<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 1998
REGISTRATION NO. 333-40809
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
AMENDMENT NO. 2 TO THE
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
KENNAMETAL INC. KENNAMETAL FINANCING I
(Exact Name of Registrant as Specified in its (Exact Name of Registrant as Specified in its
Charter) Charter)
25-0900168 52-2064104
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
PENNSYLVANIA DELAWARE
(State of Incorporation) (State of Incorporation)
c/o Kennametal Inc.
Route 981 South at Westmoreland County Airport Route 981 South at Westmoreland County Airport
Latrobe, PA 15650 Latrobe, PA 15650
(412) 539-5000 (412) 539-5000
(Address, including zip code, and telephone number, (Address, including zip code, and telephone number,
including area code, of registrant's principal including area code, of registrant's principal
executive offices) executive offices)
</TABLE>
------------------------
DAVID T. COFER
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
KENNAMETAL INC.
ROUTE 981 SOUTH AT WESTMORELAND COUNTY AIRPORT
LATROBE, PA 15650
(412) 539-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service for each Registrant)
------------------------
COPIES TO:
<TABLE>
<S> <C>
LEWIS U. DAVIS, JR., ESQ. VINCENT PAGANO, JR., ESQ.
BUCHANAN INGERSOLL PROFESSIONAL CORPORATION RISE B. NORMAN, ESQ.
20TH FLOOR, ONE OXFORD CENTRE SIMPSON THACHER & BARTLETT
301 GRANT STREET 425 LEXINGTON AVENUE
PITTSBURGH, PA 15219 NEW YORK, NY 10017
(412) 562-8800 (212) 455-2000
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses incurred in connection with the
sale and distribution of the securities being registered which will be paid
solely by the Company. All the amounts shown are estimates, except the
Commission registration fee and the listing fee.
<TABLE>
<S> <C>
Commission Registration Fee............................................. $ 424,242
NYSE Listing Fee........................................................ 41,513
Blue Sky Fees and Expenses.............................................. 10,000
Transfer Agent, Trustee and Registrar Fees and Expenses................. 120,000
Accounting Fees and Expenses............................................ 425,000
Legal Fees and Expenses................................................. 700,000
Printing and Engraving Expenses......................................... 750,000
Rating Agency Fees...................................................... 600,000
Miscellaneous Expenses.................................................. 579,245
----------
Total.............................................................. $3,650,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law
(the "PBCL") provides in general that a corporation may indemnify any person,
including its directors, officers and employees who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (including
actions by or in the right of the corporation) by reason of the fact that he or
she is or was a representative of or serving at the request of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
the action or proceedings if he or she is determined by the board of directors,
or in certain circumstances by independent legal counsel to the shareholders, to
have acted in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the corporation and, with respect to
any criminal proceeding, had no reason to believe his conduct was unlawful. In
the case of actions by or in the right of the corporation, indemnification is
not permitted in respect of any claim, issue or matter as to which the person
has been adjudged to be liable to the corporation except to the extent a court
determines that the person is fairly and reasonably entitled to indemnification.
In any case, to the extent that the person has been successful on the merits or
otherwise in defense of any claim, issue or matter, he or she shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him or her in connection therewith. Subchapter D also provides that
the indemnification permitted or required by Subchapter D is not exclusive of
any other rights to which a person seeking indemnification may be entitled.
The Company's By-Laws provide that except as prohibited by law, every
director and officer of the Company is entitled to be indemnified by the Company
against reasonable expenses and any liability paid or incurred by such person in
connection with any actual or threatened claim, action, suit or proceeding,
civil, criminal, administrative, investigative or other in which he or she may
be involved by reason of being or having been a Director or Officer of the
Company or by reason that such person is or was serving at the request of the
Company as a director, officer, employee, fiduciary or other representative of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity. Such indemnification includes the right to have expenses incurred
paid in advance by the Company prior to final disposition, subject to such
conditions as may be prescribed by law. Persons who are not directors or
officers of the Company may be similarly indemnified in respect of service to
the Company or to another such entity at the request of the Company, to the
extent the Board of Directors designates. Expenses included fees and expenses of
counsel selected by such person, and liability includes amount of judgments,
excise taxes, fines and penalties, and amounts paid in settlement.
Indemnification pursuant to this provision of the Company's By-laws is not
permitted in any case in which the act or failure to act
II-1
<PAGE> 3
giving rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness. There may be other circumstances
where indemnification may not be permitted as a matter of public policy.
The By-Laws of the Company also provide that to the fullest extent that the
laws of the Commonwealth of Pennsylvania, as now in effect or as hereafter
amended, permit elimination of limitation of the liability of directors, no
director of the Company shall be personally liable for monetary damages as such
for any action taken, or any failure to take any action, as a director. Under
Section 1713 of the PBCL, the personal liability of a director may not be
eliminated or limited if: (1) the director has breached or failed to perform the
duties of his office under Subchapter B of Chapter 17 of the PBCL (relating to
the fiduciary duties of directors); and (2) the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. Furthermore, this
limitation to the personal liability of directors of the Company does not apply
to (1) the responsibility or liability of a director pursuant to any criminal
statute; or (2) the liability of a director for the payment of taxes pursuant to
local, state or federal law.
The Company purchases director and officer liability insurance covering its
directors and officers with respect to liability which they may incur in
connection with their serving as such. Under the insurance, the Company will
receive reimbursement for amounts as to which the directors and officers are
indemnified under the Company's By-Laws. The insurance may also provide certain
additional coverage for the directors and officers against certain liability
even though such liability is not subject to indemnification under the Company's
By-Laws.
The Agreement of Trust, as amended (the "Declaration") for Kennametal
Financing I (the "Trust"), provides that no Institutional Trustee or any of its
Affiliates, Delaware Trustee or any of its Affiliates, or any officer, director,
shareholder, member, partner, employee, representative, custodian, nominee or
agent of the Institutional Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any Regular Trustee,
or any officer, director, shareholder, member, partner, employee, representative
or agent of any Regular Trustee or any Affiliate thereof, or any employee or
agent of the Trust or any of its Affiliates (each a "Company Indemnified
Person") shall be liable, responsible or accountable in damages or otherwise to
the Trust, or any officer, director, shareholder, partner, member,
representative, employee or agent of the Trust or its Affiliates, or to any
holder of Preferred Securities, for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Fiduciary Indemnified Person
or Company Indemnified Person in good faith on behalf of the Trust and in a
manner such Fiduciary Indemnified Person or Company Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Fiduciary Indemnified Person or Company Indemnified Person by such Declaration
or by law, except that a Fiduciary Indemnified Person or Company Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Fiduciary Indemnified Person's or Company Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
The Declaration for the Trust also provides that to the full extent
permitted by law, the Company shall indemnify any Company Indemnified Person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Trust), by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe such person's conduct was unlawful. The
Declaration also provides that to the full extent permitted by law, the Company
shall indemnify any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that such person is or was a Company Indemnified Person,
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Trust, and except
that no such indemnification shall be made in respect of any claim, issue or
matter as to which such Company Indemnified Person shall have been
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<PAGE> 4
adjudged to be liable to the Trust, unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability,
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper. The Declaration further provides that
expenses (including attorneys' fees) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in the immediately preceding two sentences shall be paid
by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount, if it shall ultimately be determined
that such person is not entitled to be indemnified by the Company as authorized
in the Declaration.
The Declaration also provides that the Company shall indemnify each
Fiduciary Indemnified Person against any loss, liability or expense incurred
without gross negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust under the Trust,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
thereunder.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT REFERENCE
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
1.1 Form of U.S. Purchase Agreement for the Filed herewith
Common Stock Offering
1.2 Form of International Purchase Agreement Filed herewith
for the Common Stock Offering
1.3 Form of Purchase Agreement for the Filed herewith
FELINE PRIDES Offering
1.4 Form of Purchase Agreement for the Filed herewith
Senior Debt Securities Offering
2.1 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit
October 10, 1997 (c)(1) to the Company's Schedule 14D-1
dated October 17, 1997, as amended.
3.1 Amended and Restated Articles of Incorporated by reference to Exhibit 3.1
Incorporation of Kennametal, as amended of the Company's September 30, 1994 Form
10-Q.
3.2 By-Laws of Kennametal Incorporated by reference to Exhibit 3.1
of the Company's March 31, 1991 Form
10-Q.
4.1 Rights Agreement dated October 25, 1990 Incorporated by reference to Exhibit 4
of the Company's Form 8-K dated October
23, 1990.
4.2 Form of Purchase Contact Agreement Filed herewith
(including as Exhibit A the form of the
Income PRIDES and as Exhibit B the form
of the Growth PRIDES)
4.3 Form of Pledge Agreement Filed herewith
4.4 Certificate of Trust of Kennametal
Financing I*
4.5 Agreement of Trust of Kennametal Filed herewith
Financing I
4.6 Form of Amended and Restated Agreement Filed herewith
of Trust of Kennametal Financing I
(including as Exhibit A-1 the form of
Preferred Security Certificate)
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT REFERENCE
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
4.7 Form of Indenture between Kennametal and Filed herewith
The First National Bank of Chicago, as
Trustee
4.8 Form of First Supplemental Indenture Filed herewith
between Kennametal and The First
National Bank of Chicago, as Trustee
(including the form of Debentures of
Kennametal to be issued to the Trust)
4.9 Form of Preferred Securities Guarantee Filed herewith
Agreement in respect of Kennametal
Financing I, with respect to the Trust
Preferred Securities
4.10 Form of Remarketing Agreement (including Filed herewith
as Exhibit A the form of Remarketing
Underwriting Agreement)
4.11 Form of Second Supplemental Indenture Filed herewith
between Kennametal and The First
National Bank of Chicago, as Trustee of
the Debt Securities
4.12 Form of Senior Notes due 2001 Filed herewith
4.13 Form of Senior Notes due 2008 Filed herewith
4.14 Form of Senior Debentures due 2028 Filed herewith
5.1 Opinion of Buchanan Ingersoll Filed herewith
Professional Corporation
5.2 Opinion of Skadden, Arps, Slate Meagher Filed herewith
& Flom, LLP, special Delaware counsel to
the Trust
10.1 Credit Agreement dated as of November Incorporated by reference to Exhibit
17, 1997 (b)(2) to the Company's Schedule 14D-1
dated October 17, 1997, as amended.
10.2 Guaranty and Suretyship Agreement dated Incorporated by reference to Exhibit
as of November 17, 1997, as supplemented (b)(3) of the Company's Schedule 14D-1,
by the Additional Subsidiary Guarantor as amended, and Exhibit 10.2 of
Supplement dated as of November 18, 1997 Greenfield's Current Report on Form 8-K
dated November 17, 1997, respectively.
10.3 Borrower Pledge Agreement dated as of Incorporated by reference to Exhibit
November 17, 1997, as supplemented by (b)(4) of the Company's Schedule 14D-1,
the Additional Designated Collateral as amended, and Exhibit 10.5 of
Supplement dated as of November 18, 1997 Greenfield's Current Report on Form 8-K
dated November 17, 1997, respectively.
10.4 Subsidiary Pledge Agreement dated as of Incorporated by reference to Exhibit
November 18, 1997 10.3 of Greenfield's current Report on
Form 8-K dated November 17, 1997.
12.1 Computation of Ratio of Earnings to
Fixed Charges*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Buchanan Ingersoll
Professional Corporation**
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT REFERENCE
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
23.3 Consent of Price Waterhouse LLP*
23.4 Consent of Skadden, Arps, Slate Meagher
& Flom, LLP**
24 Powers of Attorney (included as part of
the prior signature pages hereof)*
25.1 Form T-1 Statement of Eligibility of The Filed herewith
First National Bank of Chicago, as
Institutional Trustee under the
Agreement of Trust
25.2 Form T-1 Statement of Eligibility of The Filed herewith
First National Bank of Chicago, as
Guarantee Trustee under the Guarantee
for Kennametal Financing I, and as
Trustee under the Indenture
</TABLE>
- ---------
*--previously filed
**--included in their opinion filed as Exhibit 5
ITEM 17. UNDERTAKINGS
(A) RULE 415 OFFERING.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(C) EQUITY OFFERINGS OF NONREPORTING REGISTRANT.
Kennametal Financing I hereby undertakes to provide to the underwriters at
the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
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(H) REQUEST FOR ACCELERATION OF EFFECTIVE DATE.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of expenses
incurred or paid by a director, officer or controlling person of the Registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
a final adjudication of such issue.
(I) REGISTRATION STATEMENTS PERMITTED BY RULE 430A.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(J) TRUST INDENTURE APPLICATION.
The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Kennametal Inc.
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
this Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in Latrobe, Pennsylvania, on this 20th
day of January, 1998.
KENNAMETAL INC.
By: /s/ DAVID T. COFER
------------------------------------
David T. Cofer
Vice President, Secretary and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to this Registration Statement has been signed by the following person in
the capacity indicated on this 20th day of January, 1998.
<TABLE>
<CAPTION>
SIGNATURES TITLES DATES
- ------------------------------------ ------------------------------------ ------------------
<S> <C> <C>
* Chairman of the Board
- ------------------------------------
William R. Newlin
* President and Director (Principal
- ------------------------------------ Executive Officer)
Robert L. McGeehan
* Vice President, Controller and Chief
- ------------------------------------ Accounting Officer (Principal
James R. Breisinger Accounting Officer)
* Vice President, Chief Financial and
- ------------------------------------ Administrative Officer (Principal
Richard J. Orwig Financial Officer)
* Director
- ------------------------------------
Richard C. Alberding
* Director
- ------------------------------------
Peter B. Bartlett
</TABLE>
II-7
<PAGE> 9
<TABLE>
<CAPTION>
SIGNATURES TITLES DATES
- ------------------------------------ ------------------------------------ ------------------
<S> <C> <C>
* Director
- ------------------------------------
A. Peter Held
* Director
- ------------------------------------
Warren H. Hollinshead
* Director
- ------------------------------------
Aloysius T. McLaughlin, Jr.
* Director
- ------------------------------------
Larry Yost
*By: /s/ DAVID T. COFER
- ------------------------------------
Attorney-in-fact
</TABLE>
II-8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Kennametal
Financing I certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this Amendment
No. 2 to this Registration Statement on Form S-3 to be signed on its behalf by
the undersigned, thereunto duly authorized, in Latrobe, Pennsylvania, on this
20th day of January, 1998.
KENNAMETAL FINANCING I
BY: KENNAMETAL INC., as Depositor
By: /s/ DAVID T. COFER
------------------------------------
Name: David T. Cofer
Title: Vice President, Secretary
and General Counsel
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<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT REFERENCE
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
1.1 Form of U.S. Purchase Agreement for the Filed herewith
Common Stock Offering
1.2 Form of International Purchase Agreement Filed herewith
for the Common Stock Offering
1.3 Form of Purchase Agreement for the Filed herewith
FELINE PRIDES Offering
1.4 Form of Purchase Agreement for the Filed herewith
Senior Debt Securities Offering
2.1 Agreement and Plan of Merger dated as of Incorporated by reference to Exhibit
October 10, 1997 (c)(1) to the Company's Schedule 14D-1
dated October 17, 1997, as amended.
3.1 Amended and Restated Articles of Incorporated by reference to Exhibit 3.1
Incorporation of Kennametal, as amended of the Company's September 30, 1994 Form
10-Q.
3.2 By-Laws of Kennametal Incorporated by reference to Exhibit 3.1
of the Company's March 31, 1991 Form
10-Q.
4.1 Rights Agreement dated October 25, 1990 Incorporated by reference to Exhibit 4
of the Company's Form 8-K dated October
23, 1990.
4.2 Form of Purchase Contract Agreement Filed herewith
(including as Exhibit A the form of the
Income PRIDES and as Exhibit B the form
of the Growth PRIDES)
4.3 Form of Pledge Agreement Filed herewith
4.4 Certificate of Trust of Kennametal
Financing I*
4.5 Agreement of Trust of Kennametal Filed herewith
Financing I
4.6 Form of Amended and Restated Agreement Filed herewith
of Trust of Kennametal Financing I
(including as Exhibit A-1 the form of
Preferred Security Certificate)
4.7 Form of Indenture between Kennametal and Filed herewith
The First National Bank of Chicago, as
Trustee
4.8 Form of First Supplemental Indenture Filed herewith
between Kennametal and The First
National Bank of Chicago, as Trustee
(including the form of Debentures of
Kennametal to be issued to the Trust)
4.9 Form of Preferred Securities Guarantee Filed herewith
Agreement in respect of Kennametal
Financing I, with respect to the Trust
Preferred Securities
4.10 Form of Remarketing Agreement (including Filed herewith
as Exhibit A the form of Remarketing
Underwriting Agreement)
4.11 Form of Second Supplemental Indenture Filed herewith
between Kennametal and The First
National Bank of Chicago, as Trustee of
the Debt Securities
4.12 Form of Senior Notes due 2001 Filed herewith
4.13 Form of Senior Notes due 2008 Filed herewith
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT REFERENCE
- ------ ---------------------------------------- ----------------------------------------
<C> <S> <C>
4.14 Form of Senior Debentures due 2028 Filed herewith
5.1 Opinion of Buchanan Ingersoll Filed herewith
Professional Corporation
5.2 Opinion of Skadden, Arps, Slate Meagher Filed herewith
& Flom, LLP, special Delaware counsel to
the Trust
10.1 Credit Agreement dated as of November Incorporated by reference to Exhibit
17, 1997 (b)(2) to the Company's Schedule 14D-1
dated October 17, 1997, as amended.
10.2 Guaranty and Suretyship Agreement dated Incorporated by reference to Exhibit
as of November 17, 1997, as supplemented (b)(3) of the Company's Schedule 14D-1,
by the Additional Subsidiary Guarantor as amended, and Exhibit 10.2 of
Supplement dated as of November 18, 1997 Greenfield's Current Report on Form 8-K
dated November 17, 1997, respectively.
10.3 Borrower Pledge Agreement dated as of Incorporated by reference to Exhibit
November 17, 1997, as supplemented by (b)(4) of the Company's Schedule 14D-1,
the Additional Designated Collateral as amended, and Exhibit 10.5 of
Supplement dated as of November 18, 1997 Greenfield's Current Report on Form 8-K
dated November 17, 1997, respectively.
10.4 Subsidiary Pledge Agreement dated as of Incorporated by reference to Exhibit
November 18, 1997 10.3 of Greenfield's current Report on
Form 8-K dated November 17, 1997.
12.1 Computation of Ratio of Earnings to
Fixed Charges*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Buchanan Ingersoll
Professional Corporation**
23.3 Consent of Price Waterhouse LLP*
23.4 Consent of Skadden, Arps, Slate Meagher
& Flom, LLP**
24 Powers of Attorney (included as part of
the prior signature page hereof)*
25.1 Form T-1 Statement of Eligibility of The Filed herewith
First National Bank of Chicago, as
Institutional Trustee under the
Agreement of Trust
25.2 Form T-1 Statement of Eligibility of The Filed herewith
First National Bank of Chicago, as
Guarantee Trustee under the Guarantee
for Kennametal Financing I, and as
Trustee under the Indenture
</TABLE>
- ---------
*--previously filed
**--included in their opinion filed as Exhibit 5
<PAGE> 1
Exhibit 1.1
==============================================================================
KENNAMETAL INC.
(a Pennsylvania corporation)
3,440,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: January __, 1998
==============================================================================
<PAGE> 2
<TABLE>
<CAPTION>
Page
----
TABLE OF CONTENTS
<S> <C>
U.S. PURCHASE AGREEMENT......................................................................................... 1
SECTION 1. Representations and Warranties................................................................ 4
(a) Representations and Warranties by the Company................................................. 4
(b) Officer's Certificates........................................................................ 11
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing................................................12
(a) Initial Securities............................................................................ 12
(b) Option Securities............................................................................. 12
(c) Payment....................................................................................... 12
(d) Denominations; Registration................................................................... 13
SECTION 3. Covenants of the Company...................................................................... 13
(a) Compliance with Securities Regulations and Commission Requests................................ 13
(b) Filing of Amendments.......................................................................... 14
(c) Delivery of Registration Statements........................................................... 14
(d) Delivery of Prospectuses...................................................................... 14
(e) Continued Compliance with Securities Laws..................................................... 14
(f) Blue Sky Qualifications....................................................................... 15
(g) Rule 158...................................................................................... 15
(h) Use of Proceeds............................................................................... 15
(i) Listing....................................................................................... 15
(j) Restriction on Sale of Securities............................................................. 15
(k) Reporting Requirements........................................................................ 16
SECTION 4. Payment of Expenses........................................................................... 16
(a) Expenses.......................................................................................16
(b) Termination of Agreement...................................................................... 16
SECTION 5. Conditions of U.S. Underwriters' Obligations.................................................. 17
(a) Effectiveness of Registration Statement....................................................... 17
(b) Opinion of Counsel for Company................................................................ 17
(c) Opinion of Counsel for U.S. Underwriters...................................................... 17
(d) Opinion of German Counsel..................................................................... 18
(e) Officers' Certificate......................................................................... 18
(f) Accountant's Comfort Letter................................................................... 19
(g) Accountant's Comfort Letter................................................................... 19
(h) Bring-down Comfort Letter..................................................................... 19
(i) Bring-down Comfort Letter..................................................................... 19
(j) Approval of Listing........................................................................... 19
(k) Maintenance of Rating......................................................................... 19
(l) Purchase of Initial International Securities.................................................. 19
(m) Conditions to Purchase of U.S. Option Securities.............................................. 20
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
(n) Maintenance of Rating......................................................................... 21
(o) Additional Documents.......................................................................... 21
(p) Termination of Agreement...................................................................... 21
SECTION 6. Indemnification............................................................................... 21
(a) Indemnification of U.S. Underwriters.......................................................... 21
(b) Indemnification of Company, Directors and Officers............................................ 22
(c) Actions against Parties; Notification......................................................... 23
(d) Settlement without Consent if Failure to Reimburse............................................ 23
SECTION 7. Contribution.................................................................................. 23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................................ 25
SECTION 9. Termination of Agreement...................................................................... 25
(a) Termination; General.......................................................................... 25
(b) Liabilities................................................................................... 25
SECTION 10. Default by One or More of the U.S. Underwriters............................................... 25
SECTION 11. Notices....................................................................................... 26
SECTION 12. Parties....................................................................................... 26
SECTION 13. GOVERNING LAW AND TIME........................................................................ 27
SECTION 14. Effect of Headings............................................................................ 27
SCHEDULES
Schedule A - List of Underwriters................................................................. Sch A-1
Schedule B - Pricing Information.................................................................. Sch B-1
Schedule C - List of Subsidiaries................................................................. Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel...................................................... A-1
</TABLE>
ii
<PAGE> 4
Draft of January 13, 1998
KENNAMETAL INC.
(a Pennsylvania corporation)
3,440,000 Shares of Capital Stock
(Par Value $1.25 Per Share)
U.S. PURCHASE AGREEMENT
January __, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
CIBC Oppenheimer Corp.
Goldman, Sachs & Co.
Lehman Brothers Inc.
as U.S. Representatives of the
several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Kennametal Inc., a Pennsylvania corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters", which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, CIBC Oppenheimer Corp., Goldman,
Sachs & Co. and Lehman Brothers Inc. are acting as representatives (in such
capacity, the "U.S. Representatives"), with respect to the issue and sale by the
Company and the purchase by the U.S. Underwriters, acting severally and not
jointly, of the respective numbers of shares of Capital Stock, par value $1.25
per share, of the Company ("Common Stock") set forth in said Schedule A, and
with respect to the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 516,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 3,440,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 516,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities".
<PAGE> 5
2
It is understood that the Company is concurrently entering
into an agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 860,000 shares of
Common Stock (the "Initial International Securities") through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers") for which Merrill Lynch International, CIBC Oppenheimer Corp.,
Goldman Sachs International and Lehman Brothers International (Europe) are
acting as lead managers (the "Lead Managers") and the grant by the Company to
the International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of up
to 129,000 additional shares of Common Stock solely to cover over-allotments, if
any (the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company is not obligated to sell and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers are
hereinafter collectively called the "Underwriters", the Initial U.S. Securities
and the Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities, and the International Securities
are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an
Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement")
providing for the coordination of certain transactions among the Underwriters
under the direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to
make a public offering of the U.S. Securities as soon as the U.S.
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-40809) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to
be used in connection with the offering and sale of the Securities: one relating
to the U.S. Securities (the "Form of U.S. Prospectus") and one relating to the
International Securities (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting" and the inclusion in the
<PAGE> 6
3
Form of International Prospectus of a section under the caption "Certain U.S.
Tax Consequences to Non-U.S. Holders." The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each Form of U.S. Prospectus and Form of International Prospectus
used before such registration statement became effective, and any prospectus
that omitted, as applicable, the Rule 430A Information or the Rule 434
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective and including
the Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final Form
of U.S. Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and
"International Prospectus" shall refer to the preliminary U.S. Prospectus dated
January 2, 1998 and preliminary International Prospectus dated January 2, 1998,
respectively, each together with the applicable Term Sheet and all references in
this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International Prospectus or any Term Sheet or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus (including the Form of
U.S. Prospectus and Form of International Prospectus) or the Prospectuses (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
<PAGE> 7
4
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither of the Prospectuses nor any amendments or supplements thereto
at the time the Prospectuses or any amendments or supplements thereto
were issued and at the Closing Time (and, if any U.S. Option Securities
are purchased, at the Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement
or the U.S. Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any U.S. Underwriter
through the U.S. Representatives expressly for use in the Registration
Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
<PAGE> 8
5
(ii) Incorporated Documents. The documents incorporated
or deemed to be incorporated by reference in the Registration Statement
and the Prospectuses at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations or the
1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations"), and, when read together with the other
information in the Prospectuses, at the time the Registration Statement
became effective, at the time the Prospectuses were issued and at the
Closing Time (and, if any U.S. Option Securities are purchased, at the
Date of Delivery), did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. Arthur Andersen LLP, the
accountants who certified the financial statements and supporting
schedules of the Company and its consolidated subsidiaries included in
the Registration Statement, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations; and Price
Waterhouse LLP, the accountants who certified the financial statements
and supporting schedules of Greenfield Industries, Inc. ("Greenfield")
included in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of
the Company included in the Registration Statement and the
Prospectuses, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
shareholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; the financial statements of
Greenfield included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
financial position of Greenfield and its consolidated subsidiaries at
the dates indicated and the statement of operations, stockholders'
equity and cash flows of Greenfield and its consolidated subsidiaries
for the periods specified; each of said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectuses present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments
<PAGE> 9
6
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania and has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and to
enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only Subsidiaries of the Company are the
subsidiaries listed on Schedule C hereto.
<PAGE> 10
7
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectuses in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement and the
International Purchase Agreement have been duly authorized, executed
and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for
issuance and sale to the U.S. Underwriters pursuant to this Agreement
and the International Managers pursuant to the International Purchase
Agreement, respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein and
the International Purchase Agreement, respectively, will be validly
issued, fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement, the International Purchase
Agreement and in the Registration Statement (including the issuance and
sale of the Securities, the use of the proceeds from the sale of the
Securities as described in the Prospectuses under the caption "Use of
Proceeds" and the concurrent issuance and sale by the Company of
4,500,000 FELINE PRIDES(SM) and $450,000,000 aggregate principal amount
of senior debt (the "Concurrent Offerings")) and compliance by the
Company with its
<PAGE> 11
8
obligations under this Agreement and the International Purchase
Agreement have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect and except for the contemplated use of proceeds
as described in the Registration Statement), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with
the employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any subsidiary's principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action,
suit, proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or affecting
the Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in this Agreement and
the International Purchase Agreement or the Concurrent Offerings or the
performance by the Company of its obligations hereunder or thereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectuses or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
<PAGE> 12
9
(xv) Possession of Intellectual Property. The Company
and its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with,
or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the International
Purchase Agreement or the consummation of the transactions contemplated
by this Agreement and the International Purchase Agreement or in
connection with the offering, issuance or sale of the securities
offered in the Concurrent Offerings, except such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws.
(xvii) Possession of Licenses and Permits. The Company
and its subsidiaries possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xviii) Title to Property. The Company and its
subsidiaries have good and marketable title to all real property owned
by the Company and its subsidiaries and good title to all other
properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectuses or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with
<PAGE> 13
10
the use made and proposed to be made of such property by the Company or
any of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectuses, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has
complied with, and is and will be in compliance with, the provisions of
that certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xx) Investment Company Act. The Company is not, and
upon the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
<PAGE> 14
11
(xxii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxiii) Related Party Transactions. No relationship,
direct or indirect, exists between or among the Company on the one
hand, and the directors, officers, shareholders, customers or suppliers
of the Company on the other hand, which is required to be described in
the Prospectuses which is not so described.
(xxiv) Employee Matters. The Company and any entity
which would be treated as a single employer under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code")
(each such entity, an "ERISA Affiliate"), is in compliance in all
material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"),
and, if applicable, the Code; no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any ERISA Affiliate would have any
liability; neither the Company nor any ERISA Affiliate has incurred or
expects to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any such "pension plan" or (ii)
Sections 412 or 4971 of the Code; and each "pension plan" for which the
Company or any ERISA Affiliate would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(xxv) Taxes. The Company has filed all federal, state,
local and foreign income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, might have) a Material Adverse Effect or a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the Global
Coordinator, the U.S. Representatives or to counsel for the U.S. Underwriters
shall be deemed a representation and warranty by the Company to each U.S.
Underwriter as to the matters covered thereby.
<PAGE> 15
12
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each U.S. Underwriter, severally and
not jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the
number of Initial U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial U.S. Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional 516,000
shares of Common Stock at the price per share set forth in Schedule B, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial Securities shall be made at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, or
at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option
Securities are purchased by the U.S. Underwriters, payment of the purchase price
for, and delivery of
<PAGE> 16
13
certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to the U.S. Representatives for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Securities to be purchased by them. It
is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Securities or the U.S. Option Securities, if any, to be purchased by any U.S.
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Global Coordinator immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectuses or any
amended Prospectuses shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company
<PAGE> 17
14
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Global Coordinator with copies
of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Global Coordinator or counsel for the
U.S. Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the U.S. Representatives and counsel for
the U.S. Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the U.S.
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each U.S. Underwriter, without charge, as many copies of each
preliminary prospectus as such U.S. Underwriter reasonably requested,
and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each U.S.
Underwriter, without charge, during the period when the U.S. Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the U.S. Prospectus (as amended or supplemented) as
such U.S. Underwriter may reasonably request. The U.S. Prospectus and
any amendments or supplements thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the
International Purchase Agreement and in the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters or for the Company, to
amend the Registration Statement or
<PAGE> 18
15
amend or supplement any Prospectus in order that the Prospectuses will
not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will
furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the U.S. Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Global Coordinator may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earning
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectuses, the Company will not, without
the prior written consent of the Global Coordinator, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into
or exercisable or exchangeable for
<PAGE> 19
16
Common Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the International Purchase Agreement, (B) any shares
of Common Stock issuable upon early settlement of the shares of FELINE
PRIDESSM, (C) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectuses, (D)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectuses or (E) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the fees and expenses
incurred in connection with the listing of the Securities on the New York Stock
Exchange.
(b) Termination of Agreement. If this Agreement is terminated
by the U.S. Representatives in accordance with the provisions of Section 5 or
Section 9(a)(i) hereof, the
<PAGE> 20
17
Company shall reimburse the U.S. Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of David T. Cofer, Vice President, Secretary and General
Counsel to the Company and of Buchanan Ingersoll Professional
Corporation, special counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed
or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the U.S.
Underwriters may reasonably request.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time,
the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of Simpson Thacher & Bartlett, counsel for
the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters with respect to the
matters set forth in clauses (i), (ii), (v), (vi) (solely as to
preemptive or other similar rights arising by operation of law or under
the charter or by-laws of the Company), (viii) through (x), inclusive,
(xiv) (solely as to the information in the Prospectus under
"Description of Common Stock--Common Stock") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
<PAGE> 21
18
deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Opinion of German Counsel. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
the Closing Time, of Hasche Eschenlohr Peltzer Riesenkampff Fischotter,
German counsel to the Company, in form and substance satisfactory to
counsel for the U.S. Underwriters to the effect that:
(i) Kennametal Hertel AG has been incorporated and
is validly existing as a corporation in good standing under
German laws, has the corporate power and authority to own,
lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus, and
is qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would
not have a Material Adverse Effect; all of the issued and
outstanding capital stock of Kennametal Hertel AG has been
authorized and validly issued, is fully paid and
non-assessable and 98.25% of the ordinary and 57.21% of the
non-voting preferred shares are owned by the Company, directly
or through its subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity; and
(ii) Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to
which Kennametal Hertel AG or any of its subsidiaries is a
party or to which any property of Kennametal Hertel AG or any
of its subsidiaries is the subject which reasonably would be
expected individually or in the aggregate to have a Material
Adverse Effect; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(e) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the U.S. Representatives shall
have received a certificate of the President or a Vice President of the
Company and of the chief financial officer, chief accounting officer or
treasurer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and
as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the
<PAGE> 22
19
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the U.S. Representatives shall have received from
Arthur Andersen LLP a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S.
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements, pro forma financial
statements and certain financial information of the Company contained
in the Registration Statement and the Prospectuses.
(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the U.S. Representatives shall have received from
Price Waterhouse LLP a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S.
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information of Greenfield contained in the Registration Statement and
the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Arthur Andersen LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(i) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Price Waterhouse LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(j) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(k) Maintenance of Rating. Since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to
any of the Company's other securities by any "nationally recognized
statistical rating agency", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under
surveillance or review its rating of any of the Company's other
securities.
(l) Purchase of Initial International Securities.
Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this
<PAGE> 23
20
Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(m) Conditions to Purchase of U.S. Option Securities. In the
event that the U.S. Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the U.S. Option
Securities, the representations and warranties of the Company contained
herein and the statements in any certificates furnished by the Company
or any subsidiary of the Company hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery:
(1) the U.S. Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial officer, chief accounting
officer or treasurer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section
5(e) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable
opinion of Buchanan Ingersoll Professional Corporation,
counsel for the Company, in form and substance satisfactory to
counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The
favorable opinion of Simpson Thacher & Bartlett, counsel for
the U.S. Underwriters, dated such Date of Delivery, relating
to the U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Opinion of German Counsel. The favorable
opinion of Hasche Eschenlohr Peltzer Riesenkampff Fischotter,
German counsel for the Company, in form and substance
satisfactory to counsel to the U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(d) hereof.
(v) Bring-down Comfort Letter. A letter from Arthur
Andersen LLP, in form and substance satisfactory to the U.S.
Representatives and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the
U.S. Representatives pursuant to Section 5(h) hereof, except
that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior
to such Date of Delivery.
<PAGE> 24
21
(vi) Bring-down Comfort Letter. A letter from Price
Waterhouse LLP, in form and substance satisfactory to the U.S.
Representatives and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the
U.S. Representatives pursuant to Section 5(i) hereof, except
that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior
to such Date of Delivery.
(2) Maintenance of Rating. Since the date of this
Agreement, there shall not have occurred a downgrading in the
rating assigned to any of the Company's other securities by
any "nationally recognized statistical rating agency", as that
term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall
have publicly announced that it has under surveillance or
review its rating of any of the Company's other securities.
(n) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished
with such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(o) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of U.S. Option Securities on a Date of Delivery which is after
the Closing Time, the obligations of the several U.S. Underwriters to
purchase the relevant Option Securities, may be terminated by the U.S.
Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of U.S. Underwriters. The Company agrees
to indemnify and hold harmless each U.S. Underwriter and each person, if any,
who controls any U.S. Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any
<PAGE> 25
22
amendment thereto), including the Rule 430A Information and the Rule
434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
U.S. Underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary U.S.
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto) or
<PAGE> 26
23
such preliminary prospectus or the U.S. Prospectus (or any amendment or
supplement thereto).
(c) Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the U.S. Underwriters on the other hand from the
offering of the Securities pursuant to this
<PAGE> 27
24
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the U.S. Underwriters on the other hand in
connection with the statements or omissions, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand
and the U.S. Underwriters on the other hand in connection with the offering of
the U.S. Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the U.S. Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S.
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the U.S. Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
<PAGE> 28
25
For purposes of this Section 7, each person, if any, who
controls a U.S. Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
U.S. Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may
terminate this Agreement, by notice to the Company, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
U.S. Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the U.S. Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal,
New York or Pennsylvania authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
<PAGE> 29
26
SECTION 10. Default by One or More of the U.S. Underwriters.
If one or more of the U.S. Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of
the non-defaulting U.S. Underwriters shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the U.S. Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such
Date of Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting U.S. Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the U.S. Underwriters to purchase and the Company to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "U.S. Underwriter"
includes any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
U.S. Underwriters shall be directed to the U.S. Representatives at North Tower,
World Financial Center, New York, New York 10281-1201, attention of John J.
Bolebruch; and notices to the Company shall be directed to it at Route 981 South
at Westmoreland County Airport, Latrobe, PA 15650, attention of David T. Cofer.
SECTION 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the U.S. Underwriters and the Company and their
respective successors.
<PAGE> 30
27
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the U.S.
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the U.S. Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
<PAGE> 31
28
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the U.S. Underwriters and the Company in accordance with its
terms.
Very truly yours,
KENNAMETAL INC.
By______________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
CIBC OPPENHEIMER CORP.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
BY: MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By_______________________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
<PAGE> 32
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................................................................
CIBC Oppenheimer Corp......................................................................
Goldman, Sachs & Co........................................................................
Lehman Brothers Inc........................................................................
---------
Total...................................................................................... 3,440,000
=========
</TABLE>
Sch A - 1
<PAGE> 33
SCHEDULE B
KENNAMETAL INC.
3,440,000 Shares of Capital Stock
(Par Value $1.25 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $_________________.
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $_________________, being an amount equal
to the initial public offering price set forth above less $___________________
per share; provided that the purchase price per share for any U.S. Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial U.S. Securities
but not payable on the U.S. Option Securities.
Sch B-1
<PAGE> 34
SCHEDULE C
[List of Subsidiaries]
Sch C-1
<PAGE> 35
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement and the International
Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred
to in the Prospectuses); the shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(v) The Securities to be purchased by the U.S. Underwriters
and the International Managers from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the
U.S. Purchase Agreement and the International Purchase Agreement, will
be validly issued and fully paid and non-assessable and no holder of
the Securities is or will be subject to personal liability by reason of
being such a holder.
(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
A-1
<PAGE> 36
(vii) Each U.S. Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to
the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary.
(viii) The U.S. Purchase Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectuses pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectuses, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to which
we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need
express no opinion), when they were filed with the Commission, complied
as to form in all material respects with the requirements of the 1934
Act, and the rules and regulations of the Commission thereunder.
(xii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and
by-laws of the Company and the requirements of the New York Stock
Exchange.
A-2
<PAGE> 37
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or brought
by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the U.S. Purchase
Agreement and International Purchase Agreement or the Concurrent
Offerings or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectuses under "Description
of Common Stock", "Business--Properties", "Business--Regulation",
"Business--Legal Matters", "Description of Other Offerings", and in the
Registration Statement under Item 15, to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and
bylaws or legal proceedings, or legal conclusions, has been reviewed by
us and is correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that
are not described as required.
(xvi) All descriptions in the Prospectuses of contracts and
other documents to which the Company or its subsidiaries are a party
are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xvii) To the best of our knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no default
by the Company or any subsidiary exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectuses or filed or
incorporated by reference as an exhibit to the Registration Statement.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under
the 1933 Act and the 1933 Act Regulations, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or
required in connection with the due authorization, execution and
delivery of the U.S. Purchase Agreement and the International Purchase
Agreement or for the offering, issuance, sale or delivery of the
Securities or the securities offered in the concurrent Offerings.
A-3
<PAGE> 38
(xix) The execution, delivery and performance of the U.S.
Purchase Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in the U.S. Purchase
Agreement, the International Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Securities, and the
use of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use Of Proceeds" and the Concurrent
Offerings) and compliance by the Company with its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement do not
and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xi) of the Purchase
Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any subsidiary is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect and except
for the contemplated use of proceeds as described in the Registration
Statement), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree, known to us, of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the Company or
any subsidiary or any of their respective properties, assets or
operations.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
(xxi) The rights under the Company's shareholder rights plan
to which holders of the Securities will be entitled have been duly
authorized and validly issued.
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses or any
amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time the Prospectuses were issued, at the time any
such amended or supplemented prospectus was issued or at the Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
A-4
<PAGE> 39
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
A-5
<PAGE> 1
Exhibit 1.2
==============================================================================
KENNAMETAL INC.
(a Pennsylvania corporation)
860,000 Shares of Capital Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: January __, 1998
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
SECTION 1. Representations and Warranties................................................................ 4
(a) Representations and Warranties by the Company................................................. 4
(i) Compliance with Registration Requirements........................................... 4
(ii) Incorporated Documents.............................................................. 5
(iii) Independent Accountants............................................................. 5
(iv) Financial Statements................................................................ 5
(v) No Material Adverse Change in Business.............................................. 6
(vi) Good Standing of the Company........................................................ 6
(vii) Good Standing of Subsidiaries....................................................... 6
(viii) Capitalization...................................................................... 7
(ix) Authorization of Agreement.......................................................... 7
(x) Authorization and Description of Securities......................................... 7
(xi) Absence of Defaults and Conflicts................................................... 7
(xii) Absence of Labor Dispute............................................................ 8
(xiii) Absence of Proceedings.............................................................. 8
(xiv) Accuracy of Exhibits................................................................ 8
(xv) Possession of Intellectual Property................................................. 9
(xvi) Absence of Further Requirements..................................................... 9
(xvii) Possession of Licenses and Permits.................................................. 9
(xviii) Title to Property................................................................... 9
(xix) Compliance with Cuba Act............................................................ 10
(xx) Investment Company Act.............................................................. 10
(xxi) Environmental Laws.................................................................. 10
(xxii) Registration Rights................................................................. 11
(xxiii) Related Party Transactions.......................................................... 11
(xxiv) Employee Matters.................................................................... 11
(xxv) Taxes............................................................................... 11
(b) Officer's Certificates........................................................................ 11
SECTION 2. Sale and Delivery to International Managers; Closing.......................................... 12
(a) Initial Securities............................................................................ 12
(b) Option Securities............................................................................. 12
(c) Payment....................................................................................... 12
(d) Denominations; Registration................................................................... 13
SECTION 3. Covenants of the Company...................................................................... 13
(a) Compliance with Securities Regulations and Commission Requests................................ 13
(b) Filing of Amendments.......................................................................... 14
(c) Delivery of Registration Statements........................................................... 14
(d) Delivery of Prospectuses...................................................................... 14
(e) Continued Compliance with Securities Laws..................................................... 14
(f) Blue Sky Qualifications....................................................................... 15
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
(g) Rule 158...................................................................................... 15
(h) Use of Proceeds............................................................................... 15
(i) Listing....................................................................................... 15
(j) Restriction on Sale of Securities............................................................. 15
(k) Reporting Requirements........................................................................ 16
SECTION 4. Payment of Expenses........................................................................... 16
(a) Expenses...................................................................................... 16
(b) Termination of Agreement...................................................................... 17
SECTION 5. Conditions of International Managers' Obligations............................................. 17
(a) Effectiveness of Registration Statement....................................................... 17
(b) Opinion of Counsel for Company................................................................ 17
(c) Opinion of Counsel for International Managers................................................. 17
(d) Opinion of German Counsel..................................................................... 18
(e) Officers' Certificate......................................................................... 18
(f) Accountant's Comfort Letter................................................................... 19
(g) Accountant's Comfort Letter................................................................... 19
(h) Bring-down Comfort Letter..................................................................... 19
(i) Bring-down Comfort Letter..................................................................... 19
(j) Approval of Listing........................................................................... 19
(k) Maintenance of Rating......................................................................... 19
(l) Purchase of Initial U.S. Securities........................................................... 19
(m) Conditions to Purchase of International Option Securities..................................... 20
(n) Additional Documents.......................................................................... 21
(o) Termination of Agreement...................................................................... 21
SECTION 6. Indemnification............................................................................... 21
(a) Indemnification of International Managers..................................................... 21
(b) Indemnification of Company, Directors and Officers............................................ 22
(c) Actions against Parties; Notification......................................................... 23
(d) Settlement without Consent if Failure to Reimburse............................................ 23
SECTION 7. Contribution.................................................................................. 23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................................ 25
SECTION 9. Termination of Agreement...................................................................... 25
(a) Termination; General.......................................................................... 25
(b) Liabilities................................................................................... 25
SECTION 10. Default by One or More of the International Managers.......................................... 26
SECTION 11. Notices....................................................................................... 26
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 12. Parties............................................................................................ 27
SECTION 13. GOVERNING LAW AND TIME............................................................................. 27
SECTION 14. Effect of Headings................................................................................. 27
SCHEDULES
Schedule A - List of Underwriters..................................................................Sch A-1
Schedule B - Pricing Information...................................................................Sch B-1
Schedule C - List of Subsidiaries..................................................................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................................................A-1
</TABLE>
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<PAGE> 5
Draft of January 13, 1998
KENNAMETAL INC.
(a Pennsylvania corporation)
860,000 Shares of Capital Stock
(Par Value $1.25 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
Dated: January __, 1998
MERRILL LYNCH INTERNATIONAL
CIBC OPPENHEIMER CORP.
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Kennametal Inc., a Pennsylvania corporation (the "Company"),
confirms its agreement with Merrill Lynch International ("Merrill Lynch") and
each of the other international underwriters named in Schedule A hereto
(collectively, the "International Managers", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Merrill Lynch, CIBC Oppenheimer Corp., Goldman Sachs International and Lehman
Brothers International (Europe) acting as representatives (in such capacity, the
"Lead Managers"), with respect to the issue and sale by the Company and the
purchase by the International Managers, acting severally and not jointly, of the
respective numbers of shares of Capital Stock, par value $1.25 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the International Managers, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 129,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 860,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 129,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities".
It is understood that the Company is concurrently entering
into an agreement dated the date hereof (the "U.S. Purchase Agreement")
providing for the offering by the
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<PAGE> 6
Company of an aggregate of 3,440,000 shares of Common Stock (the "Initial U.S.
Securities") through arrangements with certain underwriters in the United States
and Canada (the "U.S. Underwriters") for which Merrill Lynch, Pierce, Fenner &
Smith Incorporated, CIBC Oppenheimer Corp., Goldman, Sachs & Co. and Lehman
Brothers Inc. are acting as representatives (the "U.S. Representatives") and the
grant by the Company to the U.S. Underwriters, acting severally and not jointly,
of an option to purchase all or any part of the U.S. Underwriters' pro rata
portion of up to 516,000 additional shares of Common Stock solely to cover
overallotments, if any (the "U.S. Option Securities" and, together with the
International Option Securities, the "Option Securities"). The Initial U.S.
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities". It is understood that the Company is not obligated to sell and the
International Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are
hereinafter collectively called the "Underwriters", the Initial International
Securities and the Initial U.S. Securities are hereinafter collectively called
the "Initial Securities", and the International Securities, and the U.S.
Securities are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an
Intersyndicate Agreement of even date herewith (the "Intersyndicate Agreement")
providing for the coordination of certain transactions among the Underwriters
under the direction of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers
propose to make a public offering of the International Securities as soon as the
Lead Managers deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-40809) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to
be used in connection with the offering and sale of the Securities: one relating
to the International Securities (the "Form of International Prospectus") and one
relating to the U.S. Securities (the "Form of U.S. Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting" and the inclusion in the Form of International Prospectus of a
section under the caption "Certain U.S. Tax Consequences to Non-U.S. Holders."
The information included in any such prospectus or in
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<PAGE> 7
any such Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form of
International Prospectus and Form of U.S. Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the
"International Prospectus" and the "U.S. Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the preliminary
International Prospectus dated January 2, 1998 and preliminary U.S. Prospectus
dated January 2, 1998, respectively, each together with the applicable Term
Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus (including the Form of
U.S. Prospectus and Form of International Prospectus) or the Prospectuses (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
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<PAGE> 8
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither of the Prospectuses nor any amendments or supplements thereto,
at the time the Prospectuses or any amendments or supplements thereto
were issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by any International Manager through the Lead Managers
expressly for use in the Registration Statement or the International
Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
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<PAGE> 9
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectuses, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations or the
1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations"), and, when read together with the other
information in the Prospectuses, at the time the Registration Statement
became effective, at the time the Prospectuses were issued and at the
Closing Time (and, if any International Option Securities are
purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(iii) Independent Accountants. Arthur Andersen LLP, the
accountants who certified the financial statements and supporting
schedules of the Company and its consolidated subsidiaries included in
the Registration Statement, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations; and Price
Waterhouse LLP, the accountants who certified the financial statements
and supporting schedules of Greenfield Industries, Inc. ("Greenfield")
included in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements of the
Company included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; the financial statements of Greenfield
included in the Registration Statement and the Prospectuses, together
with the related schedules and notes, present fairly the financial
position of Greenfield and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of Greenfield and its consolidated subsidiaries for the
periods specified; each of said financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement. The pro forma financial statements and the related notes
thereto included in the Registration Statement and the Prospectuses
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments
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<PAGE> 10
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary. The only Subsidiaries of the Company are the
subsidiaries listed on Schedule C hereto.
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<PAGE> 11
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
this Agreement and the U.S. Purchase Agreement, respectively, against
payment of the consideration set forth herein and the U.S. Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to
the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, the U.S. Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Securities, the use
of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds" and the concurrent
issuance and sale by the Company of 4,500,000 FELINE PRIDES(SM) and
$450,000,000 aggregate principal amount of senior debt (the "Concurrent
Offerings")) and compliance by the Company with its obligations under
this Agreement and the U.S. Purchase Agreement have been duly
authorized by all
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<PAGE> 12
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect and except for the
contemplated use of proceeds as described in the Registration
Statement), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in this Agreement and
the U.S. Purchase Agreement or the Concurrent Offerings or the
performance by the Company of its obligations hereunder or thereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectuses or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
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<PAGE> 13
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpainted and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities under this Agreement and the U.S. Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement or in connection with the
offering, issuance or sale of the securities offered in the Concurrent
Offerings, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do
not, singly or
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in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
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<PAGE> 15
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
(xxiii) Related Party Transactions. No relationship, direct or
indirect, exists between or among the Company on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company on the other hand, which is required to be described in the
Prospectuses which is not so described.
