (as defined herein) arising solely from an
Indemnified Party's (as defined herein) breach of this Commitment Letter or
breach of any other agreements between an Indemnified Party and Intermet, or
among an Indemnified Party and the Reorganized Company, Intermet agrees to
indemnify and hold harmless the Initial Committed Purchasers and their
respective affiliates, directors, officers, partners, members, employees,
attorneys, agents and assignees (including affiliates thereof) (each an
"Indemnified Party") from and against any and all losses, claims, damages,
liabilities (or actions or other proceedings commenced or threatened in respect
thereof) or other expenses to which such Indemnified Party may become subject
(each an "Indemnity Claim"), insofar as such losses, claims, damages,
liabilities (or actions or other proceedings commenced or threatened in respect
thereof) or other expenses arise out of or in any way relate to or result from
this Commitment Letter or the proceeds of the Backstop Investment, and Intermet
agrees to reimburse (on an as incurred monthly basis) each Indemnified Party for
any legal or other out-of-pocket expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability or action or other proceeding (whether or not such Indemnified Party
is a party to any action or proceeding out of which such indemnified expenses
arise), but excluding therefrom all losses, claims, damages, liabilities and
expenses that are finally determined in a non-appealable decision of a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Indemnified Party. In the event of any litigation or
dispute involving this Commitment Letter, the Initial Committed Purchasers shall
not be responsible or liable to Intermet or any other person or entity for any
special, indirect, consequential, incidental or punitive damages. The
obligations of Intermet under this paragraph (the "Indemnification Obligations")
shall remain effective whether or not any of the transactions contemplated in
this Commitment Letter are consummated, any Definitive Investment Documents with
respect to the Backstop Investment are executed and notwithstanding any
termination of this Commitment Letter, and shall be binding upon Reorganized
Intermet in the event that any plan of reorganization of Intermet is
consummated.
Except as provided herein, Intermet agrees that, once paid, the fees or
any part thereof payable hereunder shall not be refundable or form the basis of
any defense, setoff, or recoupment claim under any circumstances, regardless of
whether the transactions contemplated by this
Intermet Corporation
August 4, 2005
Page 4
Commitment Letter are consummated. All fees payable hereunder shall be paid in
immediately available funds.
Intermet represents and warrants that: (i) all written information and
other materials concerning the Company and the Plan (the "Information") which
has been, or is hereafter, prepared by, or on behalf of, Intermet and delivered
to the Initial Committed Purchasers were or will be, when delivered, when
considered as a whole, complete and correct in all material respects and did
not, or will not when delivered, contain any untrue statement of material fact
or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statements have been made; and (ii) to the extent that any such Information
contains projections, such projections were prepared in good faith on the basis
of (A) assumptions, methods and tests which are believed by Intermet to be
reasonable at the time made and (B) information believed by Intermet to have
been accurate based upon the information available to Intermet at the time such
projections were furnished to the Initial Committed Purchasers.
Except as otherwise required by law, Intermet shall not issue any press
release or make any other announcement that refers to the Initial Committed
Purchasers or the Backstop Investment without the prior written consent of the
Initial Committed Purchasers. Notwithstanding the sentence immediately
preceding, in no event shall Intermet issue any such press release or make any
such announcement without providing each of the Initial Committed Purchasers at
least one business day to review the proposed press release or announcement and
provide their written comments or suggested revisions with respect thereto.
This Commitment Letter (a) supersedes all prior discussions, agreements,
commitments, arrangements, negotiations or understandings, whether oral or
written, of the parties with respect thereto, including the Commitment Letter
among R2 Investments, Stanfield Capital and Intermet dated June 21, 2005, (b)
shall be governed, except to the extent that the Bankruptcy Code is applicable,
by the laws of the State of New York, without giving effect to the conflict of
laws provisions thereof; (c) shall not be assignable by Intermet or the Initial
Committed Purchasers; (d) is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto; and (e) may not be
amended or waived except by an instrument in writing signed by Intermet and the
Initial Committed Purchasers.
This Commitment Letter may be executed in any number of counterparts, each
of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
Notwithstanding anything herein to the contrary, all of the obligations of
Intermet hereunder are subject to the approval of the Bankruptcy Court. Intermet
shall seek Bankruptcy Court approval of this Commitment Letter at the hearing
scheduled for August 9, 2005 (including the Indemnification Obligations and the
payment of the Commitment Amount and Reimbursable Expenses).
If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof by returning to the Initial Committed Purchasers
executed counterparts hereof not later than 4:00 p.m., New York City time, on
August 4, 2005. This Commitment Letter will become effective upon the mutual
exchange of executed counterparts hereof. This Commitment Letter shall expire at
4:00 p.m., New York City time, on August 4, 2005, unless it has previously
become effective.
Very truly yours,
R2 INVESTMENTS, LDC
(on behalf of certain of its related or
associated entities)
By: Amalgamated Gadget, L.P., as its
Investment Manager
By: Scepter Holdings, Inc., General Partner
By: /s/ DAVE GILLESPIE
____________________________________
Name: Dave Gillespie
Title: Chief Financial Officer
STANFIELD CAPITAL PARTNERS LLC
(on behalf of certain of its related or
associated entities)
By: /s/
____________________________________
Name: _____________________________
Title: _____________________________
Agreed and accepted on this
4th day of August, 2005
INTERMET Corporation
By: /s/ GARY F. RUFF
____________________________________________
Name: Gary F. Ruff
Title: President and Chief Executive Officer
ANNEX "A"
INTERMET CORPORATION
RESTRUCTURING TERM SHEET
AUGUST 4, 2005
The transactions contemplated by this term sheet are subject to conditions to be
set forth in definitive documents. This term sheet is part of the commitment
letter (the "Commitment Letter"), dated August 4, 2005, addressed to Intermet
(as defined below) by the Initial Committed Purchasers (as defined below) and is
subject to the terms thereof. This term sheet is proffered in the nature of a
settlement proposal in furtherance of settlement discussions and is entitled to
protection from any use or disclosure to any party or person pursuant to Federal
Rule of Evidence 408 and any other rule of similar import.
Until publicly disclosed by INTERMET Corporation, with the prior written consent
of the Initial Committed Purchasers, this term sheet and the information
contained herein is strictly confidential and may not be shared with any person
other than the DIP Lenders (as defined below), the Senior Credit Lenders (as
defined below), the Exit Facility Lenders (as defined below), the Official
Committee of Unsecured Creditors (the "Creditors' Committee") appointed in the
Chapter 11 Cases (as defined below), the Official Committee of Equity Holders
(the "Equity Committee") appointed in the Chapter 11 Cases, the Ad Hoc Committee
of Trade Claimants (the "Ad Hoc Trade Committee") and each such party's
professionals and other advisors.
COMPANY: INTERMET Corporation ("Intermet" and, as
reorganized, "Reorganized Intermet"), and certain
of its subsidiaries (together with Intermet, the
"Company" and, as reorganized with Reorganized
Intermet, the "Reorganized Company").
NOTEHOLDERS: The entities (the "Noteholders") that hold 9.75%
Senior Notes due 2009 issued by Intermet and
guaranteed by certain subsidiaries of Intermet
(collectively, the "Notes"). The claims held by
the Noteholders (inclusive of principal and
interest accrued as of the petition date of the
Chapter 11 Cases) against Intermet and all of the
guaranty claims held by the Noteholders against
Intermet's debtor subsidiaries shall be
collectively referred to herein as the "Noteholder
Claims".
OTHER UNSECURED CLAIMANTS: Holders of all unsecured obligations (the "GUC
Claims") other than (i) the Notes; and (ii) such
obligations which qualify or elect to be treated
in a convenience class (the "Convenience Class
Claims") of Intermet and its debtor subsidiaries
(the "GUC Holders", together with the Noteholders,
the "Unsecured Holders").