(xxiv) Employee Matters. The Company and any entity which
would be treated as a single employer under Section 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code") (each
such entity, an "ERISA Affiliate"), is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), and, if
applicable, the Code; no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any ERISA Affiliate would have any liability;
neither the Company nor any ERISA Affiliate has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any such "pension plan" or (ii) Sections 412 or
4971 of the Code; and each "pension plan" for which the Company or any
ERISA Affiliate would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(xxv) Taxes. The Company has filed all federal, state, local
and foreign income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, might have) a Material Adverse Effect or a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the Global
Coordinator, the Lead Managers or to counsel for the International Managers
shall be deemed a representation and warranty by the Company to each
International Manager as to the matters covered thereby.
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<PAGE> 16
SECTION 2. Sale and Delivery to International Managers;
Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each International Manager, severally
and not jointly, and each International Manager, severally and not jointly,
agrees to purchase from the Company, at the price per share set forth in
Schedule B, the number of Initial International Securities set forth in Schedule
A opposite the name of such International Manager, plus any additional number of
Initial International Securities which such International Manager may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 129,000 shares of Common Stock at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of certificates for, the Initial Securities shall be made at the offices of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, or
at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
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<PAGE> 17
In addition, in the event that any or all of the International
Option Securities are purchased by the International Managers, payment of the
purchase price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to the Lead Managers for the respective accounts of the International
Managers of certificates for the International Securities to be purchased by
them. It is understood that each International Manager has authorized the Lead
Managers, for its account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the International
Managers, may (but shall not be obligated to) make payment of the purchase price
for the Initial International Securities or the International Option Securities,
if any, to be purchased by any International Manager whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such International Manager from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectuses or any amended Prospectuses shall have
been filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will
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<PAGE> 18
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term Sheet
or any amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Global Coordinator with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Global Coordinator or
counsel for the International Managers shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the International Managers. The copies of the Registration Statement and each
amendment thereto furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the International
Prospectus (as amended or supplemented) as such International Manager may
reasonably request. The International Prospectus and any amendments or
supplements thereto furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement, the U.S. Purchase Agreement
and in the Prospectuses. If at
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<PAGE> 19
any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the International Managers or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the Prospectuses
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or supplement as
the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Global Coordinator may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earning statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
the listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any
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<PAGE> 20
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder or under the U.S. Purchase Agreement, (B) any shares of Common
Stock issuable upon early settlement of the shares of FELINE PRIDES(SM), (C) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectuses, (D) any shares of Common Stock issued or
options to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectuses or (E) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the fees and expenses
incurred in connection with the listing of the Securities on the New York Stock
Exchange.
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<PAGE> 21
(b) Termination of Agreement. If this Agreement is terminated
by the Lead Managers in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the International Managers for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the International Managers.
SECTION 5. Conditions of International Managers' Obligations.
The obligations of the several International Managers hereunder are subject to
the accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Managers shall have received the favorable opinion, dated as of Closing Time, of
David T. Cofer, general counsel to the Company and of Buchanan Ingersoll
Professional Corporation, special counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International Managers to
the effect set forth in Exhibit A hereto and to such further effect as counsel
to the International Managers may reasonably request.
(c) Opinion of Counsel for International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Simpson Thacher & Bartlett, counsel for the International
Managers, together with signed or reproduced copies of such letter for each of
the other International Managers with respect to the matters set forth in
clauses (i), (ii), (v), (vi) (solely as to preemptive or other similar rights
arising by operation of law or under the charter or by-laws of the Company),
(viii) through (x), inclusive, (xiv) (solely as to the information in the
Prospectus under "Description of Common Stock--Common Stock") and the
penultimate paragraph of Exhibit A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Lead Managers. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent
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<PAGE> 22
they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Opinion of German Counsel. At Closing Time, the Lead
Managers shall have received the favorable opinion, dated as of the Closing
Time, of Hasche Eschenlohr Peltzer Riesenkampff Fischotter, German counsel to
the Company, in form and substance satisfactory to counsel for the International
Managers to the effect that:
(i) Kennametal Hertel AG has been incorporated and is validly
existing as a corporation in good standing under German laws, has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted and as described in
the Prospectus, and is qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of
Kennametal Hertel AG has been authorized and validly issued, is fully
paid and non-assessable and 98.25% of the ordinary and 57.21% of the
non-voting preferred shares are owned by the Company, directly or
through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and
(ii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which Kennametal Hertel AG
or any of its subsidiaries is a party or to which any property of
Kennametal Hertel AG or any of its subsidiaries is the subject which
reasonably would be expected individually or in the aggregate to have a
Material Adverse Effect; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(e) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Lead Managers shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer, chief accounting
officer or treasurer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
-18-
<PAGE> 23
(f) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Managers shall have received from Arthur Andersen
LLP a letter dated such date, in form and substance satisfactory to the Lead
Managers, together with signed or reproduced copies of such letter for each of
the other International Managers containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements, pro forma financial statements and certain
financial information of the Company contained in the Registration Statement and
the Prospectuses.
(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Managers shall have received from Price Waterhouse
LLP a letter dated such date, in form and substance satisfactory to the Lead
Managers, together with signed or reproduced copies of such letter for each of
the other International Managers containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information of
Greenfield contained in the Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the Lead
Managers shall have received from Arthur Andersen LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (f) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(i) Bring-down Comfort Letter. At Closing Time, the Lead
Managers shall have received from Price Waterhouse LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(j) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(k) Maintenance of Rating. Since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to any of the
Company's other securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of any of the
Company's other securities.
(l) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased the
Initial U.S. Securities under the U.S. Purchase Agreement.
-19-
<PAGE> 24
(m) Conditions to Purchase of International Option Securities.
In the event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery:
(1) the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and
of the chief financial officer, chief accounting officer or
treasurer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion
of David T. Cofer, general counsel for the Company and of
Buchanan Ingersoll Professional Corporation, special counsel for
the Company, in form and substance satisfactory to counsel for
the International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for International Managers. The
favorable opinion of Simpson Thacher & Bartlett, counsel for the
International Managers, dated such Date of Delivery, relating to
the International Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Opinion of German Counsel. The favorable opinion of
Hasche Eschenlohr Peltzer Riesenkampff Fischotter, German counsel
for the Company, in form and substance satisfactory to counsel to
the Lead Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required
by Section 5(d) hereof.
(v) Bring-down Comfort Letter. A letter from Arthur Andersen
LLP, in form and substance satisfactory to the Lead Managers and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Lead Managers pursuant
to Section 5(h) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(vi) Bring-down Comfort Letter. A letter from Price
Waterhouse LLP, in form and substance satisfactory to the Lead
Managers and dated such Date of
-20-
<PAGE> 25
Delivery, substantially in the same form and substance as the letter
furnished to the Lead Managers pursuant to Section 5(i) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(2) Maintenance of Rating. Since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to
any of the Company's other securities by any "nationally recognized
statistical rating agency", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under
surveillance or review its rating of any of the Company's other
securities.
(n) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the International Managers shall have been furnished with
such documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Lead Managers and counsel for the International Managers.
(o) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the several International Managers to purchase the
relevant Option Securities may be terminated by the Lead Managers by notice to
the Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers. The Company
agrees to indemnify and hold harmless each International Manager and each
person, if any, who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any
-21-
<PAGE> 26
preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
international prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such International Manager through the Lead Managers
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
-22-
<PAGE> 27
(c) Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the International Managers on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in
-23-
<PAGE> 28
clause (i) above but also the relative fault of the Company on the one hand and
of the International Managers on the other hand in connection with the
statements or omissions, or in connection with any violation of the nature
referred to in Section 6(a)(ii)(A) hereof, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand
and the International Managers on the other hand in connection with the offering
of the International Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the International Managers agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the International Managers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
International Manager shall be required to contribute any amount in excess of
the amount by which the total price at which the International Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such International Managers has
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
-24-
<PAGE> 29
For purposes of this Section 7, each person, if any, who
controls an International Managers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such International Manager, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
International Manager or controlling person, or by or on behalf of the Company,
and shall survive delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Lead Managers, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal,
New York or Pennsylvania authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
-25-
<PAGE> 30
SECTION 10. Default by One or More of the International
Managers. If one or more of the International Managers shall fail at Closing
Time or a Date of Delivery to purchase the Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Lead Managers shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date, each of
the non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the International Managers to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting
International Manager.
No action taken pursuant to this Section shall relieve any
defaulting International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"International Manager" includes any person substituted for an International
Manager under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of John
Bolebruch; and notices to the Company shall be directed to it at Route 981 South
at Westmoreland County Airport, Latrobe, Pennsylvania 15650, attention of David
T. Cofer.
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<PAGE> 31
SECTION 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the International Managers and the Company and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers and the Company and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
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<PAGE> 32
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the International Managers and the Company in accordance with
its terms.
Very truly yours,
KENNAMETAL INC.
By________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
CIBC OPPENHEIMER CORP.
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS INTERNATIONAL
(EUROPE)
By: MERRILL LYNCH INTERNATIONAL
By________________________________________
Authorized Signatory
For themselves and as Lead Managers of the
other International Managers named in Schedule A
hereto.
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<PAGE> 33
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
International
Name of International Manager Securities
- ----------------------------- ----------
<S> <C>
Merrill Lynch International................................................................
CIBC Oppenheimer Corp......................................................................
Goldman Sachs International................................................................
Lehman Brothers International (Europe).....................................................
-------
Total...................................................................................... 860,000
=======
</TABLE>
-1-
<PAGE> 34
SCHEDULE B
KENNAMETAL INC.
860,000 Shares of Capital Stock
(Par Value $1.25 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $_________________.
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $_________________, being an
amount equal to the initial public offering price set forth above less
$___________________ per share; provided that the purchase price per share for
any International Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities.
Sch B-1
<PAGE> 35
SCHEDULE C
[List of Subsidiaries]
Sch C-1
<PAGE> 36
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under the U.S. Purchase Agreement and the International
Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred
to in the Prospectuses); the shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(v) The Securities to be purchased by the U.S. Underwriters
and the International Managers from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the
U.S. Purchase Agreement and the International Purchase Agreement, will
be validly issued and fully paid and non-assessable and no holder of
the Securities is or will be subject to personal liability by reason of
being such a holder.
A-1
<PAGE> 37
(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(vii) Each U.S. Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to
the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary.
(viii) The U.S. Purchase Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectuses pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule
424(b); and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectuses, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to which
we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need
express no opinion), when they became effective or were filed with the
Commission, complied as to form in all material respects with the
A-2
<PAGE> 38
requirements of the 1934 Act, and the rules and regulations of the
Commission thereunder.
(xii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and
by-laws of the Company and the requirements of the New York Stock
Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or brought
by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the U.S. Purchase
Agreement and International Purchase Agreement or the Concurrent
Offerings or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectuses under "Description
of Common Stock", "Business--Properties", "Business--Regulation",
"Business--Legal Matters", "Description of Other Offerings", "Certain
U.S. Tax Consequences to Non-U.S. Holders" and in the Registration
Statement under Item 15, to the extent that it constitutes matters of
law, summaries of legal matters, the Company's charter and bylaws or
legal proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that
are not described as required.
(xvi) All descriptions in the Prospectuses of contracts and
other documents to which the Company or its subsidiaries are a party
are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or to be filed as exhibits
thereto other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xvii) To the best of our knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no default
by the Company or any subsidiary exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectuses or filed or
incorporated by reference as an exhibit to the Registration Statement.
A-3
<PAGE> 39
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under
the 1933 Act and the 1933 Act Regulations, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which we need express no opinion) is necessary or
required in connection with the due authorization, execution and
delivery of the U.S. Purchase Agreement and the International Purchase
Agreement or for the offering, issuance, sale or delivery of the
Securities or the securities offered in the Concurrent Offerings.
(xix) The execution, delivery and performance of the U.S.
Purchase Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated in the U.S. Purchase
Agreement, the International Purchase Agreement and in the Registration
Statement (including the issuance and sale of the Securities, and the
use of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use Of Proceeds" and the Concurrent
Offerings) and compliance by the Company with its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement do not
and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xi) of the Purchase
Agreements) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any subsidiary is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect and except
for the contemplated use of proceeds as described in the Registration
Statement), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree, known to us, of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the Company or
any subsidiary or any of their respective properties, assets or
operations.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
(xxi) The rights under the Company's shareholder rights plan
to which holders of the Securities will be entitled have been duly
authorized and validly issued.
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), at the time such
A-4
<PAGE> 40
Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses or any
amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time the Prospectuses were issued, at the time any
such amended or supplemented prospectus was issued or at the Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
A-5
<PAGE> 1
Exhibit 1.3
KENNAMETAL INC.
(A PENNSYLVANIA CORPORATION)
KENNAMETAL FINANCING I
(A DELAWARE BUSINESS TRUST)
4,500,000 FELINE PRIDES(SM)
PURCHASE AGREEMENT
DATED: JANUARY , 1998
<PAGE> 2
KENNAMETAL INC.
(A PENNSYLVANIA CORPORATION)
KENNAMETAL FINANCING I
(A DELAWARE BUSINESS TRUST)
FELINE PRIDES*
(STATED AMOUNT OF $50 PER FELINE PRIDES)
EACH CONSISTING OF
A PURCHASE CONTRACT OF KENNAMETAL INC. REQUIRING THE
PURCHASE ON FEBRUARY 16, 2001
OF CERTAIN SHARES OF CAPITAL STOCK OF
KENNAMETAL INC.
AND
A % TRUST ORIGINATED PREFERRED SECURITY
OF KENNAMETAL FINANCING I
PURCHASE AGREEMENT
January , 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
Kennametal Inc., a Pennsylvania corporation (the "Company"),
and Kennametal Financing I, a Delaware statutory business trust (the "Trust"
and, together with the Company, the "Offerors"), confirm their agreement with
Merrill Lynch & Co., Merrill Lynch, Pierce,
- --------
* "FELINE PRIDES," "INCOME PRIDES," AND "GROWTH PRIDES" ARE SERVICE
MARKS OF MERRILL LYNCH & CO., INC.
<PAGE> 3
2
Fenner & Smith Incorporated ("Merrill Lynch") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any Underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch and Goldman, Sachs & Co. are acting as
representatives (in such capacity, the "Representatives") with respect to the
issue and sale by the Offerors and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of FELINE PRIDES(sm), each
of which will initially consist of a unit (referred to as Income PRIDES(sm) with
a Stated Amount of $50 comprised of (a) a stock purchase contract (the "Purchase
Contract") under which (i) the holder will purchase from the Company on February
16, 2001, a number of shares of capital stock, par value $1.25 per share, of the
Company (the "Common Stock"), equal to the Settlement Rate as set forth in the
Purchase Contract Agreement (defined below) and (ii) the Company will pay to the
holder unsecured, subordinated contract adjustment payments, if any, and (b)
either beneficial ownership of a ____% Trust Originated Preferred Security
("Trust Preferred Security"), having a stated liquidation amount per Trust
Preferred Security equal to the Stated Amount, representing a preferred
undivided beneficial interest in the assets of the Trust, or upon the occurrence
of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the
Applicable Ownership Interest in the Treasury Portfolio (the "Initial
Securities"). The Company and the Trust also propose to grant to the
Underwriters an option to purchase up to 675,000 additional Income PRIDES (the
"Option Securities" and together with the Initial Securities, the "Securities")
as described in Section 2(b) hereof. In accordance with the terms of the
Purchase Contract Agreement, to be dated as of January , 1998, between the
Company and , as Purchase Contract Agent (the "Purchase Contract Agent"), the
Trust Preferred Securities constituting a part of the Securities will be pledged
by the Purchase Contract Agent, on behalf of the holders of the Securities, to
, as Collateral Agent, pursuant to the Pledge Agreement, to be
dated as of January , 1998 (the "Pledge Agreement"), among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligation to purchase Common Stock under the Purchase Contracts. The rights and
obligations of a holder of Securities in respect of Trust Preferred Securities,
subject to the pledge thereof, and Purchase Contracts will be evidenced by
Security Certificates (the "Security Certificates") to be issued pursuant to the
Purchase Contract Agreement.
The Trust Preferred Securities will be guaranteed by the
Company with respect to distributions and payments upon liquidation, redemption
and otherwise (the "Trust Preferred Securities Guarantee") pursuant to the Trust
Preferred Securities Guarantee Agreement, dated as of January , 1998 (the "Trust
Preferred Securities Guarantee Agreement"), executed and delivered by the
Company and The First National Bank of Chicago, as trustee (the "Guarantee
Trustee"), for the benefit of the holders from time to time of the Trust
Preferred Securities, and certain back-up undertakings of the Company. All, or
substantially all, of the proceeds from the sale of the Trust Preferred
Securities will be combined with the entire net proceeds from the sale by the
Trust to the Company of its common securities (the "Common Securities" and,
together with the Trust Preferred Securities, the "Trust Securities") guaranteed
by the Company with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the Trust
Preferred Securities Guarantee, the "Guarantees") pursuant to the Common
Securities Guarantee Agreement, dated as of January , 1998 (the "Common
<PAGE> 4
3
Securities Guarantee Agreement" and, together with the Trust Preferred
Securities Guarantee Agreement, the "Guarantee Agreements"), executed and
delivered by the Company for the benefit of the holders from time to time of the
Common Securities, and certain backup-undertakings of the Company, and will be
used by the Trust to purchase the % Debentures due February 16, 2003 (the
"Debentures") of the Company. The Trust Preferred Securities and the Common
Securities will be issued pursuant to the amended and restated agreement of
trust of the Trust, dated as of November 12, 1997 (the "Declaration"), among the
Company, as Sponsor, , and (the "Regular Trustees"), and , as the institutional
trustee (the "Institutional Trustee") and First Chicago Delaware, Inc., as the
Delaware trustee (the "Delaware Trustee" and, together with the Institutional
Trustee and the Regular Trustees, the "Trustees"), and the holders from time to
time of undivided beneficial interests in the assets of the Trust. The
Debentures will be issued pursuant to the Indenture, dated as of January , 1998
(the "Base Indenture"), between the Company and the Bank of New York, as Trustee
(the "Debt Trustee"), as supplemented by the First Supplemental Indenture, dated
January , 1998 (the Base Indenture, as supplemented and amended, being referred
to as the "Indenture"). Capitalized terms used herein without definition shall
be used as defined in the Prospectus.
It is understood that the Company is concurrently entering
into purchase agreements providing for the offering by the Company of an
aggregate of 4,300,000 shares of Common Stock and of $450,000,000 aggregate
principal amount of senior debt (the "Concurrent Offerings").
Prior to the purchase and public offering of the Securities by
the Underwriters, the Offerors and the Underwriters shall enter into an
agreement substantially in the form of Schedule B hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written communication between the Offerors and the Underwriters
and shall specify such applicable information as is indicated in Schedule B
hereto. The offering of the Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution
and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-40809) covering the registration of securities of the Company and the Trust,
including the Securities and the Purchase Contracts and Trust Preferred
Securities included in and shares of Common Stock underlying, the Securities,
under the Securities Act of 1933, as amended (the "1933 Act"), including the
related preliminary prospectus or prospectuses, and the offering thereof from
time to time in accordance with the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations") and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
the Pricing Agreement. Such registration statement, as so amended, has been
declared effective by the Commission. Such registration statement, as so
amended, including the exhibits and schedules thereto, if any, and the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration
<PAGE> 5
4
Statement"; and the final prospectus relating to the offering of the Securities,
in the form first furnished to the Underwriters by the Company for use in
connection with the offering of the Securities, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Pricing Agreement; provided, further, that if the Offerors file a
registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after such
filing, all references to "Registration Statement" shall be deemed to include
the Rule 462(b) Registration Statement; and provided, further, that if the
Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "Prospectus" shall be deemed to include the final or preliminary
prospectus and the applicable term sheet or abbreviated term sheet (the "Term
Sheet"), as the case may be, in the form first furnished to the Underwriters by
the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Underwriting Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to
refer to any prospectus used before the registration statement became effective
and any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of the applicable Pricing Agreement. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the electronically transmitted
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make
a public offering of the Securities as soon as the Underwriters deem advisable
after the Pricing Agreement has been executed and delivered and the Declaration,
the Indenture and the Trust Preferred Securities Guarantee Agreement have been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
<PAGE> 6
5
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter as
of the date hereof and as of the date of the Pricing Agreement (such later date
being hereinafter referred to as the "Representation Date") that:
(i) The Company and the Trust meet, and at the respective
times of the commencement and consummation of the offering of the
Securities will meet, the requirements for the use of Form S-3 under
the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or
are pending or, to the knowledge of the Offerors, are contemplated by
the Commission, and any request on the part of the Commission for
additional information has been complied with. At the respective times
the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendments thereto became effective and at each
Representation Date, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus and at the Closing Time (as
defined herein), the Prospectus and any amendments and supplements
thereto did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If the Offerors elect to rely upon Rule 434
of the 1933 Act Regulations, the Offerors will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
(A) statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Offerors in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the Prospectus
or (B) the part of the Registration Statement which shall constitute
the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied as so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with the
offering of the Securities will, at the time of such delivery, be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
<PAGE> 7
6
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934
Act, and the rules and regulations of Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing
Time, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading.
(iii) Each of the accountants who certified the financial
statements and supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the statement of operations,
shareholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified. The financial statements of
Greenfield Industries, Inc. ("Greenfield") included or incorporated by
reference in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly the financial
position of Greenfield and its consolidated subsidiaries as at the
dates indicated and the statement of operations, stockholders' equity
and cash flows of Greenfield and its consolidated subsidiaries for the
periods specified. Each of the financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included or incorporated by reference in
the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The
ratio of earnings to fixed charges included in the Prospectus has been
calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration Statement
and the Prospectus. The pro forma financial statements and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to
therein.
<PAGE> 8
7
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries, considered as one
enterprise, and (C) except for regular quarterly dividends on the
Common Stock in amounts per share that are consistent with past
practice there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) The Company has been duly organized, is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement, the Pricing Agreement, the Purchase Contract Agreement, the
Pledge Agreement and the Guarantee Agreements. The Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not have a Material Adverse Effect.
(vii) Other than the Trust, each subsidiary of the Company has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect; all
of the issued and outstanding shares of capital stock of each
subsidiary of the Company have been authorized and validly issued, are
fully paid and non-assessable and all such shares are owned by the
Company, directly or through its subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of the
subsidiaries was issued in violation of preemptive or other similar
rights of any securityholder of such subsidiary. The only subsidiaries
of the Company are the subsidiaries listed on Schedule C hereto.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in
<PAGE> 9
8
the Prospectus). The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(ix) The Trust has been created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act
(the "Delaware Act") with the power and authority to own property and
to conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under this
Agreement, the Pricing Agreement, the Trust Preferred Securities, the
Common Securities and the Declaration; the Trust is qualified to
transact business as a foreign company and is in good standing in each
jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a Material
Adverse Effect on the Trust; the Trust is not a party to or otherwise
bound by any agreement other than those described in the Prospectus;
the Trust is and will, under current law, be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
(x) The Purchase Contract Agreement has been duly authorized
by the Company and, at the Closing Time, when validly executed and
delivered by the Company and assuming due authorization, execution and
delivery of the Purchase Contract Agreement by the Purchase Contract
Agent, will constitute a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
and will conform in all material respects to the description thereof
contained in the Prospectus and at the Closing Time, the Trust
Preferred Securities Guarantee Agreement will have been duly qualified
under the 1939 Act.
(xi) The Pledge Agreement has been duly authorized by the
Company and, at the Closing Time, when validly executed and delivered
by the Company and assuming due authorization, execution and delivery
of the Pledge Agreement by the Collateral Agent and the Purchase
Contract Agent, will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, and will conform in all material respects to the description
thereof contained in the Prospectus.
(xii) The Remarketing Agreement has been duly authorized by
each of the Offerors and, at the Closing Time, when validly executed
and delivered by each of the Offerors and assuming due authorization,
execution and delivery of the Remarketing Agreement by the Purchase
Contract Agent and the Remarketing Agent, will constitute a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, and will conform in all material
respects to the description thereof contained in the Prospectus.
(xiii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
the Prospectus, will be validly issued
<PAGE> 10
9
and will represent undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and at
the Closing Time all of the issued and outstanding Common Securities of
the Trust will be directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right.
(xiv) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Institutional Trustee and the
Delaware Trustee, the Declaration will, at the Closing Time, be a
legal, valid and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the Regular Trustees in
accordance with its terms, and will conform in all material respects to
the description thereof contained in the Prospectus; and at the Closing
Time, the Declaration will have been duly qualified under the 1939 Act.
(xv) Each of the Guarantee Agreements has been duly authorized
by the Company and, when validly executed and delivered by the Company,
and, in the case of the Trust Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Trust
Preferred Securities Guarantee by the Guarantee Trustee, will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, and each
of the Guarantees and the Guarantee Agreements will conform in all
material respects to the description thereof contained in the
Prospectus; and at the Closing Time, the Trust Preferred Securities
Guarantee Agreement will have been duly qualified under the 1939 Act.
(xvi) The Securities have been duly authorized for issuance
and sale to the Underwriters and, when issued and delivered against
payment of the consideration as provided herein, will be validly issued
and fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus and
such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; the issuance of
the Securities is not subject to preemptive or other similar rights of
any securityholder of the Company.
(xvii) The shares of Common Stock to be issued and sold by the
Company pursuant to the Purchase Contract Agreement (the "Shares"),
when issued and delivered in accordance with the provisions of the
Purchase Contract Agreement and the Pledge Agreement, will be
authorized, validly issued and fully paid and non-assessable and will
conform in all material respects to the description thereof contained
in the Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Shares will be
subject to personal liability by reason of being such a holder; and the
issuance of such Shares will not be subject to preemptive or other
similar rights of any securityholder of the Company.
<PAGE> 11
10
(xviii) The Indenture has been duly authorized by the Company
and qualified under the 1939 Act and, at the Closing Time, will have
been executed and delivered and will constitute a legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms; the Indenture will conform in all material
respects to the description thereof contained in the Prospectus.
(xix) The Debentures have been duly authorized by the Company
and, at the Closing Time, will have been executed by the Company and,
when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, and
will be in the form contemplated by, and entitled to the benefits of,
the Indenture and will conform in all material respects to the
description thereof contained in the Prospectus.
(xx) Each of the Regular Trustees of the Trust is an employee
of the Company and has been authorized by the Company to execute and
deliver the Declaration.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its articles of incorporation or by-laws. The Trust is not
in violation of the Declaration or its certificate of trust filed with
the State of Delaware on November 12, 1997 (the "Certificate of
Trust"); none of the Company, any of its subsidiaries or the Trust is
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, note, lease, loan or credit agreement or any other agreement
or instrument to which the Company, any of its subsidiaries or the
Trust is a party or by which any of them may be bound, or to which any
of the property or assets of the Company, any subsidiary or the Trust
is subject (collectively "Agreements and Instruments"), or in violation
of any applicable law, rule or regulation or any judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets, which
violation or default would, singly or in the aggregate, have a Material
Adverse Effect.
(xxii) The entry into the Purchase Contracts underlying the
Securities by the Company, the offer of the Securities as contemplated
herein and in the Prospectus, the issue of the Shares and the sale of
the Shares by the Company pursuant to the Purchase Contracts; the
execution, delivery and performance of this Agreement, the Pricing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement, the Remarketing Agreement, the Declaration, the Trust
Preferred Securities, the Common Securities, the Indenture, the
Debentures, the Guarantee Agreements and the Guarantees, and the
consummation of the transactions contemplated herein, therein and in
the Registration Statement (including the issuance and sale of the
Securities, the use of proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds" and the
concurrent issuance and sale of Common Stock and $450,000,000 aggregate
principal amount of senior debt by the Company (the "Concurrent
Offerings")) and compliance by the
<PAGE> 12
11
Offerors with their obligations hereunder and thereunder have been
authorized by all necessary action (corporate or otherwise) and do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of any of the
terms or provisions of, or constitute a default or Repayment Event (as
defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company,
any subsidiary or the Trust pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will any such action result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary or the Declaration
or Certificate of Trust or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company, any subsidiary or the Trust or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company,
any subsidiary or the Trust.
(xxiii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect.
(xxiv) There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened against or affecting the Trust, the Company or any
of its subsidiaries which is required to be disclosed in the
Registration Statement and the Prospectus (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might be reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
Concurrent Offerings, the Pricing Agreement, the Purchase Contracts,
the Purchase Contract Agreement, the Pledge Agreement, the Guarantee
Agreements, the Indenture or the performance by the Company of it
obligations hereunder and thereunder. The aggregate of all pending
legal or governmental proceedings to which the Trust, the Company or
any subsidiary thereof is a party or of which any of their respective
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xxv) There are no contracts or documents which are required
to be described in the Registration Statement, the Prospectus or the
documents incorporated by
<PAGE> 13
12
reference therein or to be filed as exhibits thereto which have not
been so described and filed as required.
(xxvi) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by each of the Offerors.
(xxvii) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice
or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xxviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Offerors of their obligations hereunder, in
connection with the offering, issuance or sale of the Securities
hereunder, the entry into the Purchase Contracts underlying the
Securities, in connection with the issuance and sale of the Common
Securities, and the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts or the consummation of the
transactions contemplated by this Agreement or the issuance and sale of
Common Stock and of senior debt of the Company pursuant to the
Concurrent Offerings, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xxix) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
<PAGE> 14
13
(xxx) The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxxi) Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxxii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business in Cuba, codified as Section 517.075 of
the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
<PAGE> 15
14
(xxxiii) None of the Trust nor the Company or any of its
subsidiaries is, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom
as described in the Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxxiv) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed through
the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, might have) a Material Adverse Effect or a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Representatives or to counsel for the
Representatives shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Offerors
agree to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Offerors,
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter at the price per security set forth in the Pricing Agreement,
plus any additional number of Initial Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule 430A of
the 1933 Act Regulations, the initial public offering price per Security and the
purchase price per Security to be paid by the Underwriters for the Securities
have each been determined and set forth in the Pricing Agreement, dated the date
hereof, and any necessary amendments to the Registration Statement and the
Prospectus will be filed before the Registration Statement becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of the
1933 Act Regulations, the purchase price per Security to be paid by the
Underwriters shall be an amount equal to the initial public offering price per
Security, less an amount per Security to be determined by agreement between the
Underwriters and the Offerors. The initial public offering price per Security
shall be a fixed price to be determined by agreement between the Underwriters
and the Offerors. The initial public offering price and the purchase price, when
so determined, shall be set forth in the Pricing Agreement. In the event that
such prices have
<PAGE> 16
15
not been agreed upon and the Pricing Agreement has not been executed and
delivered by all parties thereto by the close of business on the fourth business
day following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless otherwise
agreed to by the Offerors and the Underwriters.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Offerors hereby grant to the Underwriters, severally and not jointly,
the right to purchase up to an additional 675,000 Option Securities at the price
per share set forth in the Pricing Agreement. The option hereby granted will
expire automatically at the close of business on the 30th calendar day after (i)
the later of the date the Registration Statement and any Rule 462(b)
Registration Statement becomes effective, if the Offerors have elected not to
rely upon Rule 430A under the 1933 Act Regulations, or (ii) the Representation
Date, if the Offerors have elected to rely upon Rule 430A under the 1933 Act
Regulations, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Offerors setting forth the aggregate number of additional
Optional Securities to be purchased and the time and date of delivery for the
related Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives but shall not be later
than seven full business days after the exercise of such option, nor in any
event before the Closing Time, unless otherwise agreed upon by the
Representatives and the Offerors. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) The Trust Preferred Securities underlying the Securities
will be pledged with the Collateral Agent to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. Such pledge shall be
effected by the transfer to the Collateral Agent of the Trust Preferred
Securities to be pledged at the Closing Time and appropriate Date of Delivery,
if any, in accordance with the Pledge Agreement.
(d) Payment of the purchase price for, and delivery of
certificates for, the Initial Securities, shall be made, against the delivery to
the Collateral Agent of the Trust Preferred Securities relating to such
Securities, at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue,
New York, New York 10017, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
<PAGE> 17
16
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Representatives may request in writing at least one full business days
before the Closing Time or any Date of Delivery, as the case may be. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Representatives in The
City of New York not later than 10:00 a.m. (Eastern time) on the business day
prior to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Offerors. The Offerors covenant
with each Underwriter as follows:
(a) The Offerors, subject to Section 3(b), will comply with
the requirements of Rule 430A of the 1933 Act Regulations and/or Rule
434 of the 1933 Act Regulations, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) of
the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the
Prospectus, (ii) of the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus
or for additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or the initiation of any proceedings for that
purpose and (v) of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or
the exemption from qualification of the Securities or the Shares under
state securities or Blue Sky laws or the initiation or threatening of
any proceeding for such purpose. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as
it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
<PAGE> 18
17
Commission and, in the event that it was not, it will promptly file
such prospectus. The Offerors will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment and any filing under
Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise; will furnish the Representatives with copies of any such
Rule 462(b) Registration Statement, Term Sheet, amendment, supplement
or revision a reasonable amount of time prior to such proposed filing
or use, as the case may be; and will not file or use any such Rule
462(b) Registration Statement, Term Sheet, amendment, supplement or
revision to which the Representatives or counsel for the
Representatives shall object.
(c) The Company has furnished or will deliver to the
Representatives and counsel for the Representatives, without charge,
signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed
to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(d) The Company has delivered to each Underwriter, without
charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T.
(e) The Offerors will comply with the 1933 Act and the 1933
Act Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Registration Statement and
the Prospectus. If at any time when a Prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of
<PAGE> 19
18
counsel for the Underwriters or for the Offerors, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Offerors will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Offerors will furnish to the Underwriters,
without charge, such number of copies of such amendment or supplement
as the Underwriters may reasonably request.
(f) The Offerors will use their best efforts, in cooperation
with the Underwriters, to qualify the Securities for offering and sale
under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from
the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Offerors will file such statements and reports as may be required by
the laws of such jurisdiction to continue such qualification in effect
for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) The Offerors, during the period when the Prospectus is
required to be delivered under the 1933 Act of the 1934 Act, will file
all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(j) The Offerors will use their best efforts to effect the
listing of the Income PRIDES and the Shares on the New York Stock
Exchange and to cause the Securities to be registered under the 1934
Act.
<PAGE> 20
19
(k) During a period of 90 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the prior
written consent of Merrill Lynch, (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
Securities, Purchase Contracts, Trust Preferred Securities, Common
Stock or the Debentures or any security convertible into or
exchangeable or exercisable for Securities, Purchase Contracts, Trust
Preferred Securities, Common Stock or the Debentures, or any equity
securities substantially similar to the Securities, Trust Preferred
Securities, Purchase Contracts or Common Stock or any debt securities
substantially similar to the Debentures; or (B) enter into any swap or
any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
the Securities, Purchase Contracts, Trust Preferred Securities, Common
Stock or the Debentures or any security convertible into or
exchangeable into or exercisable for the Securities, Purchase
Contracts, Trust Preferred Securities, Common Stock or the Debentures
or any debt securities substantially similar to the Debentures or
equity securities substantially similar to the Securities, whether any
such swap or transaction described in (A) or (B) is to be settled by
delivery of Securities, Purchase Contracts, Trust Preferred Securities,
Common Stock or the Debentures or other such securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the
Securities, Purchase Contracts, Trust Preferred Securities, Common
Stock or the Debentures to be sold hereunder or pursuant to the
Concurrent Offerings, (B) Income PRIDES or Growth PRIDES to be created
or recreated upon substitution of pledged securities or shares of
Common Stock issuable upon early settlement of the Income PRIDES or
Growth PRIDES, (C) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the
Prospectus, (D) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectus or (E) any shares of
Common Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
the Pricing Agreement, the Purchase Contracts, the Purchase Contract Agreement,
the Pledge Agreement and the Remarketing Agreement, including, without
limitation, expenses related to the following, if incurred: (i) the preparation,
delivery, printing and filing of the Registration Statement and Prospectus as
originally filed (including financial statements and exhibits) and of each
amendment thereto; (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, the Pricing Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance, or delivery of the Securities; (iii) the
preparation, issuance and delivery of the certificates for the Securities and
the Shares to the Underwriters, including any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters; (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors or agents (including the transfer agents
and registrars), as well as fees and
<PAGE> 21
20
disbursements of the Trustees, the Purchase Contract Agent, the Remarketing
Agent, the Collateral Agent and any Depositary, and their respective counsel;
(v) the qualification of the Securities and the Shares under securities laws in
accordance with the provisions of Section 3(f), including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto; (vi) the printing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
of each preliminary prospectus, any Term Sheet and of the Prospectus and any
amendments or supplements thereto; (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto; (viii)
any fees payable in connection with the rating of the Securities by nationally
recognized statistical rating organizations; (ix) any fees payable to the
Commission; and (x) the fees and expenses incurred in connection with the
listing of the Income PRIDES and the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Offerors herein contained or in
certificates of any officer of the Company or any subsidiary or the trustees of
the Trust delivered pursuant to the provisions hereof, to the performance by the
Offerors of their covenants and other obligations hereunder, and to the
following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective, and on the date hereof
and at the Closing Time and any Date of Delivery, no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the satisfaction of counsel to the Underwriters. A prospectus
containing Rule 430A shall have been filed with the Commission in
accordance with Rule 424(b) (or any required post-effective amendment
providing such information shall have been filed and declared effective
in accordance with the requirements of Rule 430A), or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).
(b) At the Closing Time the Representatives shall have
received:
(1) The favorable opinion, dated as of the Closing
Time, of David T. Cofer, Vice President, Secretary and General
Counsel to the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other
Underwriters, to the effect that:
<PAGE> 22
21
(i) The Company has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the Commonwealth
of Pennsylvania.
(ii) The Company has corporate power
and authority to own, lease and operate its
properties and to conduct its business as described
in the Prospectus.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which such
qualification is required whether by reason of the
ownership or leasing of property or the conduct of
business, except where the failure so to qualify or
to be in good standing would not result in a Material
Adverse Effect.
(iv) The authorized, issued and
outstanding capital stock of the Company is as set
forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except
for subsequent issuances, pursuant to reservation,
agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding
capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; and
none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the
Company.
(v) Except for the Trust, each U.S.
subsidiary of the Company has been incorporated and
is validly existing as a corporation in good standing
under the laws of the jurisdiction of its
incorporation, has the corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify or to be in good standing would
not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each such
subsidiary of the Company has been duly authorized
and validly issued, is fully paid and non-assessable
and, to the best of my knowledge, is owned by the
Company directly or through subsidiaries all such
shares are owned by the Company, directly or through
its subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital
stock of any subsidiary was issued in violation of
the preemptive or similar rights of any
securityholder of such subsidiary.
<PAGE> 23
22
(vi) The Declaration has been duly
authorized, executed and delivered by the Company and
the Trustees and is a legal, valid and binding
obligation of the Company, enforceable against the
Company and each of the Regular Trustees in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law) (the "Bankruptcy
Exceptions"); and the Declaration has been duly
qualified under the 1939 Act.
(vii) All legally required proceedings
in connection with the authorization, issuance and
validity of the Securities and the sale of the
Securities in accordance with this Agreement (other
than the filing of post-issuance reports, the
non-filing of which would not render the Securities
invalid) have been taken and all legally required
orders, consents or other authorizations or approvals
of any other public boards or bodies in connection
with the authorization, issuance and validity of the
Securities and the sale of the Securities in
accordance with this Agreement (other than in
connection with or in compliance with the provisions
of the securities or Blue Sky laws of any
jurisdictions, as to which no opinion need be
expressed) have been obtained and are in full force
and effect.
(viii) The Registration Statement,
including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 Act and the
required filing of the Prospectus pursuant to the
Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the
best of my knowledge, no stop order suspending the
effectiveness of the Registration Statement or a Rule
462(b) Registration Statement has been issued under
the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
(ix) The Registration Statement as of
its effective date and the Prospectus and each
amendment or supplement thereto as of its issue date
(other than the financial statements and supporting
schedules included therein or omitted therefrom, as
to which we need express no opinion), complied as to
form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations; and the
Declaration, the Indenture, the Trust Preferred
Securities Guarantee Agreement and the Statements of
Eligibility on Forms T-1 with respect to each of the
Institutional Trustee, the Debt Trustee, and the
Guarantee Trustee filed with the Commission as part
of the Registration Statement complied as to form in
all respects with the requirements of the 1939 Act
and the 1939 Act Regulations.
<PAGE> 24
23
(x) Each of the documents incorporated
by reference in the Prospectus (other than the
financial statements and supporting schedules
included therein or omitted therefrom, as to which we
need express no opinion), when they were filed with
the Commission complied as to form in all material
respects with the requirements of the 1934 Act and
the 1934 Act Regulations.
(xi) The Securities have been duly
authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement
against payment of the consideration as provided in
the Pricing Agreement, will be validly issued and
fully paid and non-assessable and no holder of the
Securities is or will be subject to personal
liability by reason of being such a holder; the
Common Stock and the Securities are each registered
under the 1934 Act, and the Income PRIDES issuable at
the Closing Time and the Shares issuable by the
Company pursuant to the Purchase Contracts have been
authorized for listing on the New York Stock
Exchange, upon official notice of issuance.
(xii) The Shares subject to the Purchase
Contract Agreement have been validly authorized and
reserved for issuance and, when issued and delivered
by the Company in accordance with the provisions of
the Purchase Contract Agreement, the Purchase
Contracts and the Pledge Agreement, will be fully
paid and non-assessable and no holder of the
Securities is or will be subject to personal
liability by reason of being such a holder; the
issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or,
to the best of such counsel's knowledge, otherwise.
(xiii) The issuance of the Securities is
not subject to preemptive or other similar rights of
any securityholder of the Company.
(xiv) All of the issued and outstanding
Common Securities of the Trust are directly owned by
the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or
equitable right.
(xv) This Agreement and the Pricing
Agreement have been duly authorized, executed and
delivered by each of the Company and the Trust.
(xvi) The Purchase Contract Agreement
has been duly authorized by the Company and, assuming
due authorization, execution and delivery of the
Purchase Contract Agreement by the Purchase Contract
Agent, constitutes a legal, valid and binding
obligation of the
<PAGE> 25
24
Company, enforceable against the Company in
accordance with its terms, subject to the Bankruptcy
Exceptions.
(xvii) The Pledge Agreement has been duly
authorized by the Company and, assuming due
authorization, execution and delivery of the Pledge
Agreement by the Collateral Agent and the Purchase
Contract Agent, constitutes a legal, valid and
binding obligation of the Company, enforceable
against the Company in accordance with its terms,
subject to the Bankruptcy Exceptions.
(xviii) The Remarketing Agreement has
been duly authorized by the Offerors and, assuming
due authorization, execution and delivery of the
Remarketing Agreement by the Purchase Contract Agent
and the Remarketing Agent, constitutes a legal, valid
and binding obligation of the Company, enforceable
against the Company in accordance with its terms,
subject to the Bankruptcy Exceptions.
(xix) Each of the Guarantee Agreements
has been duly authorized, executed and delivered by
the Company; the Trust Preferred Securities Guarantee
Agreement, assuming it is duly authorized, executed,
and delivered by the Guarantee Trustee, constitutes a
legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with
its terms, subject to the Bankruptcy Exceptions, and
the Trust Preferred Securities Guarantee Agreement
and the Declaration have been duly qualified under
the 1939 Act.
(xx) The Indenture has been executed
and delivered by the Company and, assuming
authorization, execution, and delivery thereof by the
Debt Trustee, is a legal, valid and binding
obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the
Bankruptcy Exceptions; and the Indenture has been
duly qualified under the 1939 Act.
(xxi) The Debentures are in the form
contemplated by the Indenture, have been duly
authorized, executed and delivered by the Company
and, when authenticated by the Debt Trustee in the
manner provided for in the Indenture and delivered
against payment therefor by the Trust, will
constitute legal, valid and binding obligations of
the Company, enforceable against the Company in
accordance with their terms, subject to the
Bankruptcy Exceptions.
(xxii) The entry into the Purchase
Contracts underlying the Securities by the Company,
the offer of the Securities as contemplated herein
and in the Prospectus, the issue of the Shares and
the sale of the Shares by the Company pursuant to the
Purchase Contracts; the execution, delivery and
performance of this Agreement, the Pricing
<PAGE> 26
25
Agreement, the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement, the
Remarketing Agreement, the Declaration, the Trust
Preferred Securities, the Common Securities, the
Indenture, the Debentures, the Guarantee Agreements
and the Guarantees, and the consummation of the
transactions contemplated herein, therein and in the
Registration Statement (including the issuance and
sale of the Securities, the use of proceeds from the
sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds" and the
concurrent issuance and sale of Common Stock and of
senior debt by the Company (the "Concurrent
Offerings")) and compliance by the Offerors with
their obligations hereunder and thereunder have been
authorized by all necessary action (corporate or
otherwise) and do not and will not, whether with or
without the giving of notice or passage of time or
both, conflict with or constitute a breach of any of
the terms or provisions of, or constitute a default
or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of
the Company, any subsidiary or the Trust pursuant to,
the Agreements and Instruments (as defined in Section
1(a)(xxi) of the Purchase Agreement) (except for such
conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material
Adverse Effect), nor will any such action result in
any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or the
Declaration or Certificate of Trust or any applicable
law, statute, rule, regulation, judgment, order, writ
or decree known to me of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company, any subsidiary or the
Trust or any of their respective assets, properties
or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder
of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such
indebtedness by the Company, any subsidiary or the
Trust.
(xxiii) All conditions precedent provided
for in the Purchase Contract Agreement relating to
the authentication and delivery of the Security
Certificates have been complied with and the Company
is duly entitled to the authentication and delivery
of the Security Certificates in accordance with the
terms of the Purchase Contract Agreement; the
Security Certificates are in a form contemplated by
the Purchase Contract Agreement and comply with all
applicable statutory requirements and with the
requirements of the New York Stock Exchange.
(xxiv) There is not pending any action,
suit, proceeding, inquiry or investigation, to which
the Company or any subsidiary is a
<PAGE> 27
26
party, or to which the property or assets of the
Company or any subsidiary is subject, before or
brought by any court or governmental agency or body,
domestic or foreign, which might reasonably result in
a Material Adverse Effect or which might reasonably
be expected to materially and adversely affect the
properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or
the concurrent Offerings or the performance by the
Company of its obligations thereunder; and to the
best of my knowledge, no such actions or proceedings
are threatened.
(xxv) The information in the Prospectus
under the captions "Business - Regulation", "Business
- Properties", "Business - Legal Matters," "The
Trust," "Use of Proceeds", "Capitalization,"
"Description of the FELINE PRIDES," "Description of
the Purchase Contracts," "Certain Provisions of the
Purchase Contract Agreements and the Pledge
Agreement," "Description of the Trust Preferred
Securities," "Description of the Guarantee,"
"Description of the Debentures," "Effect of
Obligations under the Debentures and the Guarantee",
"Description of Common Stock," to the extent that it
constitutes matters of law, summaries of legal
matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed
by me and is correct in all material respects.
(xxvi) All descriptions in the Prospectus
of contracts and other documents to which the Company
or its subsidiaries are a party are accurate in all
material respects; to the best of my knowledge, there
are no franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments
required to be described or referred to in the
Registration Statement or to be filed as exhibits
thereto other than those described or referred to
therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or
references thereto are correct in all material
respects; and no default exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, agreement, note, lease
or other instrument so described, referred to, filed
or incorporated by reference.
(xxvii) No filing with, or authorization,
approval, consent, license, order, registration,
qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than
under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as any be required under
the securities or blue sky laws of the various
states, as to which we need express no opinion) is
necessary or required in connection with the due
authorization, execution and deliver of this
Agreement or for the offering, issuance, sale or
delivery of the Securities or the securities offered
in the Concurrent Offerings or the
<PAGE> 28
27
performance by the Offerors of their respective
obligations in this Agreement, the Pricing Agreement,
the Remarketing Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Indenture, the
Debentures, the Trust Preferred Securities Guarantee
Agreement, the Trust Preferred Securities Guarantee,
the Declaration and the Securities.
(xxviii) To the best of my knowledge,
there are no statues or regulations that are required
to be described in the Prospectus that are not
described as required.
(xxix) The rights under the Company's
shareholder rights plan to which holders of the
Securities will be entitled have been duly authorized
and validly issued.
(xxx) To the best of my knowledge,
neither the Company nor any subsidiary is in
violation of its charter or by-laws and no default by
the Company or any subsidiary exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is
described or referred to in the Registration
Statement or the Prospectus or filed or incorporated
by reference as an exhibit to the Registration
Statement.
Moreover, such counsel shall confirm that nothing has come to
such counsel's attention that would lead such counsel to believe that
the Registration Statement or any amendment thereto, including the Rule
430A Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements and schedules and
other financial data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need make no statement), at
the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely, as to
matters of New York law, upon the opinion of Buchanan Ingersoll Professional
Corporation, special counsel to the Offerors, and as to matters of Delaware law,
upon the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware
counsel to the Offerors, in which case the opinion shall state that such counsel
believes that you and such counsel are entitled to so rely.
<PAGE> 29
28
(2) The favorable opinion, dated as of the Closing
Time, of Buchanan Ingersoll Professional Corporation, special
counsel to the Offerors, in form and substance satisfactory to
counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the Underwriters,
to the effect that:
(i) The Registration Statement,
including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the
time period required by Rule 424(b); and, to the best
of our knowledge no stop order suspending the
effectiveness of the Registration Statement or any
462(b) Registration Statement has been issued under
the 1933 Act, and no proceedings therefor initiated,
or threatened by the Commission.
(ii) The Registration Statement and the
Prospectus and each amendment or supplement thereto
(in each case, other than the financial statements
and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) as
of their respective effective or issue dates, or when
amended, as appropriate, complied as to form in all
material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(iii) The information in the Prospectus
under the captions "The Trust," "Description of the
FELINE PRIDES," "Description of the Purchase
Contracts," "Certain Provisions of the Purchase
Contract Agreements and the Pledge Agreement,"
"Description of the Trust Preferred Securities,"
"Description of the Guarantee," "Description of the
Debentures," "Effect of Obligations Under the
Debentures and the Guarantee," and "Description of
the Common Stock," and in the Registration Statement
under Item 15 to the extent that it constitutes
matters of law, summaries of legal matters, the
Company's charter and bylaws or legal proceedings, or
legal conclusions, has been reviewed by us and is
correct in all material respects; and the opinion of
such firm set forth under "Certain Federal Income Tax
Consequences" is confirmed.
(iv) The Purchase Contract Agreement,
the Purchase Contracts underlying the Securities
being delivered at the Closing Time and at any Date
of Delivery, and the Pledge Agreement have been duly
authorized, executed and delivered by the Company and
each is a valid and legally binding agreement of the
Company enforceable against the Company in accordance
with its terms; provided, however, that based on a
review of applicable case law, upon the occurrence of
a Termination Event, Section 365(e)(2) of the
Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as
amended) should not substantively limit the
provisions of Sections 3.15 and 5.8 of the Purchase
Contract Agreement
<PAGE> 30
29
and Section 4.3 of the Pledge Agreement that require
termination of the Purchase Contracts and release of
the Collateral Agent's security interest in the Trust
Preferred Securities or the Treasury Securities;
provided, however, that procedural restrictions
respecting relief from the automatic stay under
Section 362 of the Code may affect the timing of the
exercise of such rights and remedies.
(v) When the Securities are issued in
accordance with the terms of the Purchase Contract
Agreement and delivered against payment therefor, the
Securities will entitle the holders thereof to the
rights specified in the Purchase Contract Agreement.
(vi) For purposes of the opinions
expressed therein, such counsel has assumed that (1)
the Pledge Agreement has been authorized, executed
and delivered by the Purchase Contract Agent on
behalf of each of the holders of the Securities from
time to time, (2) the Purchase Contract Agent is
incorporated and validly existing under the laws of
the state of its incorporation, (3) the Purchase
Contract Agent and each of the holders of the
Securities has full power, authority and legal right
(including, without limitation, any legal right
dependent upon there being no necessary governmental
approvals or filings and no conflict with laws,
governing documents or contracts) to make and perform
its obligations under the Pledge Agreement, (4) the
Pledge Agreement is the legal, valid, binding and
enforceable obligation of the Purchase Contract Agent
on behalf of each of the holders of the Securities
from time to time, and (5) the Purchase Contract
Agent and each holder of Securities has sufficient
rights in the Preferred Securities or the Treasury
Securities, as the case may be, for the security
interest of the Collateral Agent for the benefit of
the Company to attach.
For purposes of such counsel's opinion: (i) "UCC" means the
Uniform Commercial Code as in effect on the date thereof in the State
of New York; (ii) "Federal Book-Entry Regulations" means the United
States Department of Treasury regulations governing the transfer and
pledge of marketable Treasury Securities maintained in the form of
entries in the records of the Federal Reserve Banks and set forth in 61
Fed. Reg. 43,626 (1996) (to be codified at 31 C.F.R. Part 357), (iii)
"Securities Intermediary" means acting solely in its capacity as a
"securities intermediary" as defined in the UCC and the Federal
Book-Entry Regulations; and (iv) "Collateral Account" means account
number maintained by the Securities Intermediary in the name as
Purchase Contract Agent on behalf of the holders of certain securities
of Kennametal Financing I, Collateral Account, subject to the security
interest of The Chase Manhattan Bank, as Collateral Agent for the
benefit of Kennametal, Inc. as pledgee pursuant to the Pledge
Agreement, dated as of January , 1998, among the Securities
Intermediary, the Purchase Contract Agent and the Company (the "Pledge
Agreement") and (v) acting as defined in Section 8-313(4) of the UCC.
<PAGE> 31
30
The provisions of the Pledge Agreement are effective to
create, in favor of the Collateral Agent for the benefit of the
Company, a valid security interest under the UCC in all "securities
entitlements" (as defined in Section 8-102(a)(17) of the UCC and the
Federal Book-Entry Regulations) now or hereafter credited to the
Collateral Account relating to Preferred Securities or Treasury
Securities (such securities entitlements, the "Pledged Securities
Entitlements"). The provisions of the Pledge Agreement are effective
under the UCC and the Federal Book-Entry Regulations to perfect the
security interest of the Collateral Agent for the benefit of the
Company in the Pledged Security Entitlements.
(vii) Assuming due authorization,
execution and delivery thereof by the Guarantee
Trustee, the Trust Preferred Securities Guarantee
Agreement is a legal, valid and binding agreement of
the Company, enforceable against the Company in
accordance with its terms, subject to the Bankruptcy
Exceptions.
(viii) Assuming due authorization,
execution, and delivery thereof by the Debt Trustee,
the Indenture is a legal, valid and binding
obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the
Bankruptcy Exceptions; and the Indenture, Declaration
and Trust Preferred Securities Agreement have
been duly qualified under the 1939 Act.
(ix) Assuming due authorization,
execution and delivery thereof by the Purchase
Contract Agent, and the Remarketing Agent, the
Remarketing Agreement is a legal, valid and binding
agreement of the Company, enforceable against the
Company in accordance with its terms, subject to the
Bankruptcy Exceptions.
(x) The Securities, the Shares, the
Common Securities, the Debentures, each of the
Guarantees, the Declaration and each of the Guarantee
Agreements conform in all material respects to the
description thereof contained in the Prospectus.
(xi) No filing with, or authorization,
approval, consent, order, registration or
qualification of or with any court or governmental
authority or agency domestic or foreign is required
for the entry into the Purchase Contracts underlying
the Securities, the issuance and sale of the
Securities by the Offerors to the Underwriters, or
the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts, or the
performance by the Company and the Trust of their
respective obligations under this Agreement, the
Pricing Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement,
the Remarketing Agreement, the Indenture, the
Debentures, the Trust Preferred Securities Guarantee
Agreement, the Trust Preferred Securities Guarantee,
the Declaration and the Securities or the securities
offered in
<PAGE> 32
31
the Concurrent Offerings, except such as has been
obtained and made under the federal securities laws
or such as may be required under state or foreign
securities or Blue Sky laws.
(xii) The issuance and sale of the
Securities do not contravene the Commodity Exchange
Act or the regulations of the Commodity Futures
Trading Commission.
(xiii) None of the Trust nor the Company
or any of its subsidiaries is, and upon the issuance
and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as
described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940
Act").
Moreover, such counsel shall confirm that nothing has come to
such counsel's attention that would lead such counsel to
believe that the Registration Statement or any amendment
thereto, including the Rule 430A Information and Rule 434
Information (if applicable), (except for financial statements
and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to
which such counsel need make no statement), at the time such
Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other
financial data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need make no
statement), at the time the Prospectus was issued, at the time
any such amended or supplemented prospectus was issued or at
the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(3) The favorable opinion, dated as of the Closing
Time, of _________________, special German counsel to the
Offerors, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of
such letter for each of the Underwriters to the effect:
(i) Kennametal Hertel AG has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Prospectus and is duly qualified as a foreign
corporation to transact business and is in good
standing in each
<PAGE> 33
32
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of
property or the conduct of business, except where the
failure to so qualify or to be in good standing would
not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of Kennametal
Hertel AG has been duly authorized and validly
issued, is fully paid and non-assessable and, to the
best of our knowledge, owned the Company directly or
through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim
or equity; and
(ii) Other than as set forth in the
Prospectus, there are no legal or governmental
proceedings pending to which Kennametal Hertel AG or
any of its subsidiaries is a party or to which any
property of Kennametal Hertel AG or any of its
subsidiaries is the subject which reasonably would be
expected individually or in the aggregate to have a
Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others;
(4) The favorable opinion, dated as of the Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, special
Delaware counsel to the Offerors, in form and substance
satisfactory to counsel for the Underwriters to the effect
that:
(i) The Trust has been created and is
validly existing in good standing as a business trust
under the Delaware Act, and has the business trust
power and authority to conduct its business as
described in the Prospectus.
(ii) The Declaration constitutes a legal,
valid and binding obligation of the Company and is
enforceable against the Company in accordance with
its terms, except that to the extent enforceability
thereof may be limited by the (i) bankruptcy,
insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance and other similar
laws relating to or affecting the rights and remedies
of creditors generally, (ii) principles of equity,
including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect
of applicable public policy on the enforcement of
provisions related to indemnification.
(iii) Under the Delaware Act and the
Declaration, the Trust has the power and authority to
(i) execute and deliver, and to perform its
obligations under, this Agreement, the Pricing
Agreement and Remarketing Agreement (ii) issue, and
perform its obligations under, the Trust Securities.
<PAGE> 34
33
(iv) Under the Delaware Act and the
Declaration, the execution and delivery by the Trust
of this Agreement, the Pricing Agreement and the
Remarketing Agreement, and the performance by the
Trust of its obligations hereunder and thereunder,
have been authorized by all necessary action on the
part of the Trust.
(v) The Trust Preferred Securities have been
authorized by the Declaration and, when executed by
the Trust and authenticated by the Institutional
Trustee in accordance with the Declaration and
delivered against payment therefor in accordance with
the terms of this Agreement, will be validly issued
and, subject to qualifications hereinafter expressed,
fully paid and non-assessable undivided beneficial
interests in the assets of the Trust; the Holders of
the Trust Preferred Securities, as beneficial owners
of the Trust, will be entitled to the same limitation
of personal liability extended to stockholders of
private corporations for profit organized under the
General Corporation Law of the State of Delaware;
said counsel may note that the holders of the Trust
Preferred Securities may be obligated to make
payments as set forth in the Declaration.
(vi) The Common Securities have been
authorized by the Declaration and, when issued,
executed and authenticated in accordance with the
terms of the Declaration, and delivered and paid for
as set forth in the Prospectus, will be validly
issued, undivided beneficial interests in the assets
of the Trust.
(vii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is
not subject to preemptive or other similar rights.
(viii) None of the execution and delivery by
the Trust of, or the performance by the Trust of its
obligations under, this Agreement, the issuance and
sale of the Trust Preferred Securities by the Trust
in accordance with the terms of this Agreement, the
Remarketing Agreement and the Pricing Agreement, or
the consummation by the Trust of the other
transactions contemplated thereby, will contravene
any provisions of applicable Delaware law or Delaware
administrative regulations or the Certificate of
Trust or the Declaration.
(ix) This Agreement, the Pricing Agreement
and the Remarketing Agreement have been authorized,
executed and delivered by the Trust.
(x) No authorization, approval, consent,
order, registration or qualification of or with any
Delaware state governmental authority or Delaware
state agency is required for the entry into the
Purchase
<PAGE> 35
34
Contracts underlying the Securities, the issuance and
sale by the Trust of the Securities to the
Underwriters, or the performance by the Company and
the Trust of their respective obligations under this
Agreement, the Pricing Agreement, the Remarketing
Agreement, the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement, the
Indenture, the Debentures, the Trust Preferred
Securities Guarantee Agreement, the Trust Preferred
Securities Guarantee, the Declaration and the Trust
Securities, except such as has been obtained and made
under the federal securities laws or such as may be
required under state securities or Blue Sky laws.
(5) The favorable opinion, dated as of the Closing
Time, of ________________, counsel to The First National Bank
of Chicago, as Institutional Trustee under the Declaration,
and Guarantee Trustee under the Trust Preferred Securities
Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, together with signed or
reproduced copies of such letter of each of the Underwriters,
to the effect that:
(i) , is a Delaware corporation with
corporate powers, duly organized, validly existing
and in good standing under the laws of the State of
Delaware with all necessary power and authority to
execute and deliver, and to carry out and perform its
obligations under the terms of the Declaration and
the Trust Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance
by the Institutional Trustee of the Declaration and
the execution, delivery and performance by the
Guarantee Trustee of the Trust Preferred Securities
Guarantee Agreement have been duly authorized by all
necessary corporate action on the part of the
Institutional Trustee and the Guarantee Trustee,
respectively. The Declaration and the Trust Preferred
Securities Guarantee Agreement have been duly
executed and delivered by the Institutional Trustee
and the Guarantee Trustee, respectively, and
constitute the legal, valid and binding obligations
of the Institutional Trustee and the Guarantee
Trustee, respectively, enforceable against the
Institutional Trustee and the Guarantee Trustee,
respectively, in accordance with their terms, subject
to the Bankruptcy Exceptions.
(iii) The execution, delivery and
performance of the Declaration and the Trust
Preferred Securities Guarantee Agreement by the
Institutional Trustee and the Guarantee Trustee,
respectively, do not conflict with or constitute a
breach of the Articles of Organization or By-laws of
the Institutional Trustee and the Guarantee Trustee,
respectively.
<PAGE> 36
35
(iv) No consent, approval or authorization
of, or registration with or notice to, any Delaware
or federal banking authority is required for the
execution, delivery or performance by the
Institutional Trustee and the Guarantee Trustee of
the Declaration and the Trust Preferred Securities
Guarantee Agreement.
(6) The favorable opinion, dated as of the Closing
Time, of , counsel to The First National Bank of
Chicago, as Purchase Contract Agent, in form and substance
satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the
Underwriters, to the effect that:
(i) The Purchase Contract Agent, is duly
incorporated and is validly existing as a banking
corporation with trust powers under the laws of the
United States with all necessary power and authority
to execute, deliver and perform its obligations under
the Purchase Contract Agreement and the Pledge
Agreement.
(ii) The execution, delivery and performance
by the Purchase Contract Agent of the Purchase
Contract Agreement and the Pledge Agreement, and the
authentication and delivery of the Securities have
been duly authorized by all necessary corporate
action on the part of the Purchase Contract Agent.
The Purchase Contract Agreement and the Pledge
Agreement have been duly executed and delivered by
the Purchase Contract Agent, and constitute the
legal, valid and binding obligations of the Purchase
Contract Agent, enforceable against the Purchase
Contract Agent in accordance with its terms, subject
to the Bankruptcy Exceptions.
(iii) the execution, delivery and
performance of the Purchase Contract Agreement and
the Pledge Agreement by the Purchase Contract Agent
does not conflict with or constitute a breach of the
charter or by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization
of, or registration with or notice to, any state or
federal governmental authority or agency is required
for the execution, delivery or performance by the
Purchase Contract Agent of the Purchase Contract
Agreement and the Pledge Agreement.
(7) The opinion of Buchanan Ingersoll Professional
Corporation, special tax counsel to the Offerors, generally to
the effect that based upon current law and the assumptions
stated or referred to therein, under current U.S. federal
income tax law: (i) the Trust will be classified as a grantor
trust and not as an association taxable as a corporation; (ii)
the Debentures will be classified as indebtedness of the
Company and (iii) the discussion in the Prospectus under
<PAGE> 37
36
the caption "Certain Federal Income Tax Consequences" is a
fair and accurate summary of the matters addressed therein,
based upon current law and the assumptions stated or referred
to therein.
(8) The favorable opinion, dated as of the Closing
Time, of Simpson Thacher & Bartlett, counsel for the
Underwriters, in form and substance satisfactory to the
Underwriters, with respect to the issuance and sale of the
Securities, and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(9) The favorable opinions, dated as of the Closing
Time, of (i) LeBoeuf, Lamb, Greene, & MacRae L.L.P., special
Connecticut counsel for the Company, (ii) LeBoeuf, Lamb,
Greene, & MacRae L.L.P., special Pennsylvania counsel for the
Company, (iii) Dickinson, Wright, Moon, Van Dusen & Freeman,
special Michigan counsel for the Company, and (iv) Shook,
Hardy & Bacon, special Kansas counsel for the Company, each in
form and substance satisfactory to the Underwriters, with
respect to the applicability of the "bucket shop" laws of such
states.
(c) At the Closing Time, there shall not have been, since the
date hereof or since the respective date as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries,
considered as one enterprise, whether or not in the ordinary course of
business, and the Representatives shall have received a certificate of
the President or a Vice-President of the Company and of the Chief
Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, dated as of the Closing
Time, to the effect that (i) there has been no material adverse change,
(ii) the representations and warranties in Section 1 hereof are true
and correct as though expressly made at and as of the Closing Time,
(iii) the Company and the Trust have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at
or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(d) At the time of the execution of this Agreement, the
Representatives shall have received from Arthur Andersen, LLP a letter
dated such date in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such
letter for each of the Underwriters as to such other matters as the
Representatives may reasonably request.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from Price Waterhouse, LLP a letter
dated such date in form and substance satisfactory to the
Representatives, together with signed or reproduced
<PAGE> 38
37
copies of such letter for each of the Underwriters, as to such other
matters as the Representatives may reasonably request.
(f) At the Closing Time, the Representatives shall have
received from Arthur Andersen, LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except
that the specified date referred to shall be a date not more than three
days prior to the Closing Time.
(g) At the Closing Time, the Representatives shall have
received from Price Waterhouse, LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than three
days prior to the Closing Time.
(h) At the Closing Time, and at each Date of Delivery, if any,
counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions herein contained; and all
proceedings taken by the Offerors in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Representatives and counsel for the
Representatives.
(i) At the Closing Time, (i) the Securities shall be rated in
one of the four highest rating categories for preferred stock
("Investment Grade") by any nationally recognized statistical rating
agency, and the Offerors shall have delivered to the Underwriters a
letter, dated the Closing Time, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Securities have Investment Grade
ratings; (ii) there shall not have occurred any decrease in the rating
assigned to the Securities or any other securities of the Company or of
the financial condition of the Company by any "nationally recognized
statistical rating organization," as defined for purposes of Rule
436(g)(2) under the 1933 Act Regulations, and (iii) no such
organization shall have publicly announced that it has under
surveillance or review its rating of the Securities or any other
securities of the Company or of the financial condition of the Company.
(j) At the Closing Time, the Income PRIDES and the Shares
shall have been approved for listing on the New York Stock Exchange
upon notice of issuance.
(k) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
Option Securities, the representations and warranties of the Offerors
contained herein and the statements in any certificates furnished by
the Offerors hereunder shall be true and correct as of, and as if made
on, each Date of Delivery, and at the relevant Date of Deliveries:
<PAGE> 39
38
(1) the Representatives shall have received:
(i) A certificate, dated such Date of Delivery, of
the President or a Vice-President of the Company and the Chief
Financial Officer or Chief Accounting Officer of the Company
and a certificate of a Regular Trustee of the Trust confirming
that the certificate delivered at the Closing Time pursuant to
Section 5(c) hereof is true and correct as of, and as if made
on, such Date of Delivery.
(ii) The favorable opinion of David T. Cofer, Vice
President, Secretary, and General Counsel of the Company, in
form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the
opinion required by Section 5(b)(1) hereof.
(iii) The favorable opinion of Buchanan Ingersoll
Professional Corporation, special counsel and special tax
counsel for the Offerors, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same
effect as the opinions required by Sections 5(b)(2) and
5(b)(7) hereof.
(iv) The favorable opinion of _____________________,
special German counsel to the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Date
of Delivery to the same effect as the opinion required by
Section 5(b)(3).
(v) The favorable opinion of Skadden, Arps, Slate,
Meagher and Flom LLP, special Delaware counsel for the
Offerors, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the
opinion required by Section 5(b)(4) hereof.
(vi) The favorable opinion of , counsel
to The First National Bank of Chicago, as Institutional
Trustee and as Guarantee Trustee, in form and substance
satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Section 5(b)(5)
hereof.
(vii) The favorable opinion of , counsel to The First
National Bank of Chicago, as Purchase Contract Agent, in form
and substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities
and otherwise to the same effect as the opinion required by
Section 5(b)(6) hereof.
(viii) The favorable opinion of Simpson Thacher &
Bartlett, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities
<PAGE> 40
39
and otherwise The First National Bank of Chicago an
Institutional Trustee and an Guarantee Trustee to the same
effect as the opinion required by Section 5(b)(8) hereof.
(ix) A letter from Arthur Andersen, LLP in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(f) hereof, except that the "specified date" in the
letter furnished pursuant to this Section shall be a date not
more than five days prior to such Date of Delivery.
(x) A letter from Price Waterhouse, LLP in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(g) hereof, except that the "specified date" in the
letter furnished pursuant to this Section shall be a date not
more than five days prior to such Date of Delivery.
(2) At each Date of Delivery, (i) the Securities shall be
rated in one of the four highest rating categories for preferred stock
("Investment Grade") by any nationally recognized statistical rating
agency, and the Offerors shall have delivered to the Underwriters a
letter, dated such Date of Delivery, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Securities have Investment Grade
ratings; (ii) there shall not have occurred any decrease in the rating
assigned to the Securities or any other securities of the Company or of
the financial condition of the Company by any "nationally recognized
statistical rating organization," as defined for purposes of Rule
436(g)(2) under the 1933 Act Regulations, and (iii) no such
organization shall have publicly announced that it has under
surveillance or review its rating of the Securities or any other
securities of the Company or of the financial condition of the Company.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Securities, on a Date of Delivery
which is after the Closing Time, the obligations of the Representatives to
purchase the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or prior to the Closing
Time or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
<PAGE> 41
40
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be part
thereof, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided,
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that the foregoing indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Offerors by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed
the Registration Statement, the Trust and each of its Trustees who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information deemed
<PAGE> 42
41
to be a part thereof, if applicable, or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the
Offerors by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Merrill Lynch and, in the case
of parties indemnified pursuant to section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel
to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under
this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such
litigation investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party
<PAGE> 43
42
in respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand, and the
Underwriters, on the other hand, from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Offerors on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by Offerors on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet bear to the aggregate initial public offering price of such
Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which such Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
<PAGE> 44
43
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company and
each Trustee of the Trust who signed the Registration Statement, and each
person, if any, who controls the Company and the Trust within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Offerors. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement and the Pricing Agreement, or contained in certificates of
officers of the Company or trustees of the Trust submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or controlling person, or
by or on behalf of the Company, and shall survive delivery of and payment for
the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by
notice to the Company at any time at or prior to the Closing Time, if (i) there
has been, since the date of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions, the effect of which
is such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in the Common Stock or any other security of the Company has
been suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on either the American Stock Exchange, the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Pennsylvania authorities.
<PAGE> 45
44
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without liability of any
party to any other party except as provided in Section 4, and provided, further,
that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to the Representatives c/o Merrill Lynch at
Merrill Lynch World Headquarters, World Financial Center, North Tower, New York,
New York 10281, Attention of John Bolebruch; notices to
<PAGE> 46
45
the Company and the Trust shall be directed to it at Kennametal Inc., Route 981
South at Westmoreland County Airport, Latrobe, Pennsylvania 15650, Attention of
David T. Cofer.
SECTION 12. Parties. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors and
legal representatives, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from the Underwriters
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE
PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME
UNLESS OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
<PAGE> 47
46
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Company, the Trust and the Underwriters in accordance with
its terms.
Very truly yours,
KENNAMETAL INC.
By: ____________________________
Name:
Title:
KENNAMETAL FINANCING I
By: ____________________________
Name:
Title: Regular Trustee
By: ____________________________
Name:
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________
Authorized Signatory:
<PAGE> 48
SCHEDULE A
Name of Underwriter Number of
------------------- Initial
Securities
----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................
Goldman, Sachs & Co......................................
----------
Total....................................................
==========
<PAGE> 49
SCHEDULE B
KENNAMETAL INC.
(A PENNSYLVANIA CORPORATION)
KENNAMETAL FINANCING I
(A DELAWARE BUSINESS TRUST)
, FELINE PRIDES*
(STATED AMOUNT OF $50 PER SECURITY)
EACH CONSISTING OF
A PURCHASE CONTRACT OF KENNAMETAL INC.
REQUIRING THE PURCHASE ON FEBRUARY 16, 2001
OF CERTAIN SHARES OF CAPITAL STOCK
OF KENNAMETAL INC.
AND
A % TRUST PREFERRED SECURITY
OF KENNAMETAL FINANCING I
PRICING AGREEMENT
January , 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
GOLDMAN, SACHS & CO.
c/o Merrill Lynch & Co.
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Purchase Agreement, dated January __, 1998
(the "Purchase Agreement"), relating to the purchase by the Underwriters named
therein of the
- --------
* "FELINE PRIDES" IS A SERVICE MARK OF MERRILL LYNCH & CO., INC.
<PAGE> 50
2
above FELINE PRIDES (the "Securities") of Kennametal Inc. (the "Company"), and
Kennametal Financing I (the "Trust").
Pursuant to Section 2 of the Purchase Agreement, the Company and
the Trust agree with each of the Underwriters as follows:
1. The initial public offering price per security for the
Securities, determined as provided in said Section 2, shall be $50.00.
2. The purchase price per security for the Securities to be paid by
the Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per security.
<PAGE> 51
Schedule C
List of Subsidiaries
<PAGE> 1
Exhibit 1.4
KENNAMETAL INC.
(a Pennsylvania corporation)
$150,000,000 ___% Senior Notes due 2001
$150,000,000 ___% Senior Notes due 2008
$150,000,000 ___% Senior Debentures due 2028
PURCHASE AGREEMENT
Dated: January __, 1998
<PAGE> 2
TABLE OF CONTENTS
PURCHASE AGREEMENT........................................................ 1
SECTION I. Representations and Warranties................................ 3
A. Representations and Warranties by the Company.................... 3
1. Compliance with Registration Requirements.......... 3
2. Incorporated Documents............................. 4
3. Independent Accountants............................ 4
4. Financial Statements............................... 4
5. No Material Adverse Change in Business............. 4
6. Good Standing of the Company....................... 5
7. Good Standing of Subsidiaries...................... 5
8. Capitalization..................................... 5
9. Authorization of Agreement......................... 6
10. Authorization of the Indenture..................... 6
11. Authorization of the Securities.................... 6
12. Description of the Securities and the Indenture.... 6
13. Absence of Defaults and Conflicts.................. 6
14. Absence of Labor Dispute........................... 7
15. Absence of Proceedings............................. 7
16. Accuracy of Exhibits............................... 7
17. Possession of Intellectual Property................ 8
18. Absence of Further Requirements.................... 8
19. Possession of Licenses and Permits................. 8
20. Title to Property.................................. 8
21. Compliance with Cuba Act........................... 9
22. Investment Company Act............................. 9
23. Environmental Laws................................. 9
B. Officer's Certificates........................................... 10
SECTION II. Sale and Delivery to Underwriters; Closing................... 10
A. Securities....................................................... 10
B. Payment ........................................................ 11
C. Denominations; Registration...................................... 11
SECTION III. Covenants of the Company.................................... 11
A. Compliance with Securities Regulations and Commission Requests... 11
B. Filing of Amendments............................................. 12
C. Delivery of Registration Statements.............................. 12
D. Delivery of Prospectuses......................................... 12
<PAGE> 3
E. Continued Compliance with Securities Laws........................ 12
F. Blue Sky Qualifications.......................................... 13
G. Rule 158 ........................................................ 13
H. Use of Proceeds.................................................. 13
I. Restriction on Sale of Securities................................ 13
J. Reporting Requirements........................................... 14
SECTION IV. Payment of Expenses.......................................... 14
A. Expenses ........................................................ 14
B. Termination of Agreement......................................... 14
SECTION V. Conditions of Underwriters' Obligations....................... 14
A. Effectiveness of Registration Statement.......................... 14
B. Opinion of Counsel for Company................................... 15
C. Opinion of Counsel for Underwriters.............................. 15
D. Opinion of German Counsel........................................ 15
E. Officers' Certificate............................................ 16
F. Accountant's Comfort Letter...................................... 16
G. Accountant's Comfort Letter...................................... 16
H. Bring-down Comfort Letter........................................ 16
I. Bring-down Comfort Letter........................................ 16
J. Maintenance of Rating............................................ 17
K. Additional Documents............................................. 17
L. Termination of Agreement......................................... 17
SECTION VI. Indemnification.............................................. 17
A. Indemnification of Underwriters.................................. 17
B. Indemnification of Company, Directors and Officers............... 18
C. Actions against Parties; Notification............................ 18
D. Settlement without Consent if Failure to Reimburse............... 19
SECTION VII. Contribution................................................ 19
SECTION VIII. Representations, Warranties and Agreements to
Survive Delivery..................................................... 20
SECTION IX. Termination of Agreement..................................... 21
A. Termination; General............................................. 21
B. Liabilities...................................................... 21
SECTION X. Default by One or More of the Underwriters.................... 21
SECTION XI. Notices...................................................... 22
<PAGE> 4
SECTION XII. Parties..................................................... 22
SECTION XIII. GOVERNING LAW AND TIME..................................... 22
SECTION XIV. Effect of Headings.......................................... 22
SCHEDULES
Schedule A - List of Underwriters...........................Sch A-1
Schedule B - Pricing Information............................Sch B-1
Schedule C - List of Subsidiaries...........................Sch C-1
<PAGE> 5
Draft of January 5, 1998
KENNAMETAL INC.
(a Pennsylvania corporation)
$450,000,000
$150,000,000 __% Senior Notes due 2001
$150,000,000 __% Senior Notes due 2008
$150,000,000 __% Senior Debentures due 2028
PURCHASE AGREEMENT
January __, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
CIBC Oppenheimer Corp.
Deutsche Morgan Grenfell Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Kennametal Inc., a Pennsylvania corporation (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Goldman, Sachs & Co., CIBC Oppenheimer Corp.
and Deutsche Morgan Grenfell Inc., are acting as representatives (in such
capacity, the "Representatives"), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective principal amounts set forth in said Schedule A of $450,000,000
aggregate principal amount of the Company's $150,000,000 __% Senior Notes due
2001, $150,000,000 __% Senior Notes due 2008, and $150,000,000 __% Senior
Debentures due 2028 (the "Securities"). The Securities are to be issued pursuant
to an indenture dated as of January __, 1998 (the "Indenture") between the
Company and The First National Bank of Chicago, as trustee (the "Trustee").
<PAGE> 6
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deems advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-40809) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated January 2, 1998, together with the Term Sheet and
all references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or
2
<PAGE> 7
supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION I. Representations and Warranties.
A. Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
1. Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations"), and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
3
<PAGE> 8
2. Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations or the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations"), as applicable,
and, when read together with the other information in the Prospectus,
at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time, did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
3. Independent Accountants. Each of the accountants who
certified the financial statements and supporting schedules included in
the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
4. Financial Statements. The financial statements included in
the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, shareholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; the financial statements of Greenfield Industries, Inc.
("Greenfield") included in the Registration Statement and the
Prospectus, together with the related schedules and notes, present
fairly the financial position of Greenfield and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of Greenfield and its consolidated
subsidiaries for the periods specified; each of said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement. The pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have
been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
5. No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or
4
<PAGE> 9
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the common stock, par value 1.25 per
share, of the Company (the "Common Stock") in amounts per share that
are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
6. Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
7. Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been
duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of the
Company are the subsidiaries listed on Schedule C hereto.
8. Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was
5
<PAGE> 10
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
9. Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
10. Authorization of the Indenture. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and,
when duly executed and delivered by the Company and the Trustee, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
11. Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
12. Description of the Securities and the Indenture. The
Securities and the Indenture will conform in all material respects to
the respective statements relating thereto contained in the Prospectus
and will be in substantially the respective forms filed or incorporated
by reference, as the case may be, as exhibits to the Registration
Statement.
13. Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture and the
Securities and the consummation of the transactions contemplated herein
and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus
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<PAGE> 11
under the caption "Use of Proceeds" and the concurrent issuance and
sale by the Company of 4,500,000 FELINE PRIDESSM and 4,300,000 shares
of Common Stock of the Company (the "Concurrent Offerings")) and
compliance by the Company with its obligations hereunder and under the
Indenture and the Securities have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
14. Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
15. Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the Concurrent Offerings
or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
16. Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
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<PAGE> 12
17. Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
18. Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or in the Concurrent
Offerings or for the due execution, delivery or performance of the
Indenture by the Company, except such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws and except for the qualification of the Indenture
under the 1939 Act.
19. Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
20. Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its
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<PAGE> 13
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
21. Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
22. Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
23. Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result
in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
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<PAGE> 14
24. Registration Rights. There are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
25. Related Party Transactions. No relationship, direct or
indirect, exists between or among the Company on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company on the other hand, which is required to be described in the
Prospectus which is not so described.
26. Employee Matters. The Company and any entity which would be
treated as a single employer under Section 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code") (each
such entity, an "ERISA Affiliate"), is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), and, if
applicable, the Code; no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any ERISA Affiliate would have any liability;
neither the Company nor any ERISA Affiliate has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any such "pension plan" or (ii) Sections 412 or
4971 of the Code; and each "pension plan" for which the Company or any
ERISA Affiliate would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
27. Taxes. The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed through
the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, might have) a Material Adverse Effect or a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
B. Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION II. Sale and Delivery to Underwriters; Closing.
A. Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
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<PAGE> 15
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
B. Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Simpson Thacher
& Bartlett, 425 Lexington Avenue, New York, New York 10017, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (Eastern time) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representatives
and the Company (such time and date of payment and delivery being herein called
"Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
C. Denominations; Registration. Certificates for the Securities shall
be in such denominations ($1,000 or integral multiples thereof) and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time. The Securities, which may be in temporary
form, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
SECTION III. Covenants of the Company. The Company covenants with each
Underwriter as follows:
A. Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such
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<PAGE> 16
steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible
moment.
B. Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall object.
C. Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
D. Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
E. Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations and the 1939 Act and the 1939 Act Regulations
so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition
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<PAGE> 17
shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
F. Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement. The Company will also supply the Underwriters
with such information as is necessary for the determination of the
legality of the Securities for investment under the laws of such
jurisdictions as the Underwriters may request.
G. Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
H. Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds".
I. Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the
prior written consent of Merrill Lynch, directly or indirectly, issue,
sell, offer or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of, any debt securities of the Company.
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<PAGE> 18
J. Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION IV. Payment of Expenses. A. Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities and (ix) any fees payable in
connection with the rating of the Securities.
B. Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION V. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
A. Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has
elected to
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<PAGE> 19
rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
B. Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of David T. Cofer, Vice President, Secretary and General
Counsel to the Company and of Buchanan Ingersoll Professional
Corporation, special counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A hereto and to such further effect as
counsel to the Underwriters may reasonably request.
C. Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Simpson Thacher & Bartlett, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters with respect to the matters set
forth in clauses (i), (ii), (vi) through (xii), inclusive, and the
penultimate paragraph of Exhibit A hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
D. Opinion of German Counsel. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
the Closing Time, of _________________, German counsel to the Company,
in form and substance satisfactory to counsel for the Underwriters to
the effect that:
(i) Kennametal Hertel AG has been incorporated and is
validly existing as a corporation in good standing under
German laws, has the corporate power and authority to own,
lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus, and
is qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would
not have a Material Adverse Effect; all of the issued and
outstanding capital stock of Kennametal Hertel AG has been
authorized and validly issued, is fully paid and
non-assessable and all such shares are owned by the Company,
directly or through its subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim
or equity; and
(ii) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which
Kennametal Hertel AG or any of its subsidiaries is a party or
to which any property of Kennametal Hertel AG or
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<PAGE> 20
any of its subsidiaries is the subject which reasonably would
be expected individually or in the aggregate to have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
E. Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
F. Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Representatives shall have received from Arthur
Andersen LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements, pro forma financial statements and certain
financial information of the Company contained in the Registration
Statement and the Prospectus.
G. Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Representatives shall have received from Price
Waterhouse LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information of Greenfield
contained in the Registration Statement and the Prospectus.
H. Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Price Waterhouse LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (F) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
I. Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Price Waterhouse LLP a letter,
dated as of Closing Time, to the
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<PAGE> 21
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (G) of this Section, except that the specified
date referred to shall be a date not more than three business days
prior to Closing Time.
J. Maintenance of Rating. At Closing Time, the Securities
shall be rated at least Baa3 by Moody's Investor's Service Inc. and
BBB+ by Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., and the Company shall have delivered to the Representatives a
letter dated the Closing Time, from each such rating agency, or other
evidence satisfactory to the Representatives, confirming that the
Securities have such ratings; and since the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other debt securities by any
"nationally recognized statistical rating agency", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act, and no such organization shall have publicly announced that it has
under surveillance or review its rating of the Securities or any of the
Company's other debt securities.
K. Additional Documents. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Representatives and counsel for the
Underwriters.
L. Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION VI. Indemnification.
A. Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
1. against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged
17
<PAGE> 22
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
2. against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
3. against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
B. Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
C. Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
18
<PAGE> 23
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
D. Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION VII. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the
19
<PAGE> 24
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION VIII. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain
20
<PAGE> 25
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company, and shall survive delivery of the Securities to the Underwriters.
SECTION IX. Termination of Agreement.
A. Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by Federal New York or Pennsylvania
authorities.
B. Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION X. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Securities which
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
A. if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
21
<PAGE> 26
B. if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION XI. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of John J. Bolebruch;
and notices to the Company shall be directed to it at Route 981 South at
Westmoreland County Airport, Latrobe, Pennsylvania 15650, attention of David T.
Cofer.
SECTION XII. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION XIII. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION XIV. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
22
<PAGE> 27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
KENNAMETAL INC.
By ____________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
CIBC OPPENHEIMER CORP.
DEUTSCHE MORGAN GRENFELL INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By __________________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
23
<PAGE> 28
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
Goldman, Sachs & Co............................................
CIBC Oppenheimer Corp..........................................
Deutsche Morgan Grenfell Inc...................................
----------
Total.................................................
==========
1
<PAGE> 29
SCHEDULE B
KENNAMETAL INC.
$150,000,000 Senior Notes due 2001
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
$150,000,000 Senior Note due 2008
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
$150,000,000 Senior Debentures due 2028
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
2
<PAGE> 30
SCHEDULE C
List of subsidiaries
1
<PAGE> 1
Exhibit 4.2
- --------------------------------------------------------------------------------
-------------------------------------------------------------------------------
KENNAMETAL INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
--------------------------
PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF JANUARY ___, 1998
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE> 2
Page
----
TABLE OF CONTENTS
RECITALS......................... 1
ARTICLE I
Definitions and Other Provisions
of General Applications .......................... 1
<TABLE>
<S> <C> <C>
Section 1.1. Definitions..................................................1
Section 1.2. Compliance Certificates and Opinions........................11
Section 1.3. Form of Documents Delivered to Agent........................12
Section 1.4. Acts of Holders; Record Dates...............................13
Section 1.5. Notices.....................................................15
Section 1.6. Notice to Holders; Waiver...................................16
Section 1.7. Effect of Headings and Table of Contents....................16
Section 1.8. Successors and Assigns......................................16
Section 1.9. Separability Clause.........................................17
Section 1.10. Benefits of Agreement.......................................17
Section 1.11. Governing Law...............................................17
Section 1.12. Legal Holidays..............................................17
Section 1.13. Counterparts................................................18
Section 1.14. Inspection of Agreement.....................................18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
ARTICLE II
<S> <C> <C>
Certificate Forms...............................18
Section 2.1. Forms of Certificates Generally.............................18
Section 2.2. Form of Agent's Certificate of Authentication...............19
ARTICLE III
The Securities................................20
Section 3.1. Title and Terms; Denominations..............................20
Section 3.2. Rights and Obligations Evidenced by the Certificates........20
Section 3.3. Execution, Authentication, Delivery and Dating..............21
Section 3.4. Temporary Certificates......................................22
Section 3.5. Registration; Registration of Transfer and Exchange.........23
Section 3.6. Book-Entry Interests........................................24
Section 3.7. Notices to Holders..........................................25
Section 3.8. Appointment of Successor Clearing Agency....................25
Section 3.9. Definitive Certificates.....................................25
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates..........26
Section 3.11. Persons Deemed Owners.......................................27
Section 3.12. Cancellation................................................28
Section 3.13. Substitution of Securities..................................28
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 3.14. Reestablishment of Income PRIDES.............................30
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event..32
Section 3.16. No Consent to Assumption.....................................32
ARTICLE IV
The Preferred Securities............................33
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.....33
Section 4.2. Notice and Voting............................................34
Section 4.3. Distribution of Debentures; Tax Event Redemption.............35
ARTICLE V
The Purchase Contracts.............................36
Section 5.1. Purchase of Shares of Common Stock...........................36
Section 5.2. Contract Adjustment Payments.................................38
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments...39
Section 5.4. Payment of Purchase Price....................................41
Section 5.5. Issuance of Shares of Common Stock...........................45
Section 5.6. Adjustment of Settlement Rate................................46
Section 5.7. Notice of Adjustments and Certain Other Events...............52
Section 5.8. Termination Event; Notice....................................53
Section 5.9. Early Settlement.............................................54
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 5.10. No Fractional Shares.........................................56
Section 5.11. Charges and Taxes............................................56
ARTICLE VI
Remedies....................................57
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock........................57
Section 6.2. Restoration of Rights and Remedies...........................57
Section 6.3. Rights and Remedies Cumulative...............................57
Section 6.4. Delay or Omission Not Waiver.................................58
Section 6.5. Undertaking for Costs........................................58
Section 6.6. Waiver of Stay or Extension Laws.............................58
ARTICLE VII
The Agent....................................59
Section 7.1. Certain Duties and Responsibilities..........................59
Section 7.2. Notice of Default............................................60
Section 7.3. Certain Rights of Agent......................................60
Section 7.4. Not Responsible for Recitals or Issuance of Securities.......61
Section 7.5. May Hold Securities..........................................61
Section 7.6. Money Held in Custody........................................61
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 7.7. Compensation and Reimbursement...............................61
Section 7.8. Corporate Agent Required; Eligibility........................62
Section 7.9. Resignation and Removal; Appointment of Successor............62
Section 7.10. Acceptance of Appointment by Successor.......................64
Section 7.11. Merger, Conversion, Consolidation or Succession to Business..65
Section 7.12. Preservation of Information; Communications to Holders.......65
Section 7.13. No Obligations of Agent......................................65
Section 7.14. Tax Compliance...............................................66
ARTICLE VIII
Supplemental Agreements.............................66
Section 8.1. Supplemental Agreements Without Consent of Holders...........66
Section 8.2. Supplemental Agreements with Consent of Holders..............67
Section 8.3. Execution of Supplemental Agreements.........................68
Section 8.4. Effect of Supplemental Agreements............................69
Section 8.5. Reference to Supplemental Agreements.........................69
ARTICLE IX
Consolidation, Merger, Sale or Conveyance...........69
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions..............................69
Section 9.2. Rights and Duties of Successor Corporation ..................70
</TABLE>
v
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 9.3. Opinion of Counsel Given to Agent............................70
ARTICLE X
Covenants....................................71
Section 10.1. Performance Under Purchase Contracts.........................71
Section 10.2. Maintenance of Office or Agency..............................71
Section 10.3. Company to Reserve Common Stock..............................72
Section 10.4. Covenants as to Common Stock.................................72
Section 10.5. Statements of Officers of the Company as to Default..........72
</TABLE>
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
vi
<PAGE> 8
PURCHASE CONTRACT AGREEMENT, dated as of January ___, 1998, between
Kennametal Inc., a Pennsylvania corporation (the "Company"), and The First
National Bank of Chicago, a national banking association, acting as purchase
contract agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
<PAGE> 9
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Authorized Newspaper; (iv) Indenture, (v) Investment Company
Event; (vi) Liquidation Distribution; (vii) Preferred Securities Guarantee;
(viii) Primary Treasury Dealer; (ix) Quotation Agent; (x) Redemption Amount;
(xi) Redemption Price; (xii) Reset Agent; (xiii) Reset Announcement Date; (xiv)
Reset Rate; (xv) Reset Spread; (xvi) Tax Event; (xvii) Tax Event Redemption;
(xviii) Tax Event Redemption Date; (xix) Two-Year Benchmark Treasury; (xx)
Treasury Portfolio; and (xxi) Treasury Portfolio Purchase Price; and
(e) the following terms have the meanings given to them in this Section
1.1(e).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
2
<PAGE> 10
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of New York)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
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"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, par value $1.25, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means the fee payable by the Company in
respect of each Purchase Contract, equal to % per annum of the Stated Amount,
computed on the basis of a 360 day year of twelve 30 day months, plus any
Deferred Contract Adjustment Payments accrued pursuant to Section 5.2.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division, except that for purposes of Section 10.2, such term shall
mean the office or agency of the Agent in the Borough of Manhattan, the City of
New York, which office at the date hereof is located at 14 Wall Street, Eighth
Floor, New York, NY 10005.
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"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the ____% Debentures due February 16, 2003, to be issued under the Indenture as
of the date hereof.
"Declaration" means the Amended and Restated Agreement of Trust of
Kennametal Financing I, dated January ___, 1998, among the Company, as the
sponsor, the trustees named therein and the holders from time to time of
individual beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
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<PAGE> 13
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities or for the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, as collateral to secure
a holder's obligations under a Purchase Contract, the collective rights and
obligations of a holder of a Growth PRIDES Certificate in respect of such
Treasury Securities, subject in each case to the Pledge thereof, and the related
Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security or an
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, subject in each case to the Pledge thereof, and the related Purchase
Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
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<PAGE> 14
"Indenture" has the meaning set forth in Section 1.1 of the
Declaration.
"Indenture Trustee" means The First National Bank of Chicago, a
national banking association, as trustee under the Indenture, or any successor
thereto.
"Institutional Trustee" means The First National Bank of Chicago, as
institutional trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES and
(B) Income PRIDES for which the Stated Amount of the related Preferred
Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, or a Liquidation Distribution in respect of such
Preferred Security, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Income PRIDES;
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<PAGE> 15
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in respect
of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced
by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act with
respect to such Income PRIDES or Growth PRIDES and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing February 16, 1998.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
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<PAGE> 16
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Preferred Securities" means the ____% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
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"Purchase Agreement" means the Purchase Agreement dated January ___,
1998 between the Company, the Trust, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Goldman, Sachs & Co.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution and Contract Adjustment Payments
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, a day
selected by the Company which shall be more than one Business Day but less than
60 Business Days prior to such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated January
___, 1998 by and between the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
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<PAGE> 18
"Remarketing Purchase Agreement" has the meaning specified in the
Remarketing Agreement.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on parity with or subordinated in right of payment to the
Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) a judgment, decree or court order
for the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of its property, or for the winding
up or liquidation of its affairs, shall have been entered, and, unless such
judgment, decree or order shall have been entered within 60 days prior to the
Purchase Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days, or (iii) at any
time on or prior to the Purchase Contract Settlement Date the Company shall file
a petition for relief under the Bankruptcy Code, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganiza-
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tion or liquidation under the Bankruptcy Code or any other similar applicable
Federal or State law, or shall consent to the filing of any such petition, or
shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury Securities (Cusip
Number 912820 A20) which are the principal strip of the 7-3/4% U.S. Treasury
Securities which mature on February 15, 2001.
"Trust" means Kennametal Financing I, a statutory business trust formed
under the laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
requested by the Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
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<PAGE> 20
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of
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<PAGE> 21
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of
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<PAGE> 22
Securities. If any record date is set pursuant to this paragraph, the Holders of
the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as the case may
be, on such record date, and no other Holders, shall be entitled to take the
relevant action with respect to the Income PRIDES or the Growth PRIDES, as the
case may be, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly pro-
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<PAGE> 23
vided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, to the Agent at The
First National Bank of Chicago, One First National Plaza, Suite 0126,
Chicago, IL 60670-0126, Attention: Corporate Trust Services Division,
or at any other address previously furnished in writing by the Agent to
the Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at Kennametal Inc., Corporate Headquarters, State Route 981
South, P.O. Box 231, Latrobe, PA 15650-0231, Attention: Corporate
Secretary, or at any other address previously furnished in writing to
the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed
in writing and personally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at The Chase Manhattan Bank,
450 West 33rd Street, 15th Floor, New York, NY 10001, Attention:
Corporate Trust Administration, or at any other address previously
furnished in writing by the Collateral Agent to the Agent, the Company
and the Holders; or
(4) the Institutional Trustee by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed
to the Institutional Trustee at The First National Bank of Chicago, One
First National Plaza, Suite 0126, Chicago, IL 60670-0126, Attention:
Corporate Trust Services Division, or at any other address previously
furnished in writing by the Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at One First National Plaza, Suite 0126, Chicago, IL
60670-0126, Attention: Corporate
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<PAGE> 24
Trust Services Division, or at any other address previously furnished
in writing by the Indenture Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
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Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
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<PAGE> 26
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Income PRIDES Certificates, as evidenced by their
execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Income PRIDES evidenced by such Income PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase
Contracts forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of
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identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Growth PRIDES evidenced by such Growth PRIDES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING
AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
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ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 5,175,000 except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred Security
or the Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, subject to the Pledge of such Preferred Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the
Pledge Agreement, the Preferred Security or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, forming a part of such Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Preferred
Security or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to purchase the Common Stock of the Company.
Prior to the purchase of shares of Common Stock under each Purchase Contract,
such Purchase Contracts shall not entitle the Holder of an Income PRIDES
Certificates to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends or
other payments or to consent or to receive notice as
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stockholders in respect of the meetings of stockholders or for the election of
directors of the Company or for any other matter, or any other rights whatsoever
as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000 subject to the Pledge
of such Treasury Security by such Holder pursuant to the Pledge Agreement, and
the rights and obligations of the Holder thereof and the Company under one
Purchase Contract. Prior to the purchase, if any, of shares of Common Stock
under the Purchase Contracts, such Growth PRIDES Certificates shall not entitle
the Holders of Growth PRIDES Certificates to any of the rights of a holder of
shares of Common Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election of
directors of the Company or for any other matter, or any other rights whatsoever
as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents or Treasurer. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
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No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Income PRIDES or Growth PRIDES, as the case may
be, as the temporary Certificate or
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Certificates so surrendered. Until so exchanged, the temporary Certificates
shall in all respects evidence the same benefits and the same obligations with
respect to the Income PRIDES or Growth PRIDES, as the case may be, evidenced
thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
following Collateral Substitutions and transfers of Growth PRIDES Certificates
(the Agent, in such capacity, the "Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Income PRIDES or Growth PRIDES, as the
case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Income
PRIDES or Growth PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
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Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Income PRIDES, if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
aggregate Stated Amount of the Preferred Securities or the Treasury Portfolio,
as applicable, evidenced thereby, or (iii) in the case of Growth PRIDES, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in
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Section 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full
force and effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of Contract
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and transmit payments
of Contract Adjustment Payments to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
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Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, then upon surrender of the
Global Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions, the
Company shall cause definitive Certificates to be delivered to Beneficial Owners
in accordance with the instructions of the Clearing Agency. The Company shall
not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract
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Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Preferred Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Agent)
connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the Preferred Securities or on the maturing quarterly interest
strips of the Treasury Portfolio, as applicable, receiving payments of Contract
Adjustment Payments, performance of the Purchase Contracts and for all other
purposes whatso-
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ever, whether or not any distributions on the Preferred Securities or the
Contract Adjustment Payments payable in respect of the Purchase Contracts
constituting a part of the Income PRIDES or Growth PRIDES evidenced thereby
shall be overdue and notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Income PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
be destroyed by the Agent unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
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Section 3.13. Substitution of Securities.