INITIAL COMMITTED PURCHASERS: R2 Investments, LDC and/or one or more of its
related or associated entities (collectively,
"R2 Investments") and Stanfield Capital Partners
and/or one or more of its related or associated
entities (collectively, "Stanfield Capital" and,
together with R2 Investments, the "Initial
Committed Purchasers").
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RESTRUCTURING TRANSACTION: Subject to the terms of the Commitment Letter,
Intermet shall restructure its capital structure
(the "Restructuring") through the chapter 11 plans
of reorganization (as amended, modified or
supplemented from time to time, the "Plan") and
the related disclosure statement (as amended,
modified or supplemented from time to time, the
"Disclosure Statement") filed with the United
States Bankruptcy Court for the Eastern District
of Michigan, Southern Division (the "Bankruptcy
Court") on June 24, 2005 and June 27, 2005,
respectively, in cases commenced by the Company on
September 29, 2004 under chapter 11 of the
Bankruptcy Code (the "Chapter 11 Cases"), which
Plan and Disclosure Statement shall be modified so
as to be consistent with this Term Sheet and
acceptable to the Initial Committed Purchasers.
PRIVATE PLACEMENT PURCHASE In accordance with the terms and subject to the
AGREEMENT: conditions of a purchase agreement (the "Private
Placement Purchase Agreement"), the Initial
Committed Purchasers shall commit (the "Funding
Commitment") to purchase, on a pro rata basis, on
the Effective Date (as defined below), 7,500,000
shares (the "Private Placement Shares") of
newly-issued shares of common stock (the "New
Common Stock") of Reorganized Intermet, at a
purchase price of $10.00 per share, to the extent
not otherwise purchased in the Rights Offering (as
defined below). The Funding Commitment shall be
subject to the right of the Unsecured Holders,
including the Initial Committed Purchasers,
pursuant to an election to be made in conjunction
with voting on the Plan, to purchase, on a ratable
basis, the full amount of the Private Placement
Shares (the "Rights Offering"). The Private
Placement Shares shall be subject to dilution by
the Unsecured Shares (as defined below), the Key
Employees Rights Offering (as defined below), the
Management Incentive Plan (as defined below) and
the Alternate Subscription Shares (as defined
below). In no event shall any Unsecured Holder
have any right of over-subscription with respect
to the Rights Offering. Moreover, the rights
afforded to all Unsecured Holders to purchase the
New Common Stock shall be non-transferable
provided, however, with respect to each unsecured
claim, the holder of the claim on the tenth
business day after the Bankruptcy Court approves
the adequacy of the Disclosure Statement is the
only person entitled to participate in the Rights
Offering with respect to such claim, assuming such
person continues to hold the claim. The Private
Placement Purchase Agreement, which shall reflect
the agreement of the Initial Committed Purchasers
to purchase the Private Placement Shares to be
issued by Reorganized Intermet in connection with
the Plan, shall include representations,
warranties and covenants customary for
transactions of similar type and monetary amount
and otherwise acceptable to the parties thereto.
The Private Placement Purchase Agreement (and the
Plan with respect to items (i) and (ii) below)
shall, among other things, specifically contain:
(i) a provision specifying that Reorganized
Intermet shall obtain and maintain in full force
tail insurance covering such risks as are
presently covered for a period of not less than 5
years after the
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Effective Date in favor of the former and current
officers and directors of the Company on terms and
conditions acceptable to the Company and the
Initial Committed Purchasers; provided, however,
that the aggregate cost of such tail insurance
shall not exceed $1.5 million;
(ii) a provision specifying that Reorganized
Intermet shall indemnify all officers and
directors of the Company who served in such
capacity at any time prior to the Effective Date
(as defined below) for any amounts such officers
and directors are required to pay as a result of
any retentions or deductibles applicable under
policies of insurance in effect on the date hereof
or as contemplated by paragraph (i) above, which
policies (or extensions thereof having terms no
less favorable to the officers and directors)
shall be assumed by Reorganized Intermet in the
Plan. The indemnity described in the preceding
sentence shall not include liability relating to
any action, omission, transaction, event,
occurrence or other circumstance that would
constitute an exclusion under the applicable
policies of insurance or liability in excess of
the limits of such policies. The provision shall
specify that amounts payable by Reorganized
Intermet pursuant to this provision shall be paid
on a current basis on behalf of the officers and
directors, without requiring the officers and
directors to first pay such amounts from their own
funds and then seek reimbursement from Reorganized
Intermet, so long as Reorganized Intermet shall
have received a written undertaking by each such
officer and director to repay such amounts to
Reorganized Intermet if it shall be determined by
a court of competent jurisdiction pursuant to a
final, non-appealable order that such officer or
director is not entitled to coverage under such
policies of insurance;
(iii) a provision that the Private Placement
Purchase Agreement and the Cash-Out Purchase
Agreement (as defined below) shall terminate
automatically upon the termination of the
Commitment Letter. Upon any such termination, the
obligations of the parties to the Private
Placement Purchase Agreement and the Cash-Out
Purchase Agreement shall be of no further force or
effect, except as otherwise expressly set forth
therein; and
(iv) a representation and warranty stating
that the Initial Committed Purchasers hold, as of
the date of the Commitment Letter, collectively,
on behalf of certain funds and managed accounts,
in excess of $58.0 million in face amount of the
Notes.
CASH-OUT PURCHASE The detailed terms and conditions pursuant to
AGREEMENT: which the Initial Committed Purchasers shall
purchase the Cash-Out Shares (as defined below)
shall be set forth in a purchase agreement (the
"Cash-Out Purchase Agreement") by and among
Intermet and the Initial Committed Purchasers. The
Cash-Out Purchase Agreement shall include
representations, warranties and covenants
customary for transactions of similar type and
monetary amount and otherwise acceptable to the
parties.
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OTHER FEATURES OF THE
RESTRUCTURING:
TREATMENT OF CLAIMS AND The treatment of claims and interests shall be as
INTERESTS: set forth in the Plan and described in the
Disclosure Statement, in each case as modified to
be consistent with this Term Sheet and acceptable
to the Initial Committed Purchasers.
THE KEY EMPLOYEE RIGHTS The Company will conduct a key employee rights
OFFERING: offering (the "Key Employee Rights Offering"), in
connection with which the Company shall offer to
the Key Employees (as defined below) the right to
purchase, on a pro rata basis, 181,249 shares of
New Common Stock, in consideration for cash in the
amount of $10.00 per share. The Key Employees
shall have a right of over-subscription with
respect to the Key Employee Rights Offering as set
forth on Annex C to the Commitment Letter.
Moreover, the rights to purchase shares of New
Common Stock in connection with the Key Employee
Rights Offering shall be non-transferable. Other
terms and conditions of the Key Employee Rights
Offering are to be determined by the Company and
the Initial Committed Purchasers, in consultation
with the Creditors' Committee.
As used herein, the term "Key Employees" means
those persons who: (i) shall be employed by the
Company on the effective date of the Plan (the
"Effective Date"); (ii) upon consummation of the
Plan, shall be entitled to receive stay bonuses
under the Intermet Amended and Restated Employee
Retention Plan, dated effective September 20, 2004
and restated December 8, 2004 (the "KERP"); and
(iii) are identified in an annex to the Commitment
Letter.
The Key Employees either: (i) may receive in cash
any unpaid stay bonuses to which they may be
entitled in accordance with the terms and subject
to the conditions of the KERP, including, without
limitation, the stay bonus payment schedule set
forth therein; or (ii) upon consummation of the
Plan, may purchase shares of New Common Stock in
connection with the Key Employee Rights Offering
by authorizing Reorganized Intermet to apply, on
their behalf, on a dollar-for-dollar basis, any
such stay bonuses toward the purchase of the
shares of New Common Stock covered by the Key
Employee Rights Offering.
PURCHASE OF On the Effective Date: (i) the Initial Committed
CASH-OUT SHARES: Purchasers shall purchase, on a pro rata basis,
from Reorganized Intermet the Cash-Out Shares, for
an aggregate consideration equal to the product
(the "Aggregate Cash-Out Payment") determined by
multiplying the Cash-Out Amount by the total
number of Cash-Out Shares; and (ii) the Initial
Committed Purchasers shall deliver to Reorganized
Intermet, by wire transfer of immediately
available funds, cash in the amount of the
Aggregate Cash-Out Payment, in consideration of
the Cash-Out Shares.
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EXIT FACILITY: A term loan facility and a revolving loan/letter
of credit facility the total of which shall not
exceed $260 million, or such other higher amount
as the Company and Initial Committed Purchasers,
in consultation with the Creditors' Committee,
deem appropriate and necessary (collectively, the
"Exit Facility"), shall be made available, by one
or more lenders (collectively, the "Exit Facility
Lenders"), to the Company, on terms and conditions
acceptable to the Company and the Initial
Committed Purchasers, in consultation with the
Creditors' Committee.
EMPLOYMENT AGREEMENTS: In connection with the Plan, each officer
currently a party to an employment agreement with
the Company shall enter into a new employment
agreement between such officer and the Company, on
terms and conditions acceptable to the Initial
Committed Purchasers, in consultation with the
Creditors' Committee, which shall supersede such
officer's existing employment agreement.
MANAGEMENT INCENTIVE PLAN: On or as soon as reasonably practicable after the
Effective Date, a management incentive plan (the
"Management Incentive Plan") shall be implemented
to reserve for designated members of senior
management of the Reorganized Company equity
interests (including, without limitation,
restricted common stock and/or options) in
Reorganized Intermet in an amount up to 5.0% of
the New Common Stock issued on the Effective Date.
The Management Incentive Plan will contain terms
and conditions that shall be determined by the
Board of Directors of Reorganized Intermet.
STOCKHOLDERS' AGREEMENT: All holders of New Common Stock will be subject to
a stockholders' agreement in the form attached
hereto as Exhibit B, as may be amended by mutual
agreement of Intermet and the Initial Committed
Purchasers, in consultation with the Creditors'
Committee (the "Stockholders' Agreement"). The
Stockholders' Agreement will be effective as of
the Effective Date.
REIMBURSABLE EXPENSES: The Company shall pay, within 10 days of receipt
of an invoice from the Initial Committed
Purchasers, the reasonable and documented
out-of-pocket fees and expenses incurred by the
Initial Committed Purchasers, including the fees
and expenses of their legal counsel, on and after
January 10, 2005 in connection with the
Restructuring, plus all of the reasonable and
documented fees and expenses incurred by the
Initial Committed Purchasers, including the fees
and expenses of their legal counsel, in connection
with the drafting, negotiation, prosecution or
defense of the Commitment Letter (including this
term sheet), the Private Placement Purchase
Agreement, the Rights Offering, corporate
governance documents, the Cash-Out Purchase
Agreement, the Plan, the Disclosure Statement, the
Confirmation Order, the Stockholders' Agreement,
the Exit Facility agreements and related documents
and any and all agreements and other documents
ancillary hereto or thereto (collectively, the
"Restructuring Documents"), including any fees and
expenses incurred by the Initial Committed
Purchasers in connection with obtaining all
required
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regulatory approvals (collectively, the
"Reimbursable Expenses"). The accrual of the
Reimbursable Expenses to be paid by Intermet
hereunder shall cease in the event that the
Commitment Letter is terminated. So long as the
Initial Committed Purchasers are not in material
breach of their obligations under the Commitment
Letter, the obligations of Intermet to pay the
Reimbursable Expenses provided herein shall remain
effective whether or not any of the transactions
contemplated by this Term Sheet are consummated,
any definitive documents with respect to the
Restructuring are executed and notwithstanding any
termination of the Commitment Letter, and shall be
binding upon Reorganized Intermet whether or not
any plan of reorganization with respect to
Intermet is consummated.
Notwithstanding anything contained herein or in
the Commitment Letter to the contrary, the payment
of any amounts due pursuant to the Commitment
Letter or this Term Sheet, including but not
limited to the Reimbursable Expenses due shall be
subject to the approval of the Commitment Letter
by the Bankruptcy Court, and such payment not
causing a default pursuant to the DIP Credit
Facility; provided, however, if any such payment
would cause a default pursuant to the DIP Credit
Facility, the Initial Committed Purchasers shall
have a super-priority administrative expense claim
for such unpaid amount subordinate only to the
claims of the DIP Lenders.
CORPORATE GOVERNANCE: On the Effective Date, the Board of Directors of
Reorganized Intermet shall be composed of seven
members. On the Effective Date, five of such
members shall be selected by the Initial Committed
Purchasers, one of such members shall be the Chief
Executive Officer of Reorganized Intermet and one
of such members shall be selected by the
Creditors' Committee. The member selected by the
Creditors' Committee shall be acceptable to the
Initial Committed Purchasers. Two of the five
members selected by the Initial Committed
Purchasers may not be officers, directors or
employees of either of the Initial Committed
Purchasers.
REGISTRATION RIGHTS: On the Effective Date, Reorganized Intermet shall
enter into a Registration Rights Agreement with
the Initial Committed Purchasers, pursuant to
which Intermet shall agree to register the resale
of the shares of New Common Stock issued to the
Initial Committed Purchasers in accordance with
the requirements of the Securities Act of 1933, as
amended. The Registration Rights Agreement shall
provide that any holder owning greater than 10% of
the outstanding New Common Stock upon emergence
shall be entitled to piggyback registration
rights. A summary of the material terms and
conditions of the Registration Rights Agreement
(including without limitation the time period
which must have lapsed before any demand
registration may be made thereunder) shall be set
forth in an annex to the Commitment Letter.