A Holder may separate the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as applicable, from the
related Purchase Contracts in respect of an Income PRIDES by substituting for
such Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of such Preferred
Securities or for the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable (a "Collateral Substitution"), at any time from and after the date of
this Agreement and on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date in the case of the Preferred Securities
and on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date in the case of the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in each case by (a) depositing with the
Collateral Agent Treasury Securities having an aggregate principal amount equal
to the aggregate Stated Amount of the Preferred Securities comprising part of
such Income PRIDES or for the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio comprising part of such Income PRIDES, as the case may be, and (b)
transferring the related Income PRIDES to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying such Income
PRIDES, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit C hereto. Upon receipt of
the Treasury Securities described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on behalf of the
Holder, Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, having a corresponding aggregate
Stated Amount of such Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, from the Pledge, free and clear
of the Company's security interest therein, and upon receipt thereof the Agent
shall promptly:
(i) cancel the related Income PRIDES;
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(ii) transfer the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from the related Purchase Contract and to substitute Treasury Securities
for such Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as Collateral Agent
in respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Income PRIDES if Preferred Securities are being substituted by
Treasury Securities, or (ii) only in integral multiples of 32,000 Income PRIDES
if the appropriate Applicable Ownership Interests of the Treasury Portfolio are
being substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting a part of such Income PRIDES, and any distributions on such
Preferred Security or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be held in the name of the Agent or its
nominee in trust for the benefit of such Holder, until such Income PRIDES is so
transferred or the Income PRIDES Certificate is so delivered, as the case may
be, or, with respect to an Income PRIDES Certificate, such Holder provides
evidence satisfactory to the Company and the Agent that such Income PRIDES
Certificate has been destroyed, lost or stolen, together with any indemnity that
may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be
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separable into its constituent parts, and the rights and obligations of the
Holder in respect of the Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.
Section 3.14. Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may recreate Income PRIDES at any time (i)
on or prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has not occurred, and (ii)
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, if a Tax Event Redemption has occurred, in each case
by (a) depositing with the Collateral Agent Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having an aggregate Stated Amount in the case of the Preferred
Securities, or an appropriate Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, equal to the aggregate principal amount of the Treasury Securities
comprising part of the Growth PRIDES and (b) transferring the related Growth
PRIDES to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the relevant
amount of Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, to the Collateral Agent and
requesting that the Agent instruct the Collateral Agent to release the Treasury
Securities underlying such Growth PRIDES, whereupon the Agent shall promptly
give such instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
described in clause (a) above and the instruction described in clause (b) above,
in accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
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(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may reestablish Income PRIDES in integral
multiples of 20 Growth PRIDES for 20 Income PRIDES if a Tax Event Redemption has
not occurred, and in integral multiples of 32,000 Growth PRIDES for 32,000
Income PRIDES if a Tax Event Redemption has occurred.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Preferred Securities, the appropriate Applicable Ownership Interest
of the Treasury Portfolio or the Treasury Securities, as the case may be,
underlying the Income PRIDES and the Growth PRIDES pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Treasury Securities, as the case may be, from each
Holder by written request mailed to such Holder at its address as it appears in
the Income PRIDES Register or the Growth PRIDES Register, as the case may be.
Upon book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Preferred Securities, the
Treasury Portfolio or Treasury Securities, as the case may be, underlying such
Income PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Preferred Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, and
any distributions thereon, shall be held in the name of the Agent or its nominee
in trust for the benefit of such
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Holder, until such Income PRIDES or Growth PRIDES are transferred or the Income
PRIDES Certificate or Growth PRIDES Certificate is surrendered or such Holder
provides satisfactory evidence that such Income PRIDES Certificate or Growth
PRIDES Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Preferred Security or on the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
which is paid on any Payment Date shall, subject to receipt thereof by the Agent
from the Collateral Agent as provided by the terms of the Pledge Agreement, be
paid to the Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Preferred Security or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, is a part is registered at the close of business on the Record Date for
such Payment Date.
Each Income PRIDES Certificate evidencing Preferred Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and to accrue distributions, which were
carried by the Preferred Securities underlying such other Income PRIDES
Certificate.
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In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on a Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Preferred Securities or on the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate (or
one or more Predecessor Income PRIDES Certificates) was registered at the close
of business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Income PRIDES with respect to
which Cash Settlement or Early Settlement of the underlying Purchase Contract is
effected on the Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be, or with respect
to which a Collateral Substitution has been effected, distributions on the
related Preferred Securities or on the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement Date shall not
be payable hereunder to the Holder of such Income PRIDES; provided, however,
that to the extent that such Holder continues to hold the separated Preferred
Securities that formerly comprised a part of such Holder's Income PRIDES, such
Holder shall be entitled to receive the distributions on such separated
Preferred Securities.
The applicable Coupon Rate on the Preferred Securities on and after the
Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Preferred Securities Holders will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be sufficiently
given to Holders of Preferred Securities if published in an Authorized Newspaper
in The City of New York.
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Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants holding
Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Preferred
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred Securities,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Income PRIDES a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Preferred Securities entitled to
vote) shall be entitled to instruct the Agent as to the exercise of the voting
rights pertaining to the Preferred Securities underlying their Income PRIDES and
(c) stating the manner in which such instructions may be given. Upon the written
request of the Holders of Income PRIDES on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Preferred
Securities as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Income PRIDES, the Agent
shall abstain from voting the Preferred Security underlying such Income PRIDES.
The Company hereby agrees, if applicable, to solicit Holders of Income PRIDES to
timely instruct the Agent in order to enable the Agent to vote such Preferred
Securities and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Distribution of Debentures; Tax Event Redemption
Upon the occurrence of an Investment Company Event or a liquidation of
the Trust in accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and underlying the Preferred Securities
equal to the
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aggregate Stated Amount of the Pledged Preferred Securities shall be delivered
to the Collateral Agent in exchange for the Pledged Preferred Securities.
Thereafter, the Debentures will be substituted for the Pledged Preferred
Securities, and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligations of each Holder of an
Income PRIDES to purchase the Common Stock of the Company under the Purchase
Contracts constituting a part of such Income PRIDES. Following the occurrence of
an Investment Company Event or a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Debentures as the Holders and the Collateral Agent had in respect
of the Preferred Securities subject to the Pledge thereof as provided in
Articles II, III, IV, V and VI of the Pledge Agreement, and any reference herein
to the Preferred Securities shall be deemed to be a reference to such
Debentures. The Company may cause to be made in any Income PRIDES Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the liquidation of the Trust and the
substitution of Debentures for Preferred Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principle Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES. The
Treasury Portfolio will be substituted for the Pledged Preferred Securities, and
will be held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Income PRIDES and the Collateral Agent had in respect of the Preferred Security
or Debentures, as the case may be, subject to the Pledge thereof as provided in
Articles II, III, IV, V, and VI of the Pledge Agreement, and any reference
herein to the Preferred Security or the Debenture shall be deemed to be
reference to such Treasury Portfolio. The Company may cause to be made in any
Income PRIDES Certificates thereafter to be issued such change in phraseology
and
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form (but not in substance) as may be appropriate to reflect the liquidation of
the Trust and the substitution of the Treasury Portfolio for Preferred
Securities or Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $_____ (the
"Threshold Appreciation Price"), _____ shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price, but is greater than $_____, the number of shares of Common
Stock equal to the Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Value is less than or equal to $_____, _____ shares of
Common Stock per Purchase Contract, in each case subject to adjustment as
provided in Section 5.6 (and in each case rounded upward or downward to the
nearest 1/10,000th of a share). As provided in Section 5.10, no fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities
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exchange on which the Common Stock is so listed, or if the Common Stock is not
so listed on a United States national or regional securities exchange, as
reported by The Nasdaq Stock Market, or, if the Common Stock is not so reported,
the last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if such
bid price is not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on which
the Common Stock (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Preferred Securities, the Treasury
Portfolio or the Treasury Securities pursuant to the Pledge Agreement; provided
that upon a Termination Event, the rights of the Holder of such Security under
the Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, further covenants and agrees, that, to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Stated Amount of the Preferred
Securities or the Proceeds of the Treasury Securities or the Treasury Portfolio
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and
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the Pledge Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments payable in respect of each Purchase
Contract to the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered at the close of business on the Record Date next
preceding such Payment Date. The Contract Adjustment Payments will be payable at
the office of the Agent in The City of New York maintained for that purpose or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Income PRIDES
Register or Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments accrued and
unpaid, and to accrue Contract Adjustment Payments, which were carried by the
Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall be paid to the
Person in whose name the Certificate evidencing such Security (or one or more
Predecessor Certificates) is registered at the close of business on such Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date,
Contract Adjustment Payments that
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would otherwise be payable after the Early Settlement Date with respect to such
Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments,
will be subordinated and junior in right of payment to the Company's obligations
under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders of
the Securities, but in any event not less than one Business Day prior to such
Record Date. Any Contract Adjustment Payments so deferred shall bear additional
Contract Adjustment Payments thereon at the rate of ____% per annum (computed on
the basis of 360 day year of twelve 30 day months), compounding on each
succeeding Payment Date, until paid in full (such deferred installments of
Contract Adjustment Payments together with the additional Contract Adjustment
Payments accrued thereon, being referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments shall be due on the
next succeeding Payment Date except to the extent that payment is deferred
pursuant to this Section. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date. If the Purchase
Contracts are terminated upon the occurrence of a Termination Event, the
Holder's right to receive Contract Adjustment Payments and Deferred Contract
Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date in lieu of a cash payment a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate) equal to (x)
the aggregate amount of Deferred Contract Adjustment Payments payable to such
Holder divided by (y) the Applicable Market Value.
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In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or acquisitions
of shares of capital stock of the Company in connection with the satisfaction by
the Company of its obligations under any employee or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (ii) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and the declaration thereunder of a
dividend of rights in the future).
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
Section 5.4. Payment of Purchase Price.
(a)(i) Unless a Tax Event Redemption has occurred or a Holder settles
the underlying Purchase Contract through the early delivery of cash to the
Purchase Contract Agent in the manner described in Section 5.9, each Holder of
an Income PRIDES must notify the Agent by use of a notice in substantially the
form of Exhibit E hereto of its intention to pay in cash ("Cash Settlement") the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract. Such notice shall be made on or prior to 5:00 p.m., New York
City time, on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent of the
receipt of such a notice from a Holder intending to make a Cash Settlement.
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(ii) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, such failure shall constitute an event of
default and the Holder shall be deemed to have consented to the
disposition of the pledged Preferred Securities pursuant to the
Remarketing as described in paragraph (b) below. If a Holder of an
Income PRIDES does notify the Agent as provided in paragraph (a)(i)
above of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (a)(ii) above, such failure
shall also constitute a default; however, the Preferred Securities of
such a Holder will not be remarketed but instead the Collateral Agent,
for the benefit of the Company, will exercise its rights as a secured
party with respect to such Preferred Securities, including those rights
specified in paragraph (c) below.
(b) In order to dispose of the Preferred Securities of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage a
nationally recognized investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Preferred Securities. In order to facilitate
the remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on
the fourth Business Day immediately preceding the Purchase Contract Settlement
Date, the Remarketing Agent of the aggregate number of Preferred Securities to
be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Preferred Securities to the
Remarketing Agent. Upon receipt of such notice from the Agent and such Preferred
Securities from the
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Collateral Agent, the Remarketing Agent will, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use its reasonable
efforts to remarket such Preferred Securities on such date at a price of
approximately 100.5% (but not less than 100%) of the aggregate stated
liquidation amount of such Preferred Securities, plus accrued and unpaid
distributions (including deferred distributions), if any, thereon. After
deducting as the remarketing fee ("Remarketing Fee") an amount not exceeding 25
basis points (.25%) of the aggregate stated liquidation amount of the remarketed
Preferred Securities from any amount of such proceeds in excess of the aggregate
stated liquidation amount of the remarketed Preferred Securities plus accrued
and unpaid distributions (including any deferred distributions), if any, then
the Remarketing Agent will remit the entire amount of the proceeds from such
remarketing to the Collateral Agent. Such portion of the proceeds, equal to the
aggregate stated liquidation amount of such Preferred Securities, will
automatically be applied by the Collateral Agent, in accordance with the Pledge
Agreement to satisfy in full such Income PRIDES holders' obligations to pay the
Purchase Price for the Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date. Any proceeds in excess of those required to
pay the Purchase Price and the Remarketing Fee will be remitted to the Agent for
payment to the Holders of the related Income PRIDES. Income PRIDES Holders whose
Preferred Securities are so remarketed will not otherwise be responsible for the
payment of any Remarketing Fee in connection therewith. If, in spite of using
its reasonable efforts, the Remarketing Agent cannot remarket the related
Preferred Securities of such Holders of Income PRIDES at a price not less then
100% of the aggregate stated liquidation amount of such Preferred Securities
plus accrued and unpaid distributions (including deferred distributions), if
any, the remarketing will be deemed to have failed (a "Failed Remarketing") and
in accordance with the terms of the Pledge Agreement the Collateral Agent for
the benefit of the Company will exercise its rights as a secured party with
respect to such Preferred Securities, including those actions specified in
paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral
Agent exercises such rights for the benefit of the Company with respect to such
Preferred Securities, any accrued and unpaid distributions (including any
deferred distributions) on such Preferred Securities will become payable by the
Company to the Agent for payment to the Beneficial Owner of the Income PRIDES to
which such Preferred Securities relates. Such payment will be made by the
Company on or prior to 11 a.m. New York City time on the Purchase Contract
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer in immediately available funds payable to or upon the
order of the Agent. The Company will cause a notice of such Failed Remarketing
to be published on the Second Business Day immediately preceding the
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Purchase Contract Settlement Date in a daily newspaper in the English language
of general circulation in The City of New York, which is expected to be The Wall
Street Journal.
(c) With respect to any Preferred Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as required
in (a)(ii) above, or with respect to Preferred Securities which are subject to a
Failed Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (h) below, may, among other things, (i) retain the
Preferred Securities in full satisfaction of the Holders obligations under the
Purchase Contracts or (ii) sell the Preferred Securities in one or more public
or private sales.
(d)(i) Unless a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) settles the underlying Purchase Contract through
the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.9, each Holder of a Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to a
Purchase Contract on or prior to 5:00 p.m., New York City time, on the second
Business Day immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) who has so notified the Agent of its
intention to make a Cash Settlement in accordance with paragraph (d)(i)
above is required to pay the Purchase Price to the Collateral Agent
prior to 11:00 a.m., New York City time, on the Business Day
immediately preceding the Purchase Contract Settlement Date in lawful
money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral
Agent will be invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract Settlement
Date in settlement of the Purchase Contract in a accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by
the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the
Agent when received for payment to the Holder.
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(iii) If a Holder of a Growth PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (d)(i) above, or if a Holder of an Income PRIDES (if a Tax
Event Redemption has occurred) does notify the Agent as provided in
paragraph (d)(i) above its intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph (d)(ii) above,
then upon the maturity of the Pledged Treasury Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, held by the Collateral Agent on the Business Day
immediately prior to the Purchase Contract Settlement Date, the
principal amount of the Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, received by the Collateral Agent will be invested promptly in
overnight Permitted Investments. On the Purchase Contract Settlement
Date an amount equal to the Purchase Price will be remitted to the
Company as payment thereof without receiving any instructions from the
Holder. In the event the sum of the proceeds from the related Pledged
Treasury Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and the investment earnings
earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral
Agent will distribute such excess to the Agent for the benefit of the
Holder of the related Growth PRIDES or Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the office of the Agent in The City of New
York maintained for that purpose or, at the option of the Holder, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Register.
(f) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Purchase Contract Agent in the manner
described herein, the Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, or the Pledged Treasury Securities
underlying the relevant Security to be released from the Pledge by the
Collateral Agent free and
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clear of any security interest of the Company and transferred to the Agent for
delivery to the Holder thereof or its designee as soon as practicable and (ii)
subject to the receipt thereof from the Collateral Agent, the Agent shall, by
book-entry transfer, or other appropriate procedures, in accordance with
instructions provided by the Holder thereof, transfer such Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, or such Treasury Securities (or, if no such instructions are
given to the Agent by the Holder, the Agent shall hold such Preferred Securities
or the Treasury Portfolio, as the case may be, or such Treasury Securities, and
any distribution thereon, in the name of the Agent or its nominee in trust for
the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement or
the proceeds of any Collateral Pledged to secure the obligations of the Holders
and in no event will Holders be liable for any deficiency between the proceeds
of Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the
Purchase Contract Settlement Date or an Early Settlement shall have occurred, on
the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
the newly issued shares of Common Stock registered in the name of the Agent (or
its nominee) as custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or distributions for which a record
date and payment date for such dividend or distribution has occurred after the
Purchase Contract Settlement Date, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares
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constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and the Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as
defined in clause (a), (b) and (c) of Section 5.1, in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate, as defined in clause (a), (b) and
(c) of Section 5.1, by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock at time
outstanding shall not include shares held in the treasury of the Company but
shall include any shares issuable in respect of any scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or
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warrants, to subscribe for or purchase shares of Common Stock at a price per
share less than the Current Market Price per share of the Common Stock on the
date fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan), the Settlement Rate, as defined in clause (a), (b) and (c) of Section
5.1, in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Settlement Rate, as
defined in clause (a), (b) and (c) of Section 5.1, by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate, as defined in clause (a), (b) and (c) of Section 5.1, in effect
at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate, as defined
in clause (a), (b) and (c) of Section 5.1, in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph
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(2) of this Section, any dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in paragraph (1) of this Section), the
Settlement Rate, as defined in clause (a), (b) and (c) of Section 5.1, shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate, as defined in clause (a), (b) and (c) of Section 5.1, in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Agent) of the
portion of the assets or evidences of indebtedness so distributed applicable to
one share of Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In any case
in which this paragraph (4) is applicable, paragraph (2) of this Section shall
not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of the distribution described in clause (I)
above and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate, as defined in clause (a), (b)
and (c) of Section 5.1, shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate, as defined in clause (a), (b) and
(c) of Section 5.1, in effect
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immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to paragraph
(5) of this Section or this paragraph (6) has been made, exceeds 15% of the
product of the Current Market Price per share of the Common Stock as of the last
time (the "Expiration Time") tenders could have been made pursuant to such
tender or exchange offer (as it may be amended) times the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on the
day after the date of the Expiration Time, the Settlement Rate, as defined in
clause (a), (b) and (c) of Section 5.1, shall be adjusted so that the same shall
equal the rate determined by dividing the Settlement Rate, as defined in clause
(a), (b) and (c) of Section 5.1, immediately prior to the close of business on
the date of the Expiration Time by a fraction (i) the numerator of which shall
be equal to (A) the product of (I) the
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Current Market Price per share of the Common Stock on the date of the Expiration
Time and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of Purchased
Shares), and (ii) the denominator of which shall be equal to the product of (A)
the Current Market Price per share of the Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares validly tendered
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5 consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "ex date", when used
with respect to any issuance or distribution, shall mean the first date on which
the Common Stock trades regular way on such exchange or in such market without
the right to receive such issuance or distribution.
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(9) All adjustments to the Settlement Rate, as defined in
clause (a), (b) and (c) of Section 5.1, shall be calculated to the nearest
1/10,000th of a share of Common Stock (or if there is not a nearest 1/10,000th
of a share to the next lower 1/10,000th of a share). No adjustment in the
Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also
be made to the Applicable Market Value solely to determine which of clauses (a),
(b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by multiplying
the Applicable Market Value by that fraction on the basis of which the
adjustment to the Settlement Rate pursuant to which the numerator shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) has been made;
provided, however, that if such adjustment to the Settlement Rate is required to
be made pursuant to the occurrence of any of the events contemplated by
paragraph (1) (2) (3) (4) (5) (7) or (10) of this Section 5.6(a) during the
period taken into consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in which the Company
is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another Person of the property of the
Company as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of
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or after the occurrence of a Termination Event (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to provide that
each Holder of Securities will receive on the Purchase Contract Settlement Date
with respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). In the event of such a Reorganization Event, the Person
formed by such consolidation, merger or exchange or the Person which acquires
the assets of the Company or, in the event of a liquidation or dissolution of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Security shall have the rights
provided by this Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
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(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth clause (a), (b) and (c) of the adjusted
Settlement Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which such
adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide a written notice to
the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting forth
clause (a), (b) and (c) of the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall not be responsible
for any failure of the Company to issue, transfer or deliver any shares of
Common Stock pursuant to a Purchase Contract or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or Deferred Contract Adjustment Payments, if the Company
shall have such obligation, and the rights and obligations of Holders to
purchase Common Stock, shall immediately and automatically terminate, without
the necessity of any notice or
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action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon and
after the occurrence of a Termination Event, the Securities shall thereafter
represent the right to receive the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
forming a part of such Securities in the case of Income PRIDES, or Treasury
Securities in the case of Growth PRIDES, in accordance with the provisions of
Section 4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities, having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof, may be settled early ("Early Settlement") in the case of
Income PRIDES (unless a Tax Event Redemption has occurred) on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date
and in the case of Growth PRIDES on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, in each case, as
provided herein; provided however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Income PRIDES Purchase
Contracts, underlying Income PRIDES may be settled early, on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
but only in an aggregate amount of $1,600,000 or in an integral multiple
thereof. In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated Amount times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the sum of (x) the Contract Adjustment Payments payable
on such Payment Date with respect to such Purchase Contracts plus (y) in the
case of
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Income PRIDES Certificate, the distributions on the related Preferred Securities
payable on such Payment Date. Except as provided in the immediately preceding
sentence and subject to the second to last paragraph of Section 5.2, no payment
or adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement. If the foregoing requirements are first satisfied with respect to
Purchase Contracts underlying any Securities at or prior to 5:00 p.m., New York
City time, on a Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first satisfied after
5:00 p.m., New York City time, on a Business Day or on a day that is not a
Business Day, the "Early Settlement Date" with respect to such Securities shall
be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive, _____ shares of Common Stock on account of each Purchase Contract as to
which Early Settlement is effected (the "Early Settlement Rate"); provided,
however, that upon the Early Settlement of the Purchase Contracts, the Holder of
such related Securities will forfeit the right to receive any Deferred Contract
Adjustment Payments. The Early Settlement Rate shall be adjusted in the same
manner and at the same time as the Settlement Rate is adjusted. As promptly as
practicable after Early Settlement of Purchase Contracts in accordance with the
provisions of this Section 5.9, the Company shall issue and shall deliver to the
Agent at the Corporate Trust Office a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early Settlement together
with payment in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in the case of Income PRIDES, or the related
Treasury Securities, in the case of Growth PRIDES, to be released from the
Pledge by the Collateral Agent and transferred, in each case to the Agent for
delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Preferred Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury
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Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Preferred Securities, Treasury Portfolio or Treasury Securities, as the case may
be, forming a part of such Securities, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
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Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall constitute a
component of Income PRIDES or Growth PRIDES, the Holder of any Income PRIDES or
Growth PRIDES shall have the right, which is absolute and unconditional (subject
to the right of the Company to defer payment thereof pursuant to Section 5.3,
the prepayment of Contract Adjustment Payments pursuant to Section 5.9(a) and to
the forfeiture of any Deferred Contract Adjustment Payments upon Early
Settlement pursuant to Section 5.9(b) or upon the occurrence of a Termination
Event), to receive payment of each installment of the Contract Adjustment
Payments with respect to the Purchase Contract constituting a part of such
Security on the respective Payment Date for such Security and to purchase Common
Stock pursuant to such Purchase Contract and, in each such case, to institute
suit for the enforcement of any such payment and right to purchase Common Stock,
and such rights shall not be impaired without the consent of such Holder.
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Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable
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attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of distributions on any Preferred Securities or Contract
Adjustment Payments, if any, on any Purchase Contract on or after the respective
Payment Date therefor in respect of any Security held by such Holder, or for
enforcement of the right to purchase shares of Common Stock under the Purchase
Contracts constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its part, the
Agent may, with respect to the Securities, conclusively rely, as to the
truth of
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the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Agent and conforming to
the requirements of this Agreement, but in the case of any certificates
or opinions which by any provision hereof are specifically required to
be furnished to the Agent, the Agent shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own wilfull misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
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Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
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Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
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(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
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(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage
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prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Agent and the
address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and
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deliver the Certificates so authenticated and executed with the same effect as
if such successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall, mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with
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respect to the Securities or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Securities. Such compliance shall
include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from
the Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
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(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one Class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's Obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledge Preferred Securities or the rights of holders of Growth PRIDES
to substitute Preferred Securities for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payments is payable;
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(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
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agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially all
of its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form reasonably satisfactory to the Agent and the
Collateral Agent, executed and delivered to the Agent and the Collateral Agent
by such corporation, and (ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such merger or consolidation, or such
sale, assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of the Securities
or under the Pledge Agreement.
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Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Kennametal Inc., any or all
of the Certificates evidencing Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company, and subject to
all the terms, conditions and limitations in this Agreement prescribed, the
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
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ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate Trust Office as
paying agent in such city.
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Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
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<PAGE> 83
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
KENNAMETAL INC.
By:____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:____________________________
Name:
Title:
<PAGE> 84
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. _____ Cusip No.
Number of Income PRIDES _______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one ____%
Trust Originated Preferred Security (the "Preferred Security") of Kennametal
Financing I, a Delaware statutory business trust (the "Trust"), having a stated
liquidation amount of $50, subject to the Pledge of such Preferred Security by
such Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest of the Treasury Portfolio, subject to the Pledge
of such Applicable Owner-
<PAGE> 85
ship Interest of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Kennametal Inc., a Pennsylvania corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount of
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio, as the case may be, or
cash distributions on, any Pledged Preferred Securities (as defined in the
Pledge Agreement) or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Income PRIDES
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) cash distributions with
respect to Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such terms) of the Treasury Portfolio, as the case may
be, with respect to any Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to the Pledge Agreement, to the Agent to the
account designated by the Agent, no later than 2:00 p.m., New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio, as the case may
be, of any Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in the
Treasury Portfolio, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full
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satisfaction of the respective obligations of the Holders of the Income PRIDES
of which such Pledged Preferred Securities or the Treasury Portfolio, as the
case may be, are a part under the Purchase Contracts forming a part of such
Income PRIDES. Distributions on any Preferred Security or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year, commencing February
16, 1998 (a "Payment Date"), shall, subject to receipt thereof by the Agent from
the Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on February 16,
2001 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of shares of Common Stock, no par value ("Common
Stock"), of the Company, equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement with respect to the Income PRIDES of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price (the "Purchase Price")
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of the Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the Income PRIDES of
which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to % per annum of the Stated
Amount, computed on the basis of a 360 day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Income
PRIDES Certificate (or a
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Predecessor Income PRIDES Certificate) is registered at the close of business on
the Record Date for such Payment Date.
Distributions on the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments
will be payable at the office of the Agent in The City of New York or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto as such address appears on the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
KENNAMETAL INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely
as Attorney-in-Fact of such Holder
By:________________________________________
Name:
Title:
Dated:
<PAGE> 89
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:________________________________________
Authorized Officer
<PAGE> 90
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of January ___, 1998 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and
__________________________, as Purchase Contract Agent (herein called the
"Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Income
PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $ (the "Threshold
Appreciation Price"), shares of Common Stock per Purchase Contract, (b) if
the Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $ , the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to $ , shares of Common
Stock per Purchase Contract, in each case subject to adjustment as provided in
the Purchase Contract Agreement. No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the
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third Trading Day immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, or an Early Settlement or from the
proceeds of a remarketing of the related Pledged Preferred Securities of such
holders. A Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m.
New York City time on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, to make an effective Cash Settlement or an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from the Proceeds of the sale of the
related Pledged Preferred Securities held by the Collateral Agent. Such sale
will be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and the Remarketing Purchase Agreement on the third Business Day
immediately preceding the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Preferred Securities related to
this Income PRIDES certificate, any accrued and unpaid distributions (including
deferred distributions) on such Pledged Preferred Securities will become payable
by the Company to the holder of this
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<PAGE> 92
Income PRIDES Certificate in the manner provided for in the Purchase Contract
Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Preferred
Security (as defined in the Pledge Agreement) or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of each Income
PRIDES, or the Liquidation Distribution received in respect of such Pledged
Preferred Security, from the Pledge. An Income PRIDES shall thereafter represent
the right to receive the Preferred Security or the appropriate Applicable
Ownership Interest of the Treasury Portfolio forming a part of such Income
PRIDES, or the Liquidation Distribution received in respect of such Preferred
Security, in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Preferred Securities. Upon receipt of notice of any meeting at which holders of
Preferred Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Preferred Securities, the Agent shall, as soon
as practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Preferred Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities constituting a part of such holder's
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Income PRIDES Holders on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions
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<PAGE> 93
are received. In the absence of specific instructions from the Holder of an
Income PRIDES, the Agent shall abstain from voting the Preferred Security
evidenced by such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of
the Trust, a principal amount of the Debentures constituting the assets of the
Trust and underlying the Preferred Securities equal to the aggregate Stated
Amount of the Pledged Preferred Securities shall be delivered to the Collateral
Agent in exchange for Pledged Preferred Securities. Thereafter, the Debentures
shall be held by the Collateral Agent to secure the obligations of each Holder
of Income PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the liquidation of the
Trust, the Holders and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Debentures as the Holders and the
Collateral Agent had in respect of the Pledged Preferred Securities, and any
reference in the Purchase Contract Agreement or Pledge Agreement to the
Preferred Securities shall be deemed to be a reference to the Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent for the benefit of the Company will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase, the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Preferred Security or Debentures, as the
case may be, subject to the Pledge thereof as provided in Articles II, III, IV,
V and VI, of the Pledge Agreement and any reference herein to the Preferred
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof.
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<PAGE> 94
The transfer of any Income PRIDES Certificate will be registered and Income
PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A holder who elects to substitute a Treasury
Security for Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of the Preferred Security or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, and Purchase Contract constituting such Income PRIDES may be transferred
and exchanged only as an Income PRIDES. The holder of an Income PRIDES may
substitute for the Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio securing its obligation under the
related Purchase Contract Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the holder's obligation under the Purchase Contract shall be referred to
as a "Growth PRIDES." A Holder may make such Collateral Substitution only in
integral multiples of 20 Income PRIDES for 20 Growth PRIDES; provided, however,
that if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such Collateral
Substitutions only in integral multiples of 32,000 Income PRIDES for 32,000
Growth PRIDES. Such Collateral Substitution may cause the equivalent aggregate
principal amount of this Certificate to be increased or decreased; provided,
however, the equivalent aggregate principal amount outstanding under this Income
PRIDES Certificate shall not exceed $200,000,000. All such adjustments to the
equivalent aggregate principal amount of this Income PRIDES Certificate shall be
duly recorded by placing an appropriate notation on the Schedule attached
hereto.
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<PAGE> 95
A Holder of Growth PRIDES may recreate Income PRIDES by delivering to
the Collateral Agent Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, with a Stated Amount, in the case
of such Preferred Securities, or with the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Income PRIDES Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of ____% per
annum (computed on the basis of a 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of
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<PAGE> 96
Common Stock equal to (x) the aggregate amount of Deferred Contract Adjustment
Payments payable to the Holder of this Income PRIDES Certificate divided by (y)
the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or acquisitions
of capital stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (ii) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and a declaration thereunder of a
dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Income PRIDES Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
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Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement; provided, however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, Holders may early settle Income PRIDES only in integral multiples of
32,000 Income PRIDES. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this Income PRIDES
Certificate, the Holder of this Income PRIDES Certificate shall deliver this
Income PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments payable
on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Preferred Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio underlying such Securities shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
forming part of a Income PRIDES as to which Early Settlement is effected equal
to the Early Settlement Rate; provided however, that upon the Early Settlement
of the Purchase Contracts, the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments, if any, on such Purchase Contracts.
The Early Settlement Rate shall initially be equal to shares of Common Stock
and shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Income
PRIDES
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<PAGE> 98
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
his obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on his behalf as its attorney-in-fact, and consents to the
Pledge of the Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Preferred
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of distributions payable quarterly on the Preferred
Securities, receiving payments of Contract Adjustment Payments and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and
A-15
<PAGE> 99
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-16
<PAGE> 100
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books of Kennametal
Inc. with full power of substitution in the premises.
Dated: _________________
____________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Income PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee:______________________________________
A-17
<PAGE> 101
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:________________________ _______________________________________
Signature
Signature Guarantee:___________________
(if assigned to another person)
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name and address of
Registered Holder:
_____________________________________ ______________________________________
Name Name
_____________________________________ ______________________________________
Address Address
_____________________________________ ______________________________________
_____________________________________ ______________________________________
_____________________________________ ______________________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________________
A-18
<PAGE> 102
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated:_____________________________ ________________________________________
Signature
Signature Guarantee:__________________________________
A-19
<PAGE> 103
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Preferred Securities, or
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name and
address of Registered Holder:
_____________________________________ ______________________________________
Name Name
_____________________________________ ______________________________________
Address Address
_____________________________________ ______________________________________
_____________________________________ ______________________________________
_____________________________________ ______________________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________________
A-20
<PAGE> 104
Transfer Instructions for Pledged Preferred Securities, or the Treasury
Portfolio, as the case may be, Transferable Upon Early Settlement or a
Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-21
<PAGE> 105
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OF DECREASED IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
<TABLE>
<CAPTION>
=========================================================================================================================
Principal Amount of
Amount of Amount of this Global Certificate Signature of autho-
decrease in Principal increase in Principal following such de- rized officer of
Amount of the Global Amount of the Global decrease or Trustee or Securities
Date Certificate Certificate increase Custodian
=========================================================================================================================
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
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=========================================================================================================================
</TABLE>
A-22
<PAGE> 106
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
No. __________ Number of Growth PRIDES__________ Cusip No.
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/20 undivided beneficial ownership interest, of a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Kennametal Inc., an Pennsylvania corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on February 16,
2001 (the
<PAGE> 107
"Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of shares of Common stock, no par value per share ("Common
Stock"), of the Company equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement with respect to the Growth PRIDES of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby will
be paid by application of the Proceeds from the Treasury Securities pledged to
secure the obligations under such Purchase Contract in accordance with the terms
of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract evidenced hereby an amount (the "Contract Adjustment
Payments") equal to __% per annum of the Stated Amount, computed on the basis of
the actual number of days elapsed in a year of 360 day year of twelve 30 day
months, as the case may be, subject to deferral at the option of the Company as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. Such Contract Adjustment Payments shall be payable to the Person
in whose name this Growth PRIDES Certificate (or a Predecessor Growth PRIDES
Certificate) is registered at the close of business on the Record Date for such
Payment Date.
Contract Adjustment Payments will be payable at the office of the Agent
in The City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Growth
PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-2
<PAGE> 108
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
KENNAMETAL INC.
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE FIRST NATIONAL BANK OF
CHICAGO, not individually but
solely as Attorney-in-Fact of
such Holder
By:_________________________________
Name:
Title:
Dated:
<PAGE> 109
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:___________________________________
Authorized Officer
<PAGE> 110
(Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of January ___, 1998 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (including its
successors thereunder, herein called the "Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Agent, the Company and the Holders and
of the terms upon which the Growth PRIDES Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock of the Company equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $ (the "Threshold Appreciation Price"),
____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $ ,
the number of shares of Common Stock per Purchase Contract equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Amount is less than or equal to $ , then shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the third Trading Day immediately preceding the Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed, or if the
Common Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the
<PAGE> 111
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses as
they appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Treasury
Securities (as defined in the Pledge Agreement) forming a part of each Growth
PRIDES.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby recreating
Income PRIDES, shall be responsible for any fees or expenses associated
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and the Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES may
recreate
B-6
<PAGE> 112
Income PRIDES by delivering to the Collateral Agent Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, with a
Stated Amount, in the case of such Preferred Securities, or with the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, in the case of such appropriate Applicable
Ownership Interest of the Treasury Portfolio, equal to the aggregate principal
amount of the Pledged Treasury Securities in exchange for the release of such
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Security shall be referred to as an "Income PRIDES." Such
substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate principal amount outstanding under this Growth PRIDES Certificate
shall not exceed $200,000,000. All such adjustments to the equivalent aggregate
principal amount of this Growth PRIDES Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.
A Holder of an Income PRIDES may recreate a Growth PRIDES by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Growth PRIDES may be effected only in
multiples of 20 Income PRIDES for 20 Growth PRIDES; provided, however, if a Tax
Event Redemption has occurred and the Treasury Portfolio has become a component
of the Income PRIDES, a Holder may make such Collateral Substitution in integral
multiples of 32,000 Income PRIDES for 32,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name the Growth PRIDES Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Adjustment Payments will be payable
at the office of the Agent in The City of New York or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Growth PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of ____% per
annum (computed on the basis of a 360 day year of twelve 30 day
B-7
<PAGE> 113
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Growth PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
Shares of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of the Growth PRIDES Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases or acquisitions
of shares of capital stock of the Company in connection with the satisfaction by
the Company of its obligations under any employee or agent benefit plans or the
satisfaction by the Company of its obligations pursuant to any contract or
security outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (ii) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan and the declaration thereunder of a
dividend of right in the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
business days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Growth PRIDES
Register. Upon and
B-8
<PAGE> 114
after the occurrence of a Termination Event, the Collateral Agent shall release
the Treasury Securities from the Pledge in accordance with the provisions of the
Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the order of the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments payable,
if any, on such Payment Date with respect to such Purchase Contracts. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Treasury Securities underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive, a number of shares of Common Stock on account of each Purchase
Contract forming part of a Growth PRIDES as to which Early Settlement is
effected equal to shares of Common Stock per Purchase Contract (the "Early
Settlement Rate"); provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments on such Purchase Contracts. The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Growth
PRIDES Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company
B-9
<PAGE> 115
or its trustee in the event that the Company becomes the subject of a case under
the Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Agent to enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments and any Deferred Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-10
<PAGE> 116
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto____________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer said Growth PRIDES Certificates on the books of Kennametal
Inc. with full power of substitution in the premises.
Dated: _________________ ____________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Growth PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee:_____________________________________
B-11
<PAGE> 117
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:____________________________ ________________________________________
Signature
Signature Guarantee:
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of Regis-
tered Holder:
__________________________________ ________________________________________
Name Name
__________________________________ ________________________________________
Address Address
__________________________________ ________________________________________
__________________________________ ________________________________________
__________________________________ ________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________________
B-12
<PAGE> 118
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:____________________________ ________________________________________
Signature
Signature Guarantee:___________________
B-13
<PAGE> 119
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock of Growth REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please print such Person's
name and address:
Please print name and address of Regis-
tered Holder:
__________________________________ ________________________________________
Name Name
__________________________________ ________________________________________
Address Address
__________________________________ ________________________________________
__________________________________ ________________________________________
__________________________________ ________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
__________________________________
__________________________________
__________________________________
B-14
<PAGE> 120
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
<TABLE>
<CAPTION>
=========================================================================================================================
Principal Amount of
Amount of Amount of this Global Certificate Signature of autho-
decrease in Principal increase in Principal following such de- rized officer of
Amount of the Global Amount of the Global decrease or Trustee or Securities
Date Certificate Certificate increase Custodian
=========================================================================================================================
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
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=========================================================================================================================
</TABLE>
B-15
<PAGE> 121
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 10010-2697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Kennametal Inc. (the "Company"), and
Kennametal Financing I
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of January ___, 1998, among the Company, yourselves,
as Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of securities listed below (the "Holder") has elected to
substitute [$_____ aggregate [principal amount] of Treasury Securities]
[$_______ Stated Amount of Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] in exchange
for the [Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] to you, as Collateral
Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be], and upon the
payment by such Holder of any applicable fees, to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Date:________________________ ________________________________________
By:_____________________________________
Name:
Title:
Signature Guarantee:____________________
<PAGE> 122
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]:
__________________________________ ____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
__________________________________
Address
__________________________________
__________________________________
<PAGE> 123
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Kennametal Inc. (the "Company"), and
Kennametal Financing I
The undersigned Holder hereby notifies you that it has
delivered to __________________________, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] in exchange for the [Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance with
Section 4.1 of the Pledge Agreement, dated January ___, 1998, between you, the
Company and the Collateral Agent. The undersigned Holder has paid the Collateral
Agent all applicable fees relating to such exchange. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] related to such [Income PRIDES] [Growth
PRIDES].
Dated:____________________________ _________________________________________
Signature
Signature Guarantee:_____________________
Please print name and address of Registered Holder:
__________________________________ _________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
__________________________________
__________________________________
__________________________________
D-1
<PAGE> 124
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Kennametal Inc. (the "Company"), and
Kennametal Financing I
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.4 of the Purchase Contract Agreement, dated as of
January ___, 1998 among the Company, yourselves, as Purchase Contract Agent and
as Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York
City time, on the Business Day immediately preceding the Purchase Contract
Settlement Date, (in lawful money of the United States by [certified or cashiers
check or] wire transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock issuable to such
Holder by the Company under the related Purchase Contract on the Purchase
Contract Settlement Date. The undersigned Holder hereby instructs you to notify
promptly the Collateral Agent of the undersigned Holders election to make such
cash settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Dated:____________________________ ________________________________________
Signature
Signature Guarantee:____________________
Please print name and address of Registered Holder:
__________________________________ ________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
__________________________________
__________________________________
__________________________________
E-1
<PAGE> 1
Exhibit 4.3
KENNAMETAL INC.,
---------------------------
THE CHASE MANHATTAN BANK,
as Collateral Agent
AND
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of January __, 1998
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
Section 1. Definitions.......................................................................2
Section 2. Pledge; Control and Perfection....................................................7
Section 2.1. The Pledge........................................................................7
Section 2.2. Control and Perfection............................................................9
Section 3. Distributions on Pledged Collateral..............................................10
Section 4. Substitution, Release, Repledge and Settlement of Preferred Securities...........12
Section 4.1. Substitution of Preferred Securities and the Establishment of Growth PRIDES......12
Section 4.2. Pledge of Preferred Securities and Reestablishment of Income PRIDES..............13
Section 4.3. Termination Event................................................................14
Section 4.4. Cash Settlement..................................................................15
Section 4.5. Early Settlement.................................................................17
Section 4.6. Application of Proceeds Settlement...............................................17
Section 5. Voting Rights Preferred Securities..............................................19
Section 6. Rights and Remedies; Distribution of the Debentures; Tax Event Redemption........20
Section 6.1. Rights and Remedies of the Collateral Agent......................................20
Section 6.2. Distribution of the Debentures; Tax Event Redemption.............................22
Section 6.3. Substitutions. ..................................................................23
Section 7. Representations and Warranties; Covenants........................................23
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 7.1. Representations and Warranties...................................................23
Section 7.2. Covenants........................................................................24
Section 8. The Collateral Agent.............................................................25
Section 8.1. Appointment, Powers and Immunities...............................................25
Section 8.2. Instructions of the Company......................................................26
Section 8.3. Reliance by Collateral Agent.....................................................26
Section 8.4. Rights in Other Capacities.......................................................27
Section 8.5. NonReliance on Collateral Agent..................................................27
Section 8.6. Compensation and Indemnity.......................................................28
Section 8.7. Failure to Act...................................................................28
Section 8.8. Resignation of Collateral Agent..................................................29
Section 8.9. Right to Appoint Agent or Advisor................................................30
Section 8.10. Survival.........................................................................30
Section 8.11. Exculpation......................................................................30
Section 9. Amendment........................................................................30
Section 9.1. Amendment Without Consent of Holders.............................................30
Section 9.2. Amendment with Consent of Holders................................................31
Section 9.3. Execution of Amendments..........................................................32
Section 9.4. Effect of Amendments.............................................................32
Section 9.5. Reference to Amendments..........................................................32
Section 10. Miscellaneous....................................................................33
Section 10.1. No Waiver........................................................................33
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 10.2. Governing Law.......................................................................33
Section 10.3. Notices.............................................................................33
Section 10.4. Successors and Assigns..............................................................34
Section 10.5. Counterparts........................................................................34
Section 10.6. Severability........................................................................34
Section 10.7. Expenses, etc.......................................................................34
Section 10.8. Security Interest Absolute..........................................................35
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
</TABLE>
iii
<PAGE> 5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of January __, 1998 (this "Agreement"),
among Kennametal Inc., a Pennsylvania corporation (the "Company"), The Chase
Manhattan Bank, a New York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its successors in such
capacity, the "Collateral Agent") and in its capacity as a "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The First National Bank of Chicago, not
individually but solely as purchase contract agent and as attorney in fact of
the Holders (as defined in the Purchase Contract Agreement) from time to time of
the Securities (as hereinafter defined) (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the Purchase
Contract Agreement, dated as of the date hereof (as modified and supplemented
and in effect from time to time, the "Purchase Contract Agreement"), pursuant to
which there may be issued up to 4,500,000 FELINE PRIDES (the "Securities").
Each Security, at issuance, consists of a unit (the "Income PRIDES")
comprised of (a) one stock purchase contract (the "Purchase Contract") under
which (i) the Holder will purchase from the Company on February 16, 2001, for an
amount equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate, and (ii) the Company will pay the Holder Contract
Adjustment Payments, if any, and (b) either beneficial ownership of a ____%
Trust Originated Preferred Security (a "Preferred Security") issued by
Kennametal Financing I (the "Trust"), having a liquidation amount equal to $50
(the "Stated Amount") and maturing on February 16, 2003 or upon the occurrence
of a Tax Event Redemption, the Applicable Ownership Interest of the Treasury
Portfolio.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably autho-
<PAGE> 6
rized the Purchase Contract Agent, as attorney-in-fact of such Holders, among
other things, to execute and deliver this Agreement on behalf of such Holders
and to grant the pledge provided hereby of the Preferred Securities and any
Treasury Securities delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and subject
to the terms hereof. Upon such pledge, the Preferred Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact of the Holders from time to time of the Securities, agree as
follows:
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Common Stock,
(vii) Contract Adjustment Payments, (viii) Debentures, (ix) Early
Settlement, (x) Early Settlement Amount, (xi) Early Settlement Date,
(xii) Failed Remarketing, (xiii) Holder, (xiv) Opinion of Counsel, (xv)
Outstanding Securities, (xvi) Purchase Agreement, (xvii) Purchase
Contract, (xviii) Purchase Contract Settlement Date, (xix) Purchase
Price, (xx) Remarketing Agent, (xxi) Remarketing Agreement, (xxii)
Remarketing Purchase Agreement, (xxiii) Settlement Rate, and (xxiv)
Termination Event; and
2
<PAGE> 7
(d) the following terms have the meanings assigned to them in
the Declaration: (i) Applicable Ownership Interest (ii) Applicable
Principal Amount, (iii) Institutional Trustee, (iv) Investment Company
Event,(v) Primary Treasury Dealer, (vi) Quotation Agent, (vii)
Redemption Amount, (viii) Redemption Price, (ix) Tax Event, (x) Tax
Event Redemption, (xi) Tax Event Redemption Date, (xii) Treasury
Portfolio, (xiii) Treasury Portfolio Purchase Price.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number ) maintained at
The Chase Manhattan Bank in the name "The First National Bank of Chicago", as
Purchase Contract Agent on behalf of the holders of certain securities of
Kennametal Financing I, Collateral Account subject to the security interest of
The Chase Manhattan Bank, as Collateral Agent, for the benefit of Kennametal
Inc., as pledgee" and any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
3
<PAGE> 8
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Debenture Trustee" means The First National Bank of Chicago, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Declaration" means the Amended and Restated Agreement of Trust, dated
as of January __, 1998, among the Company as sponsor, the trustees named therein
and the holders from time to time of undivided beneficial interests in the
assets of the Trust.
"Growth PRIDES" means a Purchase Contract with respect to which
Treasury Securities have been substituted for Preferred Securities, Debentures
or for the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, as collateral to secure the Holder's obligations under such
Purchase Contract.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States Govern-
4
<PAGE> 9
ment or issued by any agency thereof and backed by the full faith and credit of
the United States Government; (v) investments in commercial paper, other than
commercial paper issued by the Company or its affiliates, of any corporation
incorporated under the laws of the United States or any State thereof, which
commercial paper has a rating at the time of purchase at least equal to "A-1" by
Standard & Poor's Ratings Services or at least equal to "P-1" by Moody's
Investors Service, Inc.; and (vi) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, jointstock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section 2.1
hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
5
<PAGE> 10
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance with
the instructions of the Collateral Agent, the Purchase Contract Agent or the
Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in
appropriate physical form to the recipient accompanied by
any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary
to constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities
intermediary" (as defined in Section 8-102(a)(14) of the
Code) to (i) credit a "securities entitlement" (as defined
in Section 8-102(a)(17) of the Code) with respect to such
securities to a "securities account" (as defined in Section
8501(a) of the Code) maintained by or on behalf of
6
<PAGE> 11
the recipient; (ii) to issue a confirmation to the recipient
with respect to such credit and (iii) to make appropriate
notations in its books to reflect the security interest of
the recipient in such securities.
"Treasury Security" means a zero coupon U.S. Treasury Security (Cusip
Number 91280 AZ0) which are the principal strips of the 7:% U.S. Treasury
Securities which mature on February 15, 2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as to
(i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount thereof
and (iii) Treasury Securities, the aggregate principal amount thereof at
maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in (i) all of the
right, title and interest of such Holders (a) in the Preferred Securities
constituting a part of the Securities and all Proceeds thereof and any Treasury
Securities delivered in exchange for such Preferred Securities in accordance
with Section 4 hereof, in each case that have been Transferred to or received by
the Collateral Agent and not released by the Collateral Agent to such Holders
under the provisions of this Agreement (the "Collateral"); (b) in payments made
by Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets and other property credited thereto and all
Security Entitlements related thereto; (d) in any Debentures delivered to the
Collateral Agent upon the occurrence of an Investment Company Event or a
liquidation of the Trust as provided in Section 6.2; (e) in the Treasury
Portfolio purchased on behalf of the Holders of Income PRIDES by the Collateral
Agent upon the occurrence of a Tax Event Redemption as provided in Section 6.2
and (f) all proceeds of the foregoing. Prior to or concurrently with
7
<PAGE> 12
the execution and delivery of this Agreement, the Purchase Contract Agent, on
behalf of the initial Holders of the Income PRIDES, shall cause the Preferred
Securities comprising a part of the Income PRIDES to be delivered to the
Collateral Agent for the benefit of the Company by physically delivering such
securities to the Collateral Agent endorsed in blank and the Collateral Agent
delivering such securities to the Securities Intermediary and causing the
Securities Intermediary to credit the Collateral Account with such securities
and send the Collateral Agent a confirmation of the deposit of such securities.
In the event a Holder of Income PRIDES so elects, such Holder may Transfer
Treasury Securities to the Collateral Agent for the benefit of the Company in
exchange for the release by the Collateral Agent on behalf of the Company of
Preferred Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate stated liquidation
amount equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Preferred Securities, or with an appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio equal to the aggregate principal amount of
the Treasury Securities so transferred, in the event that a Tax Event Redemption
has occurred, to the Purchase Contract Agent on behalf of such Holder. Treasury
Securities and the Treasury Portfolio, as applicable, shall be Transferred to
the Collateral Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in accordance with
the TRADES Regulations and other applicable law and by the notation by the
Securities Intermediary on its books that a Security Entitlement with respect to
such Treasury Securities or Treasury Portfolio, has been credited to the
Collateral Account. For purposes of perfecting the Pledge under applicable law,
including, to the extent applicable, the TRADES Regulations of the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Preferred Securities (or the Debentures that are delivered pursuant to
Section 6.2 hereof) or Treasury Securities subject to the Pledge, excluding any
Preferred Securities (or the Debentures that are delivered pursuant to Section
6.2 hereof) or Treasury Securities released
8
<PAGE> 13
from the Pledge as provided in Section 4 hereof, are hereinafter referred to as
"Pledged Preferred Securities" or the "Pledged Treasury Securities,"
respectively. Subject to the Pledge and the provisions of Section 2.2 hereof,
the Holders from time to time shall have full beneficial ownership of the
Collateral. Whenever directed by the Collateral Agent acting on behalf of the
Company, the Securities Intermediary shall have the right to reregister the
Preferred Securities or any other securities held in physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
PRIDES to a Growth PRIDES, or except as otherwise required to release securities
as specified herein, neither the Collateral Agent nor the Securities
Intermediary shall relinquish physical possession of any certificate evidencing
a Preferred Security prior to the termination of this Agreement. If it becomes
necessary for the Securities Intermediary to relinquish physical possession of a
certificate in order to release a portion of the Preferred Securities evidenced
thereby from the Pledge, the Securities Intermediary shall use its best efforts
to obtain physical possession of a replacement certificate evidencing any
Preferred Securities remaining subject to the Pledge hereunder registered to it
or endorsed in blank within fifteen days of the date it relinquished possession.
The Collateral Agent shall promptly notify the Company of the Securities
Intermediary's failure to obtain possession of any such replacement certificate
as required hereby.
Section 2.2. Control and Perfection. In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent on behalf of the Company may
give in writing with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof. Such
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instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, sell, liquidate, assign, deliver or
otherwise dispose of the Preferred Securities, the Treasury Securities, the
Treasury Portfolio, and any Security Entitlements with respect thereto and to
pay and deliver any income, proceeds or other funds derived therefrom to the
Company. The Holders from time to time acting through the Purchase Contract
Agent hereby further authorize and direct the Collateral Agent, as agent of the
Company, to itself issue instructions and entitlement orders, and to otherwise
take action, with respect to the Collateral Account, the Collateral credited
thereto and any security entitlements with respect to any thereof, pursuant to
the terms and provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders. The
Collateral Agent shall be the Agent of the Company and shall act as directed in
writing by the Company. Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the Securities Intermediary
when and as directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities, it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the Stated Amount of or, if applicable, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or cash distributions on, the Pledged Preferred
Securities or on the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and all payments of the principal of, or cash distributions on, any
Pledged Treasury Securities received by the Collateral Agent that are properly
payable hereunder shall be paid by the Collateral Agent by wire transfer in same
day funds:
(i) In the case of (A) cash distributions with respect to the
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of
the Treasury Portfolio, as the case may be,
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and (B) any payments of the Stated Amount or, if applicable, the
appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio with respect
to any Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that have been
released from the Pledge pursuant to Section 4.3 hereof, to the
Purchase Contract Agent, for the benefit of the relevant Holders of
Securities, to the account designated by the Purchase Contract Agent
for such purpose, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided
that in the event such payment is received by the Collateral Agent on a
day that is not a Business Day or after 12:30 p.m., New York City time,
on a Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant to
Section 4.3 hereof, to the Holders of the Growth PRIDES to the accounts
designated by them in writing for such purpose no later than 2:00 p.m.,
New York City time, on the Business Day such payment is received by the
Collateral Agent (provided that in the event such payment is received
by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, or the principal of any
Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section
4.6(a) or 4.6(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts.
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All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Preferred Security
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable that, at the time of such payment, is a Pledged Preferred Security or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, or a Holder of a Growth PRIDES shall receive any payments of
principal on account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase Contract Agent or such
Holder shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application to
the obligations of the Holders under the related Purchase Contracts, and the
Holders shall acquire no right, title or interest in any such payments of Stated
Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement of Preferred
Securities.
Section 4.1. Substitution of Preferred Securities and the Establishment
of Growth PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Income PRIDES shall have the right to substitute
Treasury Securities for the Pledged Preferred Securities securing such Holder's
obligations under the Purchase Contract(s) comprising a part of its Income
PRIDES in integral multiples of 20 Income PRIDES by (a) Transferring to the
Collateral Agent Treasury Securities having a Value equal to the Stated Amount
of the Pledged Preferred Securities to be released and (b) delivering the
related Income PRIDES to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the Treasury Securities
Transferred by such Holder) and requesting that the Purchase Contract Agent
instruct the Collat-
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eral Agent to release from the Pledge the Pledged Preferred Securities related
to such Income PRIDES. The Purchase Contract Agent shall instruct the Collateral
Agent in the form provided in Exhibit A; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders of Income PRIDES may make such substitution only in
integral multiples of 32,000 Income PRIDES at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date. Upon
receipt of Treasury Securities from a Holder of Income PRIDES and the related
instruction from the Purchase Contract Agent, the Collateral Agent shall release
the Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, free and clear
of any lien, pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.2. Pledge of Preferred Securities and Re-establishment of
Income PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (unless a Tax Event Redemption
has occurred), a Holder of Growth PRIDES shall have the right to establish or
reestablish Income PRIDES consisting of the Purchase Contracts and Preferred
Securities in integral multiples of 20 Income PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to the Stated Amount
of the Pledged Treasury Securities to be released and (b) delivering the related
Growth PRIDES to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has transferred Preferred Securities to the Collateral
Agent pursuant to clause (a) above and requesting that the Purchase Contract
Agent instruct the Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Growth PRIDES. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in Exhibit A; provided,
however, that if a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, Holders of Growth PRIDES may make
such substitution only in integral multiples of 32,000 Growth PRIDES,
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at any time on or prior to the Business Day immediately preceding the Purchase
Contract Settlement Date. Upon receipt of the Preferred Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from such Holder and the instruction from the Purchase Contract Agent,
the Collateral Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent of
written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Preferred Securities (or
the Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the Income PRIDES and the
Growth PRIDES, respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Preferred Securities, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged
Preferred Securities, of the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided in this Section 4.3, then
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the Purchase Contract Agent shall within fifteen days after the occurrence of
such Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Preferred Securities, of the Treasury Portfolio or of the Pledged
Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding like that described in subsection (i)(z) hereof
within ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES or
Growth PRIDES has elected, in accordance with the procedures specified in
Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to
settle its Purchase Contract with cash and (ii) payment by such Holder on or
prior to 11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the United
States by certified or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Company, then the Collateral Agent
shall, upon the written direction of the Purchase Contract Agent, promptly
invest any Cash received from a Holder in connection with a Cash Settlement in
Permitted Investments. Upon receipt of the proceeds upon the maturity of the
Permitted Investments on the Purchase Contract Settlement Date, the Collateral
Agent shall pay the portion of such proceeds and deliver any certified or
cashiers' checks received, in an aggregate amount equal to the Purchase Price,
to the Company on the Purchase Contract Settlement Date, and shall distribute
any funds in respect of the interest earned from the Permitted Investments to
the Purchase Contract Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph 5.4(a)(i) of
the Purchase Contract Agreement, such failure shall constitute an event of
default under the Purchase Contract Agreement and hereunder, and the Holder
shall be deemed to have consented to the disposition of the pledged Preferred
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Securities pursuant to the remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement, which is incorporated herein by reference. If a
Holder of an Income PRIDES does notify the Agent as provided in paragraph
5.4(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.4(a)(ii) of the Purchase Contract Agreement, the Preferred Securities of such
a Holder will not be remarketed but instead the Collateral Agent, for the
benefit of the Company, will exercise its rights as a secured party with respect
to such Preferred Securities at the direction of the Company. In addition, in
the event of a Failed Remarketing as described in paragraph 5.4(b) of the
Purchase Contract Agreement, such Failed Remarketing shall constitute an event
of default hereunder by such Holder and the Collateral Agent, for the benefit of
the Company, will also exercise its rights as a secured party with respect to
such Preferred Securities at the direction of the Company.
(c) If a Holder of a Growth PRIDES fails to notify the Purchase
Contract Agent of such Holder's intention to make a Cash Settlement in
accordance with paragraph 5.4(d)(i) of the Purchase Contract Agreement, or if a
Holder of an Income PRIDES does notify the Agent as provided in paragraph (d)(i)
of the Purchase Contract Agreement of its intention to pay the Purchase Price in
cash, but fails to make such payment as required by paragraph 5.4(d)(ii) of the
Purchase Contract Agreement, such failure shall constitute an event of default
hereunder by such Holder and upon the maturity of any Pledged Treasury
Securities or the Treasury Portfolio, if any, held by the Collateral Agent on
the Business Day immediately preceding the Purchase Contract Settlement Date,
the principal amount of the Pledged Treasury Securities or the Treasury
Portfolio received by the Collateral Agent shall, upon written direction of the
Purchase Contract Agent, be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price will be
remitted to the Company as payment thereof. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the Treasury Portfolio, as the
case may be, and the investment earnings earned from such investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute
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such excess to the Purchase Contract Agent for the benefit of the Holder of the
related Growth PRIDES or Income PRIDES when received.
Section 4.5. Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio in the case of a Holder
of Income PRIDES or (b) Pledged Treasury Securities in the case of a Holder of
Growth PRIDES, as the case may be, with a principal amount equal to the product
of (i) the Stated Amount times (ii) the number of such Purchase Contracts as to
which such Holders have elected to effect Early Settlement and shall Transfer
all such Pledged Preferred Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Pledged Treasury Securities, as the case
may be, free and clear of the Pledge created hereby, to the Purchase Contract
Agent for the benefit of the Holders.
Section 4.6. Application of Proceeds Settlement. (a) In the event a
Holder of Income PRIDES (if a Tax Event Redemption has not occurred) has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement or has not made an Early Settlement of the Purchase Contract(s)
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contract(s) from
the Proceeds of the related Pledged Preferred Securities. The Collateral Agent
shall, by 10:00 a.m., New York City time, on the fourth Business Day immediately
preceding
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the Purchase Contract Settlement Date, without any instruction from such Holder
of Income PRIDES, present the related Pledged Preferred Securities to the
Remarketing Agent for remarketing. Upon receiving such Pledged Preferred
Securities, the Remarketing Agent, pursuant to the terms of the Remarketing
Agreement and the Remarketing Purchase Agreement, will use its reasonable
efforts to remarket such Pledged Preferred Securities on such date at a price
not less than approximately 100.5% of the aggregate Stated Amount of such
Pledged Preferred Securities, plus accrued and unpaid distributions (including
deferred distributions), if any, thereon. After deducting as the Remarketing Fee
an amount not exceeding 25 basis points (.25%) of the aggregate Stated Amount of
the Pledged Preferred Securities from any amount of such Proceeds in excess of
the aggregate Stated Amount, plus such accrued and unpaid distributions
(including deferred distributions) of the remarketed Pledged Preferred
Securities, the Remarketing Agent will remit the entire amount of the Proceeds
of such remarketing to the Collateral Agent. On the Purchase Contract Settlement
Date, the Collateral Agent shall apply that portion of the Proceeds from such
remarketing equal to the aggregate Stated Amount, plus such accrued and unpaid
distributions (including deferred distributions) of such Pledged Preferred
Securities, to satisfy in full the obligations of such Holders of Income PRIDES
to pay the Purchase Price to purchase the Common Stock under the related
Purchase Contracts. The remaining portion of such Proceeds, if any, shall be
distributed by the Collateral Agent to the Purchase Contract Agent for payment
to the Holders. If the Remarketing Agent advises the Collateral Agent in writing
that it cannot remarket the related Pledged Preferred Securities of such Holders
of Income PRIDES at a price not less than 100% of the aggregate Stated Amount of
such Pledged Preferred Securities plus any accrued and unpaid distributions
(including deferred distributions), thus resulting in a Failed Remarketing and
an event of default under the Purchase Contract Agreement and hereunder, the
Collateral Agent, for the benefit of the Company will, at the written direction
of the Company, dispose of the Pledged Preferred Securities in accordance with
applicable law and satisfy in full, from such disposition, such Holder's
obligation to pay the Purchase Price for the Common Stock.
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(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contract(s) underlying its Growth PRIDES or Income PRIDES, such Holder shall be
deemed to have elected to pay for the shares of Common Stock to be issued under
such Purchase Contract(s) from the Proceeds of the related Pledged Treasury
Securities or the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the Treasury Portfolio,
as the case may be, in overnight Permitted Investments. Without receiving any
instruction from any such Holder of Growth PRIDES or Income PRIDES, the
Collateral Agent shall apply the Proceeds of the related Pledged Treasury
Securities or Treasury Portfolio to the settlement of such Purchase Contracts on
the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged Treasury
Securities or Treasury Portfolio and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
distribute such excess, when received, to the Purchase Contract Agent for the
benefit of the Holders.
Section 5. Voting Rights -- Preferred Securities. The Purchase Contract
Agent may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or, as the case may be, shall not
refrain from exercising such right if, in the judgment of the Company, such
action would impair or otherwise have a material adverse effect on the value of
all or any of the Pledged Preferred Securities; and provided, further, that the
Purchase Contract Agent shall give the Company and the Collateral Agent at least
five days' prior written notice of the manner in which it intends to exercise,
or its reasons for refraining from exercising, any such right. Upon receipt of
any notices
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and other communications in respect of any Pledged Preferred Securities,
including notice of any meeting at which holders of Preferred Securities are
entitled to vote or solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Collateral Agent shall use reasonable efforts to send
promptly to the Purchase Contract Agent such notice or communication, and as
soon as reasonably practicable after receipt of a written request therefor from
the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Preferred
Securities (in form and substance satisfactory to the Collateral Agent) as are
prepared by the Purchase Contract Agent with respect to the Pledged Preferred
Securities.
Section 6. Rights and Remedies; Distribution of the Debentures; Tax
Event Redemption
Section 6.1. Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code as in effect in
the State of New York (the "Code") (whether or not the Code is in effect in the
jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Preferred Securities or other Collateral in full
satisfaction of the Holders obligations under the Purchase Contracts or (ii)
sale of the Pledged Preferred Securities or other Collateral in one or more
public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury
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Securities as provided in Section 3 hereof in satisfaction of the obligations of
the Holder of the Securities of which such Pledged Treasury Securities, or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as applicable, is a part
under the related Purchase Contracts, the inability to make such payments shall
constitute an event of default hereunder and the Collateral Agent shall have and
may exercise, with reference to such Pledged Treasury Securities, or such
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as applicable, and such
obligations of such Holder, any and all of the rights and remedies available to
a secured party under the Code and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Preferred Securities, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the Holder of a Growth PRIDES, agrees that, from time
to time, upon the written request of the Collateral Agent, the Purchase Contract
Agent or such Holder shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder. The Purchase Contract
Agent shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure to act or its own
willful misconduct.
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Section 6.2. Distribution of the Debentures; Tax Event Redemption. Upon
the occurrence of an Investment Company Event or a liquidation of the Trust, a
principal amount of the Debentures constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregate Stated Amount of the
Pledged Preferred Securities shall be delivered to the Collateral Agent in
exchange for the Pledged Preferred Securities. In the event the Collateral Agent
receives such Debentures in respect of Pledged Preferred Securities upon the
occurrence of an Investment Company Event or liquidation of the Trust, the
Collateral Agent shall Transfer the Debentures to the Collateral Account in the
manner specified herein for Pledged Preferred Securities to secure the
obligations of the Holders of Income PRIDES to purchase the Company's Common
Stock under the related Purchase Contracts. Thereafter, the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Debentures as it had in respect of the Pledged Preferred Securities as provided
in Articles II, III, IV, V and VI hereof, and any reference herein to the
Pledged Preferred Securities shall be deemed to be referring to such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent by the Institutional Trustee or upon
a dissolution of the Trust and the distribution of the related Debentures by the
Debenture Trustee on or prior to 12:30 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Preferred Securities or Debentures, as the case may be. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will, at
the written direction of the Company, apply an amount equal to the Redemption
Amount of such Redemption Price to purchase from the Quotation Agent, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of Income
PRIDES. The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account in the manner specified herein for Pledged Preferred
Securities to secure the obligation of all Holders of
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Income PRIDES to purchase Common Stock of the Company under the Purchase
Contracts constituting a part of such Income PRIDES, in substitution for the
Pledged Preferred Securities. Thereafter the Collateral Agent shall have such
security interests, rights and obligations with respect to the Treasury
Portfolio as it had in respect of the Pledged Preferred Securities or
Debentures, as the case may be, as provided in Articles II, III, IV, V, and VI,
and any reference herein to the Pledged Preferred Securities or the Debentures
shall be deemed to be reference to such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, for
Collateral held by the Collateral Agent, such substitution shall not constitute
a novation of the security interest created hereby.
Section 7. Representations and Warranties; Covenants
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered
in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or
has the right to Transfer, the Collateral it
Transfers to the Collateral Agent, free and clear of
any security interest, lien, encumbrance, call,
liability to pay money or other restriction other
than the secu-
23
<PAGE> 28
rity interest and lien granted under Section 2
hereof;
(c) upon the Transfer of the Collateral to the
Collateral Account, the Collateral Agent, for the
benefit of the Company, will have a valid and
perfected first priority security interest therein
(assuming that any central clearing operation or any
Intermediary or other entity not within the control
of the Holder involved in the Transfer of the
Collateral, including the Collateral Agent, gives
the notices and takes the action required of it
hereunder and under applicable law for perfection of
that interest and assuming the establishment and
exercise of control pursuant to Section 2.2 hereof);
and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in
the creation of any security interest, lien or other
encumbrance on the Collateral other than the
security interest and lien granted under Section 2
hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage,
charge, pledge, indenture, contract or undertaking
to which it is a party or which is binding on it or
any of its assets.
Section 7.2. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist
any mortgage, charge, lien, pledge or any other
security interest whatsoever over the Collater-
24
<PAGE> 29
al or any part of it other than pursuant to this
Agreement; and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or attempt to
dispose) of the Collateral or any part of it except
for the beneficial interest therein, subject to the
pledge hereunder, transferred in connection with the
Transfer of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority or, except as expressly required hereby,
maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 8.2 hereof,
subject to Section 8.6 hereof); (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein
25
<PAGE> 30
or in connection herewith or therewith, except for its own negligence or willful
misconduct; and (e) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder. Subject to the foregoing,
during the term of this Agreement, the Collateral Agent shall take all
reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, the Collateral Agent and Securities Intermediary
in its individual capacity hereby waive any right of setoff, bankers lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
Section 8.2. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
Section 8.3. Reliance by Collateral Agent. Each of the Securities
Intermediary and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being
26
<PAGE> 31
required to determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected by the
Collateral Agent and the Securities Intermediary. As to any matters not
expressly provided for by this Agreement, the Collateral Agent and the
Securities Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by the
Company in accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Securities (and any
of their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, and the Collateral Agent and its affiliates may accept fees
and other consideration from the Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any Holder
of Securities of this Agreement, the Purchase Contract Agreement, the Securities
or any other document referred to or provided for herein or therein or to
inspect the properties or books of the Purchase Contract Agent or any Holder of
Securities. The Collateral Agent shall not have any duty or responsibility to
provide the Company with any credit or other information concerning the affairs,
financial condition or business of the Purchase Contract Agent or any Holder of
Securities (or any of their respective affiliates) that may come into the
possession of the Collateral Agent or the Securities Intermediary or any of
their respective affiliates.
27
<PAGE> 32
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to pay
the Collateral Agent from time to time such compensation as shall be agreed in
writing between the Company and the Collateral Agent for all services rendered
by it hereunder and (ii) to indemnify the Collateral Agent and the Securities
Intermediary for, and to hold each of them harmless from and against, any loss,
liability or reasonable out-of-pocket expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the reasonable out-of-pocket costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of such powers and
duties.
Section 8.7. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, after
prompt notice to the Company and the Purchase Contract Agent, at its sole
option, to refuse to comply with any and all claims, demands or instructions
with respect to such property or funds so long as such dispute or conflict shall
continue, and the Collateral Agent shall not be or become liable in any way to
any of the parties hereto for its failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, satisfactory to the Collateral Agent or (ii) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or reasonable out-of-pocket expense which the Collateral Agent
may incur by reason of its acting. The Collateral Agent may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent may deem necessary. Notwithstanding anything contained herein
to the contrary, the Collateral Agent shall not be required to take any action
that is in its opinion contrary to law or
28
<PAGE> 33
to the terms of this Agreement, or which would in its opinion subject it or any
of its officers, employees or directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
(a) the Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any time by the Company
and (c) if the Collateral Agent fails to perform any of its material obligations
hereunder in any material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent may be removed by the Purchase
Contract Agent. The Purchase Contract Agent shall promptly notify the Company of
any removal of the Collateral Agent pursuant to clause (c) of the immediately
preceding sentence. Upon any such resignation or removal, the Company shall have
the right to appoint a successor Collateral Agent. If no successor Collateral
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's giving of notice of
resignation or such removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a successor Collateral
Agent. The Collateral Agent shall be a bank which has an office in New York, New
York with a combined capital and surplus of at least $750,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take all appropriate
action to transfer any money and property held by it hereunder (including the
Collateral) to such successor Collateral Agent. The retiring Collateral Agent
shall, upon such succession, be discharged from its duties and obligations as
Collateral Agent hereunder. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this Section 8 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Collateral Agent.
29
<PAGE> 34
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
Section 8.11. Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence or willful misconduct on the
part of the Collateral Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priori-
30
<PAGE> 35
ty of the security interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to such
matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent and the Collateral Agent may amend
this Agreement for the purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Security adversely affected thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Pledged Preferred Securities
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or the rights of Holders of Growth
PRIDES to substitute Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, for the
Pledged Treasury Securities), impair the right of the Holder of any
Security to receive distributions on the underlying Collateral or
otherwise adversely affect the Holder's rights in or to such
Collateral; or
(2) otherwise effect any action that would require the consent
of the Holder of each Outstand-
31
<PAGE> 36
ing Security affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement supplemental
thereto; or
(3) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with respect to
the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and
32
<PAGE> 37
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the Collateral Agent
or any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or
33
<PAGE> 38
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by such
party in a notice to the other parties. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have ratified
the agreements of, and the grant of the Pledge hereunder by, the Purchase
Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any
34
<PAGE> 39
modification, supplement or waiver of any of the terms of this Agreement; (b)
all reasonable costs and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in connection with (i) any
enforcement or proceedings resulting or incurred in connection with causing any
Holder of Securities to satisfy its obligations under the Purchase Contracts
forming a part of the Securities and (ii) the enforcement of this Section 10.7;
and (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument
relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
35
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
KENNAMETAL INC.
By:_______________________________
Name:
Title:
Address for Notices:
Kennametal Inc.
Corporate Headquarters
State Route 981 South
P.O. Box 231
Latrobe, PA 15650-0231
Attention: Chief Financial Officer
Telecopy: (412)539-5701
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By:_______________________________
Name:
Title:
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust
Administration
Telecopy: (312) 407-1708
<PAGE> 41
THE CHASE MANHATTAN BANK,
as Collateral Agent and as
Securities Intermediary
By:_______________________________
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001-2697
Attention: Corporate Trust
Administration Department
Telecopy: (212) 946-8160
<PAGE> 42
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, NY 100102697
Attention: Corporate Trust Administration Department
Re: FELINE PRIDES of Kennametal Inc. (the "Company"), and Kennametal
Financing I
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of January __, 1998, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, and ourselves, as Purchase Contract
Agent and as attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES]
from time to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] in exchange for an equal Value of
[Pledged Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a notice stating
that the Holder has Transferred [Treasury Securities] [Preferred Securities or
the appropriate Applicable Ownership Interest of the Treasury Portfolio] to you,
as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio], to release the [Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Treasury Securities] related to such [Income PRIDES] [Growth PRIDES]
to us in accordance with the Holder's instructions. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________ ___________________________
By:______________________
Name:
Title:
Signature Guarantee:_____________
<PAGE> 43
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio] for the [Pledged Preferred
Securities or the Treasury Portfolio] [Pledged Treasury Securities]:
_________________________________ ______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_________________________________
Address
_________________________________
_________________________________
<PAGE> 44
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Kennametal Inc. (the "Company"), and Kennametal
Financing I
The undersigned Holder hereby notifies you that it has
delivered to ___________________________, as Collateral Agent, [$_______
aggregate principal amount of Treasury Securities] [$ aggregate Stated
Amount of Preferred Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio of the appropriate Applicable Ownership Interest of
the Treasury Portfolio] in exchange for an equal Value of [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] held by the Collateral Agent (the
"Pledge Agreement"), in accordance with Section 4.1 of the Pledge Agreement,
dated January __, 1998, between you, the Company and the Collateral Agent. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Preferred
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Income PRIDES] [Growth
PRIDES]. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Signature Guarantee: ___________________
<PAGE> 45
Please print name and address of Registered Holder:
_________________________________ ______________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_________________________________
Address
_________________________________
_________________________________
_________________________________
<PAGE> 1
Exhibit 4.5
TRUST AGREEMENT
OF
KENNAMETAL FINANCING I
THIS TRUST AGREEMENT is made as of November 12, 1997 (this "Trust
Agreement"), by and among Kennametal Inc., as Depositor (the "Depositor"), and
Robert L. McGeehan, as trustee, James E. Morrison, as trustee, David T. Cofer,
as trustee, and Mark A. Ferrucci, as trustee (collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "Kennametal Financing I"
(the "Trust"), in which name the Trustees or the Depositor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trust the sum of $10. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Section 3801 et seq. (the "Business Trust Act"),
and that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Secretary of State of the State of Delaware in such form as the
Trustees may approve.
3. An amended and restated Trust Agreement satisfactory to each party
to it and substantially in the form to be included as an exhibit to the
Registration Statement (the "1933 Act Registration Statement") referred to
below, or in such other form as the parties thereto may approve, will be entered
into to provide for the contemplated operation of the Trust created hereby and
the issuance of the Preferred or Common Securities referred to therein. Prior to
the execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect of the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Depositor, as the Depositor of the Trust, is hereby authorized
(i) to file with the Securities and Exchange Commission (the "Commission") and
to execute, in the case of the 1933 Act Registration Statement and 1934 Act
Registration Statement (as herein defined), on behalf of the Trust, (a) the 1933
Act Registration Statement, including pre-effective or post-effective amendments
to such Registration Statement, relating to the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of the Preferred or Common
Securities of the Trust, (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Preferred or Common Securities required to be
filed pursuant to the 1933 Act, and (c) a Registration Statement on Form 8-A or
other appropriate form (the "1934 Act Registration
<PAGE> 2
Statement") (including all pre-effective and post-effective amendments thereto)
relating to the registration of the Preferred or Common Securities of the Trust
under the Securities Exchange Act of 1934, as amended; (ii) to file with the New
York Stock Exchange or other exchange, and execute on behalf of the Trust, a
listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred or Common Securities to be listed on the New York Stock Exchange or
such other exchange; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred or Common Securities under the
securities or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf
of the Trust, may deem necessary or desirable; and (iv) to execute, deliver and
perform on behalf of the Trust an underwriting agreement with the Depositor and
the underwriter or underwriters of the Preferred or Common Securities of the
Trust. In the event that any filing referred to in clauses (i)-(iii) above is
required by the rules and regulations of the Commission, the New York Stock
Exchange or other exchange, or state securities or Blue Sky laws to be executed
on behalf of the Trust by the Trustees, the Trustees, in their capacities as
trustees of the Trust, are hereby authorized and directed to join in any such
filing and to execute on behalf of the Trust any and all of the foregoing, it
being understood that the Trustees, in their capacities as trustees of the
Trust, shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the New York Stock Exchange or other exchange, or state securities
or Blue Sky laws. In connection with all of the foregoing, the Trustees, solely
in their capacities as trustees of the Trust, and the Depositor hereby
constitute and appoint David T. Cofer as his, her or its, as the case may be,
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution for the Depositor or in the Depositor's name, place and stead, in
any and all capacities, to sign any and all amendments (including all
pre-effective and post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with all
exhibits thereto, and any other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Depositor might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his respective substitute or substitutes,
shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be four, and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause
-2-
<PAGE> 3
any trustee of the Trust at any time. Any trustee of the Trust may resign upon
thirty days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (with regard to conflict of
laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
KENNAMETAL INC.,
as Depositor
By:
-----------------------------
Name:
Title:
Robert L. McGeehan, as Trustee James E. Morrison, as Trustee
- ------------------------------ -----------------------------
David T. Cofer, as Trustee Mark A. Ferrucci, as Trustee
- ------------------------------ -----------------------------
-3-
<PAGE> 1
Exhibit 4.6
AMENDED AND RESTATED AGREEMENT
OF TRUST
Kennametal Financing I
Dated as of January __, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION . . . . . . . . . . . . . . 9
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . 9
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE . . . . . . . . . . . . 9
SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE. . . . . . . . . . 10
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT10
SECTION 2.6 EVENTS OF DEFAULT; WAIVER. . . . . . . . . . . . . . . . . . 10
SECTION 2.7 EVENT OF DEFAULT; NOTICE . . . . . . . . . . . . . . . . . . 11
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.4 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST . . . . . . . . . . . . . . . 13
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES. . . . . . . . . . 13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE
TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE. . . . . . . 16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE
INSTITUTIONAL TRUSTEE. . . . . . . . . . . . . . . . . . . . 18
SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE. . . . . . . . . . . 20
SECTION 3.11 DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.12 EXECUTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . 22
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.14 DURATION OF TRUST. . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.15 MERGERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES. . . . . . . . . . . 24
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR. . . . . . . . . 24
SECTION 4.3 RIGHT TO PROCEED . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.4 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 24
i
<PAGE> 3
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.2 DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY . . . . . . . . . . . . . 26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY . . . . . . . . . . . . . . . . . 27
SECTION 5.5 REGULAR TRUSTEES . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES . . . . . . 28
SECTION 5.7 VACANCIES AMONG TRUSTEES . . . . . . . . . . . . . . . . . . 29
SECTION 5.8 EFFECT OF VACANCIES. . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.9 MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.10 DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION TO
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES. . . . . . . . . . . 31
SECTION 7.2 PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES . . . . . . . . . . . . . . . . . . . 33
SECTION 9.2 TRANSFER OF CERTIFICATES . . . . . . . . . . . . . . . . . . 33
SECTION 9.3 DEEMED SECURITY HOLDERS. . . . . . . . . . . . . . . . . . . 33
SECTION 9.4 BOOK ENTRY INTERESTS . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.5 NOTICES TO CLEARING AGENCY . . . . . . . . . . . . . . . . . 34
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY . . . . . . . . . . 35
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES . . . . . . . . . 35
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. . . . . . 35
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.2 EXCULPATION. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.3 FIDUCIARY DUTY . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 10.4 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 10.5 OUTSIDE BUSINESSES . . . . . . . . . . . . . . . . . . . . . 40
ii
<PAGE> 4
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 11.2 CERTAIN ACCOUNTING MATTERS . . . . . . . . . . . . . . . . . 40
SECTION 11.3 BANKING. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 11.4 WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT. . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 14.2 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 14.3 INTENTION OF THE PARTIES . . . . . . . . . . . . . . . . . . 47
SECTION 14.4 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 14.5 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . 47
SECTION 14.6 PARTIAL ENFORCEABILITY . . . . . . . . . . . . . . . . . . . 47
SECTION 14.7 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 47
iii
<PAGE> 5
AMENDED AND RESTATED
AGREEMENT OF TRUST
OF
Kennametal Financing I
January __, 1998
AMENDED AND RESTATED AGREEMENT OF TRUST (the "Declaration") dated and
effective as of January __, 1998, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders (as defined herein), from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Kennametal Financing I
(the "Trust"), a trust under the Business Trust Act (as defined herein) pursuant
to an Agreement of Trust dated as of November 12, 1997, as amended on
__________, (the "Amended Original Declaration") and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on November 12, 1997,
as amemded on January __, 1998, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Debentures of the
Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Amended Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the Trust and Holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
<PAGE> 6
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Applicable Ownership Interest" has the meaning set forth in Annex I
hereto.
"Applicable Principal Amount" has the meaning set forth in Annex I
hereto.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
Purposes of the Reset Spread Announcement Date, is currently anticipated to be
The Wall Street Journal.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than Saturday, Sunday or any day on
which banking institutions in New York City, in the State of New York, are
permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
2
<PAGE> 7
"Closing Date" means the "Closing Time" and each "Date of Delivery"
under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be
dated as of January __, 1998 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Kennametal Inc., a Pennsylvania corporation,
in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The First National Bank of Chicago, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of ____% Debentures to be issued by the
Debenture Issuer under the Indenture, a specimen certificate for such series of
Debentures being Exhibit B.
"Debenture Repayment Price" means, with respect to any Debentures put
to the Sponsor on March 2, 2001, an amount per Debenture equal to $50, plus
accumulated and unpaid interest (including deferred interest, if any).
"Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direction" by a Person means a written direction signed:
3
<PAGE> 8
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Direct Action" has the meaning specified in Section 3.8(e).
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Failed Remarketing" has the meaning specified in Section 5.4(b) of
the Purchase Contract Agreement.
"FELINE PRIDES"(SM) means a security which, upon issuance, will
consist of a unit (referred to as an "Income PRIDES"(SM)) comprised of (i) a
stock purchase contract under which (a) the holder of the unit will purchase
from the Sponsor, for an amount in cash, a certain number of shares of common
stock of the Sponsor and (b) the Sponsor will pay the holder contract adjustment
payments, and (ii) beneficial ownership of a Preferred Security, or in certain
circumstances upon the occurrence of a Tax Event Redemption, the Applicable
Ownership Interest of the Treasury Portfolio. After issuance, FELINE PRIDES(SM)
units with respect to which Treasury Securities have been substituted for
Preferred Securities or the Treasury Portfolio, as applicable, will be referred
to as "Growth PRIDES"(SM) .
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" or "holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of January __, 1998, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
4
<PAGE> 9
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms and conditions of the Preferred Securities set forth in
Annex I hereto or by the Trust Indenture Act, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Preferred Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that the officers signing the Officers' Certificate
have read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by the officer in rendering the Officers' Certificate;
(c) a statement that such officers have made such examination or
investigation as, in such officers' opinion, is necessary to enable such
officers to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of such officers, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
5
<PAGE> 10
"Pledge Agreement" means the Pledge Agreement dated as of January __,
1998 among the Sponsor, The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent"), and The First National Bank of Chicago, as purchase
contract agent (the "Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee agreement to be
dated as of January __, 1998 of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer, and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Primary Treasury Dealer" has the meaning set forth in Annex I hereto.
"Purchase Contract Agreement" means the Purchase Contract Agreement
dated as of January __, 1998 among The First National Bank of Chicago, as
Purchase Contract Agent, and the Sponsor.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Quotation Agent" has the meaning set forth in Annex I hereto.
"Redemption Amount" has the meaning set forth in Annex I hereto.
"Redemption Price" has the meaning set forth in Annex I hereto.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
6
<PAGE> 11
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Sponsor to determine the Reset Rate. It is currently anticipated
that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the tenth (10) Business Day
immediately preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be determined
by the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the rate
of interest on the Two-Year Benchmark Treasury in effect on the third Business
Day immediately preceding the Purchase Contract Settlement Date, that the
Preferred Securities should bear in order for the Preferred Securities to have
an approximate market value of 100.5% of their aggregate liquidation amount on
the third Business Day immediately preceding the Purchase Contract Settlement
Date; provided, that the Sponsor may limit such Reset Spread to be no higher
than 200 basis points (2%).
"Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth (10) Business Day immediately preceding the Purchase Contract
Settlement Date.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including, without limitation, any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Institutional Trustee
assigned by the Institutional Trustee to administer its corporate trust matters
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Sponsor" means Kennametal Inc., a Pennsylvania corporation, or any
successor entity in a merger or consolidation, in its capacity as sponsor of the
Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Tax Event Redemption" has the meaning set forth in Annex I hereto.
"Tax Event Redemption Date" has the meaning set forth in Annex I
hereto.
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"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on repayment, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Termination Event" has the meaning set forth in Section 1 of the
Purchase Contract Agreement.
"Treasury Portfolio" has the meaning set forth in Annex I hereto.
"Treasury Portfolio Purchase Price" has the meaning set forth in Annex
I hereto.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Treasury Securities" has the meaning set forth in Section 1 of the
Purchase Contract Agreement.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Two-Year Benchmark Treasury" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Preferred
Securities, as agreed upon by the Sponsor and the Reset Agent. The rate for the
Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M.,
New York City time, on the third Business Day immediately preceding the Purchase
Contract Settlement Date in the Telerate system (or if the Telerate system is
(a) no longer available on the third Business Day immediately preceding the
Purchase Contract Settlement Date or (b) in the opinion of the Reset Agent
(after consultation with the Sponsor) no longer an appropriate system from which
to obtain such rate, such other nationally recognized quotation system as, in
the opinion of the Reset Agent (after consultation with the Sponsor) is
appropriate). If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to
maturity for the Two-Year Benchmark Treasury, expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Reset Agent (after
consultation with the Sponsor) (which may include the Reset Agent or an
Affiliate thereof).
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"Purchase Agreement" means the Purchase Agreement for the offering and
sale of Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) Any application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees, on behalf of the Trust,
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees, on behalf of the Trust, shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request by the
Institutional Trustee for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Institutional Trustee. The
Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in the Lists of Holders given to it or
which it receives in the capacity as Paying Agent (if acting in such capacity),
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
Sections 311(a), 310(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE INSTITUTIONAL TRUSTEE.
Within 60 days after May 15 of each year, commencing May 15, 1998, the
Institutional Trustee shall provide to the Holders of the Preferred Securities
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
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SECTION 2.4 PERIODIC REPORTS TO INSTITUTIONAL TRUSTEE.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Institutional Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees, on behalf of the Trust, shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c) (1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default in respect of the Preferred Securities and its
consequences, provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under this Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Preferred Securities, as permitted by the Trust Indenture Act. Upon such waiver,
any such default shall cease to exist, and any Event of Default with respect to
the Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the Holders
of the Common Securities are deemed to have waived such Event of Default
under this Declaration as provided below in this Section 2.6(b), the Event
of Default under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under this Declaration as provided below
in this Section 2.6(b), the Event of Default under this Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Institutional Trustee in accordance
with the terms of the Securities. The foregoing provisions of this Section
2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act are hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the corresponding
Event of Default under this Declaration with respect to the Common Securities
for all purposes of this Declaration without further act, vote or consent of the
Holders of the Common Securities. The foregoing provisions of this Section
2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Institutional Trustee shall, within 90 days after the occurrence of
an Event of Default, actually known to a Responsible Officer of the
Institutional Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all such defaults with respect to the
Securities, unless such defaults have been cured before the giving of such
notice (the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any
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of the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1 and 5.3 of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of this Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Kennametal Financing I," as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of the Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Kennametal Inc.,
Corporate Headquarters, State Route 981 South, P.O. Box 231, Latrobe,
Pennsylvania 15650-0231. On ten Business Days written notice to the
Institutional Trustee and Holders of the Securities, the Regular Trustees may
designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and sell
the Securities and use the gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise set forth herein, to engage in only
those other activities necessary, appropriate, convenient or incidental thereto.
The Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust. It is the intent
of the parties to this Declaration for the Trust to be classified as a grantor
trust for United States federal income tax purposes under Subpart E of
Subchapter J of the Code, pursuant to which the owners of the Preferred
Securities and the Common Securities will be the owners of the Trust for United
States federal income tax purposes, and such owners will include directly in
their gross income the income, gain, deduction or loss of the Trust as if the
Trust did not exist. By the acceptance of this Trust neither the Trustees, the
Sponsor nor the Holders of the Preferred Securities or Common Securities will
take any position for United States federal income tax purposes which is
contrary to the classification of the Trust as a grantor trust.
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SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the specific
duties of the Institutional Trustee, the Regular Trustees shall have exclusive
and complete authority to carry out the purposes of the Trust. An action taken
by the Regular Trustees in accordance with their powers shall constitute the act
of and serve to bind the Trust and an action taken by the Institutional Trustee
on behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures and the
Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. A Holder
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common Securities in
accordance with this Declaration; provided, however, that the Trust may issue no
more than one series of Preferred Securities and no more than one series of
Common Securities, and, provided further, that there shall be no interests in
the Trust other than the Securities, and the issuance of Securities shall be
limited to a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the Preferred Securities, at
the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement and the prospectus relating to the registration statement on Form
S-3 prepared by the Sponsor, including any amendments or supplements,
thereto, pertaining to the Preferred Securities and to take any other
action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the FELINE PRIDES in any State in which
the Sponsor has determined to qualify or register such FELINE PRIDES for
sale;
(iii) execute and file an application, prepared by the Sponsor,
to the New York Stock Exchange, Inc. or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice of
issuance of any Preferred Securities;
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(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Purchase Agreement and Pricing
Agreement providing for the sale of the FELINE PRIDES;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Institutional Trustee for the benefit of the Trust and the
Holders of the Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written notice
of the occurrence of a Tax Event or an Investment Company Event; provided that
the Regular Trustees shall consult with the Sponsor before taking or refraining
from taking any Ministerial Action in relation to a Tax Event or Investment
Company Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, repayments, redemptions and exchanges, and to
issue relevant notices to the Holders of Preferred Securities and Holders of
Common Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms of the Securities and this Declaration;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e) the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and transfer
agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of any
notice received from the Debenture Issuer of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Indenture;
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(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust, including,
but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes, provided that such action
relating to this clause (iii) does not adversely affect the interests of
Holders;
(p) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Regular Trustees, on behalf of the Trust;
(q) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary,
appropriate, convenient or incidental to the foregoing; and
(r) if applicable, to solicit holders of Securities which form a part of
the Income PRIDES to timely instruct the Purchase Contract Agent in order to
enable the Purchase Contract Agent to vote such Securities.
The Regular Trustees must exercise the powers set forth in this Section 3.6
in a manner that is consistent with the purposes and functions of the Trust set
out in Section 3.3, and the Regular Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Institutional Trustee set forth in Section 3.8.
No permissive power or authority available to the Regular Trustees shall be
construed to be a duty.
Any expenses incurred by the Regular Trustees pursuant to this Section 3.6
shall be reimbursed by the Sponsor.
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SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness for borrowed money,
other than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE INSTITUTIONAL TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Trust
and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
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(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of the
Trust and the Holders of the Securities and, upon the receipt of payments
of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Institutional Trustee Account and make
payments to the Holders of the Preferred Securities and Holders of the
Common Securities from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured indebtedness is
rated at least "A" or above by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary,
appropriate, convenient or incidental to effect the repayment of the
Preferred Securities and the Common Securities to the extent the Debentures
mature or are redeemed or the Put Option is exercised; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary, appropriate, convenient or
incidental to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be defined
in the terms of the Securities) arising from a change in law or a change in
legal interpretation or other specified circumstances pursuant to the terms
of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities and this Declaration.
(e) The Institutional Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default of which a Responsible Officer of
the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration, the Business Trust Act or the
Trust Indenture Act; provided, however, that if the Institutional Trustee fails
to enforce its rights under the Debentures after a Holder of Preferred
Securities has made a written request, such Holder of Preferred Securities may,
to the fullest extent permitted by applicable law, institute a legal proceeding
against the Debenture Issuer without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest on
or principal of the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the Sponsor shall have the right under the Indenture to set off any
payment made to such holder. In connection with such Direct Action, the rights
of the Holders of Common Securities will be subrogated to the rights of such
Holders of Preferred Securities. In connection with such Direct Action, the
Debenture Issuer shall be subrogated to the rights of such Holder of Preferred
Securities with respect to payments on the Preferred Securities under this
Declaration to the extent of any payment made by the Debenture Issuer to such
Holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Debentures.
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(f) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer of the
Institutional Trustee occurs and is continuing, the Institutional Trustee shall,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities and this Declaration.
(h) Subject to this Section 3.8, the Institutional Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE INSTITUTIONAL TRUSTEE.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the
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correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Institutional Trustee and conforming to
the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its fiduciary accounts generally, subject to the protections and
limitations on liability afforded to the Institutional Trustee under this
Declaration, the Business Trust Act and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree with
the Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional Trustee
Account maintained by the Institutional Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
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SECTION 3.10 CERTAIN RIGHTS OF INSTITUTIONAL TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officer's Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Institutional Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Institutional Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Institutional Trustee shall be under no obligation to
conduct an investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness
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or other paper or document, but the Institutional Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration,
the Institutional Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Trustees (except as required under the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
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SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a majority of or, if there are
only two, any Regular Trustee or, if there is only one, such Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration shall be taken as the statements
of the Sponsor, and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall dissolve on November 12, 2004.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that if the Trust is not
the surviving entity:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred
Securities (the "Successor Securities"), so long as the Successor
Securities rank the same as the Preferred Securities rank with
respect to Distributions and payments upon liquidation,
redemption, repayment and otherwise and substitutes for the
Common Securities other securities having substantially the same
terms as the Common Securities (the "Successor Common
Securities"), so long as the Successor Common Securities rank the
same as the Common Securities rank with respect to Distributions
and payments upon liquidation, redemption, repayment and
otherwise;
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(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the holder of the Debentures;
(iii) if necessary, the Preferred Securities or any Successor
Securities will be listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
another organization on which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities and any Successor
Common Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation, amalgamation
or replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation
or replacement, the Trust (or the Successor Entity) will continue to
be classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common Securities
issued by the Trust, in an amount at least equal to 3.0% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 RIGHTS AND RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue, sale and, if necessary, the remarketing of
the Preferred Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities, including any
amendments thereto;
(b) if necessary, to determine the States in which to take appropriate
action to qualify or register for sale all or part of the FELINE PRIDES and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if necessary, to prepare for filing by the Trust of an application to
the New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred Securities;
(d) if necessary, to prepare for filing by the Trust with the Commission of
a registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Remarketing Agreement, the Remarketing
Purchase Agreement, the Purchase Agreement and the Pricing Agreement providing
for the sale of the FELINE PRIDES.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a Direct Action
as set forth in Section 3.8(e) hereto.
SECTION 4.4 EXPENSES.
In connection with the offering, sale and issuance of the Debentures to the
Institutional Trustee and in connection with the sale of the Securities by the
Trust, the Sponsor, in its capacity as borrower with respect to the Debentures,
shall:
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(a) pay all costs and expenses relating to the offering, sale and issuance
of the Debentures, including commissions to the underwriters payable pursuant to
the Purchase Agreement and Pricing Agreement and compensation of the Trustee
under the Indenture in accordance with the provisions of the Indenture;
(b) be responsible for and shall pay all debts and obligations (other than
with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust, the offering, sale and issuance of the
Securities (including commissions to the underwriters in connection therewith),
the fees and expenses (including reasonable counsel fees and expenses) of the
Institutional Trustee, the Delaware Trustee and the Regular Trustees (including
any amounts payable under Article X of this Declaration), the costs and expenses
relating to the operation of the Trust, including, without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of Trust assets
and the enforcement by the Institutional Trustee of the rights of the Holders of
the Securities;
(c) be primarily liable for any indemnification obligations arising under
Section 10.4 with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 4.4 shall be for the benefit
of, and shall be enforceable by, any person to whom such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice hereof. Any such Creditor may enforce the Sponsor's
obligations under this Section 4.4 directly against the Sponsor and the Sponsor
irrevocably waives any right or remedy to require that any such Creditor take
any action against the Trust or any other Person before proceeding against the
Sponsor. The Debenture Issuer agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.4.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that, the number of Trustees shall
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in no event be less than three (3); provided further that (1) one Trustee, shall
meet the requirements of Section 5.2 (a) and (b); (2) there shall be at least
two Trustees who are employees or officers of, or are affiliated with the
Sponsor (a "Regular Trustee"); and (3) one Trustee shall be the Institutional
Trustee for so long as this Declaration is required to qualify as an indenture
under the Trust Indenture Act, and such Institutional Trustee may also serve as
Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
(c) The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
SECTION 5.3 INSTITUTIONAL TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee for so long as this Declaration is required to qualify as
an Indenture under the Trust Indenture Act, which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 750 million U.S. dollars
($750,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 5.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.6(c).
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(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Preferred Securities Guarantee and the Indenture shall be deemed to
be specifically described in this Declaration and the Indenture for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Institutional Trustee shall be:
The First National Bank of Chicago
Global Corporate Trust Service
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Robert L. McGeehan
David T. Cofer
James E. Morrison
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of signing any documents that the Regular Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.6.
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SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Institutional
Trustee possessing the qualifications to act as Institutional Trustee under
Sections 5.2 and 5.3 (a "Successor Institutional Trustee") has been
appointed and has accepted such appointment by written instrument executed
by such Successor Institutional Trustee and delivered to the Regular
Trustees and the Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until such Trustee's
successor shall have been appointed or until such Trustee's death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) no such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use all reasonable efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee, as the case may be, if the Institutional Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this Section
5.6.
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(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Institutional Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two Regular Trustees, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy among the Regular Trustees
shall occur, until such vacancy is filled by the appointment of a Regular
Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 MEETINGS.
If there are more than two Regular Trustees, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at (i) a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or (ii) without a meeting by the
unanimous written consent of the Regular Trustees. In the event there is only
one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
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SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION. CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance with
the applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
(as defined in the Indenture) and Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the
Institutional Trustee (the amount of any such payment being a "Payment Amount"),
the Institutional Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one class of
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in
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Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a Regular
Trustee. Such signature shall be the manual or facsimile signature of any
present or any future Regular Trustee. In case any Regular Trustee who shall
have signed any of the Securities shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2 PAYING AGENT.
In the event that the Preferred Securities are not in book-entry only form,
the Trust shall maintain in the borough of Manhattan, City of New York, State of
New York, an office or agency where the Preferred Securities may be presented
for payment ("Paying Agent"), and any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. The Trust may appoint the Paying
Agent and may appoint one or more additional paying agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and address
of any Paying Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Paying Agent, the Institutional Trustee
shall act as such. The Trust or any of its Affiliates (including the Sponsor)
may act as Paying Agent. The Institutional Trustee shall initially act as Paying
Agent for the Preferred Securities and the Common Securities.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST.
(a) The Trust shall terminate:
(i) upon a Termination Event;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) upon the occurrence and continuation of an Investment
Company Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of Securities
in exchange for all of the Securities;
(v) when all the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) and upon completion of the winding-up of the Trust and its
termination, the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 4.4 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms of
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
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(c) Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
provided that, any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized independent
counsel experienced in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Certificate, the
Regular Trustees shall cause one or more new Certificates to be issued in the
name of the designated transferee or transferees. Every Certificate surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
The Preferred Securities Certificates, on original issuance, in addition to
being issued in the form of one or more definitive, fully registered Preferred
Securities Certificate (each a "Definitive Preferred Securities Certificate")
registered initially in the books and records of the Trust in the name of The
First National Bank of Chicago, as Purchase Contract Agent, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificate(s)
shall initially be registered on the books and records of the Trust in the name
of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certificate(s),
except as provided in Section 9.7. Except for the Definitive Preferred Security
Certificates as specified herein and the definitive,
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fully registered Preferred Securities Certificates that have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificate(s) and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificate(s) and shall have no obligation to the
Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with any
other provisions of this Declaration, the provisions of this Section 9.4 shall
control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants to
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants; provided, that, solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as Definitive
Preferred Security Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Preferred Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, unless and until definitive fully registered
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7 or otherwise, the Regular Trustees
shall give all such notices and communications specified herein to be given to
the Preferred Security Holders to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or
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(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:
(c) definitive fully registered Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
definitive fully registered Preferred Securities Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing Agency.