INITIAL COMMITTED PURCHASERS The obligations of the Initial Committed
CONDITIONS PRECEDENT: Purchasers to purchase the Private Placement
Shares, and the obligations of the Initial
Committed
6
Purchasers to purchase the Cash-Out Shares, will
be subject to the following conditions precedent
(each, an "Initial Committed Purchasers Condition
Precedent"), each of which may be waived in
writing by both of the Initial Committed
Purchasers:
(i) Intermet shall have amended the Plan and
Disclosure Statement in a manner
consistent with this Commitment Letter,
which Plan and Disclosure Statement, as
amended, shall be in form and substance
reasonably satisfactory to the Initial
Committed Purchasers, on or before 5
days after execution of the Commitment
Letter by Intermet;
(ii) a final, non-appealable order confirming
the Plan (the "Confirmation Order"), in
form and substance reasonably
satisfactory to the Initial Committed
Purchasers, shall have been entered by
the Bankruptcy Court;
(iii) there shall not have occurred any
Material Adverse Change (as defined
below);
(iv) execution and delivery of appropriate
legal documentation regarding the
Restructuring, including without
limitation, (A) the amended and restated
certificate of incorporation and bylaws
of Reorganized Intermet and each of its
subsidiaries, (B) the Exit Facility, (C)
the Registration Rights Agreement, (D)
Private Placement Purchase Agreement,
(E) the Stockholders' Agreement, and (F)
the Cash-Out Purchase Agreement, each in
form and substance satisfactory to the
Initial Committed Purchasers and the
satisfaction of the conditions precedent
contained therein, which conditions
precedent shall not vary materially from
the conditions precedent set forth
herein;
(v) all material governmental, regulatory
and third party approvals, waivers
and/or consents in connection with the
Restructuring (collectively,
"Approvals") shall have been obtained
and shall remain in full force and
effect, and there shall exist no claim,
action, suit, investigation, litigation
or proceeding, pending or threatened in
any court or before any arbitrator or
governmental instrumentality, which
would prohibit the Initial Committed
Purchasers from consummating the
transactions contemplated by the
Commitment Letter;
(vi) the Company realizes year-to-date
consolidated EBITDA for 2005, excluding
administrative fees and expenses
associated with the Restructuring,
through the latest calendar month ending
at least 25 days prior to the Effective
Date, in an amount that is no less than
the amount specified for such calendar
month on Exhibit A hereto, and the
Company shall provide the Initial
7
Committed Purchasers on the Effective
Date a statement, which shall be
executed by the President and Chief
Executive Officer and Chief Financial
Officer of Intermet, which shall set
forth the actual year to date EBITDA
through such calendar month;
(vii) issuance by Reorganized Intermet of the
shares of New Common Stock to the
Initial Committed Purchasers as
described herein;
(viii) cash (or cash equivalents) and/or
availability under the Exit Facility as
of the Effective Date, after giving
effect to the proceeds realized from the
issuance and sale of the Private
Placement Purchase Shares, but taking
into account distributions under the
Plan, of at least the amount required
pursuant to the Exit Facility, and the
Company shall provide the Initial
Committed Purchasers, on the business
day immediately preceding the Effective
Date, a certificate, executed by the
President and Chief Executive Officer
and the Chief Financial Officer of
Intermet, confirming such availability;
(ix) payment in full of the Commitment Amount
(as defined below) and all Reimbursable
Expenses outstanding on the Effective
Date, pursuant to the terms contained
herein;
(x) [INTENTIONALLY LEFT BLANK;]
(xi) the Exit Facility shall have closed on
the terms and conditions acceptable to
the Company and the Initial Committed
Purchasers, in consultation with the
Creditors' Committee, and not materially
inconsistent with the terms of the
Commitment Letter;
(xii) on the Effective Date, all
representations and warranties of the
Company contained in the Commitment
Letter, Private Placement Purchase
Agreement and the Cash-Out Purchase
Agreement shall be true, complete and
accurate in all material respects; and
(xiii) on the Effective Date, all covenants of
the Company contained in the Commitment
Letter, Private Placement Purchase
Agreement and the Cash-Out Purchase
Agreement shall have been complied with
by the Company in all material respects.
INTERMET CONDITIONS PRECEDENT: The obligations of Intermet to consummate the
transactions contemplated by the Commitment
Letter will be subject to the following
conditions precedent (each an "Intermet
Condition Precedent"), each of which may be
waived in writing by Intermet, in
8
consultation with the Creditors' Committee:
(i) on the Effective Date, all
representations and warranties of the
Initial Committed Purchasers contained
in the Commitment Letter, Private
Placement Purchase Agreement and the
Cash-Out Purchase Agreement shall be
true, complete and accurate in all
material respects;
(ii) on the Effective Date, all covenants of
the Initial Committed Purchasers
contained in the Commitment Letter,
Private Placement Purchase Agreement and
the Cash-Out Purchase Agreement shall
have been complied with by the Initial
Committed Purchasers in all material
respects;
(iii) the Confirmation Order, in form and
substance satisfactory to the Company,
shall have been entered by the
Bankruptcy Court;
(iv) execution and delivery of appropriate
legal documentation regarding the
Restructuring, including without
limitation, (A) the amended and restated
certificate of incorporation and bylaws
of Reorganized Intermet and each of its
Subsidiaries, (B) the Exit Facility, (C)
the Registration Rights Agreement, (D)
the Private Placement Purchase
Agreement, (E) the Stockholders'
Agreement and (F) the Cash-Out Purchase
Agreement, each in form and substance
satisfactory to the Company and the
satisfaction of the conditions precedent
contained therein, which conditions
precedent shall not vary materially from
the conditions precedent set forth
herein;
(v) all material Approvals shall have been
obtained and shall remain in full force
and effect, and there shall exist no
claim, action, suit, investigation,
litigation or proceeding, pending or
threatened in any court or before any
arbitrator or governmental
instrumentality, which would prohibit
the Company from consummating the
transactions contemplated by the
Commitment Letter;
(vi) the Exit Facility shall have closed on
the terms and conditions acceptable to
the Company; and
(vii) (A) Reorganized Intermet shall obtain
and maintain in full force tail
insurance covering such risks as are
presently covered for a period of not
less than 5 years after the Effective
Date in favor of the former and current
officers and directors of the Company on
terms and conditions acceptable to the
Company and the Initial Committed
Purchasers; provided, however, that the
aggregate cost of such tail insurance
shall not exceed $1.5 million and (B)
9
Reorganized Intermet shall indemnify all
officers and directors of the Company
who served in such capacity at any time
prior to the Effective Date (as defined
below) for any amounts such officers and
directors are required to pay as a
result of any retentions or deductibles
applicable under policies of insurance
in effect on the date hereof or as
contemplated by paragraph (A) above,
which policies (or extensions thereof
having terms no less favorable to the
officers and directors) shall be assumed
by Reorganized Intermet in the Plan. The
indemnity described herein shall not
include liability relating to any
action, omission, transaction, event,
occurrence or other circumstance that
would constitute an exclusion under the
applicable policies of insurance or
liability in excess of the limits of
such policies. Furthermore, amounts
payable by Reorganized Intermet pursuant
to the aforementioned shall be paid on a
current basis on behalf of the officers
and directors, without requiring the
officers and directors to first pay such
amounts from their own funds and then
seek reimbursement from Reorganized
Intermet , so long as Reorganized
Intermet shall have received a written
undertaking by each such officer and
director to repay such amounts to
Reorganized Intermet if it shall be
determined by a court of competent
jurisdiction pursuant to a final,
non-appealable order that such officer
or director is not entitled to coverage
under such policies of insurance..