The definitive fully registered Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them and the Trust
harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Debentures, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
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(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities, which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
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(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Trust) by reason of the fact that
he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed
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to be in or not opposed to the best interests of the Trust and except that
no such indemnification shall be made in respect of any claim, issue or
matter as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the Debenture Issuer as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Debenture Issuer if a determination is
reasonably and promptly made (i) by the Regular Trustees by a majority vote
of a quorum of disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based upon the facts
known to the Regular Trustees, independent legal counsel or Common Security
Holder at the time such determination is made, such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Regular Trustees, independent legal
counsel or Common Security Holder reasonably determine that such person
deliberately breached such person's duty to the Trust or its Common or
Preferred Security Holders.
(v) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of shareholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office. All rights to indemnification under this Section 10.4(a) shall
be deemed to be provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
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(vi) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any person who is or was a Company Indemnified Person against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).
(vii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as such person would have with respect to
such constituent entity if its separate existence had continued.
(viii) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the benefit of
the successors, heirs, executors and administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Institutional Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee or the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence and, in the case of the Institutional
Trustee, pursuant to Section 3.9, negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Institutional Trustee or the Delaware Trustee, as the case may be.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate
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of the Sponsor, or may act as depositary for, trustee or agent for, or act on
any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Trust shall keep,
or cause to be kept, full books of account, records and supporting documents,
which shall reflect in reasonable detail, each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Trust shall cause to be duly prepared and delivered to each of the
Holders of Securities, any annual United States federal income tax information
statement required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Trust shall endeavor to deliver all such
statements within 30 days after the end of each Fiscal Year of the Trust.
(c) The Trust shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States federal income tax return,
on a Form 1041 or such other form required by United States federal income tax
law, and any other annual income tax returns required to be filed by the Trust
on behalf of the Trust with any state or local taxing authority.
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust shall comply with all withholding requirements under United
States federal, state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates
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as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Trust shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by the Regular Trustees (or, if there are more
than two Regular Trustees, a majority of the Regular Trustees); and
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, also by the
Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware
Trustee;
(b) no amendment shall be made:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officer's Certificate
from each of the Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officer's Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
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(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income taxation as a
grantor trust;
(B) reduce or otherwise adversely affect the powers of
the Institutional Trustee in contravention of the Trust Indenture Act;
or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would materially and adversely affect the
rights, privileges or preferences of any Holder of Securities may be effected
only with such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders;
(v) to modify, eliminate and add to any provision of the
Declaration to such extent as may be necessary; and
(vi) cause the Trust to continue to be classified for United
States federal income tax purposes as a grantor trust.
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SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Regular Trustees (or as provided in the terms of the Securities) to
consider and act on any matter on which Holders of such class of Securities are
entitled to act under the terms of this Declaration, the terms of the Securities
or the rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading. The Regular Trustees shall call a meeting of the
Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration, the terms of the Securities or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning not
less than the minimum amount of Securities in liquidation amount that would
be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time specified
by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
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(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL TRUSTEE.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States of America, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Institutional Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) the execution, delivery and performance by the Institutional Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Institutional Trustee. The Declaration has been duly executed
and delivered by the Institutional Trustee, and it constitutes a legal, valid
and binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants
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to the Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee, that:
(a) The Delaware Trustee is a Delaware corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Delaware Trustee of the
Declaration has been duly authorized by all necessary corporate action on the
part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and it constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Declaration; and
(d) the execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Delaware Trustee; and
(e) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
Kennametal Financing I
Corporate Headquarters
State Route 981 South
Latrobe, Pennsylvania 15650-0231
Attn: Corporate Secretary
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
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First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
Attn: Michael J. Majchrzak
(c) if given to the Institutional Trustee, at its Corporate Trust Office to
the attention of Corporate Trust Administration (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0286
Attn: Global Corporate Trust Service
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
Kennametal Inc.
Corporate Headquarters
State Route 981 South
P.O. Box 231
Latrobe, Pennsylvania 15650-0231
Attn: Corporate Secretary
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
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SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________
, as Regular Trustee
__________________________________
, as Regular Trustee
__________________________________
, as Regular Trustee
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By _________________________________
Name _______________________________
Title ______________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Institutional Trustee
By _________________________________
Name _______________________________
Title ______________________________
KENNAMETAL INC.,
as Sponsor
By _________________________________
Name _______________________________
Title ______________________________
<PAGE> 53
ANNEX I
TERMS AND CONDITIONS OF
____% TRUST ORIGINATED PREFERRED SECURITIES
____% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Agreement of Trust,
dated as of January __, 1998 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in the Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
(a) Preferred Securities. 4,500,000 Preferred Securities of the Trust,
with an aggregate liquidation amount with respect to the assets of the Trust of
Two Hundred Twenty-Five Million Dollars ($225,000,000) and a liquidation amount
with respect to the assets of the Trust of $50 per preferred security, are
hereby designated for the purposes of identification only as "____% Trust
Originated Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by applicable law or the rules
of any stock exchange on which the Preferred Securities are listed or to conform
to ordinary usage, custom or practice.
(b) Common Securities. Common Securities of the Trust, with an
aggregate liquidation amount with respect to the assets of the Trust of Seven
Million Dollars ($7,000,000) and a liquidation amount with respect to the assets
of the Trust of $50 per common security, are hereby designated for the purposes
of identification only as "____% Trust Originated Common Securities" (the
"Common Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by applicable law or to conform to ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed initially at
a rate per annum of ____% (the "Coupon Rate") of the stated liquidation amount
of $50 per Security until February 15, 2001, and at the Reset Rate thereafter,
such rates being the rates of interest payable on the Debentures to be held by
the Institutional Trustee. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the rate of ____% until
February 15, 2001, and at the Reset Rate thereafter (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year consisting of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
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(b) Distributions on the Securities will be cumulative, will accrue
from January __, 1998, and will be payable quarterly in arrears, on February 16,
May 16, August 16 and November 16 of each year, commencing on February 16, 1998,
except as otherwise described below. The Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not extending, in the
aggregate, beyond the maturity date of the Debentures (each an "Extension
Period"). During such Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon at the rate of ____% until February 15, 2001, and at the
Reset Rate thereafter, compounded quarterly during any such Extension Period (to
the extent permitted by applicable law). Payments of accrued Distributions will
be payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period; provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed beyond the maturity date of the Debentures.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the Business Day immediately preceding each of the relevant payment
dates on the Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading "Description of the Trust
Preferred Securities -- Book Entry Only Issuance -The Depository Trust Company"
in the Prospectus Supplement dated January __, 1998 to the Prospectus dated
January __, 1998 (collectively, the "Prospectus") of the Trust relating to the
Registration Statement on Form S-3 (file no. 333-40809) of the Sponsor and the
Trust. The relevant record dates for the Common Securities shall be the same
record date as for the Preferred Securities. If the Preferred Securities shall
not continue to remain in book-entry only form or are not in book-entry only
form at issuance, the relevant record dates for the Preferred Securities, shall
conform to the rules of any securities exchange on which the securities are
listed and, if none, as shall be selected by the Regular Trustees, which dates
shall be at least more than one, but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Debentures. Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. So long as the Holder of any Preferred Securities is the
Collateral Agent, the payment of Distributions on such Preferred Securities held
by the Collateral Agent will be made at such place and to such account as may be
designated by the Collateral Agent.
(d) The Coupon Rate on the Securities (as well as the interest rate on
the Debentures) will be reset on the third Business Day immediately preceding
the Purchase Contract Settlement Date to the Reset Rate (which reset Rate will
be in effect on and after the Purchase Contract Settlement Date). On
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the Reset Announcement Date, the Reset Spread and the Two-Year Benchmark
Treasury to be used to determine the Reset Rate will be announced by the
Sponsor. On the Business Day immediately following the Reset Announcement Date,
the Holders of Securities will be notified of such Reset Spread and Two- Year
Benchmark Treasury by the Sponsor. Such notice shall be sufficiently given to
Holders of Securities if published in an Authorized Newspaper.
(e) Not later than 7 calendar days nor more than 15 calendar days
prior to the Reset Announcement Date, the Sponsor will notify DTC (as defined
herein) or its nominee (or any successor Clearing Agency or its nominee) by
first-class mail, postage prepaid, to notify the Preferred Security Beneficial
Owner or Clearing Agency Participants holding Preferred Securities, Income
PRIDES or Growth PRIDES, of such Reset Announcement Date and the procedures to
be followed by such Holders of Income PRIDES who intend to settle their
obligation under the Purchase Contract with separate cash.
(f) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of the Trust
(unless a Tax Event Redemption has occurred), the Holders of the Securities on
the date of the dissolution will be entitled to receive out of the assets of the
Trust, after satisfaction of liabilities to creditors, Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the rate of ____%, if on or
prior to February 15, 2001, and the Reset Rate thereafter, and bearing accrued
and unpaid interest in an amount equal to the accrued and unpaid Distributions
on such Securities and which shall be distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities (such amount being
"Liquidation Distribution").
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the redemption of the Debentures in whole (but not in part),
at maturity, the proceeds from such redemption shall, after satisfaction of
liabilities to creditors, be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed at a redemption price of $50 per Security plus an amount
equal to accrued and unpaid Distributions thereon at the date of the repayment,
payable in cash.
(b) If an Investment Company Event (as defined herein) shall occur and
be continuing the Regular Trustees shall dissolve the Trust and, after
satisfaction of liabilities to creditors, cause Debentures held by the
Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate the rate of ____%,
if on or prior to February 15, 2001, and the Reset Rate thereafter, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as the Securities, to be distributed to the Holders
of the Securities in liquidation of such Holders' interests in the Trust on a
Pro Rata basis, within 90 days following the occurrence of such Investment
Company Event (the "90 Day Period"); provided,
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however, that, if at the time there is available to the Trust the opportunity to
eliminate, within the 90 Day Period, the Investment Company Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure that will have no adverse effect on the
Trust, the Debenture Issuer, the Sponsor or the Holders of the Securities and
will involve no material cost ("Ministerial Action"), the Regular Trustees will
pursue such Ministerial Action in lieu of dissolution.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act (an "Investment Company Event Opinion") to the effect
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), which Change in 1940 Act Law becomes effective on or after
the date of the Prospectus, there is a more than an insubstantial risk that the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act.
(c) If a Tax Event shall occur and be continuing, the Debentures are
redeemable at the option of the Debenture Issuer, in whole but not in part, on
not less than 30 days nor more than 60 days notice ("Tax Event Redemption"). If
the Debenture Issuer redeems the Debentures upon the occurrence and continuance
of a Tax Event, the proceeds from such redemption shall simultaneously be
applied by the Institutional Trustee to redeem the Securities having an
aggregate stated liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed at a redemption price (the "Redemption Price"), per
Security, equal to the Redemption Amount plus any accumulated and unpaid
distributions thereon to the date of such redemption. If, following the
occurrence of a Tax Event, the Debenture Issuer exercises its option to redeem
the Debentures, the Debenture Issuer shall appoint the Quotation Agent to
assemble the Treasury Portfolio in consultation with the Company. The
Institutional Trustee will distribute, to the record Holder of the Securities
the Redemption Price payable in liquidation of such Holder's interests in the
Trust.
"Tax Event" means the receipt by the Regular Trustees of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance of
the Securities under the Declaration, there is more than an insubstantial risk
that (i) interest payable by the Debenture Issuer on the Debentures would not be
deductible, in whole or in part, by the Debenture Issuer for federal income tax
purposes or (ii) the Trust would be subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Treasury Portfolio" means, with respect to the Applicable Principal Amount
of Debentures (a) if the Tax Event Redemption Date occurs prior to February 16,
2001, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to February 15, 2001 in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Debentures that occurs after the Tax Event
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Redemption Date, principal or interest strips of U.S. Treasury Securities which
mature on or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the Applicable Principal Amount of the
Debentures on such date, and (b) if the Tax Event Redemption Date occurs after
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) principal or interest strips of U.S. Treasury Securities
which mature on or prior to February 15, 2003 in an aggregate amount equal to
the Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Debentures that occurs after the Tax Event Redemption Date,
principal or interest strips of such U.S. Treasury Securities which mature on or
prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Debentures
on such date.
"Applicable Ownership Interest" means, with respect to an Income PRIDES and
the U.S. Treasury Securities in the Treasury Portfolio, (A) a 1/20, or 5%,
undivided beneficial ownership interest in a $1,000 principal or interest amount
of a principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to February 15, 2001 and (B) for
each scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a _________% undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event Redemption
Date occurs prior to February 16, 2001, the aggregate principal amount of the
Debentures corresponding to the aggregate stated liquidation amount of the
Preferred Securities which are components of Income PRIDES on the Tax Event
Redemption Date or (ii) if the Tax Event Redemption occurs on or after February
16, 2001, the aggregate principal amount of the Debentures corresponding to the
aggregate stated liquidation amount of the Preferred Securities outstanding on
such Tax Event Redemption Date.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate price quoted
by a primary U.S. government securities dealer in New York City (a "Primary
Treasury Dealer") to the Quotation Agent on the third Business Day immediately
preceding the Tax Event Redemption Date for the purchase of the Treasury
Portfolio for settlement on the Tax Event Redemption Date.
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc. and
its respective successors, provided, however, that if the foregoing shall cease
to be a Primary Treasury Dealer, the Sponsor shall substitute therefor another
Primary Treasury Dealer and (ii) any other Primary Treasury Dealer selected by
the Sponsor.
On and from the date fixed by the Regular Trustees for a Tax Event
Redemption or any distribution of Debentures and dissolution of the Trust: (i)
the Securities will no longer be deemed to be outstanding, (ii) The Depository
Trust Company ("DTC") or its nominee (or any successor Clearing Agency or its
nominee) or the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by DTC or its
nominee (or any successor Clearing Agency or its nominee), will be deemed to
represent beneficial interests in the Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of $50,
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with an interest rate of ____% if on or prior to February 15, 2001, and at the
Reset Rate thereafter, and accrued and unpaid interest equal to accrued and
unpaid Distributions on such Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
5. Redemption or Distribution Procedures.
(a) Notice of any redemption (other then in connection with the
maturity of the Debentures) of, or notice of distribution of Debentures in
exchange for, the Securities (a "Redemption/Distribution Notice") will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the Tax Event
Redemption Date. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section 5(a),
a Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 5 (such notice will be
irrevocable), then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Institutional Trustee will deposit
irrevocably with DTC or its nominee (or any successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Securities and will give DTC irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred Securities
so called for redemption, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, provided that the Debenture Issuer has
paid the Institutional Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Institutional Trustee
will pay the relevant Redemption Price to the Holders of such Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust. Notwithstanding the foregoing, so long as the Holder of
any Preferred Securities is the Collateral Agent or the Purchase Contract Agent,
the payment of the Redemption Price in respect of such Preferred Securities held
by the Collateral Agent or the Purchase Contract Agent shall be made no later
than 12:00 noon, New York City time, on the Tax Event Redemption Date by check
or wire transfer in immediately available funds at such place and to such
account as may be designated by the Collateral Agent or the Purchase Contract
Agent. If a Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the close of
business on the date of such deposit, or on the redemption date, as applicable,
distributions will cease to accrue on the Securities so redeemed and all rights
of Holders of such Securities so called for redemption will cease, except the
right of the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer of
any Securities that have been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (without any interest or other payment in respect of any such
delay) except that, if such Business Day
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falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for repayment. If payment of the Redemption Price in respect
of any Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for repayment for
purposes of calculating the Redemption Price.
(c) Redemption/Distribution Notices shall be sent by the Trust to (A)
in respect of the Preferred Securities, the DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been issued or,
if Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities, to the Holder thereof.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws) the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
6. Repayment at Option of Holders.
(a) If a Failed Remarketing (as described in Section 5.4(b) of the
Purchase Contract Agreement and incorporated herein by reference) has occurred,
each holder of Securities who holds such Securities on the day immediately
following the Purchase Contract Settlement Date, shall have the right on or
after the Business Day immediately following February 16, 2001 to require the
Trust to repay all or a portion of such Securities owned by such holder (the
"Put Option") on March 2, 2001 (the "Put Option Exercise Date"), upon at least
three Business Days' prior notice, at a repayment price of $50 per Security plus
an amount equal to the accrued and unpaid Distributions (including deferred
distributions if any) thereon to the date of payment (the "Put Option Repayment
Price").
(b) The Trust shall obtain funds to pay the Put Option Repayment Price
of Securities being repaid under the Put Option through presentation by the
Institutional Trustee, on behalf of the Trust, to the Debenture Issuer, pursuant
to the right of the holder of the Debentures to require the Debenture Issuer to
repay all or a portion of the Debentures on the Put Option Exercise Date,
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Securities for repayment on the Put Option Exercise
Date at the Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put Option
Exercise Date, the Trust must receive on or prior to 4:00 p.m. on the third
Business Day immediately preceding the Put Option Exercise Date, at the
Corporate Trust Office of the Institutional Trustee, the Securities to be repaid
with the form entitled "Option to Elect Repayment" on the reverse thereof or
otherwise accompanying such Security duly completed. Any such notice received by
the Trust shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Securities for repayment shall
be determined by the Trust, whose determination shall be final and binding.
(d) Payment of the Put Option Repayment Price to Holders of Securities
shall be made at the Corporate Trust Office of the Institutional Trustee,
provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related repayment of the
Debenture no later than 1:00 p.m., New York City time, on the Put Option
Exercise Date by check or wire transfer in immediately available funds at such
place and to such account as may be designated by such
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Holders. If the Institutional Trustee holds immediately available funds
sufficient to pay the Put Option Repayment Price of such Securities, then,
immediately prior to the close of business on the Put Option Exercise Date, such
Securities will cease to be outstanding and distributions thereon will cease to
accrue, whether or not Securities are delivered to the Institutional Trustee,
and all other rights of the Holder in respect of the Securities, including the
Holder's right to require the Trust to repay such Securities, shall terminate
and lapse (other than the right to receive the Put Option Repayment Price but
without interest on such Put Option Repayment Price). Neither the Regular
Trustees nor the Trust shall be required to register or cause to be registered
the transfer of any Securities for which repayment has been elected. If payment
of the Put Option Repayment Price in respect of Securities is (i) improperly
withheld or refused and not paid either by the Institutional Trustee or by the
Sponsor as guarantor pursuant to the Securities Guarantee, or (ii) not paid by
the Institutional Trustee as the result of an Event of Default with respect to
the Debentures presented for repayment as described in paragraph 6(b),
Distributions on such Securities will continue to accrue, from the original Put
Option Exercise Date to the actual date of payment, in which case the actual
payment date will be considered the Put Option Exercise Date for purposes of
calculating the Put Option Repayment Price.
(e) The Debenture Issuer will request, not later than seven nor more
than 15 calendar days prior to February 13, 2001 (the date on which some or all
of the Preferred Securities could be remarketed in the manner described in
Section 5.4(b) of the Purchase Contract Agreement and incorporated herein by
reference) that DTC notify the Preferred Securities Holders as well as the
Income PRIDES and Growth PRIDES holders of such remarketing and of the
procedures that must be followed if a Holder of Preferred Securities wishes to
exercise such Holder's rights with respect to the Put Option.
7. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 7(b) and 9 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or the
exercise of any trust or power conferred upon the Institutional Trustee under
the Declaration, including (i) directing the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee with respect to
the Debentures, (ii) waiving any past default and its consequences that is
waivable under the Indenture, (iii) exercising any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
or (iv) consenting to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required, provided,
however, that, where a consent under the Indenture would require the consent or
act of the Holders of greater than a majority of the Holders in principal amount
of Debentures affected thereby (a "Super Majority"), the Institutional Trustee
may only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Preferred
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities under this paragraph unless the
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Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Debentures after a
Holder of Preferred Securities has made a written request, such Holder of
Preferred Securities may, to the fullest extent permitted by applicable law,
institute a legal proceeding directly against the Debenture Issuer to enforce
the Institutional Trustee's rights under the Debentures without first
instituting a legal proceeding against the Institutional Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder on or after the
respective due date specified in the Debentures. Except as provided in the
preceding sentence, the Holders of Preferred Securities shall not exercise
directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to repay and cancel Preferred Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities. Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
8. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b) and (c) and Section 9 and
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event
of Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
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method, and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable, provided that, where a consent or action under the Indenture
would require the consent or act of the Holders of a Super Majority, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Pursuant to this
Section 7(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Institutional Trustee or the Debenture Trustee as
set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may institute a legal proceeding
directly against any Person to enforce the Institutional Trustee's rights under
the Declaration, without first instituting a legal proceeding against the
Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.
9. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
materially adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or (ii)
the dissolution of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities as a class will be
entitled to vote on such amendment or proposal (but not on any other amendment
or proposal) and such amendment or proposal shall not be effective except with
the approval of the Holders of at least a Majority in liquidation amount of the
Securities, voting together as a single class; provided, however, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
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(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 8(b) unless (i)
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action or (ii) such
action would not reduce or otherwise adversely affect powers of the
Institutional Trustee or cause the Trust to be deemed an "investment company"
which is required to be registered under the Investment Company Act of 1940.
10. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
11. Ranking.
The Preferred Securities rank pari passu and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities by the acceptance
thereof, agrees to the provisions of the Preferred Securities Guarantee and the
Common Securities Guarantee, respectively.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to subscribe
for any additional securities.
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14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
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EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
Trust or its agent for registration of transfer, exchange or payment, and any
Preferred Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number ___________ Number of Preferred Securities __________
CUSIP NO. ___________
Certificate Evidencing Preferred Securities
of
Kennametal Financing I
____% Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)
Kennametal Financing I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that __________ (the
"Holder") is the registered owner of preferred securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
designated as the ____% Trust Originated Preferred Securities (liquidation
amount $50 per preferred security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Agreement of Trust of the Trust dated
as of January __, 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
<PAGE> 66
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
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IN WITNESS WHEREOF, the Trust has executed this certificate this ______ day of
January, 1998.
KENNAMETAL FINANCING I
By: __________________________________________
Name: ________________________________________
Title: Regular Trustee
By: __________________________________________
Name: ________________________________________
Title: Regular Trustee
<PAGE> 68
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of ____% (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
rate of ____% until February 15, 2001, and at the Reset Rate thereafter (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year consisting of twelve 30-day
months, and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on February 16, May 16, August 16 and
November 16 of each year, commencing on February 16, 1998, to holders of record,
if in book-entry only form, one Business Day prior to such payment date, which
payment dates shall correspond to the interest payment dates on the Debentures.
In the event that the Preferred Securities are not in book-entry form, the
Regular Trustees will have the right to select relevant record dates, which will
be more than one Business Day but less than 60 Business Days prior to the
relevant payment dates. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding beyond the date of maturity
of the Debentures (each an "Extension Period") and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon at the rate of ____%
until February 15, 2001, and at the Reset Rate thereafter, compounded quarterly
during any such Extension Period (to the extent permitted by applicable law).
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed beyond the maturity date of the
Debenture.
The Preferred Securities shall be redeemable as provided in the
Declaration.
<PAGE> 69
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $_____ stated liquidation amount of the within Preferred Security,
pursuant to its terms, on the "Put Option Exercise Date," together with
distributions thereon accrued but unpaid to the date of repayment, to the
undersigned at:
____________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a new
Preferred Security or Preferred Securities representing the remaining stated
liquidation amount of this Preferred Security.
For this Option to Elect Repayment to be effective, the within Preferred
Security with this Option to Elect Repayment duly completed must be received by
the Trust at the Corporate Trust Office of the Institutional Trustee at
______________________________, __________________________________________,
Attention: Corporate Trust Administration.
Dated: Signature: ____________________________________
Signature Guarantee: __________________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Preferred Security in every
particular without alternation or enlargement or any change whatsoever.
<PAGE> 70
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ____________________________________
Signature: ___________________________
Signature Guarantee: _________________
(Sign exactly as your name appears on the other side of
this Preferred Security Certificate)
<PAGE> 71
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the Debenture Issuer
and any Related Party to the Debenture Issuer or a Related Party of the
Debenture Issuer; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
Certificate Number ___________ Number of Common Securities ____________
Certificate Evidencing Common Securities
of
Kennametal Financing I
____% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
Kennametal Financing I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Kennametal Inc. (the
"Holder") is the registered owner of common securities of the Trust
representing common undivided beneficial interests in the assets of the Trust
designated as the ____% Trust Originated Common Securities (liquidation amount
$50 per common security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Agreement of Trust of the Trust dated as of January __,
1998, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
<PAGE> 72
IN WITNESS WHEREOF, the Trust has executed this certificate this _______
day of January, 1998.
KENNAMETAL FINANCING I
By: _________________________________________________________________________
Name: _______________________________________________________________________
Title: Regular Trustee
<PAGE> 73
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the rate of ____%
until February 15, 2001, and at the Reset Rate thereafter (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such cash distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common Securities
will be cumulative, will accrue from the date of original issuance and will be
payable quarterly in arrears, on February 16, May 16, August 16 and November 16
of each year, commencing on February 16, 1998, to Holders of record one Business
Day prior to such payment dates, which payment dates shall correspond to the
interest payment dates on the Debentures. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding
beyond the date of maturity of the Debentures (each an "Extension Period") and,
as a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the rate of ____% until
February 15, 2001, and at the Reset Rate thereafter, compounded quarterly during
any such Extension Period. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first record
date after the end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period; provided, that such Extension Period
together with all such previous and further extensions thereof may not exceed
beyond the maturity date of the Debentures.
The Common Securities shall be redeemable as provided in the Declaration.
<PAGE> 74
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $_____ stated liquidation amount of the within Common Security, pursuant
to its terms, on the "Put Option Exercise Date," together with distributions
thereon accrued and unpaid to the date of repayment, to the undersigned at:
____________________________________________________________
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a new
Common Security or Common Securities representing the remaining stated
liquidation amount of this Common Security.
For this Option to Elect Repayment to be effective, the within Common Security
with this Option to Elect Repayment duly completed must be received by the Trust
at the Corporate Trust Office of the Institutional Trustee
______________________________ _______________________________________________
Attention: Corporate Trust Administration.
Dated: Signature: ____________________________________
Signature Guarantee: __________________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Common Security in every particular
without alternation or enlargement or any change whatsoever.
<PAGE> 75
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ____________________________________
Signature: ____________________________________
Signature Guarantee: __________________________
(Sign exactly as your name appears on the other side
of this Common Security Certificate)
<PAGE> 76
EXHIBIT B
SPECIMEN OF DEBENTURE
<PAGE> 77
EXHIBIT C
Purchase Agreement
<PAGE> 1
Exhibit 4.7
- --------------------------------------------------------------------------------
KENNAMETAL INC.,
AS ISSUER
TO
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
- --------------------------------------------------------------------------------
Indenture
DATED AS OF ________, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
KENNAMETAL INC.
RECONCILIATION AND TIE BETWEEN TRUST
INDENTURE ACT OF 1939, AS AMENDED
AND INDENTURE, DATED AS OF JANUARY , 1998
TRUST INDENTURE INDENTURE SECTION
ACT SECTION
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . .609
(a)(2) . . . . . . . . . . . . . . . . . . . . .609
(a)(3) . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . .613
(b) . . . . . . . . . . . . . . . . . . . . . . .613
Section 312 (a) . . . . . . . . . . . . . . . . . . . . 701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . .702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . .702(c)
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . .703(a)
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . .703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . .703(b)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . .704
(b) . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . . . . .102
(c)(2). . . . . . . . . . . . . . . . . . . . . .102
(c)(3). . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . .102
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . .601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . .602
(c) . . . . . . . . . . . . . . . . . . . . . . .601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . .601(c)
(d)(l). . . . . . . . . . . . . . . . . .601(a), 601(c)
(d)(2). . . . . . . . . . . . . . . . . . . . . .601(c)
(d)(3). . . . . . . . . . . . . . . . . . . . . .601(c)
(e) . . . . . . . . . . . . . . . . . . . . . . .514
Section 316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . .512
(a)(1)(B) . . . . . . . . . . . . . . . . . 502, 513
(a)(2). . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . .508
Section 317 (a)(1). . . . . . . . . . . . . . . . . . . . . .503
(a)(2). . . . . . . . . . . . . . . . . . . . . .504
(b) . . . . . . . . . . . . . . . . . . . . . . 1009
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . .107
- -----------------------
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THIS INDENTURE.
<PAGE> 3
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. . . . . . . . . . . . . . . . . .1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . .1
Authenticating Agent. . . . . . . . . . . . . . . . . . . .2
Bankruptcy Law. . . . . . . . . . . . . . . . . . . . . . .2
Board of Directors. . . . . . . . . . . . . . . . . . . . .2
Board Resolution. . . . . . . . . . . . . . . . . . . . . .2
Business Day. . . . . . . . . . . . . . . . . . . . . . . .2
Capitalized Lease Obligation. . . . . . . . . . . . . . . .2
Capital Stock . . . . . . . . . . . . . . . . . . . . . . .2
Commission. . . . . . . . . . . . . . . . . . . . . . . . .2
Common Depositary . . . . . . . . . . . . . . . . . . . . .2
Company . . . . . . . . . . . . . . . . . . . . . . . . . .2
Company Request . . . . . . . . . . . . . . . . . . . . . .2
Company Order . . . . . . . . . . . . . . . . . . . . . . .2
Corporate Trust Office. . . . . . . . . . . . . . . . . . .2
Covenant Defeasance . . . . . . . . . . . . . . . . . . . .2
Custodian . . . . . . . . . . . . . . . . . . . . . . . . .2
Default . . . . . . . . . . . . . . . . . . . . . . . . . .3
Defaulted Interest. . . . . . . . . . . . . . . . . . . . .3
Defeasance. . . . . . . . . . . . . . . . . . . . . . . . .3
Dollars . . . . . . . . . . . . . . . . . . . . . . . . . .3
Event of Default. . . . . . . . . . . . . . . . . . . . . .3
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . .3
GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . .3
Security holder . . . . . . . . . . . . . . . . . . . . . .3
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . .3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . .3
Interest. . . . . . . . . . . . . . . . . . . . . . . . . .3
Interest Payment Date . . . . . . . . . . . . . . . . . . .3
Lien. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Maturity. . . . . . . . . . . . . . . . . . . . . . . . . .4
Officer . . . . . . . . . . . . . . . . . . . . . . . . . .4
Officer's Certificate . . . . . . . . . . . . . . . . . . .4
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . .4
Original Issue Discount Security. . . . . . . . . . . . . .4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . .4
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . .4
Person. . . . . . . . . . . . . . . . . . . . . . . . . . .4
Place of Payment. . . . . . . . . . . . . . . . . . . . . .4
Redemption Date . . . . . . . . . . . . . . . . . . . . . .5
Redemption Price. . . . . . . . . . . . . . . . . . . . . .5
Registered Security . . . . . . . . . . . . . . . . . . . .5
Regular Record Date . . . . . . . . . . . . . . . . . . . .5
Responsible Officer . . . . . . . . . . . . . . . . . . . .5
Securities. . . . . . . . . . . . . . . . . . . . . . . . .5
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Security Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Significant Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
U.S. Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . .6
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . .6
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 105. Notices, Etc., to Trustee and Company. . . . . . . . . . . . . . . . . .7
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . .8
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . .8
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 114. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . .9
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 2
SECURITY FORMS
<S> <C> <C>
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 203. Form of Reverse of Security. . . . . . . . . . . . . . . . . . . . . .12
SECTION 204. Form of Trustee's Certificate of Authentication . . . . . . . . . . . .15
SECTION 205. Securities in Global Form. . . . . . . . . . . . . . . . . . . . . . .15
SECTION 206. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 207. Form of Legend for the Securities in Global Form. . . . . . . . . . . .16
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 3
THE SECURITIES
<S> <C> <C>
SECTION 301. Amount Unlimited; Issuable in Series. . . . . . . . . . . . . . . . . .16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 303. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . .18
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . .20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . . . . . . . .21
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . . . . . . . . .22
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . .23
</TABLE>
ARTICLE 4
SATISFACTION AND DISCHARGE
ii
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . .24
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . .24
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 5
REMEDIES
<S> <C> <C>
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . .26
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee. . . . . . . .26
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . .27
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest. . .28
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . .29
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 6
THE TRUSTEE
<S> <C> <C>
SECTION 601. Certain Duties and Responsibilities of the Trustee . . . . . . . . . . . . . .30
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . .31
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . .32
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . .32
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . .32
SECTION 611. Acceptance of Appointment by Successor or Additional Trustees. . . . . . . . .33
SECTION 612. Merger, Conversion, Consolidation or Succession to Business. . . . . . . . . .34
SECTION 613. Preferential Collection of Claims Against Company. . . . . . . . . . . . . . .34
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . . . . . . . . . . . .35
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
<S> <C> <C>
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. . . . . . . . . . 36
SECTION 702. Preservation of Information; Communications to Holders . . . . . . . . . . . 36
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 8
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
<S> <C> <C>
SECTION 801. When Company May Merge, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 802. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C> <C>
SECTION 803. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . .38
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 9
SUPPLEMENTAL INDENTURES
<S> <C> <C>
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . .38
SECTION 902. Supplemental Indentures with Consent of Holders. . . . . . . . . . . . .39
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . .40
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . .40
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . .40
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . .40
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 10
COVENANTS
<S> <C> <C>
SECTION 1001. Payments of Securities . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . .41
SECTION 1003. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 1004. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . .41
SECTION 1005. Compliance Certificates. . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 1006. Commission Reports . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 1007. Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . . . . . .42
SECTION 1008. Money for Securities Payments to Be Held in Trust. . . . . . . . . . . .43
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 11
REDEMPTION OF SECURITIES
<S> <C> <C>
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . .44
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. . . . . . . . . . . .44
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . .45
SECTION 1106. Securities Payable on Redemption Date. . . . . . . . . . . . . . . . . .45
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . .45
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 12
SINKING FUNDS
<S> <C> <C>
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. . . . . . . . . .46
SECTION 1203. Redemption of Securities for Sinking Fund. . . . . . . . . . . . . . . .46
</TABLE>
<TABLE>
<CAPTION>
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
<S> <C> <C>
SECTION 1301. Applicability of Article; Company's Option to Effect Defeasance or
Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 1303. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 1304. Conditions to Defeasance or Covenant Defeasance. . . . . . . . . . . . .47
SECTION 1305. Deposited Money and Government Obligations To Be Held In Trust . . . . .48
</TABLE>
iv
<PAGE> 7
ARTICLE 14
MISCELLANEOUS
SECTION 1401. Miscellaneous. . . . . . . . . . . . . . . 49
v
<PAGE> 8
Indenture, dated as of _______, 1998, between KENNAMETAL INC., a
corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania (herein called the "Company"), having its principal office at Route
981 at Westmoreland County Airport, Latrobe, Pennsylvania 15650 and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(4) the word "Including" (and with the correlative meaning "Include") means
including, without limiting the generality of, any description following such
term; and
(5) the words "Herein," "Hereof" and "Hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means another Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such first Person.
For the purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting securities or by contract
or otherwise.
<PAGE> 9
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the board of directors of the Company; provided,
however, that when the context refers to actions or resolutions of the Board of
Directors, then the term "Board of Directors" shall also mean any duly
authorized committee of the Board of Directors of the Company or Officer
authorized to act with respect to any particular matter to exercise the power of
the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or regulation to close.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with generally accepted accounting principles, and the
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with such principles; and the
Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person shall mean any and all shares, interests,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any preferred stock, but excluding any debt
securities convertible into such equity.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller,
an Assistant Controller, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Services Division, except for purposes of Section 1002 such term shall mean the
office or agency of the Trustee in the Borough of Manhattan, the City of New
York, which office at the date hereof is located at First Chicago Trust Company
of New York, 14 Wall Street, Eighth Floor, New York, New York 10005.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
such Person or any of its Restricted Subsidiaries against fluctuations in
currency values.
2
<PAGE> 10
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
"GAAP" means such accounting principles that are generally accepted in the
United States of America as of the date of any computation required hereunder.
"Holder" or "Security holder" means a Person in whose name a Security is
registered in the Security Register.
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication, (i) any liability, contingent or otherwise, of
such Person (A) for borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument or (C) for the
payment of money relating to a Capitalized Lease Obligation or other obligation
(whether issued or assumed) relating to the deferred purchase price of property;
(ii) all conditional sale obligations and all obligations under any title
retention agreement (even if the rights and remedies of the seller under such
agreement in the event of default are limited to repossession or sale of such
property), but excluding trade accounts payable arising in the ordinary course
of business; (iii) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction other than
entered into in the ordinary course of business; (iv) all indebtedness of others
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on any asset or property
(including, without limitation, leasehold interests and any other tangible or
intangible property) of such Person, whether or not such indebtedness is assumed
by such Person or is not otherwise such Person's legal liability; provided, that
if the obligations so secured have not been assumed in full by such Person or
are otherwise not such Person's legal liability in full, the amount of such
indebtedness for the purposes of this definition shall be limited to the lesser
of the amount of such indebtedness secured by such Lien; (v) all indebtedness of
others (including all interest and dividends on any Indebtedness or preferred
stock of any other Person for the payment of which is) guaranteed, directly or
indirectly, by such Person or that is otherwise its legal liability or which
such Person has agreed contingently to supply or advance funds; and (vi)
obligations in respect of Currency Agreements and Interest Swap Obligations.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of particular series of Securities established as contemplated
by Section 301.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Interest Swap Obligations" shall mean the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such Person or any of
its Subsidiaries against fluctuations in interest rates.
3
<PAGE> 11
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge or adverse claim affecting title or resulting in an encumbrance
against real or personal property or a security interest of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof other than a lease which is not a Capitalized Lease
Obligation.)
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officer" means the Chairman of the Board, the Vice Chairman of the Board,
the President, the Executive Vice President, any Vice President, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Assistant
Secretary of the Company.
"Officer's Certificate" means a certificate signed by an Officer and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be reasonably acceptable
to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except: (i) Securities
theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation; (ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; (iii)
Securities which have been paid pursuant to Section 306 or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and (iv) Securities which have been defeased
pursuant to Section 1302; provided, however, that in determining whether the
Holders of the requisite principal amount of the Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding for such purposes shall be that portion of the
principal amount thereof that could be declared to be due and payable upon the
occurrence of an Event of Default and the continuation thereof pursuant to the
terms of such Original Issue Discount Security as of the date of such
determination and (b) Securities owned by the Company or any other obligor upon
the Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company may act as Paying Agent with respect to any Securities
issued hereunder.
"Person" means any individual, corporation, partnership, limited
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
4
<PAGE> 12
"Place of Payment," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Redemption Date," when used with respect to any Security of any series to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security of any series to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security issued hereunder and registered in
the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee in its Corporate Trust Office and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Significant Subsidiary" means a Subsidiary or Subsidiaries of the Company
possessing assets (including the assets of its own Subsidiaries but without
regard to the Company or any other Subsidiary) having a book value, in the
aggregate, equal to not less than 10% of the book value of the aggregate assets
of the Company and its Subsidiaries calculated on a consolidated basis.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any Person means (i) any Person of which more than 50% of
the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Restricted Subsidiaries of that
Person or a combination thereof, and (ii) any partnership, joint venture or
other Person in which such Person or one or more of the Restricted Subsidiaries
of that Person or a combination thereof has the power to control by contract or
otherwise the board of directors or equivalent governing body or otherwise
controls such entity.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this Indenture was executed; provided, however,
that in the event that such Act is amended after such date, "Trust Indenture
Act" means the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
global Securities, the Person designated as U.S. Depositary by the Company
5
<PAGE> 13
pursuant to Section 301, which must be a clearing agency registered under the
Exchange Act until a successor U.S. Depositary shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "U.S. Depositary"
shall mean or include each Person who is then a U.S. Depositary hereunder, and
if at any time there is more than one such Person, "U.S. Depositary" shall mean
the U.S. Depositary with respect to the Securities of that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America which, in either case, are not
callable or redeemable at the option of the issuer thereof or otherwise subject
to prepayment, and shall also include a depository receipt issued by a New York
Clearing House bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment or interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt or from any amount held by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, other than an action permitted by
Sections 205 and 704 hereof, the Company shall furnish to the Trustee an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
6
<PAGE> 14
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer or Officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "ACT" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 105. Notices, Etc., to Trustee and Company.
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<PAGE> 15
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee and received by the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture, attention: Secretary, or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture or any Security provides for notice to Holders of any
event, such notice shall be deemed sufficiently given (unless otherwise herein
or in such Security expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders or the
validity of the proceedings to which such notice relates. Where this Indenture
or any Security provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or shall be
excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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<PAGE> 16
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws (other than the choice of law provisions) of the State
of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day or on such other day as may be set out in the Officer's
Certificate pursuant to Section 301 at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
SECTION 114. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Security holder, by accepting a Security,
waives and releases all such liability. Such waivers and releases are part of
the consideration for the issuance of the Securities.
ARTICLE 2
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, ln each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
Officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.
The definitive Securities shall be photocopied, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the Officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
(If the Security is an Original Issue Discount Security, insert--FOR
PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION 1273(a)(1)
OF THE CODE AND TREASURY REGULATION SECTION
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<PAGE> 17
1.1273-l(a) WITH RESPECT TO THIS SECURITY IS , THE ISSUE PRICE (AS
DEFINED IN TREASURY REGULATION SECTION 1.1273-2) OF THIS SECURITY IS , THE
ISSUE DATE (AS DEFINED IN SECTION 1275(a)(2) OF THE CODE AND TREASURY REGULATION
SECTION 1.1273-2) OF THIS SECURITY IS AND THE YIELD TO MATURITY OF THIS
SECURITY IS ).
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<PAGE> 18
Kennametal Inc.
........................
No. ________ ($)________
Kennametal Inc., a corporation duly organized and existing under the laws
of the Commonwealth of Pennsylvania (herein called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns, the
principal sum of $ on . (If the Security is to bear interest prior to
Maturity, insert --, and to pay interest thereon from _______________ or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, (semi-annually) (quarterly) (monthly) in arrears on and
in each year, commencing , at the rate of % per annum, until
the principal hereof is paid or made available for payment (If applicable
insert--, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of % per annum on any overdue principal and
premium and on any overdue installment of interest). The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the of
(whether or not a Business Day), as the case maybe, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.)
(If the Security is not to bear interest prior to Maturity, insert--The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.)
Payment of the principal of, and premium, if any, and (if applicable,
insert--any such) interest on this Security will be made at the office or agency
of the Company maintained for that purpose in , in Dollars (if applicable,
insert--; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register).
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE> 19
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Kennametal Inc.
By: _________________________________________
Attest:
- -----------------------------------
(SEAL)
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________ , 1998 (herein called the
"Indenture"), between the Company and The First National Bank of Chicago as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof (limited in aggregate principal amount to $ ).
(If applicable, insert--The Securities of this series are subject to redemption
upon not less than 30 nor more than 45 days' notice by first class mail, (if
applicable, insert--(1) on in any year commencing with the year ____ and
ending with the year through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, and (2)) at
any time (on or after ,), as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount):
If redeemed (on or before , %, and if redeemed) during the
12-month period beginning of the years indicated,
Year Redemption Price Year Redemption Price
and thereafter at a Redemption Price equal to _______ of the principal amount,
together in the case of any such redemption (if applicable, insert -- (whether
through operation of the sinking fund or otherwise)) with accrued and unpaid
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.)
(If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 nor more than 45 days' notice by first class
mail, (1) on in any year commencing with the year and ending with the
year through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time (on or after ____________), as a whole or in part, at the election of
the Company, at the Redemption
12
<PAGE> 20
Prices for redemption otherwise than through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below:
If redeemed during a 12-month period beginning of the years
indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued and unpaid interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.)
(Notwithstanding the foregoing, the Company may not, prior to
redeem any Securities of this series as contemplated by (clause (2) of) the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than % per annum.)
(The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the year of (not
less than) $ (("mandatory sinking fund") and not more than $
aggregate principal amount of Securities of this series.) (Securities of this
series acquired or redeemed by the Company otherwise than through (mandatory)
sinking fund payments may be credited against subsequent (mandatory) sinking
fund payments otherwise required to be made--in the (inverse) order in which
they become due.)
(In the event of redemption of this Security in part only a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.)
(If the Security is not an Original Issue Discount Security, insert -- If
any Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.)
(If the Security is an Original Issue Discount Security, insert -- If an Event
of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal -- insert formula for determining the
amount.) Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.
This Security is a senior unsecured obligation of the Company and will rank
pari passu in right of payment with all other senior unsecured obligations of
the Company.
This Security is subject to Defeasance as described in the Indenture.
The Indenture may be modified by the Company and the Trustee without
consent of any Holder with respect to certain matters as described in the
Indenture. In addition, the Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding
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<PAGE> 21
of each series to be affected. The Indenture also contains provisions permitting
the Holders of a majority in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall bind such Holder
and all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same Stated Maturity and aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of ($1,000) and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture imposes certain limitations on the ability of the Company to,
among other things, merge or consolidate with any other Person or sell, assign,
transfer or lease all or substantially all of its properties or assets (If other
covenants are applicable pursuant to the provisions of Section 301, insert
here). All such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under this Security or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder, by accepting a Security, waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
(If applicable, insert -- Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures ("CUSIP"), the Company
has caused CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No representation
is made as to the correctness or accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.)
All capitalized terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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<PAGE> 22
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: ________________ Your Signature: ______________________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranty: ___________________________________________________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Transfer
Agent, which requirements will include membership or
participation in STAMP or such other "signature guarantee
program" as may be determined by the Transfer Agent in
addition to, or in substitution for, STAMP all in
accordance with the Exchange Act.)
Social Security Number or Taxpayer Identification Number: ______________________
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated: ____________________
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
-------------------------------
as Trustee
By:
--------------------------
Authorized Signatory
SECTION 205. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated by
Section 301, then, notwithstanding the provisions of Section 302, any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from
15
<PAGE> 23
time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made in such manner and upon instructions given by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
to the Trustee pursuant to Section 303 or Section 304. Subject to the provisions
of Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of Section 309 shall apply to any Security represented by a
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby.
Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of, premium, if
any, and interest on any Security in permanent global form shall be made to the
Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security.
SECTION 206. CUSIP Number.
The Company in issuing Securities of any series may use a "CUSIP" number,
and, if so, the Trustee may use the CUSIP number in notices of redemption or
exchange as a convenience to Holders of such series; provided, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed on the notice or on the Securities of such
series, and that reliance may be placed only on the other identification numbers
printed on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP number of any series of Securities.
SECTION 207. Form of Legend for the Securities in Global Form.
Any Security in global form authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is in global form within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Common Depositary or
a U.S. Depositary. Unless and until it is exchanged in whole or in part for
Securities in certificated form, this Security may not be transferred except as
a whole by the Common Depositary or a U.S. Depositary or by a nominee of the
Common Depositary or a nominee of the U.S. Depositary as the case may be."
ARTICLE 3
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
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<PAGE> 24
The Securities may be issued from time to time in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officer's Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to Sections
304, 305, 306, 906 or 1107);
(3) whether any Securities of the series are to be issuable in permanent
global form with or without coupons and, if so, (i) whether beneficial owners of
interests in any such permanent global security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided in Section 305, and (ii) the name of the
Common Depositary (as defined in Section 304) or the U.S. Depositary, as the
case may be, with respect to any global security;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest (including reset rates, if any, and the method by which such rate will
be determined), if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest shall be payable and the
Regular Record Date for the interest payable on any Interest Payment Date and,
if applicable to such series of Securities, the basis points and United States
Treasury rate(s) and any other rates or other methods to be used in calculating
the reset rate;
(6) the place or places where the principal of (and premium, if any) and
interest on Securities of the series shall be payable and where the Company will
maintain an office or agency where Securities may be presented for registration
of transfer or exchange and the place or places where notices and demands to or
upon the Company in respect of Securities and the Indenture may be made;
(7) the right of the Company, if any, to defer any payment of principal of,
premium, or interest on the Securities of the series, and the maximum length of
any such deferral period which shall not exceed the Stated Maturity for the
final installment of principal on the Securities of such series;
(8) the period or periods within which, the price or prices at which the
currency or currency units and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price or
prices at which, the currency or currency units and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in whole or
in part, pursuant to such obligation, and, where applicable, the obligation of
the Company to select the Securities to be redeemed;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(12) any additions, modifications or deletions in the Events of Default
with respect to Securities of the series, if any, other than those set forth
herein;
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(13) if either or both of Section 1302 and Section 1303 shall be
inapplicable to the Securities of the series (provided that if no such
inapplicability shall be specified, then both Section 1302 and Section 1303
shall be applicable to the Securities of the series);
(14) if other than U.S. dollars, the currency or currencies or units based
on or related to currencies in which the Securities of such series shall be
denominated and in which payments or principal of, and any premium and interest
on, such Securities shall or may by payable;
(15) additions, modifications or deletions of the Company's covenants with
respect to Securities of the series, if any, other than those set forth herein;
(16) any index or indices used to determine the amount of payments of
principal of any premium, if any, on such securities and the manner in which
such amounts will be determined;
(17) if other than the Trustee, the identity of the Registrar and any
Paying Agent;
(18) the appointment of a Person as a Trustee which meets the requirements
of Section 609 with respect to Securities of the series;
(19) any index or indices used to determine the amounts of payments of
principal of an premium, if any, on the Securities and the manner in which such
amounts will be determined;
(20) the terms and conditions of any obligation or right of the Company or
a Holder to exchange or convert Securities into other securities;
(21) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officer's Certificate or in any such
Indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officer's
Certificate setting forth, or providing the manner for determining, the terms of
the Securities of such series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any security that
has been duly authenticated and delivered by the Trustee.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold
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such offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and make such Securities available for
delivery. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through (d) of the Trust Indenture Act) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture;
(c) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, except
to the extent enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding ln equity or at law); and
(d) that no consent, approval, authorization, order, registration or
qualification of or with any court or any governmental agency or body having
jurisdiction over the Company is required for the execution and delivery of such
Securities by the Company, except such as have been obtained (except that no
opinion need be expressed as to state securities or Blue Sky laws).