TERMINATION OF The Commitment Letter shall terminate and all of
COMMITMENT LETTER: the obligations of the parties thereto (other
than the obligations of Intermet to pay the
Reimbursable Expenses and to satisfy its
indemnification obligations thereunder in
accordance with the terms and conditions of the
Commitment Letter) shall be of no further force
or effect, upon the giving of written notice of
termination by the Initial Committed Purchasers
or, with respect to (xiii)(B) and (xvi) only,
Intermet, in the event that any of the following
occurs (each, a "Termination Event"), each of
which may be waived in writing by both of the
Initial Committed Purchasers or, with respect to
(xiii)(B) and (xvi) only, Intermet, as
applicable:
(i) the Board of Directors of Intermet shall
fail to approve of the terms and
conditions of the Commitment Letter on
or before the filing of a motion with
the Bankruptcy Court seeking entry of
the Approval Order (as defined below);
(ii) Intermet shall fail to file a motion
with the Bankruptcy Court (or provide
other notice) seeking an order (the
"Approval Order"), approving the terms
and conditions of the Commitment Letter
and designating the payment of any
indemnification or the payment of the
Commitment
10
Amount and the Reimbursable Expenses
payable thereunder as administrative
expenses and obligations of Intermet,
one business day after execution of the
Commitment Letter by Intermet;
(iii) the Bankruptcy Court shall fail to enter
the Approval Order on or before the 14th
day following the filing of the motion
seeking entry of the Approval Order;
(iv) Intermet and the Initial Committed
Purchasers shall fail to agree upon,
execute and deliver the Private
Placement Purchase Agreement and the
Cash-Out Purchase Agreement on or before
30 days after the entry of the Approval
Order;
(v) the Company shall fail to amend the Plan
and Disclosure Statement in a manner
consistent with this Commitment Letter,
which Plan and Disclosure Statement, as
amended, shall be in form and substance
reasonably satisfactory to the Initial
Committed Purchasers, on or before 5
days after execution of the Commitment
Letter by Intermet;
(vi) the Disclosure Statement or a version
thereof that is not inconsistent with
the terms set forth in the Commitment
Letter shall not have been approved by a
final, non-appealable order of the
Bankruptcy Court on or before 24 days
after the filing of the motion seeking
the Approval Order;
(vii) the Confirmation Order shall not have
been entered by the Bankruptcy Court
within 75 days of the entry of the
Approval Order;
(viii) the Plan shall not have become effective
on or before the 20th day following
confirmation of the Plan;
(ix) there shall be any modification to any
provision of the Plan or the Disclosure
Statement that is inconsistent with the
terms and conditions set forth in the
Commitment Letter, without the prior
written consent of the Initial Committed
Purchasers, which consent shall not be
unreasonably withheld, or Intermet shall
withdraw, or file a motion to withdraw,
the Plan, except on terms reasonably
acceptable to the Initial Committed
Purchasers;
(x) an event shall have occurred or an order
shall have been entered by the
Bankruptcy Court that shall have the
practical effect of preventing
confirmation of the Plan on or before
the date contemplated in clause (vii)
above and such order or event shall not
have been vacated or
11
otherwise corrected within 30 days after
receipt of notice from the Initial
Committed Purchasers;
(xi) the conversion of one or more of the
Chapter 11 Cases to a case under Chapter
7 of the Bankruptcy Code, unless any
such conversion is made with the prior
written consent of the Initial Committed
Purchasers;
(xii) the appointment of a trustee, receiver
or examiner with expanded powers in one
or more of the Chapter 11 Cases, unless
any such appointment is made with the
prior written consent of the Initial
Committed Purchasers;
(xiii) (A) one or more of the Initial Committed
Purchasers Conditions Precedent shall
not have been satisfied (or waived by
the Initial Committed Purchasers) on or
before the Effective Date, unless such
delay is solely due to the fault of the
Initial Committed Purchasers; or (B) one
or more of the Intermet Conditions
Precedent shall not have been satisfied
(or waived by the Intermet) on or before
the Effective Date, unless such delay is
solely due to the fault of the Intermet;
(xiv) 10 days after the receipt of written
notice of termination by Intermet from
the Initial Committed Purchasers that
Intermet has failed to perform in any
material respect any of its obligations
under the Commitment Letter and such
failure remains uncured at the
conclusion of such ten-day period; or
(xv) at any time after the occurrence of a
Material Adverse Change. As used herein,
the term "Material Adverse Change" means
any change, effect, event, occurrence,
state of facts or development, either
alone or in combination, and either
known or unknown by the Company as of
June 21, 2005, that is materially
adverse to the business, financial
condition or results of operation of
Intermet and its subsidiaries, taken as
a whole; provided, however, that in no
event shall any change, effect, event,
occurrence, state of facts or
development that is disclosed in
Intermet's Annual Report on Form 10-K
for the twelve-month period ended
December 31, 2003, or in Intermet's
Quarterly Reports on Form 10-Q for the
three-month periods ended March 31,
2004, June 30, 2004 and September 30,
2004, or on any filing on Form 8-K made
by Intermet prior to June 21, 2005, each
in the form first filed by Intermet with
the Securities and Exchange Commission,
or any other information delivered in
writing by the Company to the Initial
Committed Purchasers prior to June 21,
2005, be considered a Material Adverse
Change, and provided further, that in no
12
event shall the prosecution of the
Chapter 11 Cases on terms and conditions
consistent with the terms and conditions
set forth in the Commitment Letter be
considered a Material Adverse Change.
(xvi) Intermet receives a binding offer with
respect to a financial restructuring
that (a) pays the Company's existing
secured creditors in full in cash, and
(b) delivers a dollar recovery to all
Unsecured Holders in excess of the
implied dollar recovery to Unsecured
Holders as set forth in the Disclosure
Statement.
REPRESENTATION OF INITIAL The Initial Committed Purchasers represent to the
COMMITTED PURCHASER Debtors that the Initial Committed Purchasers
OWNERSHIP: hold, as of the date of the Commitment Letter,
collectively, on behalf of certain funds and
managed accounts, in excess of $58.0 million in
face amount of the Notes. If the Initial Committed
Purchasers, at any time prior to the date on which
the Plan shall be confirmed by the Bankruptcy
Court or the termination of the Commitment Letter,
shall fail to hold collectively, on behalf of such
funds and managed accounts, at least $58 million
in face amount of the Notes, the Initial Committed
Purchasers shall promptly deliver written notice
(the "Sell-Down Notice") thereof to Intermet.
So long as Intermet is not in breach of its
obligations under the Commitment Letter, Intermet
may terminate the Commitment Letter at any time
within five business days of its receipt of the
Sell-Down Notice by delivering to the Initial
Committed Purchasers written notice (the
"Sell-Down Termination Notice") of such
termination. Upon the receipt of the Sell-Down
Termination Notice by the Initial Committed
Purchasers, the Commitment Letter shall terminate
and all of the obligations of the parties thereto
(other than the obligations of Intermet to pay the
Reimbursable Expenses and to satisfy its
indemnification obligations thereunder in
accordance with the terms and conditions of the
Commitment Letter) shall be of no further force or
effect.
COMMITMENT AMOUNT: In accordance with the terms and conditions of the
Commitment Letter and this Term Sheet, Intermet
shall pay the Initial Committed Purchasers an
amount equal to $3.0 million (the "Commitment
Amount") on the Effective Date. In the event that
the Commitment Letter is terminated prior to the
Effective Date, the Commitment Amount shall not be
payable. Notwithstanding anything contained herein
to the contrary, in the event that the Commitment
Letter is terminated in accordance herewith prior
to the Effective Date, the Initial Committed
Purchasers sole and exclusive remedy shall be
limited to the payment of the Reimbursable
Expenses accrued up until the date of termination
and the Indemnification Obligation (as defined in
the Commitment Letter).
The Initial Committed Purchasers shall have no
duties or obligations under the Commitment Letter,
Private Placement Purchase Agreement
13
or Cash-Out Purchase Agreement, other than those
expressly set forth herein or therein.
Notwithstanding anything contained herein or in
the Commitment Letter to the contrary, the payment
of any amounts due pursuant to the Commitment
Letter or this Term Sheet, including but not
limited to the payment of the Commitment Fee shall
be subject to the approval of the Commitment
Letter by the Bankruptcy Court, and such payment
not causing a default under the DIP Credit
Facility; provided, however, if any such payment
would cause a default pursuant to the DIP Credit
Facility, the Initial Committed Purchasers shall
have a super-priority administrative expense claim
for such unpaid amount subordinate only to the
claims of the DIP Lenders.
ALTERNATE APPLICATION OF THE So long as the Commitment Letter has not been
COMMITMENT AMOUNT: previously terminated, on the Effective Date, the
Initial Committed Purchasers:(i) may purchase up
to 300,000 additional shares of New Common Stock,
at a purchase price of $10.00 per share, by
delivering to Reorganized Intermet, by wire
transfer of immediately available funds, cash in
an amount up to the Commitment Amount that the
Initial Committed Purchasers shall have previously
received; and (ii) may apply all or any portion of
the Commitment Amount otherwise payable to the
Initial Committed Purchasers toward the purchase
of up to 300,000 additional shares of New Common
Stock at a purchase price of $10.00 per share. Any
shares of New Common Stock purchased by an Initial
Committed Purchaser (collectively, the "Alternate
Subscription Shares") pursuant to this paragraph
shall be issued to such Initial Committed
Purchaser on the Effective Date, and the portion
of the Commitment Amount otherwise payable to such
Initial Committed Purchaser shall be
correspondingly reduced.
PLAN SUPPORT: Until the termination of the Commitment Letter in
accordance with its terms, the Initial Committed
Purchasers agree to support confirmation of the
Plan and agree not to support any other plan of
reorganization with regard to the Company.
14
EXHIBIT A
INTERMET CORPORATION
If the latest calendar month Then the year-to-date
ending at least 25 days prior to 2005 consolidated EBITDA,
the Effective Date is the month excluding administrative
of: fees and expenses
associated with the
Restructuring, for such
calendar month shall be
no less than:
June 2005 $15,230,000
July 2005 $14,163,000
August 2005 $17,149,000
September 2005 $22,476,000
October 2005 $26,799,000
November 2005 $29,725,000
December 2005 $27,459,000
15
EXHIBIT B
STOCKHOLDERS' AGREEMENT
16
EXHIBIT B
STOCKHOLDERS AGREEMENT
AMONG
INTERMET CORPORATION
AND
THE STOCKHOLDERS SPECIFIED HEREIN
TABLE OF CONTENTS
Page
----
STOCKHOLDERS AGREEMENT among INTERMET CORPORATION and THE STOCKHOLDERS SPECIFIED HEREIN....................... 1
TABLE OF CONTENTS................................................................................................. i
INTERMET CORPORATION STOCKHOLDERS AGREEMENT....................................................................... 1
Preamble......................................................................................................... 1
ARTICLE I DEFINITIONS............................................................................................. 1
1.1 Definitions..................................................................................... 1
ARTICLE II RESTRICTIONS ON TRANSFER............................................................................... 3
2.1 Transfers Binding Upon Transferees.............................................................. 3
2.2 Restrictions on Transfer........................................................................ 3
2.3 Agreement to Become Party; Invalid Transfers.................................................... 5
2.4 Issuance of New Company Shares.................................................................. 5
2.5 Legends......................................................................................... 5
ARTICLE III INFORMATION RIGHTS AND CONFIDENTIALITY................................................................ 6
3.1 Information Rights.............................................................................. 6
3.2 Confidentiality................................................................................. 6
ARTICLE IV MISCELLANEOUS.......................................................................................... 7
4.1 Amendment and Waiver............................................................................ 7
4.2 Severability.................................................................................... 7
4.3 Entire Agreement................................................................................ 7
4.4 Successors and Assigns.......................................................................... 7
4.5 Counterparts.................................................................................... 8
4.6 Remedies........................................................................................ 8
4.7 Notices......................................................................................... 8
4.8 Delivery by Facsimile........................................................................... 8
4.9 Descriptive Headings............................................................................ 8
4.10 Governing Law................................................................................... 8
4.11 Submission to Jurisdiction...................................................................... 9
4.12 Agreement Binding and Enforceable............................................................... 9
i
INTERMET CORPORATION
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of
[EFFECTIVE DATE], among INTERMET Corporation, a Delaware corporation (the
"Company"), each of the holders of the Common Stock (as hereinafter defined), as
set forth on Schedule 1, and each other holder or potential holder of Common
Stock who may be or may become bound by the terms of this Agreement, pursuant to
the provisions of Sections 2.3, 2.4, or 4.12 hereof or otherwise (the
"Stockholders").
PREAMBLE
WHEREAS, pursuant to the Plan (as hereinafter defined), each
Stockholder listed on Schedule I hereto is receiving from the Company, on the
date hereof, the number of shares of Common Stock set forth opposite such
Stockholder's name on Schedule I hereto; and
WHEREAS, pursuant to the Plan, the Company and the Stockholders are
entering into this Agreement to govern certain of their rights relating to the
Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Unless otherwise provided in this Agreement,
capitalized terms used herein shall have the following meanings:
"Agreement" has the meaning set forth in the first paragraph hereof.
"Beneficial Owner" and "Beneficial Ownership" shall be determined
pursuant to Rules 13d-3 and 13d-5 under the Exchange Act. The term "Beneficially
Owned" shall have a correlative meaning.
"Common Stock" means the Common Stock, $[o] par value per share, of
the Company.
"Company" has the meaning set forth in the first paragraph hereof.
"Company Shares" means any shares of any class or series of capital
stock of the Company (or any securities, options, or warrants convertible into,
or exercisable or exchangeable for, any shares of capital stock of the Company)
held by any Stockholder.
"Effective Date" means the date and time immediately following the
consummation of the Plan.
1
"Exchange Act" means the Securities Exchange Act of 1934, as the
same may be amended from time to time.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Person" has the meaning set forth in Section 2.2.
"Plan" means the Debtors' Plan of Reorganization filed by the
Company with the United States Bankruptcy Court of the Eastern District of
Michigan, Southern District, on June 24, 2005, as amended, modified and
supplemented on or prior to the date hereof.
"Public Offering" means any public offering of Common Stock
registered under the Securities Act.
"R2 Investments" means R2 Investments, LDC and/or one or more of its
related or associated entities.
"Registrant" has the meaning assigned in Rule 12b-2 under the
Exchange Act.
"Securities Act" means the Securities Act of 1933, as the same may
be amended from time to time.
"Stanfield" means Stanfield Capital Partners LLC and/or one or more
of its related or associated entities.
"Stockholders" has the meaning set forth in the Preamble.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (a) if a corporation, capital stock possessing the voting power under
normal circumstances to elect a majority of the directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; or (b) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more of the other Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a limited liability company, partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of the gains or losses of such limited liability company,
partnership, association or other business entity or shall be or control (or
have the power to control) a managing director, manager or general partner of
such limited liability company, partnership, association or other business
entity.
"Ten Percent Holder" means, the Beneficial Owner of at least 10% of
the outstanding Common Stock on the Effective Date.
2
"Transfer" has the meaning set forth in Section 2.2 of this Agreement. The terms
"Transferee", "Transferor" "Transferred" and other forms of the word "Transfer"
shall have correlative meanings.
ARTICLE II
RESTRICTIONS ON TRANSFER
2.1 TRANSFERS BINDING UPON TRANSFEREES. The terms of this Agreement
shall be binding upon any Transferee of any Company Shares.
2.2 Restrictions on Transfer. The following restrictions shall apply
to any Transfer of any of the Company Shares:
(a) If an individual, partnership, limited liability company, firm,
company, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under Section 14(d)(2) of
the Exchange Act (each a "Person"), shall attempt to transfer in any manner
whatsoever, including by way of sale, transfer, assignment, conveyance or other
disposition, including without limitation by merger, operation of law, bequest
or pursuant to any domestic relations order, whether voluntarily or
involuntarily, other than a sale, transfer, assignment, conveyance or other
disposition to the Company, any of the Company Shares (any such transfer or
assignment being a "Transfer"), (provided, however, that a transaction that is a
pledge shall not be deemed a Transfer, but a foreclosure pursuant thereto shall
be deemed to be a Transfer), then such Transfer shall be void and shall not be
recognized by the Company, except as authorized pursuant to this Section 2.2.
(b) The restrictions contained in this Section 2.2 are for the
purpose of ensuring that the Company is not required to become a Registrant
under the Exchange Act due to the number of Stockholders. In connection
therewith, and to provide for the effective policing of these provisions, a
potential transferor or transferee who proposes to effect a Transfer, prior to
the date of the proposed Transfer, must submit a request in writing (a
"Request") that the Company review the proposed Transfer and authorize or not
authorize the proposed Transfer. A Request shall be mailed or delivered to the
attention of the Chief Executive Officer and the General Counsel of the Company
at the Company's principal place of business or telecopied to the Company's
telecopier number at its principal place of business. Such Request shall be
deemed to have been delivered when actually received by the Company. A Request
shall include (i) the name, address and telephone number of the proposed
transferee, (ii) a description of the interest proposed to be Transferred by the
proposed transferee, (iii) the date on which the proposed Transfer is expected
to take place, (iv) the name of the proposed transferor of the interest to be
Transferred, (v) the percentage of the proposed transferor's Company Shares to
be Transferred and (vi) a Request that the Company authorize, if appropriate,
the Transfer and inform the proposed transferor and transferee of its
determination regarding the proposed Transfer. Each such Request shall be
reviewed, on behalf of the Company, by the Company's General Counsel or, if the
Company does not have a General Counsel at the time of such Request, by the
Chief Executive Officer of the Company (such reviewing executive hereinafter
referred to as the "Reviewer"). Subject to subparagraph (c) hereof, the Reviewer
shall conclusively determine whether to authorize or reject the proposed
Transfer, and shall promptly, and in any event within thirty (30) days after
receipt of (i) a properly completed Request and (ii)
3
any additional information the Reviewer may request pursuant to Section 2.2(c),
inform the proposed transferee or transferor making the Request of such
determination.