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee, or in the written opinion of
counsel to the Trustee (which counsel may be an employee of the Trustee) such
authentication may not lawfully be made or would involve the Trustee in personal
liability.
Notwithstanding the provisions of Section 301 and of the immediately
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to the immediately preceding
paragraph at or prior to the time of authentication of each security of such
series if such documents are delivered at or prior to the authentication upon
original issuance of the first security of such series to be issued.
If the Company shall establish pursuant to Section 301 that the Securities
of a series are to be issued in the form of one or more global Securities, then
the Company shall execute and the Trustee shall, in accordance with this Section
and the Company Order with respect to the authentication and delivery of such
series, authenticate and deliver one or more global Securities that (i) shall be
in an aggregate amount equal to the aggregate principal amount specified in such
Company Order, (ii) shall be registered in the name of the Common Depositary or
U.S. Depositary, as the case may be, therefor or its nominee, and (iii) shall be
made available for delivery by the Trustee to such depositary or pursuant to
such depositary's instruction.
Each depositary designated pursuant to Section 301 must, at the time of its
designation and at all times while it serves as depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation.
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Unless otherwise provided for in the form of security, each security shall
be dated the date of its authentication.
No security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
security shall be conclusive evidence, and the only evidence, that such security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
In the case of Securities of any series, such temporary Securities may be
in global form, representing all or a portion of the Outstanding Securities of
such series.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of Section 305), if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor. Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be delivered
to the office of a depositary or common depositary (the "COMMON DEPOSITARY") for
credit to the respective accounts of the beneficial owners of such Securities
(or to such other accounts as they may direct).
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of registration of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any security of any series
at the office or agency of the Company in Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and Stated Maturity, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
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Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified and as subject to the conditions contemplated by
Section 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that series in aggregate
principal amount equal to the principal amount of such permanent global
security, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Securities shall be
surrendered from time to time by the Common Depositary or the U.S. Depositary,
as the case may be, and in accordance with instructions given to the Trustee and
the Common Depositary or the U.S. Depositary, as the case may be (which
instructions shall be in writing but need not comply with Section 102 or be
accompanied by an Opinion of Counsel), as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or in part, for definitive Securities of the
same series without charge. The Trustee shall authenticate and make available
for delivery, in exchange for each portion of such surrendered permanent global
security, a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
permanent global security to be exchanged which shall be in the form of the
Securities of such series; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Securities of that series selected for
redemption under Section 1103 and ending at the close of business on the day of
such mailing. Promptly following any such exchange in part, such permanent
global Security shall be returned by the Trustee to the Common Depositary or the
U.S. Depositary, as the case may be, or such other Common Depositary or U.S.
Depositary referred to above in accordance with the written instructions of the
Company referred to above. If a Security in the form specified for such series
is issued in exchange for any portion of a permanent global Security after the
close of business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of interest or Defaulted Interest, as the case may be, such
interest or Defaulted Interest will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such security in
the form specified for such series, but will be payable on such Interest Payment
Date or proposed date for payment, as the case may be, only to the Person to
whom interest in respect of such portion of such permanent global Security is
payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligation, of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise provided in the Securities to be transferred or exchanged,
no service charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any security so selected for redemption in whole or in
part, except the unredeemed portion of any security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
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If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid at the Place of Payment
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, except that at the option of the Company payment may be made
(i) except in the case of a global Security by check mailed to the address of
the Person entitled thereto as such address appears in the Securities Registrar
or (ii) by transfer to an account maintained by the Person entitled thereto as
specified in the Securities Registrar provided that proper transfer instructions
have been received by the Regular Record Date.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Section
307 provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of such series
at his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special
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Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this Section
307, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
None of the Company, the Trustee or any agent of the Company or the Trustee
shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interest of a
Security in global form, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest. Notwithstanding the
foregoing, with respect to any Security in global form, nothing herein shall
prevent the Company or the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by any U.S. Depositary or Common Depositary (or its nominee), as a
Holder, with respect to such Security in global form or impair, as between such
U.S. Depositary or Common Depositary and owners of beneficial interests in such
Security in global form, the operation of customary practices governing the
exercise of the right of such U.S. Depositary or Common Depositary (or its
nominee) as holder of such Security in global form.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities shall be held by the Trustee and may
be destroyed (and, if so destroyed, certification of their destruction shall be
delivered to the Company upon its request, unless, by a Company Order, the
Company shall direct that cancelled Securities be returned to it).
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year consisting of twelve 30-day months.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
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This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for or in the form of Security for such series), when the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1009) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1009 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1009, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with or
received by the Trustee.
ARTICLE 5
REMEDIES
SECTION 501. Events of Default.
"EVENT OF DEFAULT," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or to be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
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(1) the Company defaults in the payment of interest on any Security of that
series when such interest becomes due and payable and the default continues for
a period of 30 days; provided, however, that if the Company is permitted by the
terms of the Securities of the applicable series to defer the payment in
question, the date on which such payment is due and payable shall be the date on
which the Company is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities; or
(2) the Company defaults in the payment of the principal of (or premium, if
any, on) any Security of that series when the same becomes due and payable at
Maturity, upon redemption (including redemptions under Article 11), or
otherwise; provided, however, that if the Company is permitted by the terms of
the Securities of the applicable series to defer the payment in question, the
date on which such payment is due and payable shall be the date on which the
Company is required to make payment following such deferral, if such deferral
has been elected pursuant to the terms of the Securities; or
(3) the Company fails to observe or perform in any material respect any of
its other covenants, warranties or agreements in the Securities of that series
or this Indenture (other than a covenant, agreement or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series), and the failure to
observe or perform continues for the period and after the notice specified in
the last paragraph of this Section; or
(4) any event of default, as defined in any other indenture, mortgage, or
instrument under which there may be issued, or by which there may be secured or
evidenced, any Indebtedness of the Company (whether such Indebtedness now exists
or shall hereafter be created or incurred) shall occur and shall consist of
default in the payment of such Indebtedness at the maturity thereof (after
giving effect to any applicable grace period) or shall result in Indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, and such default in payment is not cured or
such acceleration shall not be rescinded or annulled within 30 days after
written notice to the Company from the Trustee or to the Company and to the
Trustee from the Holders of at least 25% in aggregate principal amount of the
Securities of that series at the time outstanding; provided that it shall not be
an Event of Default if the principal amount of Indebtedness (other than
Indebtedness represented by Securities issued pursuant to this Indenture) which
is not paid at maturity or the maturity of which is accelerated is less than or
equal to $25 million provided further that if, prior to a declaration of
acceleration of the maturity of the Securities of that series or the entry of
judgment in favor of the Trustee in a suit pursuant to Section 503, such default
shall be remedied or cured by the Company or waived by the holders of such
Indebtedness, then the Event of Default hereunder by reason thereof shall be
deemed likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any of the Holders of the
Securities of that series, and provided further, that, subject to Sections 601
and 602, the Trustee shall not be charged with knowledge of any such default
unless written notice of such default shall have been given to the Trustee by
the Company, by a holder or an agent of a holder of any such Indebtedness, by
the trustee then acting under any indenture or other instrument under which such
default shall have occurred, or by the Holders of at least five percent in
aggregate principal amount of the Securities of that series at the time
Outstanding; or
(5) the Company pursuant to or within the meaning of any Bankruptcy Law (A)
commences a voluntary case or proceeding under any Bankruptcy Law with respect
to itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law, (C)
consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (D) applies for, consents to or acquiesces in the
appointment of or taking possession by a Custodian of the Company or for any
material part of its property, (E) makes a general assignment for the benefit of
its creditors or (F) takes any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(6) (i) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any Bankruptcy Law which shall (A) approve as properly filed a petition
seeking reorganization, arrangement, adjustment or composition in respect of the
Company, (B) appoint a Custodian of the Company or for any material part of its
property, or (C) order the winding-up or liquidation of its affairs, and such
judgment, decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (ii) any bankruptcy or insolvency petition or application
is filed, or any bankruptcy or insolvency proceeding is commenced against the
Company and such petition, application or proceeding is not dismissed within 60
days; or
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(iii) a warrant of attachment is issued against any material portion of the
property of the Company which is not released within 60 days of service; or
(7) any other Event of Default provided with respect to Securities of that
series.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series notify the Company of the Default and the
Company does not cure the Default within 90 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default." When a Default under clause (3) above is
cured within such 90-day period, it ceases.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series (other than
an Event of Default specified in clause (5) or (6) of Section 501) occurs and is
continuing, the Trustee by notice in writing to the Company, or the Holders of
at least 25% in aggregate principal amount of the Outstanding Securities of that
series by notice in writing to the Company and the Trustee, may declare the
unpaid principal of and accrued interest to the date of acceleration (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) on all
the Outstanding Securities of that series to be due and payable immediately and,
upon any such declaration, the Outstanding Securities of that series (or
specified principal amount) shall become and be immediately due and payable.
If an Event of Default specified in clause (5) or (6) of Section 501
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or specified principal amount) shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder of any Security of that series.
Upon payment of all such principal and interest, all of the Company's
obligations under the Securities of that series and (upon payment of the
Securities of all series) this Indenture shall terminate, except obligations
under Section 607.
The Holders of a majority in principal amount of the Outstanding Securities
of that series by notice to the Trustee may rescind an acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment of
the principal and interest of the Securities of that series that has become due
solely by such declaration of acceleration, have been cured or waived, (ii) to
the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal that has become due otherwise
than by such declaration of acceleration have been paid, (iii) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction and (iv) all payments due to the Trustee and any predecessor
Trustee under Section 607 have been made.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any Security of any
series when such interest becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any,
on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to secure any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel) and of the Holders allowed in such judicial proceedings, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article in respect of
the Securities of any series shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities in respect of which moneys have been collected
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
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First: To the payment of all amounts due the Trustee under Section 607
applicable to such series;
Second: To the payment of the amounts then due and unpaid for principal of
(and premium, if any) and interest on the Securities of such series in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities of such series for principal (and premium, if any)
and interest, respectively; and
Third: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 506. At least fifteen (15) days before such
record date, the Trustee shall mail to each Holder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of Holders of Securities of
any series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other of such Holders, or to obtain or to seek to obtain priority
or preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all Holders of Securities of the affected series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
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SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or ln equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) subject to Section 601, the Trustee need not take any action which
might involve the Trustee in personal liability or be unduly prejudicial to the
Holders not joining therein.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may by written notice to the Trustee on
behalf of the Holders of all the Securities of such series waive any Default or
Event of Default with respect to such series and its consequences, except a
Default or Event of Default
(1) in respect of the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or other provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such Default or Event of Default shall cease to exist
and shall be deemed to have been cured, for every purpose of this Indenture and
the Securities of such series; but no such waiver shall extend to any subsequent
or other Default or Event of Default or impair any right consequent thereon.
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SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE 6
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities of the Trustee.
(a) Except during the continuance of an Event of Default, the Trustee's
duties and responsibilities under this Indenture shall be governed by Section
315(a) of the Trust Indenture Act.
(b) In case an Event of Default has occurred and is continuing, and is
known to the Trustee, the Trustee shall exercise the rights and powers vested in
it by this Indenture, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) None of the provisions of Section 315(d) of the Trust Indenture Act
shall be excluded from this Indenture.
SECTION 602. Notice of Defaults.
Within 30 days after the occurrence of any Default or Event of Default with
respect to the Securities of any series, the Trustee shall give to all Holders
of Securities of such series, as their names and addresses appear in the
Security Register, notice of such Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any) or interest on
any Security of such series or in the payment of any sinking fund installment
with respect to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders
of Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity to its reasonable satisfaction against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval or other paper or document, or the books and records of the
Company, unless requested in writing to do so by the Holders of a majority in
principal amount of the Outstanding Securities of any series; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the Trustee, reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding; the reasonable expense of every
such investigation shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder (including amounts held by the
Trustee as Paying Agent) need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed upon in writing
with the Company.
SECTION 607. Compensation and Reimbursement.
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The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability, damage, claim or expense, including taxes (other than taxes
based upon or determined or measured by the income of the Trustee), incurred
without gross negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(5) or Section 501(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section 607 shall survive this Indenture and the
resignation or removal of any Trustee hereunder.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall be disqualified only where such disqualification is
required by Section 310(b) of the Trust Indenture Act. Nothing shall prevent the
Trustee from filing with the Commission the application referred to in the
second to last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under Section 310(a)(1) of the Trust Indenture Act having a
combined capital and surplus of at least $50,000,000 subject to supervision or
examination by federal or State authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. Neither the Company nor any Person directly or indirectly
controlling, controlled by, or under common control with the Company may serve
as Trustee. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months; or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request here for by the Company or by any such
Holder of a Security who has been a bona fide Holder of a Security for at least
six months; or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the
Trust Indenture Act, any Holder who has been a bona fide Holder of a security
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company with respect to such Securities. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. Acceptance of Appointment by Successor or Additional
Trustees.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
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successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a Trustee or a successor with
respect to the Securities of one or more (but not all) series, the Company, any
retiring Trustee and each Trustee or a successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each Trustee or a successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each Trustee
or a successor Trustee all the rights, powers, trusts and duties of any retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such Trustee or a successor Trustee relates, (2) if any retiring
Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of any retiring Trustee with respect to the
Securities of that or those series as to which any retiring Trustee is not
retiring shall continue to be vested in any retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental Indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such Trustee or a successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of any retiring Trustee with respect to the Securities
of that or those series to which the appointment of such Trustee or a successor
Trustee relates; but, on request of the Company or any Trustee or a successor
Trustee, any such retiring Trustee shall duly assign, transfer and deliver to
such Trustee or a successor Trustee all property and money held by any such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of any such Trustee or successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under the
Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of, and subject to the
direction of, the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee
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hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $5,000,000 and subject to supervision or examination by
federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in lieu
of the Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
Form of Authenticating Agent's
Certificate of Authentication
Dated:
---------------------------
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
---------------------------------------------
As Trustee
By:
-----------------------------------------
As Authenticating Agent
By:
-----------------------------------------
Authorized Signatory
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ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than January 1 and July 1 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding December 15 or June 15, as the case
may be; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Indenture or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit
then the Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a); or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information preserved
at the time by the Trustee in accordance with Section 702(a) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interest of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
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(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year 1998,
the Trustee shall transmit by mail to all Holders of Securities as provided in
Section 313(c) of the Trust Indenture Act, a brief report dated as of May 15, if
required by and in compliance with Section 313(a) of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the Exchange Act in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations;
(3) furnish to the Trustee, on or before May 1 of each year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this paragraph, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture. Such
certificate need not comply with Section 102.
ARTICLE 8
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 801. When Company May Merge, Etc.
The Company shall not consolidate, or merge with or into any other
corporation (whether or not the Company shall be the surviving corporation), or
sell, assign, transfer or lease or otherwise dispose of all or substantially all
of its properties and assets as an entirety or substantially as an entirety to
any Person or group of affiliated Persons, in one transaction or a series of
related transactions, unless:
(1) either the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or with which or into which
the Company is merged or the Person (or group of affiliated Persons) to which
all or substantially all the properties and assets of the Company as an entirety
or substantially as an entirety are sold, assigned, transferred or leased shall
be a corporation, partnership or trust or other entity
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organized and existing under the laws of the United States of America or any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture; and
(2) immediately before and after giving effect to such transaction or
series of related transactions, no Event of Default, and no Default, and no
event which, after notice or lapse of time or both, would become and Event of
Default, shall have occurred and be continuing.
SECTION 802. Opinion of Counsel.
The Company shall deliver to the Trustee prior to the proposed
transaction(s) covered by Section 801 an Officer's Certificate and an Opinion of
Counsel stating that the transaction(s) and such supplemental indenture comply
with this Indenture and that all conditions precedent to the consummation of the
transaction(s) under this Indenture have been met.
SECTION 803. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into an
other corporation or any lease, sale, assignment, or transfer of all or
substantially all of the property and assets of the Company in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or the successor corporation or affiliated group of
corporations to which such lease, sale, assignment, or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation or corporations had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation or
corporations shall be relieved of all obligations and covenants under this
Indenture and the Securities and in the event of such conveyance or transfer,
except in the case of a lease, any such predecessor corporation may be dissolved
and liquidated.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without notice to or the consent of any Holders of a series of Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of series) or to surrender any
right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any
series of Securities; or
(4) to add or change any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the issuance of Securities in
bearer form, registrable or not registrable as to principal, and with or without
interest coupons; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental Indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
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(7) to establish the form or terms of Securities of any series as permitted
by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by
a Trustee or a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or
(9) to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision herein which may be inconsistent with any other
provision herein; or
(10) to make any change that does not materially adversely affect the
interests of the Holders of Securities of such series; or
(11) to qualify, or maintain the qualification of the Indenture under the
Trust Indenture Act.
Upon request of the Company, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in (and subject to the last sentence of)
Section 903, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of a majority in principal amount
of the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee shall, subject
to Section 903, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or extend the time for payment thereof, or reduce the amount
of the principal of an Original Issue Discount security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or the coin or currency in
which, any security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or Defaults or
Events of Default hereunder and their consequences provided for in this
Indenture; or
(3) change the redemption provisions (including Article Eleven) hereof in a
manner adverse to such Holder; or
(4) modify any of the provisions of this Section or Section 513, except to
increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of Sections 611(b)
and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provisions of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article, subject to the last sentence of this Section 903. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
Indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, ln the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticate and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
SECTION 1001. Payments of Securities.
With respect to each series of Securities, the Company will duly and
punctually pay the principal of (and premium, if any) and interest on such
Securities in accordance with their terms and this Indenture, and will duly
comply with all the other terms, agreements and conditions contained in, or made
in the Indenture for the benefit of, the Securities of such series.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency in each Place of Payment
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment, where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change ln
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee as set forth in Section 105
hereof.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such
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designations. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates the Corporate Trust Office as such office of
the Company.
SECTION 1003. Corporate Existence.
Subject to Article 8 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each of its Subsidiaries and the rights (charter and
statutory) of the Company and its Subsidiaries; provided, however, that (a) the
Company shall not be required to preserve any such right, license or franchise
or the corporate existence of any of its Subsidiaries if the Board of Directors,
or the board of directors of the Subsidiary concerned, as the case may be, shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company or any of its Subsidiaries and that the loss thereof
is not materially disadvantageous to the Holders, and (b) nothing herein
contained shall prevent any Subsidiary of the Company from liquidating or
dissolving, or merging into, or consolidating with the Company (provided that
the Company shall be the continuing or surviving corporation) or with any one or
more Subsidiaries if the Board of Directors or the board of directors of the
Subsidiary concerned, as the case may be, shall so determine.
SECTION 1004. Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary material
to the Company and its Subsidiaries taken as a whole, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a
material lien upon the property of the Company or any Subsidiary material to the
Company and its Subsidiaries taken as a whole; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which adequate provision has been made.
SECTION 1005. Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 10 days after the
occurrence thereof, notice of any acceleration which with the giving of notice
and the lapse of time would be an Event of Default within the meaning of Section
501(4) hereof.
(b) The Company shall deliver to the Trustee forthwith upon becoming aware
of a Default or Event of Default (but in no event later than 10 days after the
occurrence of each Default or Event of Default that is continuing), an Officer's
Certificate setting forth the details of such Default or Event of Default and
the action that the Company proposes to take with respect thereto and the
specific section or sections of this Indenture in connection with which such
Default or Event of Default has occurred.
SECTION 1006. Commission Reports.
(a) So long as the Securities remain outstanding, the Company shall cause
its annual report to shareholders and any other financial reports furnished by
it to shareholders generally, to be mailed to the Holders at their addresses
appearing in the register of Securities maintained by the Security Registrar in
each case at the time of such mailing or furnishing to shareholders. If the
Company is not required to furnish annual reports to its shareholders pursuant
to the Exchange Act, the Company shall cause its financial statements, including
any notes thereto and, with respect to annual reports, an auditors' report by an
accounting firm of established national reputation and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," to be
so filed with the Trustee and mailed to the Holders within 90 days after the end
of each of the Company's fiscal years and within 45 days after the end of each
of the first three quarters of each fiscal year.
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(b) The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Company may
be required to deliver to the Holders under this Section 1006.
SECTION 1007. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim,
and will actively resist any and all efforts to be compelled to take the benefit
or advantage of, any stay or extension law or any usury law or other law, which
would prohibit or forgive the Company from paying all or any portion of the
principal of and/or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 1008. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if
any) or interest on any Securities of that series, deposit with a Paying Agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment of
principal (and premium, if any) or interest on the Securities of that series;
and
(iii) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company
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<PAGE> 50
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
of such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
ARTICLE 11
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms in whole or in part (provided
Securities issued in denominations larger than $50 may be redeemed in part only
in integral multiples of $50) and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series to be redeemed. In the case
of any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officer's Certificate
evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 90 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, substantially pro rata, by lot
or by any other method as the Trustee considers fair and appropriate and that
complies with the requirements of the principal national securities exchange, if
any, on which such Securities are listed, and which may provide for the
selection for redemption of portions (equal to the lesser of the minimum
authorized denomination for Securities of that series or $50 per Security, and
any integral multiple thereof) of the principal amount of Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series; provided that in case the Securities of such series
have different terms and maturities, the Securities to be redeemed shall be
selected by the Company and the Company shall give notice thereof to the
Trustee.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of the Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at this address appearing in the
security Register.
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<PAGE> 51
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(4) that on the Redemption Date, the Redemption Price will become due and
payable upon each such security to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the case;
(7) the CUSIP number, if any, of the Securities to be redeemed; and
(8) unless otherwise provided as to a particular series of Securities, if
at the time of publication or mailing of any notice of redemption the Company
shall not have deposited with the Trustee or Paying Agent and/or irrevocably
directed the Trustee or Paying Agent to apply, from money held by it available
to be used for the redemption of Securities, an amount in cash sufficient to
redeem all of the Securities called for redemption, including accrued interest
to the Redemption Date, such notice shall state that it is subject to the
receipt of the redemption moneys by the Trustee or Paying Agent before the
Redemption Date (unless such redemption is mandatory) and such notice shall be
of no effect unless such moneys are so received before such date.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10098) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such security for redemption in accordance with said notice, such security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Regular or Special Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed in the Security.
44
<PAGE> 52
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such security without service charge, a new Security or Securities of
the same series and Stated Maturity, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the security so surrendered.
ARTICLE 12
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "Mandatory Sinking Fund
Payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "Optional Sinking
Fund Payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to redemption as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Securities of a series (other than any
Securities previously called for redemption) and (2) may apply as a credit
Securities of a series which have been (i) previously cancelled pursuant to
Section 309 or delivered for cancellation or (ii) redeemed either at the
election of the Company pursuant to the terms of such Securities or through the
application of permitted Optional Sinking Fund Payments pursuant to the terms of
such Securities, in each case in satisfaction of all or any part of any
Mandatory Sinking Fund Payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been previously
so credited. Such Securities shall be received and credited at the principal
amount for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such Mandatory Sinking Fund Payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
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<PAGE> 53
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.
Unless pursuant to Section 301 provision is made for the inapplicability of
either or both of (a) Defeasance of the Securities of a series under Section
1302 or (b) Covenant Defeasance of the Securities of a series under Section
1303, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article, shall be applicable to the
Securities of such series, and the Company may at its option by Board
Resolution, at any time, with respect to the Securities of such series, elect to
have either Section 1302 (unless inapplicable) or Section 1303 (unless
inapplicable) be applied to the Outstanding Securities of such series upon
compliance with the applicable conditions set forth below in this Article.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301 to
defease the Outstanding Securities of a particular series, the Company shall be
discharged from its obligations with respect to the Outstanding Securities of
such series on the date the applicable conditions set forth in Section 1304 are
satisfied (hereinafter, "Defeasance"). Defeasance shall mean that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same); provided, however, that the
following rights, obligations, powers, trusts, duties and immunities shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities of such series to receive, solely from the
trust fund provided for in Section 1304, payments in respect of the principal of
(and premium, if any) and interest on such Securities when such payments are
due, (B) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1001, 1002 and 1008, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article, the Company may exercise its option with respect
to Defeasance under this Section 1302 notwithstanding the prior exercise of its
option with respect to Covenant Defeasance under Section 1303 in regard to the
Securities of such series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301 to
obtain a Covenant Defeasance with respect to the Outstanding Securities of a
particular series, the Company shall be released from its obligations under this
Indenture (except its obligations under Sections 304, 305, 306, 506, 509, 610,
1001, 1002, 1005, 1007 and 1008) with respect to the Outstanding Securities of
such series on and after the date the applicable conditions set forth in Section
1304 are satisfied (hereinafter, "Covenant Defeasance"). Covenant Defeasance
shall mean that, with respect to the Outstanding Securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in this Indenture (except its
obligations under Sections 304, 305, 306, 506, 509, 610, 1001, 1002, 1005, 1007
and 1008), whether directly or indirectly by reason of any reference elsewhere
herein or by reason of any reference to any other provision herein or in any
other document, and such omission to comply shall not constitute an Event of
Default under Section 501(4) with respect to Outstanding Securities of such
series, and the remainder of this Indenture and of the Securities of such series
shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance under Section 1302 and
Covenant Defeasance under Section 1303 with respect to the Outstanding
Securities of a particular series:
(1) the Company shall irrevocably have deposited or caused to be deposited
(and in the case of Defeasance such deposit shall have been made 121 days prior
to Defeasance with the Trustee (or another trustee satisfying the requirements
of Section 609 who shall agree to comply with the provisions of this Article
applicable
46
<PAGE> 54
to it), under the terms of an irrevocable trust agreement in form and substance
reasonably satisfactory to such Trustee, as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A) Dollars
in an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than the due date of any payment, money in an
amount, or (C) a combination thereof, in each case sufficient, after payment of
all federal, state and local taxes or other charges or assessments in respect
thereof payable by the Trustee, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium, if any, on) and each installment of principal of (and
premium, if any) and interest on the Outstanding Securities of such series on
the Stated Maturity of such principal or installment of principal or interest
and (ii) any mandatory sinking fund payments or analogous payments applicable to
the Outstanding Securities of such series on the day on which such payments are
due and payable in accordance with the terms of this Indenture and of such
Securities.
(2) No Default or Event of Default with respect to the Securities of such
series shall have occurred and be continuing on the date of such deposit or
shall occur as a result of such deposit, and no Default or Event of Default
under clause (5) or (6) of Section 501 hereof shall occur and be continuing, at
any time during the period ending on the 31st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such deposit, Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(4) In the case of an election with respect to Section 1302, the Company
shall have delivered to the Trustee either (A) a ruling directed to the Trustee
received from the Internal Revenue Service to the effect that the Holders of the
Outstanding Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Defeasance had not occurred or
(B) an Opinion of Counsel, based on a ruling published by the Internal Revenue
Service or on a change in the applicable federal income tax law since the date
of this Indenture, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Defeasance had not occurred.
(5) In the case of an election with respect to Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel or a ruling directed
to the Trustee received from the Internal Revenue Service to the effect that the
Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred.
(6) Such Defeasance or Covenant Defeasance shall be effected in compliance
with any additional terms, conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section 301.
(7) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Defeasance under Section 1302 or
the Covenant Defeasance under Section 1303 (as the case may be) have been
complied with.
SECTION 1305. Deposited Money and Government Obligations
To Be Held In Trust.
Subject to the provisions of the last paragraph of Section 1009, all money
and Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee--collectively for purposes of this Section
1305, the "Trustee") pursuant to Section 1304 in respect of the Outstanding
Securities of a particular series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
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<PAGE> 55
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1304 or the principal and interest received in respect
thereof, other than any such tax, fee or other charge which by law is for the
account of the Holders of the Outstanding Securities of such series.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver to pay to the Company from time to time upon Company Request any money
or Government Obligations held by it as provided ln Section 1304 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited for
the purpose for which such money or Government Obligations were deposited.
ARTICLE 14
MISCELLANEOUS
SECTION 1401. Miscellaneous.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 56
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
KENNAMETAL INC.,
as Issuer
By _______________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By _______________________________________________
Name:
Title:
<PAGE> 1
Exhibit 4.8
-----------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of January , 1998
between
KENNAMETAL INC.,
AS ISSUER
and
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
-----------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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ARTICLE I
<S> <C> <C> <C> <C>
DEFINITIONS .................................................1
SECTION 1.1. Definition of Terms ..............................................................1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES .........................................3
SECTION 2.1. Designation and Principal Amount .................................................3
SECTION 2.2. Maturity .........................................................................3
SECTION 2.3. Form and Payment .................................................................3
SECTION 2.4. Global Debenture .................................................................4
SECTION 2.5. Interest .........................................................................5
ARTICLE III
REDEMPTION OF THE DEBENTURES ............................................5
SECTION 3.1. Tax Event Redemption .............................................................5
SECTION 3.2. Redemption Procedure for Debentures ..............................................6
SECTION 3.3. No Sinking Fund ..................................................................6
SECTION 3.4. Option to Put Debentures .........................................................6
SECTION 3.5. Repurchase Procedure for Debentures ..............................................6
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD .........................................7
SECTION 4.1. Extension of Interest Payment Period .............................................7
SECTION 4.2. Notice of Extension ..............................................................8
SECTION 4.3. Limitation of Transactions .......................................................8
ARTICLE V
EXPENSES ................................................................8
SECTION 5.1. Payment of Expenses ..............................................................8
SECTION 5.2. Payment Upon Resignation or Removal ..............................................9
ARTICLE VI
NOTICE ..................................................................9
SECTION 6.1. Notice by the Company ............................................................9
ARTICLE VII
FORM OF DEBENTURE ...........................................................9
SECTION 7.1. Form of Debenture ................................................................9
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES ......................................................18
SECTION 8.1. Original Issue of Debentures ....................................................18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
ARTICLE IX
MISCELLANEOUS .............................................................18
SECTION 9.1. Ratification of Indenture .......................................................18
SECTION 9.2. Trustee Not Responsible for Recitals ............................................18
SECTION 9.3. Governing Law ...................................................................18
SECTION 9.4. Separability ....................................................................18
SECTION 9.5. Counterparts ....................................................................18
</TABLE>
ii
<PAGE> 4
FIRST SUPPLEMENTAL INDENTURE, dated as of January , 1998 (the "First
Supplemental Indenture"), between KENNAMETAL INC., a corporation duly organized
and existing under the laws of the Commonwealth of Pennsylvania, (the
"Company"), and The First National Bank of Chicago, a national banking
association, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture dated as of
January , 1998 (the "Base Indenture"), to the Trustee to provide for the future
issuance of the Company's unsecured debentures, notes or other evidence of
indebtedness (the "Securities"), to be issued from time to time in one or more
series as might be determined by the Company under the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its ___% Debentures due February 16, 2003 (the "Debentures"), the form
and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Base Indenture and this First
Supplemental Indenture (together, the "Indenture");
WHEREAS, Kennametal Financing I, a Delaware statutory business trust
(the "Trust"), has offered to the public its ___% Trust Originated Preferred
Securities (the "Preferred Securities"), representing preferred, undivided
beneficial interests in the assets of the Trust, and proposes to invest the
proceeds from such offering, together with the proceeds of the issuance and sale
by the Trust to the Company of its ___% Trust Originated Common Securities (the
"Common Securities" and together with the Preferred Securities, the "Trust
Securities"), in the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this First Supplemental Indenture and all requirements necessary to make this
First Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company and all acts and
things necessary have been done and performed to make this First Supplemental
Indenture enforceable in accordance with its terms, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the
Declaration: (i) Authorized Newspaper; (ii) Business Day; (iii) Clearing Agency;
(iv) Delaware Trustee; (v) DTC; (vi) FELINE PRIDES; (vii) Growth PRIDES;
<PAGE> 5
(viii)Income PRIDES; (xix) Institutional Trustee; (x) Investment Company Event;
(xi) Preferred Security Certificate; (xii) Pricing Agreement; (xiii) Purchase
Agreement; (xiv) Regular Trustees; (xv) Reset Agent; (xvi) Reset Announcement
Date; (xvii) Reset Spread; (xviii) Two-Year Benchmark Treasury; and (xix)
Treasury Securities.
(f) the following terms have the meanings given to them in this Section
1.11(f):
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to February 16, 2001, the aggregate principal
amount of the Debentures corresponding to the aggregate stated liquidation
amount of the Preferred Securities which are components of Income PRIDES on the
Tax Event Redemption Date or (ii) if the Tax Event Redemption occurs on or after
February 16, 2001, the aggregate principal amount of the Debentures
corresponding to the aggregate stated liquidation amount of the Preferred
Securities outstanding on such Tax Event Redemption Date.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Debentures Redemption Price" shall have the meaning set forth in
Section 3.4.
"Declaration" means the Amended and Restated Agreement of Trust of
Kennametal Financing I, a Delaware statutory business trust, dated as of
January, 1998.
"Deferred Interest" shall have the meaning set forth in Section 4.1
hereof.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Tax Event, an Investment Company Event or otherwise, the Trust
is to be dissolved in accordance with the Declaration, and, except in the case
of a Tax Event Redemption, the Debentures held by the Institutional Trustee are
to be distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Failed Remarketing" shall have the meaning set forth in Section 5.4(b)
of the Purchase Contract Agreement.
"Global Debentures" shall have the meaning set forth in Section 2.4.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4.
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement, dated as of January , 1998, between the Company and The
First National Bank of Chicago, as purchase contract agent.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" shall have the meaning set forth in Section 3.4.
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer
selected by the Company.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) the Treasury Portfolio Purchase
Price expressed as a percentage of the Applicable Principal Amount.
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"Tax Event" means the receipt by the Trust of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Trust Securities are issued, which amendment or change is effective or which
interpretation or pronouncement is announced on or after the date of issuance of
the Trust Securities under the Declaration, there is more than an insubstantial
risk that (i) interest payable by the Company on the Debentures would not be
deductible, in whole or in part, by the Company for federal income tax purposes
or (ii) the Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption Date" shall have the meaning set forth in Section
3.1 hereof.
"Treasury Portfolio" means with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
February 16, 2001, a portfolio of zero-coupon U.S. Treasury Securities
consisting of (i) principal or interest strips of U.S. Treasury Securities which
mature on or prior to February 15, 2001 in an aggregate amount equal to the
Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Debentures that occurs after the Tax Event Redemption Date
principal or interest strips of U.S. Treasury Securities which mature on or
prior to such date in an aggregate amount equal to the aggregate interest
payment that would be due on the Applicable Principal Amount of the Debentures
on such date, and (b) if the Tax Event Redemption Date occurs after February 16,
2001, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to February 15, 2003 in an aggregate amount equal to the Applicable
Principal Amount and (ii) with respect to each scheduled interest payment date
on the Debentures that occurs after the Tax Event Redemption Date interest or
principal strips of such U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by a primary U.S. government securities dealer in New York City (a
"Primary Treasury Dealer") to the Quotation Agent on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of the
Treasury Portfolio for settlement on the Tax Event Redemption Date.
(g) the following terms shall have the meanings given to them in the
Purchase Contract: Collateral Agent.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the ___%
Debentures (the "Debentures") due February 16, 2003, limited in aggregate
principal amount to $232,000,000, which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Debentures
pursuant to Section 303 of the Base Indenture.
SECTION 2.2. Maturity. The Maturity Date will be February 16, 2003.
SECTION 2.3. Form and Payment.
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Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons and in denominations
of $50 and integral multiples thereof. Principal and interest on the Debentures
issued in certificated form will be payable, the transfer of such Debentures
will be registrable and such Debentures will be exchangeable for Debentures of
other denominations of a like aggregate principal amount and provisions at the
office or agency of the Institutional Trustee; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
Holder at such address as shall appear in the Security Register or by wire
transfer to an account appropriately designated by the holder entitled thereto.
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Institutional Trustee, the payment of the principal of and interest (including
Compounded Interest and expenses and taxes of the Trust set forth in Section 4.1
hereof, if any) on such Debentures held by the Institutional Trustee will be
made at such place and to such account as may be designated by the Institutional
Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to
the Trustee by the Institutional Trustee in exchange for a global Debenture in
an aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures except for the aggregate principal amount of Debentures
to be issued pursuant to subparagraph (ii) below (a "Global Debenture"), to be
registered in the name of the Clearing Agency, or its nominee, and delivered by
the Institutional Trustee to the Clearing Agency for crediting to the accounts
of its participants pursuant to the instructions of the Regular Trustees. The
Company upon any such presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture. Payments on the
Debentures issued as a Global Debenture will be made to the Clearing Agency; and
(ii) any Preferred Security Certificate which represents
Preferred Securities other than Preferred Securities held by the Clearing Agency
or its nominee ("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in the Debentures presented to the Trustee by the
Institutional Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates will
be cancelled and a Debenture, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Security Certificate
cancelled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture to such holder. On
issue of such Debentures, Debentures with an equivalent aggregate principal
amount that were presented by the Institutional Trustee to the Trustee will be
deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of the Clearing Agency, or to a successor Clearing Agency
selected or approved by the Company or to a nominee of such successor Clearing
Agency.
(c)If at any time the Clearing Agency notifies the Company that it
is unwilling or unable to continue as a Clearing Agency or if at any time the
Clearing Agency for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor Clearing Agency for such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be, the Company
will execute, and, subject to Article III of the Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. In addition, the Company may at
any time determine that the Debentures shall no longer be represented by Global
Debenture. In such event
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the Company will execute, and subject to Section 3.3 of the Base Indenture, the
Trustee, upon receipt of an Officer's Certificate evidencing such determination
by the Company, will authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be cancelled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture shall be registered in such names and in such authorized denominations
as the Clearing Agency, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Securities to the Clearing Agency for delivery to the Persons in whose
names such Securities are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the rate of ___% per
annum (the Coupon Rate") from the original date of issuance until February 15,
2001, and at the Reset Rate thereafter until the principal thereof becomes due
and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ___% until February 15, 2001 and at the Reset Rate
thereafter, compounded quarterly, payable (subject to the provisions of Article
IV herein) quarterly in arrears on February 16, May 16, August 16 and November
16 of each year (each, an "Interest Payment Date") commencing on February 16,
1998, to the Person in whose name such Debenture or any predecessor Debenture is
registered, at the close of business on the Regular Record Date for such
interest installment, which, in respect of (i) Debentures of which the
Institutional Trustee is the Holder and the Preferred Securities are in
book-entry only form or (ii) a Global Debenture, shall be the close of business
on the Business Day next preceding that Interest Payment Date. Notwithstanding
the foregoing sentence, if (i) the Debentures are held by the Institutional
Trustee and the Preferred Securities are no longer in book-entry only form or
(ii) the Debentures are not represented by a Global Debenture, the Company may
select a Regular Record Date for such interest installment which shall be more
than one Business Day but less than 60 Business Days prior to an Interest
Payment Date.
(b) The Coupon Rate on the Debentures will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (which Reset Rate will become effective on and after the Purchase
Contract Settlement Date). On the tenth (10) Business Day immediately preceding
the Purchase Contract Settlement Date, the Reset Announcement Date, the Reset
Spread and the relevant Two-Year Benchmark Treasury will be announced by the
Company. On the Business Day immediately following such Reset Announcement Date,
the Holders of Debentures will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be sufficiently given to
such Holders of Debentures if published in an Authorized Newspaper.
(c) Not later than seven calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date, the Company will request that
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) or the Institutional Trustee, notify the Holders of Debentures of such
Reset Announcement Date and the procedures to be followed by such holders of
Debentures wishing to settle the related Purchase Contract with separate cash on
the Business Day immediately preceding the Purchase Contract Settlement Date.
(d) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a 90-day
period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
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ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, including Compounded Interest and the expenses and
taxes of the Trust set forth in Section 4.1 hereof, if any, to the date of such
redemption (the "Tax Event Redemption Date"). If, following the occurrence of a
Tax Event, the Company exercises its option to redeem the Debentures, then the
proceeds of such redemption, if distributed to the Institutional Trustee as the
sole Holder of such Debentures, will be applied by the Institutional Trustee to
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed, at the Redemption
Price. If, following the occurrence of a Tax Event, the Company exercises its
option to redeem the Debentures, the Company shall appoint the Quotation Agent
to assemble the Treasury Portfolio in consultation with the Company. Notice of
any redemption will be mailed at least 30 days but not more than 60 days before
the Tax Event Redemption Date to each registered Holder of the Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of the
Redemption Price, on and after the redemption date interest shall cease to
accrue on such Debentures.
SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Paying Agent, no later than 12:00 noon, New York City time, on the
Tax Event Redemption Date, by check or wire transfer in immediately available
funds at such place and to such account as may be designated by each such Holder
of Debentures, including the Institutional Trustee or the Collateral Agent, as
the case may be. If the Trustee holds immediately available funds sufficient to
pay the Redemption Price of the Debentures (or, if the Company is acting as
Paying Agent or the Institutional Trustee has received the Redemption Price),
then, on such Tax Event Redemption Date, such Debentures will cease to be
outstanding and interest thereon will cease to accrue, whether or not such
Debentures have been received by the Company, and all other rights of the Holder
in respect of the Debentures shall terminate and lapse (other than the right to
receive the Redemption Price upon delivery of such Debentures but without
interest on such Redemption Price).
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4. Option to Put Debentures.
If a Failed Remarketing has occurred, each Holder of Debentures who
holds such Debentures on the day immediately following the Purchase Contract
Settlement Date shall have the right (the "Put Option") on or after the Business
Day immediately following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to repurchase such
Holder's Debentures on March 2, 2001 (the "Put Option Exercise
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<PAGE> 10
Date"), either in whole or in part, at a repayment price per Debenture equal to
$50, plus accrued and unpaid interest, if any, thereon to the date of payment
including deferred interest, if any (the "Debenture Repayment Price").
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on the Put
Option Exercise Date, the Company must receive on or prior to 5:00 p.m. New York
City time on the third Business Day immediately preceding the Put Option
Exercise Date, at the principal executive offices of Kennametal Inc. in Latrobe,
Pennsylvania, the Debentures to be repurchased with the form entitled "Option to
Elect Repayment" on the reverse of or otherwise accompanying such Debentures
duly completed. Any such notice received by the Trustee shall be irrevocable.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of the Debentures for repayment shall be determined by the Company,
whose determination shall be final and binding.
(b) Payment of the Debentures Repayment Price to Holders of
Debentures shall be made through the Trustee, subject to the Trustee's receipt
of payment from the Company in accordance with the terms of the Indenture either
through the Trustee or the Company acting as Paying Agent, no later than 12:00
noon, New York City time, on the Put Option Exercise Date, and to such account
as may be designated by such Holders. If the Trustee holds immediately available
funds sufficient to pay the Debentures Repayment Price of the Debentures
presented for repayment (or, if the Company is acting as Paying Agent and the
Institutional Trustee has received the Debentures Repayment Price), then,
immediately prior to the close of business on the Business Day immediately
preceding the Put Option Exercise Date, such Debentures will cease to be
outstanding and interest thereon will cease to accrue, whether or not such
Debentures have been received by the Company, and all other rights of the Holder
in respect of the Debentures, including the Holder's right to require the
Company to repay such Debentures, shall terminate and lapse (other than the
right to receive the Debentures Repayment Price upon delivery of such Debentures
but without interest on such Debentures Repayment Price). Neither the Trustee
nor the Company will be required to register or cease to be registered the
transfer of any Debentures for which repayment has been elected.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right at any time, and from time to time,
during the term of the Debentures, to defer payments of interest by extending
the interest payment period of such Debentures for a period not extending, in
the aggregate, beyond the Maturity Date of the Debentures (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon
at the rate of ___% until February 15, 2001, and at the Reset Rate thereafter
compounded quarterly for each quarter of the Extended Interest Payment Period
("Compounded Interest"). At the end of the Extended Interest Payment Period, the
Company shall pay all interest accrued and unpaid on the Debentures, including
any expenses and taxes of the Trust set forth in Section 5.1 hereof and
Compounded Interest (together, "Deferred Interest") that shall be payable to the
Holders of the Debentures in whose names the Debentures are registered in the
Security Register on the first record date after the end of the Extended
Interest Payment Period; provided, however, that during any such Extended
Interest Payment Period, (a) the Company shall not declare or pay dividends on
or make any distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee or agent
benefit plans or the satisfaction by the Company of its obligations pursuant to
any contract or security outstanding on the date of such event requiring the
Company to purchase capital stock of the Company, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or
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series of the Company capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends or distributions in capital stock of the Company (or rights to
acquire capital stock) or repurchases or redemptions of capital stock solely
from the issuance or exchange of capital stock or (v) redemptions or repurchases
of any rights outstanding under a shareholder rights plan and the declaration
thereunder of a dividend of rights in the future), (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company that rank junior
to the Debentures, and (c) the Company shall not make any guarantee payments
with respect to the foregoing (other than payments pursuant to the Guarantee or
the Common Securities Guarantee). Prior to the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such previous and further extensions thereof
shall not extend beyond the Maturity Date of the Debentures. Upon the
termination of any Extended Interest Payment Period and the payment of all
Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company, at its option, may prepay on any Interest Payment Date
all or any portion of the interest accrued during the then elapsed portion of an
Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extended Interest Payment
Period one Business Day before the earlier of (i) the next succeeding date on
which Distributions on the Trust Securities issued by the Trust are payable, or
(ii) the date the Trust is required to give notice of the record date, or the
date such Distributions are payable, to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Institutional Trustee is not the only Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the Holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
SECTION 4.3. Limitation of Transactions.
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, or (ii) there shall have occurred any Event
of Default, as defined in the Indenture, then (a) the Company shall not declare
or pay dividends or make any distribution with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock and (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future), (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company that rank
junior to the Debentures, and (c) the
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Company shall not make any guarantee payments with respect to the foregoing
(other than payments pursuant to the Guarantee or the Common Securities
Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Institutional Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Purchase Agreement and the Pricing Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of Section 609
of the Base Indenture;
(b) pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the offering,
sale and issuance of the Trust Securities (including commissions to the
underwriters in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of the Trust, including without limitation, costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets) to which the Trust
might become subject;
(c) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee pursuant to this Section
5.2, the Company shall pay to the Trustee all amounts accrued to the date of
such termination, removal or resignation. Upon termination of the Declaration or
the removal or resignation of the Delaware Trustee or the Institutional Trustee,
as the case may be, pursuant to Section 5.6 of the Declaration, the Company
shall pay to the Delaware Trustee or the Institutional Trustee, as the case may
be, all amounts accrued to the date of such termination, removal or resignation.
ARTICLE IV
NOTICE
SECTION 6.1. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article VI. Notwithstanding any of the
provisions of the Base Indenture and this First Supplemental Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts
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that would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of the Base Indenture,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder or holders of Senior
Indebtedness or from any trustee therefor and before the receipt of any such
written notice, the Trustee, subject to the provisions of the Base Indenture,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Article VI at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture
is a Global Debenture within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Clearing Agency or a nominee of the
Clearing Agency. This Debenture is exchangeable for Debentures registered in the
name of a person other than the Clearing Agency or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Clearing
Agency to a nominee of the Clearing Agency or by a nominee of the Clearing
Agency to the Clearing Agency or another nominee of the Clearing Agency) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the issuer
or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. _________________________
$ ___________________________
CUSIP No. ___________________
KENNAMETAL INC.
___% DEBENTURE
DUE FEBRUARY 16, 2003
KENNAMETAL INC., a Pennsylvania corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, the
principal sum of ___________________ ($______________) on February 16, 2003
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(such date is hereinafter referred to as the "Maturity Date"), and to pay
interest on said principal sum from January , 1998, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on February 16, May 16, August 16 and November 16
of each year, commencing on February 16, 1998, initially at the rate of ___% per
annum until February 15, 2001, and at the Reset Rate thereafter until the
principal hereof shall have become due and payable, and on any overdue principal
and premium, if any, and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the rate of ___% until February 15, 2001, and at the Reset Date
thereafter, compounded quarterly. The interest rate will be reset on the third
business day preceding February 16, 2001 to the Reset Rate (as determined by the
Reset Agent). The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
In the event that any date on which interest is payable on this Debenture is not
a Business Day, then payment of interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the regular record date for such interest installment which in
the case of a Global Debenture shall be the close of business on the business
day next preceding such Interest Payment Date; provided, however, if pursuant to
the terms of the indenture the Debentures are no longer represented by a Global
Debenture, the Company may select such regular record date for such interest
installment which shall be more than one Business Day but less than 60 Business
Days prior to an Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered Holders of this series of Debentures not less than 10 days prior to
such special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange all as more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Debenture shall be payable at the
office or agency of the Trustee maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Security Register or by
wire transfer to an account appropriately designated by the Holder entitled
thereto. Notwithstanding the foregoing, so long as the Holder of this Debenture
is the Institutional Trustee or the Collateral Agent, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated in writing by the
Institutional Trustee or the Collateral Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, senior and unsecured and will rank in right of payment on
parity with all other senior unsecured obligations of the Company.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
11
<PAGE> 15
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated
KENNAMETAL INC.
By: ______________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
<PAGE> 16
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
Dated _____________________
___________________________
as Trustee
By ________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of January , 1998 (the "Base Indenture"), duly executed
and delivered between the Company and The First National Bank of Chicago, as
Trustee (the "Trustee") (as supplemented by a First Supplemental Indenture,
dated January , 1998), (the Base Indenture as so supplemented, the "Indenture"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders of the
Securities. By the terms of the Indenture, the Securities are issuable in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Securities is limited in
aggregate principal amount as specified in said First Supplemental Indenture.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem Debentures in whole (but not in part) at any time at a Redemption
Price per Debenture equal to the Redemption Amount plus accrued and unpaid
interest thereon, including Compounded Interest and expenses and taxes of the
Trust (each as defined herein), if any, to the Tax Event Redemption Date. The
Redemption Price shall be paid to each Holder of the Debenture by the Company,
no later than 12:00 noon, New York City time, on the Tax Event Redemption Date,
by check or wire transfer in immediately available funds, at such place and to
such account as may be designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing has occurred, each Holder of this Debenture who
holds this Debenture on the day immediately following the Purchase Contract
Settlement Date shall have the right (the "Put Option") on or after the Business
Day immediately following the Purchase Contract Settlement Date, upon at least
three Business Days' prior notice, to require the Company to repurchase such
Holder's Debentures on March 2, 2001 (the "Put Option Exercise Date"), either in
whole or in part, at a repayment price per Debenture equal to $50, plus accrued
and unpaid interest, if any, thereon to the date of payment including deferred
interest, if any (the "Debenture Repayment Price"). In order for the Debentures
to be so repurchased, the Company must receive, on or prior to 5:00 p.m. New
York City Time on the third Business Day immediately preceding the Put Option
Exercise Date, at the principal executive offices of Kennametal Inc. in Latrobe,
Pennsylvania, the Debentures to be repurchased with the form entitled "Option to
Elect Repayment" on the reverse of or otherwise accompanying such Debentures
duly completed. Any such notice received by the Trustee shall be irrevocable.