(c) Notwithstanding anything to the contrary set forth in this
Section 2.2, the Reviewer shall authorize (i) any proposed Transfer by a
Stockholder of the Company to another Stockholder of the Company, and (ii) any
proposed Transfer of all of the Company Shares owned by the proposed transferor
to a Person who is treated as a single record holder under the Exchange Act. The
Reviewer shall reject any proposed Transfer that the Reviewer determines in good
faith could cause the Company to be required to become a Registrant under the
Exhange Act due to the number of Stockholders. For the avoidance of doubt, the
Reviewer shall address requests for Transfers contemplated in the order in which
the Requests are received. In deciding whether to approve any proposed Transfer,
the Reviewer may seek the advice of outside counsel to the Company and may
request all relevant additional information from the proposed Transferor and/or
the Transferee necessary to make her or his determination. The Reviewer may rely
in good faith upon any advice so provided and on information provided in the
Request or pursuant to this Section 2.2(c).
(d) Any Transfer attempted to be made in violation of this Section
2.2 will be null and void. The proposed transferee shall not be entitled to any
rights of stockholders of the Company, including, but not limited to, the rights
to vote or to receive dividends and liquidating distributions, with respect to
the Company Shares that were the subject of such attempted Transfer.
(e) In addition to any remedies available to the Company under
applicable law or in equity, after learning of a Transfer not in compliance with
this Section 2.2, the Company shall demand the immediate surrender, or cause to
be immediately surrendered, to the Company, all certificates representing the
Company Shares that were the subject of such attempted transfer, or any proceeds
received upon a sale of such Company Shares, and any dividends or other
distributions made after such noncompliant transfer with respect to such Company
Shares, if any. Any such surrendered certificates shall be destroyed. If any
such certificates are not immediately surrendered, the Company shall cancel such
certificates, or cause such certificates to be cancelled, on the stock transfer
records and other records of the Company. Any shares attempted to be transferred
pursuant to a destroyed or cancelled certificate shall continue to be registered
in the name of the purported Transferor. Nothing in this subparagraph (e) shall
be deemed inconsistent with the Transfer of such securities being deemed null
and void pursuant to subparagraph (d) hereof.
(f) The Company may require, as a condition precedent to the
registration of the Transfer of any of the Company Shares or the payment of any
distribution on any of the Company Shares, that the proposed transferor and
transferee or payee furnish to the Company all information reasonably requested
by the Company with respect to all the direct or indirect ownership interests in
such Company Shares. The Company may make such arrangements or issue such
instructions to its stock transfer agent as may be determined by the Chief
Executive Officer under the direction of the Board of Directors to be necessary
or advisable to implement this Section 2.2, including, without limitation,
instructing the transfer agent not to register any Transfer of Company Shares on
the Company's stock transfer records if it has knowledge that such Transfer is
prohibited by this Section 2.2, and/or authorizing such transfer agent to
require
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an affidavit from a transferee or transferor regarding such Person's ownership
of Company Shares and other evidence that a Transfer will not be prohibited by
this Section 2.2, as a condition to registering any Transfer.
(g) Nothing contained in this Section 2.2 shall limit the authority
of the Company, its executive officers or the Board of Directors to take such
other action to the extent permitted by law as it deems necessary or advisable
to ensure that the Company is not required to become a Registrant under the
Exchange Act due to the number of Stockholders.
(h) The provisions of this Section 2.2 shall terminate upon the
earliest of (i) any Public Offering of Common Stock, (ii) the filing by the
Company of a registration statement pursuant to Section 12(g) of the Exchange
Act, and (iii) such time as the Board of Directors determines that the
provisions of this Section 2.2 are no longer necessary for the preservation of
the Company's status as a non-reporting company under the Exchange Act.
(i) This Section 2.2 shall not apply to the Transfer of any Common
Stock offered and sold by a Stockholder in conjunction with a Public Offering.
Upon completion of a Public Offering, the holder of any certificate representing
any Common Stock offered or sold in conjunction with such Public Offering shall
be entitled to receive from the Company, without expense, new securities of like
tenor not bearing either of the legends required under Section 2.5.
2.3 AGREEMENT TO BECOME PARTY; INVALID TRANSFERS. No Stockholder may
Transfer any Company Shares unless, prior to the consummation thereof, such
Stockholder delivers to the Company a counterpart or joinder of this Agreement
executed by the Transferee of such Company Shares.
2.4 ISSUANCE OF NEW COMPANY SHARES. Prior to any issuance of Company
Shares (other than pursuant to a Public Offering) to any Person who is not
already a Stockholder, the Company shall cause such Person to execute and agree
to deliver to the Company a counterpart or joinder of this Agreement.
2.5 LEGENDS. (a) Each certificate evidencing Company Shares subject
to the terms hereof and each certificate issued in exchange for or upon the
Transfer of any such Company Shares shall be stamped or otherwise imprinted with
a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OTHER OBLIGATIONS SET FORTH IN
THE STOCKHOLDERS AGREEMENT, DATED AS OF [ ], 2005, AS THE SAME
MAY BE AMENDED OR MODIFIED FROM TIME TO TIME, AMONG THE ISSUER OF
THESE SECURITIES (THE "COMPANY") AND ITS STOCKHOLDERS. A COPY OF
SUCH STOCKHOLDERS AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
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Subject to the prior approval of the Board of Directors, the holder of any
certificate representing Company Shares and bearing such legend shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing the legend set forth above.
(b) In addition, each certificate evidencing Company Shares issued to a Ten
Percent Holder shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT
BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED."
A holder of a certificate representing shares of Company Shares and bearing such
legend shall be entitled to have a new certificate issued without such legend
upon delivery to the Company of an opinion of counsel reasonably acceptable to
the Company to the effect that such legend is no longer required to ensure
compliance with the Securities Act.
ARTICLE III
INFORMATION RIGHTS AND CONFIDENTIALITY
3.1 INFORMATION RIGHTS. After the end of each fiscal year, the
Company shall provide to each Stockholder that shall request such information in
writing (so long as such information may be provided by the Company without
unreasonable effort or expense), an audited balance sheet of the Company as of
the end of such fiscal year, and an audited statement of income and statement of
cash flows of the Company for such year, in each case prepared in accordance
with generally accepted accounting principles and setting forth in comparative
form the figures for the previous fiscal year, all in reasonable detail, and
audited by the Company's independent public accountants.
3.2 CONFIDENTIALITY. Each Stockholder agrees to use commercially
reasonable efforts (equivalent to the efforts such Stockholder applies to
maintaining the confidentiality of its own confidential information) to maintain
as confidential all information regarding the Company and its business provided
to such Stockholder by the Company pursuant to Section 3.1 or otherwise for a
period of two years following receipt thereof, except that such Stockholder may
disclose such information: (a) to its authorized representatives, so long as
such authorized representatives have agreed in writing to comply with the
covenant contained in this Section 3.2; (b) in connection with any Transfer or
proposed Transfer to any bona fide proposed Transferee that has agreed in
writing to comply with
6
the covenant contained in this Section 3.2 (and any such bona fide proposed
Transferee may disclose such information to its authorized representatives, so
long as such authorized representatives have agreed in writing to comply with
the covenant contained in this Section 3.2); (c) as required or requested by any
governmental authority or compelled by any court decree, subpoena or legal or
administrative order or process; (d) in connection with the exercise of any
right or remedy under this Agreement or in connection with any action, claim,
lawsuit, demand, investigation or proceeding to which such Stockholder is a
party before any governmental authority or before any arbitrator or panel of
arbitrators; or (e) that ceases to be confidential through no fault of such
Stockholder.
ARTICLE IV
MISCELLANEOUS
4.1 AMENDMENT AND WAIVER. This Agreement may only be modified or
amended, and the provisions hereof may be waived, by an instrument in writing
signed by the Company and approved by the Board of Directors, provided, however,
that: (a) any amendment, modification or waiver that would adversely affect the
rights or obligations of all Stockholders under Sections 2.2 and 3.1 hereof
shall not be effective without the prior written consent of the holders of at
least 66.6% of all shares of Common Stock then issued and outstanding; (b) any
amendment, modification and waiver that would adversely affect the rights or
obligations of any Stockholder, in its capacity as a Stockholder, without
similarly affecting the rights or obligations hereunder of all Stockholders,
shall not be effective as to such Stockholder without its prior written consent;
and (c) the Company may automatically amend Schedule 1 hereto and may distribute
such amended Schedule 1 to each of the Stockholders upon any change in any
Stockholder's information thereon, such as a change in the Stockholder's notice
information or a change required as a result of a Transfer of Common Stock by a
Stockholder in accordance with this Agreement, or a change required as a result
of the addition of additional Stockholders in accordance with Section 2.3 or
Section 2.4. Any waiver of any provision of this Agreement must be granted in
writing by the party granting such waiver.
4.2 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction, but this Agreement shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
4.3 ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
4.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and permitted assigns and the Stockholders and their
respective successors and permitted assigns, subject to the restrictions on
transfer set forth herein.
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4.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same Agreement.
4.6 REMEDIES. The Company and the other Stockholders shall be
entitled to enforce their rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach of
the provisions of this Agreement and that the Company and any Stockholder may in
its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
4.7 NOTICES. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the Schedule 1 hereto and to any
subsequent holder of Company Shares subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices shall be deemed to have been given hereunder when
delivered personally, three days after deposit in the U.S. mail and one day
after deposit with a reputable overnight courier service. The Company's address
is:
INTERMET Corporation
5445 Corporate Drive
Suite 200
Troy, Michigan 48098
Attn: Chief Executive Officer and General Counsel
4.8 DELIVERY BY FACSIMILE. This Agreement, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party hereto, each other party hereto
shall reexecute original forms thereof and deliver them to all other parties. No
party hereto shall raise the use of a facsimile machine to deliver a signature
or the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
4.9 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
4.10 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware. In
furtherance of the foregoing, the internal law of the State of Delaware shall
control the
8
interpretation and construction of this Agreement, even though under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
4.11 SUBMISSION TO JURISDICTION. The Company and each Stockholder
hereby irrevocably submit to any suit, action or proceeding arising out of or
related to this Agreement to the exclusive jurisdiction of any court of the
State of Delaware located in Wilmington and waive any and all objections to
jurisdiction that they may have under the laws of the State of Delaware or the
United States and any claim or objection that any such court is an inconvenient
forum.
4.12 AGREEMENT BINDING AND ENFORCEABLE. This Agreement shall be
binding on and enforceable by each holder of Common Stock that shall receive
such Common Stock pursuant to the terms of the Plan, to the same extent and with
the same effect as if such holder shall have executed and delivered this
Agreement as of the date hereof, irrespective of whether: (a) such holder is a
signatory hereto; (b) such holder's name is set forth on Schedule 1 hereto; and
(c) such holder shall receive the certificate or certificates evidencing such
Common Stock on or after the Effective Date. Upon the written request of the
Company, each holder of Common Stock that is not a signatory to this Agreement
agrees to execute and deliver to the Company a counterpart or joinder to this
Agreement.
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
INTERMET CORPORATION
By: _____________________________________
Name:
Title:
[Name of Stockholder]
By: _____________________________________
Name:
Title:
[Name of Stockholder]
By: _____________________________________
Name:
Title:
[Name of Stockholder]
By: _____________________________________
Name:
Title:
[Name of Stockholder]
By: _____________________________________
Name:
Title:
[Signature Pages to Stockholders Agreement]
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SCHEDULE 1
STOCKHOLDERS
NAME AND ADDRESS SHARES OF
OF STOCKHOLDER COMMON STOCK
- ---------------- ------------
ANNEX "B"
Summary of the Terms and Conditions
of the Registration Rights Agreement
The Registration Rights Agreement shall provide, among other things, that:
(i) within sixty days after the date on which Reorganized Intermet shall
receive a written request, signed by either of the Initial Committed Purchasers,
pursuant to which such Initial Committed Purchaser shall request that
Reorganized Intermet register the resale of the shares of New Common Stock held
by such Initial Committed Purchaser under the Securities Act of 1933, as amended
(the "Securities Act"), Reorganized Intermet shall prepare and file, and shall
use its reasonable best efforts to have declared effective within sixty days
thereafter, a registration statement under the Securities Act for the offering
on a continuous basis pursuant to Rule 415 of the Securities Act, of the shares
of New Common Stock held by such Initial Committed Purchaser (the "Shelf
Registration"); and
(ii) Reorganized Intermet shall keep the Shelf Registration effective for
a period ending on the earlier of (a) the date that is the two-year anniversary
of the date upon which such registration statement is declared effective by the
Securities and Exchange Commission (the "SEC"), (b) the date such Registrable
Securities have been disposed of pursuant to an effective registration
statement, (c) the date such Registrable Securities have been disposed of (1)
pursuant to and in accordance with SEC Rule 144 (or any similar provision then
in force) under the Securities Act or (2) pursuant to another exemption from the
registration requirements of the Securities Act pursuant to which the
Registrable Securities are thereafter freely tradeable without restriction under
the Securities Act, (d) the date such Registrable Securities may be disposed of
pursuant to SEC Rule 144 (or any similar provision then in force) within the
volume limitations thereunder within a 90 day period or pursuant to SEC Rule
144(k) (or any similar provision then in force) under the Securities Act or (e)
such Registrable Securities cease to be outstanding.
The Registration Rights Agreement shall include such other provisions,
including provisions relating to indemnification and contribution and the
payment by Reorganized Intermet of the fees and expenses incurred by the Initial
Committed Purchasers, customarily included in registration rights agreements
entered into in connection with similar financings.
The Registration Rights Agreement shall also provide that any person
holding more than 10% of the outstanding New Common Stock on the Effective Date
shall be entitled to piggy-back registration rights.
ANNEX "C"
Key Employee Rights Offering
Name of Number of Shares
Key Employee of New Common Stock
- ------------ -------------------
Those persons who upon consummation of the Plan, shall be 181,249*
entitled to receive stay bonuses under the Intermet Amended
and Restated Employee Retention Plan, dated effective
September 20, 2004 and restated December 8, 2004 and are
classified as Tier I Participants or Tier II Participants
* To the extent that the KERP Shares exercised by TIER I participants plus the
KERP Shares exercised by the TIER II participants is less than 181,249, such
TIER I participants and such TIER II participants may purchase the KERP Shares
that have not otherwise been exercised on a pro rata basis based upon the KERP
payment which would otherwise be due to such participant. In no event will more
than 181,249 shares be issued.
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