All questions as to the validity, eligibility (including time of receipt) and
13
<PAGE> 17
acceptance of the Debentures for repayment shall be determined by the Company,
whose determination shall be final and binding. The payment of the Debentures
Repayment Price in respect of such Debentures shall be made, either through the
Trustee or the Company acting as Paying Agent, no later than 12:00 noon, New
York City time, on the Put Option Exercise Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying the rights of the Holders of the Debentures; provided,
however, that, among other things, no such supplemental indenture shall (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon (subject to the Company's right to defer such
payments in the manner set forth herein), or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected, or (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive a Default or Event of Default with respect to such
series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange for or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as the Company is not in default in the payment of interest on the
Debenture, the Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures for a period not extending, in the aggregate, beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"). At the end of an
Extended Interest Payment Period, the Company shall pay all interest then
accrued and unpaid (together with the interest thereon at the rate of ___% until
February 15, 2001 and at the Reset Rate thereafter to the extent that payment of
such interest is enforceable under applicable law). In the event that the
Company exercises this right, then (a) the Company shall not declare or pay
dividends or make any distribution with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of capital stock of the Company in connection
with the satisfaction by the Company of its obligations under any employee or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
purchases of any rights outstanding under a shareholder rights plan and the
declaration thereunder of a dividend of rights in the future), (b) the Company
shall not make any payment of interest, principal or premium, if any, or repay,
repurchase
14
<PAGE> 18
or redeem any debt securities issued by the Company that rank junior to the
Debentures, and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than payments pursuant to the Guarantee or the
Common Securities Guarantee). Prior to the termination of any such Extended
Interest Payment Period, the Company may further extend the interest payment
period; provided, that such Extended Interest Payment Period, together with all
such previous and further extensions thereof, may not extend beyond the Maturity
Date of the Debenture. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest and any
additional amount then due, the Company may commence a new Extended Interest
Payment Period, subject to the above requirements.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the City of
Chicago and State of Illinois accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company or the Trustee duly executed by
the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture, the
Company, the Trustee, any Paying Agent and the Security Registrar may deem and
treat the registered holder hereof as the absolute owner hereof (whether or not
this Debenture shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving payment of or on account of the principal hereof and premium, if
any, and interest due hereon and for all other purposes, and neither the Company
nor the Trustee nor any Paying Agent nor any Security Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the interest
on this Debenture, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
shareholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
The Indenture imposes certain limitations on the ability of the Company to,
among other things, merge or consolidate with any other Person or sell, assign,
transfer or lease all or substantially all of its properties or assets. All such
covenants and limitations are subject to a number of important qualifications
and exceptions. The Company must report periodically to the Trustee on
compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form without
coupons in denominations of $50 and any integral multiple thereof. This Global
Debenture is exchangeable for Debentures in definitive form only under certain
limited circumstances set forth in the Indenture. As provided in the Indenture
and subject to certain limitations therein set forth, Debentures of this series
so issued are exchangeable for a like aggregate principal amount of Debentures
of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
15
<PAGE> 19
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $_____ principal amount of the within Debenture, pursuant to its terms,
on the "Put Option Exercise Date," together with any interest thereon accrued
but unpaid to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Indenture, a new
Debenture or Debentures representing the remaining aggregate principal amount of
this Debenture.
For this Option to Elect Repayment to be effective, this Indenture with the
Option to Elect Repayment duly completed must be received by the Company at
Kennametal Inc., Attn: Corporate Secretary, Route 981 South at Westmoreland
County Airport, Latrobe, PA, 15650, no later than 5:00 p.m. on February 27,
2001.
Dated: Signature: _________________________________________
Signature Guarantee: _______________________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture in every particular
without alternation or enlargement or any change whatsoever.
16
<PAGE> 20
----------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Debenture on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
-----------------------------------------
Signature:
-----------------------------------------
Signature Guarantee:
-------------------------------
(Sign exactly as your name appears on the other side of this Debenture)
17
<PAGE> 21
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $ may, upon execution
of this First Supplemental Indenture, be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Debentures to or upon the written order of the Company, signed
by its Chairman, its Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the Company.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Ratification of Indenture.
The Indenture as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 9.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
SECTION 9.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 9.4 Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 9.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
18
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.
KENNAMETAL INC.,
as Issuer
By: ________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: ________________________________________
Name:
Title:
<PAGE> 1
Exhibit 4.9
-------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
KENNAMETAL FINANCING I
Dated as of January , 1998
-------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation ......................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application ....................................................4
SECTION 2.2 List of Holders of Securities .......................................................4
SECTION 2.3 Reports by the Preferred Guarantee Trustee ..........................................5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee .....................................5
SECTION 2.5 Evidence of Compliance with Conditions Precedent ....................................5
SECTION 2.6 Events of Default; Waiver ...........................................................5
SECTION 2.7 Event of Default; Notice ............................................................5
SECTION 2.8 Conflicting Interests ...............................................................5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee ...............................6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee ......................................7
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee ..............................9
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility ...........................................9
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees ...............9
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee .........................................................................10
SECTION 5.2 Waiver of Notice and Demand .......................................................10
SECTION 5.3 Obligations Not Affected ..........................................................10
SECTION 5.4 Rights of Holders .................................................................11
SECTION 5.5 Guarantee of Payment ..............................................................12
SECTION 5.6 Subrogation .......................................................................12
SECTION 5.7 Independent Obligations ...........................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
<S> <C> <C>
SECTION 6.1 Limitation of Transactions ........................................................12
SECTION 6.2 Ranking ...........................................................................13
ARTICLE VII
TERMINATION
SECTION 7.1 Termination .......................................................................13
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation .......................................................................13
SECTION 8.2 Indemnification ...................................................................14
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns ............................................................14
SECTION 9.2 Amendments ........................................................................14
SECTION 9.3 Notices ...........................................................................14
SECTION 9.4 Benefit ...........................................................................15
SECTION 9.5 Governing Law .....................................................................15
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of January __, 1998, is executed and delivered by Kennametal Inc., a
Pennsylvania corporation (the "Guarantor"), and The First National Bank of
Chicago, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Kennametal Financing I, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Agreement of Trust (the
"Declaration"), dated as of January __, 1998, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 4,500,000 preferred securities, liquidation amount
$50 per preferred security, having an aggregate liquidation amount of
$225,000,000 designated the ___% Trust Originated Preferred Securities (the
"Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Declaration), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders to receive
Guarantee Payments under this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Preferred Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(c) all reference to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
<PAGE> 5
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than Saturday, Sunday or any day on
which banking institutions in the City of New York, New York are authorized or
required by any applicable law to close.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at The First National Bank of
Chicago, One First National Plaza, Suite 0126, Chicago, IL 60670-0126,
Attention: Corporate Trust Services Division.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of debt securities of the Guarantor
designated the ___% Debentures due February 16, 2003 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
"Direction" by a person means a written direction signed: (a) if the
Person is a natural person, by that Person; or (b) in any other case in the name
of such Person by one or more Authorized Officers of that Person.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid distributions to the date of redemption
(the "Repayment Price") with respect to Preferred Securities in respect of which
the related Debentures have been redeemed by the Company upon the occurrence of
a Tax Event Redemption, to the extent the Issuer has funds available therefor,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
the Holders in exchange for Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds
2
<PAGE> 6
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default under the
Indenture has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of January __, 1998, among the
Guarantor (the "Debenture Issuer") and The First National Bank of Chicago, as
trustee, and any indenture supplemental thereto pursuant to which certain debt
securities of the Debenture Issuer are to be issued to the Institutional Trustee
of the Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of outstanding
Preferred Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The First National Bank of Chicago
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms
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of this Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust office of the Preferred
Guarantee Trustee, including any vice-president, any assistant vice-president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Tax Event Redemption" has the same meaning as defined in Annex I to
the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 List of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of such date, (i)
within 1 Business Day after January 1 and July 1 of each year, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Preferred Guarantee Trustee provided, that the Guarantor shall not
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
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SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of all Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Preferred Securities Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all Events of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, that, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice thereof, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge thereof.
SECTION 2.8 Conflicting Interests
The Declaration and the Indenture shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OFGUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders, and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee in and
to this Preferred Securities Guarantee shall automatically vest in any Successor
Preferred Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express provisions
of this Preferred Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall be
read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Preferred Guarantee Trustee and conforming to
the requirements of this Preferred Securities Guarantee; but in the
case of any such certificates or opinions that by any provision hereof
are
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specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if
the Preferred Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Preferred Securities
Guarantee or indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
a Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with competent
legal counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and
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complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustees, agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in
this Section 3.2 (a) (vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required
to inquire as to the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of
this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be deemed
to impose any duty or obligation on the Preferred Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law,
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to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Preferred
Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 750 million U.S. dollars ($750,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1 (a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts owing to
the Preferred Guarantee Trustee for fees and reimbursement of expenses which
have accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following,
whether or not with notice to, or the consent of the Guarantor:
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(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Repayment Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Repayment Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the Debentures permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders or Preferred Guarantee Trustee to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders or Preferred
Guarantee Trustee pursuant to the terms of the Preferred Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or Preferred Guarantee
Trustee to give notice to, or obtain the consent of, the Guarantor or any other
person with respect to the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Preferred Guarantee Trustee or any other Person. Notwithstanding the foregoing,
if the Guarantor has failed to make a Guarantee Payment, a Holder may directly
institute a proceeding against the Guarantor for enforcement of the Preferred
Security Guarantee for such payment. The Guarantor waives any right or remedy to
require that any action on this Preferred Securities Guarantee be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
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SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all rights, if any, of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Preferred Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Preferred Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this Preferred
Securities Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an Event of Default under the Declaration
and written notice of such Event of Default has been given to the Guarantor,
then (a) the Guarantor shall not declare or pay dividends or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of capital stock of the Guarantor in connection with the
satisfaction by the Guarantor of its obligations under any employee or agent
benefit plans or the satisfaction by the Guarantor of its obligations pursuant
to any contract or security outstanding on the date of such event requiring the
Guarantor to purchase capital stock of the Guarantor, (ii) as a result of a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another class or
series of the Guarantor's capital stock, (iii) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Guarantor (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
purchases of any rights outstanding under a shareholder rights plan and the
declaration of a dividend of rights in the future), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor that rank
junior to the Debentures (to the extent appropriate notice has been given to the
holders thereof effectively blocking such
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payment or to the extent the failure to make any such payment is otherwise
authorized under the agreements governing such debt), and (c) the Guarantor
shall not make any guarantee payments with respect to the foregoing (other than
payments pursuant to the Guarantee or the Common Securities Guarantee) to the
extent appropriate notice has been given to the beneficiaries thereof
effectively blocking such payment or to the extent the failure to make any such
payment is otherwise authorized under the agreements governing such guarantee
payments.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute a senior unsecured
obligation of the Guarantor and, at all times when an Event of Default has
occurred and is continuing under the Declaration, will rank:
(i) pari passu with all of the Guarantor's senior unsecured
obligations except those made subordinate hereto by their terms; and
(ii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Repayment Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to all Holders or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor
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by any Person as to matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Guarantor, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might
properly be paid.
SECTION 8.2 Indemnification
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Preferred Securities, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
out-of-pocket expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
(c) The provisions set forth in this Section 8.2 shall survive the
termination of the Preferred Securities Guarantee or the resignation or removal
of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders apply to the
giving of such approval.
SECTION 9.3 Notices
14
<PAGE> 18
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
One First National Plaza
Chicago, Il 60670-0126
Corporate Trust Services Division
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders):
Kennametal Inc.
Corporate Headquarters
State Route 981 South
P.O. Box 231
Latrobe, PA 15650-0231
(c) If given to any Holder, at the address set forth on the books and
records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders and, subject to Section 3.1(a), is not separately transferable from the
Preferred Securities.
SECTION 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15
<PAGE> 19
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
KENNAMETAL INC.,
as Guarantor
By: ____________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Guarantee Trustee
By: ____________________________________________
Name:
Title:
<PAGE> 1
Exhibit 4.10
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of January ___, 1998 (the
"Remarketing Agreement") by and between Kennametal Inc., a Pennsylvania
corporation ("Kennametal" or the "Company"), Kennametal Financing I, a Delaware
statutory business trust (the "Trust"),The First National Bank of Chicago, a
national banking association, not individually but solely as Purchase Contract
Agent and as attorney-in-fact of the holders of Purchase Contracts (each as
defined in the Purchase Contract Agreement (as defined herein)), and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue an aggregate Stated Amount
$225,000,000 of its FELINE PRIDES (the "FELINE PRIDES") under the Purchase
Contract Agreement, dated as of January ___, 1998, by and between the Purchase
Contract Agent and the Company (the "Purchase Contract Agreement"); and
WHEREAS, the Trust will issue concurrently in connection with
the issuance of the FELINE PRIDES___% Trust Originated Preferred Securities (the
"Preferred Securities") in an aggregate stated liquidation amount of
$225,000,000, under the Amended and Restated Agreement of Trust, dated as of
January ___, 1998, by and among the Company, the Regular Trustees, the Delaware
Trustee and the Institutional Trustee (the "Declaration"); and
WHEREAS, each FELINE PRIDES will initially consist of a unit
(referred to as an "Income PRIDES") with a Stated Amount of $50 comprised of (a)
a Purchase Contract under which (i) the holder is required to purchase from the
Company, for an amount in cash equal to the Stated Amount, newly issued Common
Stock of the Company on the Purchase Contract Settlement Date, and (ii) the
Company will pay Contract Adjustment Payments, and (b) either beneficial
ownership in one Preferred Security or the Applicable Ownership Interest in the
Treasury Portfolio; and
WHEREAS, the sole assets of the Trust, $232,000,000 aggregate
principal amount of ___% Debentures due February 16, 2003 (the "Debentures") of
the Company will be purchased by the Trust from the Company with the proceeds of
the sale of the Preferred Securities and the proceeds of the sale of the common
securities of the Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities"); and
WHEREAS, the Preferred Securities (or upon a dissolution of
the Trust and the distribution of the Debentures as described in the
Declaration, such Debentures) will be pledged pursuant to the Pledge Agreement
(the "Pledge Agreement"), dated as of January ___, 1998, by and between the
Company, The Chase Manhattan Bank, as collateral agent (the "Collateral Agent")
and the Purchase Contract Agent, to secure an Income PRIDES holder's obligations
under the related Purchase Contract on the Purchase Contract Settlement Date;
and
<PAGE> 2
WHEREAS, the Preferred Securities or the Debentures, as the
case may be, of such Income PRIDES holders who have elected not to settle the
Purchase Contracts related to their Income PRIDES from the proceeds of a Cash
Settlement and who have not early settled their Purchase Contracts, will be
remarketed by the Remarketing Agent on the third Business Day immediately
preceding the Purchase Contract Settlement Date; and
WHEREAS, the applicable distribution rate on the Preferred
Securities (and, thus, the interest rate on the Debentures) that remain
outstanding on and after the Purchase Contract Settlement Date will be reset on
the third Business Day immediately preceding the Purchase Contract Settlement
Date, to the Reset Rate to be determined by the Reset Agent as the rate that
such Preferred Securities (and, thus the Debentures) should bear in order to
have an approximate market value of 100.5% of the aggregate stated liquidation
amount of the Preferred Securities or the aggregate principal amount of the
Debentures on the third Business Day immediately preceding the Purchase Contract
Settlement Date, provided that in the determination of such Reset Rate, the
Company may limit the Reset Spread (a component of the Reset Rate) to be no
higher than 200 basis points (2%); and
WHEREAS, the Company has requested Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as
the Reset Agent and as the Remarketing Agent, and as such to perform the
services described herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and conditions
expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in the Purchase
Contract Agreement or, if not therein stated, the Declaration or the Pledge
Agreement.
Section 2. Appointment and Obligations of Remarketing Agent.
The Company hereby appoints Merrill Lynch and Merrill Lynch hereby accepts such
appointment, (i) as the Reset Agent to determine in consultation with the
Company, in the manner provided for in the Declaration with respect to the Trust
Securities and the Indenture with respect to the Debentures, the Reset Rate,
that in the opinion of the Reset Agent, will, when applied to the Trust
Securities (and, thus, the Debentures), enable a Trust Security (and, thus, a
Debenture), to have an approximate market value of approximately 100.5% of the
aggregate stated liquidation amount in the case of such Trust Security and the
aggregate principal amount in the case of such Debenture, and (ii) as the
exclusive Remarketing Agent to remarket the Preferred Securities, or the
Debentures, as the case may be, provided that the Company may limit such Reset
Rate to be no higher than the rate on the Two-Year Benchmark Treasury plus 200
basis points (2%), as the case may be, of such Income PRIDES holders who have
not early settled the related Purchase Contracts and have failed to notify the
Purchase Contract Agent, on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, of their intention to settle
the related Purchase Contracts through Cash Settlement, for settlement on the
Purchase Contract Settlement Date, pursuant to the Remarketing Purchase
Agreement with the Company, the Trust and the Purchase Contract Agent,
substantially in
2
<PAGE> 3
the form attached hereto as Exhibit A (with such changes as the Company, the
Purchase Contract Agent and the Remarketing Agent may agree upon, it being
understood that changes may be necessary in the representations, warranties,
covenants and other provisions of the Remarketing Purchase Agreement due to
changes in law or facts and circumstances). Pursuant to the Remarketing Purchase
Agreement, the Remarketing Agent, either as the sole remarketing underwriter or
as the representative of a syndicate including the Remarketing Agent and one or
more other remarketing underwriters designated by the Remarketing Agent, will
agree, subject to the terms and conditions set forth therein, that the
Remarketing Agent and any such other remarketing underwriters will purchase
severally the Preferred Securities or the Debentures, as the case may be, to be
sold by the holder or holders of Income PRIDES on the third Business Day
immediately preceding the Purchase Contract Settlement Date and use their
reasonable efforts to remarket such Preferred Securities or the Debentures, as
the case may be, (such purchase and remarketing being hereinafter referred to as
the "Remarketing"), at a price of approximately 100.5% of such Preferred
Securities aggregate stated liquidation amount plus any accrued and unpaid
distributions (including any deferred distributions) and in the case of
Debentures, at a price of approximately 100.5% of such Debentures aggregate
principal amount plus any accrued and unpaid interest (including any deferred
interest). Notwithstanding the preceding sentence, the Remarketing Agent shall
not remarket any Preferred Securities or Debentures, as the case may be, for a
price less than 100% of the aggregate stated liquidation amount or aggregate
principal amount of such Preferred Securities or Debentures, respectively, plus
accumulated and unpaid distributions or accrued and unpaid interest, as the case
may be. The proceeds of such remarketing shall be paid to the Collateral Agent
in accordance with Section 4.6 of the Pledge Agreement and Section 5.4 of the
Purchase Contract Agreement (each of which Sections are incorporated herein by
reference).
Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as Remarketing Fee an amount not exceeding 25
basis points (.25%), of the aggregate stated liquidation amount of the
remarketed securities from any amount received in connection with such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount of such remarketed Preferred Securities or Debentures plus any
accrued and unpaid (including deferred) distributions or any accrued and unpaid
interest (including any deferred interest), as the case may be. In addition, the
Reset Agent shall receive from the Company a reasonable and customary fee as the
Reset Agent Fee (the "Reset Agent Fee"); provided, however, that if the
Remarketing Agent shall also act as the Reset Agent, then the Reset Agent shall
not be entitled to receive any such Reset Agent Fee. Payment of such Reset Agent
Fee shall be made by the Company on the third Business Day immediately preceding
the Purchase Contract Settlement Date in immediately available funds or, upon
the instructions of the Reset Agent by certified or official bank check or
checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing Agent.
(a) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent in its capacity hereunder by giving
notice prior to 3:00 p.m., New York City time, on the eleventh Business Day
immediately prior to the Purchase Contract Settlement Date. Any such replacement
shall become effective upon the Company's appointment of a successor to perform
the services that would otherwise be performed hereunder by the Remarketing
Agent and/or the Reset Agent. Upon providing such notice, the Company shall use
all reasonable efforts to appoint such a successor and to enter into a
remarketing agreement with such successor as soon as reasonably practicable.
3
<PAGE> 4
(b) Merrill Lynch may resign at any time and be discharged
from its duties and obligations hereunder as the Remarketing Agent and/or as the
Reset Agent by giving notice prior to 3:00 p.m., New York City time, on the
eleventh Business Day immediately prior to the Purchase Contract Settlement
Date. Any such resignation shall become effective upon the Company's appointment
of a successor to perform the services that would otherwise be performed
hereunder by the Remarketing Agent and/or the Reset Agent. Upon receiving notice
from the Remarketing Agent and/or the Reset Agent that it wishes to resign
hereunder, the Company shall appoint such a successor and enter into a
remarketing agreement with it as soon as reasonably practicable.
Section 5. Dealing in the Securities. The Remarketing Agent,
when acting hereunder or under the Remarketing Purchase Agreement or acting in
its individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold or deal in any of the Preferred Securities or Debentures, as the case
may be. With respect to any Preferred Securities or Debentures, as the case may
be, owned by it, the Remarketing Agent may exercise any vote or join in any
action with like effect as if it did not act in any capacity hereunder. The
Remarketing Agent, in its individual capacity, either as principal or agent, may
also engage in or have an interest in any financial or other transaction with
the Company as freely as if it did not act in any capacity hereunder.
Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required (in the opinion
of counsel for either the Remarketing Agent or the Company) by applicable law,
regulations or interpretations in effect at the time of such Remarketing, the
Company shall use its reasonable efforts to have a registration statement
relating to the Preferred Securities effective under the Securities Act of 1933
by the third Business Day immediately preceding the Purchase Contract Settlement
Date, shall furnish a current prospectus and/or prospectus supplement to be used
in such Remarketing by the remarketing underwriter or underwriters under the
Remarketing Purchase Agreement, and shall pay all expenses relating thereto.
Section 7. Conditions to the Remarketing Agent's Obligations.
(a) The obligations of the Remarketing Agent and any other remarketing
underwriters to purchase and remarket the Preferred Securities or the
Debentures, as the case may be, shall be subject to the terms and conditions of
the Remarketing Purchase Agreement.
(b) If at any time during the term of this Agreement, any
Indenture Event of Default or Declaration Event of Default, or event that with
the passage of time or the giving of notice or both would become an Indenture
Event of Default or Declaration Event of Default, has occurred and is continuing
under the Indenture or the Declaration, then the obligations and duties of the
Remarketing Agent under this Agreement shall be suspended until such default or
event has been cured. The Company will cause the Indenture Trustee and the
Institutional Trustee to give the Remarketing Agent notice of all such defaults
and events of which the Trustee is aware.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to the Remarketing Agent on the effective date of
its replacement pursuant to Section 4(a) hereof or pursuant to Section 4(b)
hereof. Notwithstanding any such termination, the obligations set forth in
Section 3 hereof shall survive and remain in full force and effect until all
amounts payable under said Section 3 shall have been paid in full.
4
<PAGE> 5
Section 9. Remarketing Agent's Performance; Duty of Care. The
duties and obligations of the Remarketing Agent hereunder shall be determined
solely by the express provisions of this Agreement and the Remarketing Purchase
Agreement.
Section 10. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 11. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof and except as otherwise provided herein,
this Agreement shall remain in full force and effect from the date hereof until
the first day thereafter on which no Preferred Securities are outstanding.
Section 12. Successors and Assigns. The rights and obligations
of the Company hereunder may not be assigned or delegated to any other person
without the prior written consent of Merrill Lynch as the Remarketing Agent
and/or as the Reset Agent. The rights and obligations of Merrill Lynch as the
Remarketing Agent and/or as the Reset Agent hereunder may not be assigned or
delegated to any other person without the prior written consent of the Company.
This Agreement shall inure to the benefit of and be binding upon the Company and
Merrill Lynch as the Remarketing Agent and/or as the Reset Agent and their
respective successors and assigns. The terms "successors" and "assigns" shall
not include any purchaser of Securities merely because of such purchase.
Section 13. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be used
in the interpretation of any provision of this Agreement.
Section 14. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.
Section 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 16. Amendments. This Agreement may be amended by any
instrument in writing signed by the parties hereto.
Section 17. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone, telegraph or telecopy, and confirmed in
writing. All written notices and confirmations of notices by telecommunication
shall be deemed to have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and postage prepaid. All
such notices, requests, consents or
5
<PAGE> 6
other communications shall be addressed as follows: if to the Company, to
Kennametal Inc., Corporate Headquarters, State Route 981 South, P.O. Box 231,
Latrobe, PA 15650-0231, Attention: ___________; if to the Remarketing Agent or
Reset Agent (if Merrill Lynch & Co. is the Remarketing Agent or the Reset
Agent), to c/o Merrill Lynch & Co. at Merrill Lynch World Headquarters, World
Financial Center, North Tower, New York, New York 10281, Attention: Douglas
Squires, Managing Director, with a copy to Skadden, Arps, Slate Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022, Attention: John Osborn; and if
to the Purchase Contract Agent, to The First National Bank of Chicago, Corporate
Trust Services Division, One First National Plaza, Suite 0126, Chicago, IL
60670-0126, or to such other address as any of the above shall specify to the
other in writing.
6
<PAGE> 7
IN WITNESS WHEREOF, each of the Company and the Remarketing
Agent has caused this Agreement to be executed in its name and on its behalf by
one of its duly authorized officers as of the date first above written.
KENNAMETAL, INC.
By: _______________________________________________
Name:
Title:
KENNAMETAL FINANCING I
By: _______________________________________________
Name:
Title:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
ONFIRMED AND ACCEPTED:
By: _______________________________________________
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO
By : _____________________________
Name:
Title:
<PAGE> 8
Exhibit A to
Remarketing Agreement
FORM OF REMARKETING PURCHASE AGREEMENT
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner, & Smith
Incorporated (the "Remarketing Underwriter") hereby agrees to purchase the
securities (the "Securities") as set forth in Schedule I hereto, that have been
tendered by the holders of the Income PRIDES for sale on February ____, 2001.
1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the purchase contract
agreement (the "Purchase Contract Agreement"), the pledge agreement (the "Pledge
Agreement"), the purchase agreement (the "Purchase Agreement"), the amended and
restated declaration agreement of trust (the "Declaration") and the indenture
(the "Indenture"), each as identified in Schedule I hereto.
2. Registration Statement and Prospectus. If required (in the opinion
of counsel to either the Remarketing Underwriter or the Company) by applicable
law, the Company and the Trust have filed with the Securities and Exchange
Commission, and there has become effective, a registration statement on Form S-3
(No. 333-40809), including a prospectus, relating to the Securities. Such
registration statement, as amended to the date of this Agreement, is hereinafter
referred to as the "Registration Statement", the prospectus included in the
Registration Statement is hereinafter referred to as the "Basic Prospectus" and
the Basic Prospectus, as amended or supplemented to the date of this Agreement
to relate to the Securities and to the remarketing of the Securities, is
hereinafter referred to as the "Final Prospectus" (including in each case all
documents incorporated by reference).
3. Provisions Incorporated by Reference.
(a) Subject to Section 3(b), the provisions of the following
sections of the Purchase Agreement shall be incorporated in their entirety into
this Agreement and made applicable to the obligations of the Remarketing
Underwriter, except as explicitly amended hereby: Sections [1, 3, 4, 5, 6 and
7.]
(b) With respect to the provisions of the Purchase Agreement
incorporated herein, for the purposes hereof, (i) all references therein to the
"Underwriter" or "Underwriters" or the "Representative" or "Representatives", as
the case may be, shall be deemed to refer to the Remarketing Underwriter; (ii)
all references therein to the "Securities" which are the subject thereof shall
be deemed to refer to the Securities as defined herein; (iii) all references
therein to the "Closing Date" shall be deemed to refer to the Remarketing
Closing Date specified in Schedule I hereto (the "Remarketing Closing Date");
(iv) all references therein to the "Registration Statement" the "Basic
Prospectus" and the "Final Prospectus" shall be deemed to refer to the
Registration Statement, the Basic Prospectus and the Final Prospectus,
respectively, as defined herein;[ (v) reference to the Company in Section 3(i)
thereof is stricken and replaced with the phrase "the registered holder"; (vi)
reference to "Income Prides" and "Shares" in Section 3(m) thereof is stricken
and replaced with either the words "Preferred Securities" or "Debentures", as
applicable; (vii) Sections 3(a) and 3(k) thereof are stricken in their entirety;
(viii) Sections 5(b)(1)(xiii) and 5(b)(2) (iv), (v), (vi), (vii) and (xi)
thereof
<PAGE> 9
are stricken in their entirety; (ix) Sections 5(b)(5) and 5(b)(8) are
stricken in their entirety; and (xi) Section 5(j) thereof is stricken in its
entirety].
4. Purchase and Sale; Remarketing Underwriting Fee. Subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth or incorporated herein, the Remarketing Underwriter agrees to
purchase from the registered holder or holders thereof in the manner specified
in Section 5 hereof, the principal amount of Securities set forth in Schedule I
hereto at a purchase price not less than 100% of such Securities, aggregate
stated liquidation amount or aggregate principal amount, as the case may be,
plus any accrued and unpaid distributions or interest, as applicable, thereon.
In connection therewith, the registered holder or holders thereof agree, in the
manner specified in Section 5 hereof, to pay to the Remarketing Underwriter a
Remarketing underwriting Fee equal to an amount not exceeding 25 basis points
(.25%), from any amount received in connection from such Remarketing in excess
of the aggregate stated liquidation amount or aggregate principal amount, as the
case may be, of the Securities.
5. Delivery and Payment. Delivery of payment for the remarketed
Securities and payment of the Remarketing Underwriting Fee shall be made on the
Remarketing Closing Date at the location and time specified in Schedule I hereto
(or such later date not later than five business days after such date as the
Remarketing representatives shall designate), which date and time may be
postponed by agreement between the Remarketing Underwriter, the Company, the
Trust and the [registered holder or holders thereof]. Delivery of the remarketed
Securities and payment of the Remarketing [Underwriting] Fee shall be made to
the Remarketing Underwriter [to or upon the order of the [registered holder or
holders of the Remarketed Securities] by certified or official bank check or
checks drawn on or by a New York Clearing House bank and payable in immediately
available funds] [in immediately available funds by wire transfer to an account
or accounts designated by the [Company] [Trustee] [registered holder or holders
of the remarketed Securities]] or, if the remarketed Securities are represented
by a Global Security, by any method of transfer agreed upon by the Remarketing
Underwriter and the Depositary for the Securities under the Declaration or
Indenture, as applicable.
[It is understood that any registered holder or, if the Securities are
represented by a Global Security, any beneficial owner, that has an account at
the Remarketing Underwriter and tenders its Securities through such account will
not be required to pay any fee or commission to the Remarketing Underwriter.]
If the Securities are not represented by a Global Security,
certificates for the Securities shall be registered in such names and
denominations as the Remarking Representatives may request not less than three
full business days in advance of the Remarketing Closing Date, and the Company,
the Trust and the [registered holder or holders thereof] agree to have such
certificates available for inspection, packaging and checking by the Remarketing
Underwriter in New York, New York not later than 1:00 p.m. on the Business Day
prior to the Remarketing Closing Date.
6. Notices. Unless otherwise specified, any notices, requests, consents
or other communications given or made hereunder or pursuant hereto shall be made
in writing or transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All written notices
and confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt
A-2
<PAGE> 10
requested and postage prepaid. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company, to Kennametal
Inc., Corporate Headquarters, State Route, 981 South, P.O. Box 231, Latrobe, PA
15650-0231; if to the Remarketing Agent or Reset Agent, to c/o Merrill Lynch &
Co. at Merrill Lynch World Headquarters, World Financial Center, North Tower,
New York, New York 10281, Attention: Douglas Squires, Managing Director, with a
copy to Skadden, Arps, Slate Meagher & Flom LLP, 919 Third Avenue, New York, New
York 10022, Attention: John Osborn; and if to the Purchase Contract Agent, to
The First National Bank of Chicago, Corporate Trust Services Division, One First
National Plaza, Suite 0126, Chicago, IL 60670-0126, or to such other address as
any of the above shall specify to the other in writing.
A-3
<PAGE> 11
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Remarketing Underwriters.
Very truly yours,
KENNAMETAL INC.
By: _____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory
By : ____________________________________
Name:
Title:
A-4
<PAGE> 12
SCHEDULE I
Purchase Contract Agreement, dated as of
January ___, 1998 by and between Kennametal
Inc., a Pennsylvania corporation, and
The First National Bank of Chicago, a national banking
association
Pledge Agreement dated as of January ___, 1998 by and between Kennametal Inc., a
Pennsylvania corporation, The First National Bank of Chicago, a national
banking association, and
the Chase Manhattan Bank
Amended and Restated Agreement of Trust dated as of January ___, 1998 of
Kennametal Financing I, a Delaware business trust
Indenture dated as of January ___, 1998 by and between Kennametal Inc., a
Pennsylvania corporation, and The First National Bank of Chicago, a national
banking association
First Supplemental Indenture, dated as of December 8, 1997 by and between
Kennametal Inc., a Pennsylvania corporation, and The First National Bank of
Chicago, a national banking association
Registration Statement No. 333-40809
Title of Securities: _____% Trust Originated Preferred
Securities of Kennametal Financing I
Principal Amount of Securities: $
Purchase Agreement, dated as of January __, 1998, among Kennametal Inc.,
Kennametal Financing Trust I and Merrill Lynch & Co. _____________
Remarketing [Underwriting] Fee: %($ )
Remarketing Closing Date, Time and Location:
A-5
<PAGE> 1
Exhibit 4.11
------------------------------------------------------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of January , 1998
between
KENNAMETAL INC.,
AS ISSUER
and
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS.............................. 1
SECTION 1.1. Definition of Terms............................................ 1
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE SENIOR DEBT SECURITIES..................... 5
SECTION 2.1. Designation and Principal Amount............................... 5
SECTION 2.2. Maturity....................................................... 5
SECTION 2.3. Form and Payment............................................... 5
SECTION 2.4. Interest....................................................... 6
ARTICLE III
REDEMPTION OF THE SENIOR DEBT SECURITIES.............. 7
SECTION 3.1. Optional Redemption............................................ 7
SECTION 3.2. No Sinking Fund................................................ 7
ARTICLE IV
COVENANTS................................ 7
SECTION 4.1. Amendments to Article 10 of the Indenture...................... 7
ARTICLE V
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER.......... 9
SECTION 5.1. Amendments to Article 8 of the Indenture....................... 9
ARTICLE VI
FORM OF SENIOR DEBT SECURITIES................... 9
SECTION 6.1. Form of Senior Debt Securities................................. 9
ARTICLE VII
ORIGINAL ISSUE OF SENIOR DEBT SECURITIES.............. 10
SECTION 7.1. Original Issue of Senior Debt Securities...................... 10
i
<PAGE> 3
Page
----
ARTICLE VIII
MISCELLANEOUS............................. 10
SECTION 8.1. Ratification of Indenture..................................... 10
SECTION 8.2. Trustee Not Responsible for Recitals.......................... 10
SECTION 8.3. Governing Law................................................. 10
SECTION 8.4. Separability.................................................. 10
SECTION 8.5. Counterparts.................................................. 11
ii
<PAGE> 4
SECOND SUPPLEMENTAL INDENTURE, dated as of January __, 1998
(the "Second Supplemental Indenture"), between KENNAMETAL INC., a corporation
duly organized and existing under the laws of the Commonwealth of Pennsylvania
(the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the indenture
dated as of January __, 1998 (the "Base Indenture"), to the Trustee to provide
for the future issuance of the Company's unsecured debentures, notes or other
evidence of indebtedness (the "Securities"), to be issued from time to time in
one or more series as might be determined by the Company under the Base
Indenture;
WHEREAS, pursuant to the terms of the First Supplemental
Indenture, the Company established a series of its Securities known as its ___%
Debentures due February 16, 2003 (the "Debentures);
WHEREAS, pursuant to the terms of the Base Indenture, the
Company desires to provide for the establishment of three new series of its
Securities to be known as its _% Senior Notes due 2001 (the "2001 Notes"), its
__% Senior Notes due 2008 (the "2008 Notes") and its __% Senior Debentures due
2028 (the "2028 Debentures"; and together with the 2001 Notes and the 2008
Notes, the "Senior Debt Securities"), the form and substance of such Senior Debt
Securities and the terms, provisions and conditions thereof to be set forth as
provided in the Base Indenture and this Second Supplemental Indenture (together,
the "Indenture");
WHEREAS, the Company has requested that the Trustee execute
and deliver this Second Supplemental Indenture and all requirements necessary to
make this Second Supplemental Indenture a valid instrument in accordance with
its terms, and to make the Senior Debt Securities, when executed by the Company
and authenticated and delivered by the Trustee, the valid obligations of the
Company, and all acts and things necessary have been done and performed to make
this Second Supplemental Indenture enforceable in accordance with its terms, and
the execution and delivery of this Second Supplemental Indenture has been duly
authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance
of the Senior Debt Securities by the Holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Senior Debt Securities and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
<PAGE> 5
2
(a) a term defined in the Indenture has the same meaning when used in
this Second Supplemental Indenture;
(b) a term defined anywhere in this Second Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in this Section
1.1(e):
"Consolidated Net Worth" shall mean the excess of assets over
liabilities of the Company and its consolidated Subsidiaries, plus Minority
Interests, as determined from time to time in accordance with generally
accepted accounting principles.
"Issue Date" shall mean the first date on which a Senior Debt Security
is authenticated by the Trustee pursuant to this Second Supplemental
Indenture.
"Make-Whole Premium," with respect to any 2008 Note or 2028 Debenture,
as the case may be, (or portion thereof) to be redeemed will be an amount
equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the
applicable Redemption Date (as defined herein), of:
(A) each interest payment that, but for such
redemption, would have been payable on any such Senior Debt
Security (or portion thereof) being redeemed on each Interest
Payment Date occurring after the Redemption Date (excluding
any accrued interest for the period prior to the Redemption
Date); and
(B) the principal amount that, but for such
redemption, would have been payable at the final maturity of
any such Senior Debt Security (or portion thereof) being
redeemed; over
(ii) the principal amount of such Senior Debt Security (or
portion thereof) being redeemed.
The present values of interest and principal payments referred to in
clause (i) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
applicable Redemption Date at a discount
<PAGE> 6
3
rate equal to the applicable Treasury Yield (as defined herein) plus __ basis
points for the 2008 Notes or the applicable Treasury Yield plus __ basis points
for the 2028 Debentures.
"Minority Interest" is defined as any shares of stock of any class of a
Subsidiary that are not owned by the Company or a Subsidiary.
"Permitted Liens" shall mean, with respect to any Person: (i) Liens
existing on the Issue Date; (ii) Liens on property or assets of, or any shares
of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary of the Company or any of its
Restricted Subsidiaries or at the time such corporation is merged into the
Company or any of its Restricted Subsidiaries; (iii) Liens in favor of the
Company or any of its Restricted Subsidiaries; (iv) Liens in favor of
governmental bodies to secure progress or advance payments; (v) Liens securing
industrial revenue or pollution control bonds; (vi) Liens on Property to secure
Indebtedness incurred for the purpose of (a) financing all or any part of the
purchase price of such Property incurred prior to, at the time of, or within 180
days after, the acquisition of such Property or (b) financing all or any part of
the cost of construction, improvement, development or expansion of any such
Property; (vii) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provisions, if any, as shall be required in
conformity with generally accepted accounting principles shall have been made
therefor; (viii) Liens on current assets of the Company or its Restricted
Subsidiaries securing Indebtedness of the Company or its Restricted
Subsidiaries; and (ix) any extensions, substitutions, replacements or renewals
in whole or in part of a Lien (an "existing Lien") enumerated in clauses (i)
through (viii) above; provided that the Lien may not extend beyond (A) the
Property or Indebtedness subject to the existing Lien and (B) improvements and
construction on such Property and the Indebtedness secured by the Lien may not
exceed the Indebtedness secured at the time by the existing Lien.
"Principal Property" means any manufacturing plant or warehouse owned
or leased by the Company or any Subsidiary, the gross book value of which
exceeds four percent of Consolidated Net Worth, other than manufacturing plants
and warehouses which the Board of Directors by resolution declares, together
with all other plants and warehouses previously so declared, is not of material
importance to the total business conducted by the Company and its Restricted
Subsidiaries as an entirety.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of the Company and its Subsidiaries under
generally accepted accounting principles.
"Restricted Subsidiary" shall mean any Subsidiary of the Company that
is not an Unrestricted Subsidiary.
<PAGE> 7
4
"Stated Maturity" when used with respect to any security or any
installment of interest thereon, shall mean the date specified in such security
as the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Treasury Yield" means a rate of interest per annum equal to the weekly
average yield to maturity of United States Treasury securities that have a
constant maturity that corresponds to the remaining term to maturity of such
Senior Debt Security, calculated to the nearest 1/12th of a year (the "Remaining
Term"). The Treasury Yield will be determined as of the third business day
immediately preceding the applicable Redemption Date.
The weekly average yields to maturity of United States Treasury
securities will be determined by reference to the most recent statistical
release published by the Federal Reserve Bank of New York and designated
"H.15(519) Selected Interest Rates" or any successor release (the "H.15
Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield to maturity for United States Treasury securities having a
constant maturity that is the same as the Remaining Term, then the Treasury
Yield will be equal to such weekly average yield to maturity. In all other
cases, the Treasury Yield will be calculated by interpolation, on a straight-
line basis, between the weekly average yields to maturity on the United States
Treasury securities that have a constant maturity closest to and greater than
the Remaining Term and the United States Treasury securities that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields to
maturity as calculated by interpolation will be rounded to the nearest 1/100th
of 1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields to maturity for United States Treasury securities are not
available in the H.15 Statistical Release or otherwise, then the Treasury Yield
will be calculated by interpolation of comparable rates selected by the
Independent Investment Banker (as defined herein).
"Unrestricted Subsidiary" means (i) any Subsidiary not organized under
the laws of a state of the United States or the District of Columbia and any
Subsidiary of such Subsidiary which is not organized under the laws of a state
of the United States or the District of Columbia and (ii) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of the Company in the manner provided below
and any Subsidiary of such Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly-acquired or newly-formed
Subsidiary) organized under the laws of a state of the United States or of the
District of Columbia to be an Unrestricted Subsidiary unless such Subsidiary
owns any capital stock of, or owns or holds any Property of, the Company or any
other Subsidiary of the Company that is not a Subsidiary of the Subsidiary so
designated; provided, however, that the Subsidiary to be so designated has total
assets of $35,000,000 or less.
<PAGE> 8
5
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE SENIOR DEBT SECURITIES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized the following series of Securities
designated:
(i) the __% Senior Notes due 2001 (the "2001 Notes"), limited
in aggregate principal amount to $150,000,000, which amount shall be as set
forth in any written order of the Company for the authentication and delivery of
the 2001 Notes pursuant to Section 303 of the Indenture;
(ii) The ___% Senior Notes due 2008 (the "2008 Notes"),
limited in aggregate principal amount to $150,000,000, which amount shall be as
set forth in any written order of the Company for the authentication and
delivery of the 2008 Notes pursuant to Section 303 of the Indenture; and
(iii) The ___% Senior Debentures due 2028 (the "2028
Debentures"), limited in aggregate principal amount to $150,000,000, which
amount shall be as set forth in any written order of the Company for the
authentication and delivery of the 2028 Debentures pursuant to Section 303 of
the Indenture.
SECTION 2.2. Maturity.
The principal amount of the 2001 Notes will be payable on
___________ __, 2001; the principal amount of the 2008 Notes will be payable on
___________ __, 2008; and the principal amount of the 2028 Debentures will be
payable on __________ __, 2028.
SECTION 2.3. Form and Payment.
The Senior Debt Securities will be issued as global notes, in
fully registered book-entry form without coupons in denominations of $1,000 and
integral multiples thereof.
Principal, premium, if any, and/or interest, if any, on the
global debt securities representing the Senior Debt Securities will be made to
The Depository Trust Company (the "Depositary").
The global debt securities representing the Senior Debt
Securities will be deposited with, or on behalf of, the Depositary and will be
registered in the name of the Depositary or a nominee of the Depositary. No
global debt securities may be transferred except as a whole by a nominee of the
Depositary to the Depositary or to another nominee of the Depositary, or by the
Depositary or such nominee to a successor of the Depositary or a nominee of such
successor.
So long as the Depositary or its nominee is the registered
owner of a global debt security, the Depositary or its nominee, as the case may
be, will be the sole Holder of
<PAGE> 9
6
the Senior Debt Securities represented thereby for all purposes under the
Indenture. Except as otherwise provided herein, each actual purchaser of each
Senior Debt Security represented by a global debt security ("Beneficial Owner")
will not be entitled to receive physical delivery of certificated Senior Debt
Securities and will not be considered the holders thereof for any purpose under
the Indenture, and no global debt security representing the Senior Debt
Securities shall be exchangeable or transferable. Accordingly, each Beneficial
Owner must rely on the procedures of the Depositary and, if such Beneficial
Owner is not a participant, on the procedures of the participant through which
such Beneficial Owner owns its interest in order to exercise any rights of a
Holder under such global debt security or the Indenture.
The global debt securities representing each series of Senior
Debt Securities will be exchangeable for certificated Senior Debt Securities of
like tenor and terms and of differing authorized denominations aggregating a
like principal amount, only if (i) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for the global debt securities,
(ii) the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii) the
Company in its sole discretion determines that the global debt securities shall
be exchangeable for certificated Senior Debt Securities or (iv) there shall have
occurred and be continuing an Event of Default under the Indenture with respect
to the Senior Debt Securities. Upon any such exchange, the certificated Senior
Debt Securities shall be registered in the names of the Beneficial Owners of the
global debt securities representing the Senior Debt Securities, which names
shall be provided by the Depositary's relevant participants (as identified by
the Depositary) to the Trustee. In such event the Company will execute, and
subject to Section 303 of the Indenture, the Trustee, upon receipt of an
Officers Certificate evidencing such determination by the Company, will
authenticate and deliver the Senior Debt Securities in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the global debt securities in exchange
for such global debt securities. Upon the exchange of the global debt securities
for such Senior Debt Securities in definitive registered form without coupons,
in authorized denominations, the global debt securities shall be cancelled by
the Trustee. Such Senior Debt Securities in definitive registered form issued in
exchange for the global debt securities shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Senior Debt Securities to the Depositary for
delivery to the Persons in whose names such Senior Debt Securities are so
registered.
SECTION 2.4. Interest.
The 2001 Notes shall bear interest at a rate equal to ____%
per annum; the 2008 Notes shall bear interest at a rate equal to ___% per annum;
and the 2028 Debentures shall bear interest at a rate equal to ___% per annum.
Interest on the Senior Debt Securities shall accrue from ____________ __, 1998,
or from the most recent interest payment date to which interest has been paid or
duly provided upon for such series, as the case may be. Interest on the Senior
Debt Securities shall be payable semiannually in arrears on ____________ __ and
_________ __, commencing ______________ __, 1998 (each an "Interest Payment
Date"), to the persons in whose names the Senior Debt Securities are
<PAGE> 10
7
registered at the close of business on _________ and ________, as the case may
be, preceding such Interest Payment Date.
ARTICLE III
REDEMPTION OF THE SENIOR DEBT SECURITIES
SECTION 3.1. Optional Redemption.
The 2008 Notes and the 2028 Debentures may be redeemed at any
time at the option of the Company, in whole or from time to time in part, upon
not less than 30 and not more than 60 days' notice to the Holders thereof, on
any date prior to maturity (the "Redemption Date") at a price (the "Redemption
Price") equal to (i) 100% of the principal amount of the applicable series of
Senior Debt Securities, plus (ii) accrued interest to the Redemption Date
(subject to the right of Holders of record of such Senior Debt Securities on the
relevant record date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date) plus (iii) a Make-Whole Premium, if any. In
no event will the Redemption Price of the Senior Debt Securities be less than
100% of the principal amount of the applicable series of Senior Debt Securities
being redeemed, respectively, plus accrued interest to the applicable Redemption
Date.
The Make-Whole Premium will be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, that if the Company fails to make such appointment at least 45
business days prior to the Redemption Date, or if the institution so appointed
is unwilling or unable to make such calculation, such calculation will be made
by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, if such firm is
unwilling or unable to make such calculation, by an independent investment
banking institution of national standing appointed by the Trustee (in any such
case, an "Independent Investment Banker").
If less than all of the Senior Debt Securities of a series are
to be redeemed, the Trustee will select the Senior Debt Securities to be
redeemed by such method as the Trustee shall deem fair and appropriate. The
Trustee may select for redemption Senior Debt Securities and portions of Senior
Debt Securities in amounts of whole multiples of $1,000.
SECTION 3.2. No Sinking Fund.
The Senior Debt Securities are not entitled to the benefit of
any sinking fund.
ARTICLE IV
COVENANTS
SECTION 4.1. Amendments to Article 10 of the Indenture.
<PAGE> 11
8
Article 10 of the Indenture is hereby amended in respect of
the Senior Debt Securities and only in respect of the Senior Debt Securities by
adding Section 1010, Section 1011, Section 1012 and Section 1013 as follows:
SECTION 1010. LIMITATION ON LIENS.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur or otherwise cause
or suffer to exist or become effective any Liens of any kind
upon any Principal Property or any shares of stock or
indebtedness of any Restricted Subsidiary (whether such
Principal Property, shares of stock or indebtedness are now
owned or hereafter acquired) unless all payments due under the
Indenture and the Senior Debt Securities are secured on an
equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien,
except for Permitted Liens.
SECTION 1011. LIMITATION ON SALE AND LEASEBACK
TRANSACTIONS.
Neither the Company nor any Restricted Subsidiary
will enter into any sale and leaseback transaction with
respect to any Principal Property (except for temporary leases
of a term, including renewals, not exceeding five years)
unless either (a) the Company or such Restricted Subsidiary
would be entitled, pursuant to the provisions of the
Indenture, to incur Indebtedness secured by a lien on the
property to be leased without equally and ratably securing the
Senior Debt Securities, or (b) the Company within 180 days
after the effective date of such transaction applies to the
voluntary retirement of its funded debt an amount equal to the
value of such transaction, defined as the greater of the net
proceeds of the sale of the property leased in such
transaction or the fair value, in the opinion of the Board of
Directors, of the leased property at the time such transaction
was entered into.
SECTION 1012. EXEMPTED INDEBTEDNESS.
Notwithstanding the foregoing limitations in Sections
1010 and 1011, the Company and its Restricted Subsidiaries may
issue, assume, suffer to exist or guarantee Indebtedness
secured by a Lien without securing the Senior Debt Securities,
or may enter into sale and leaseback transactions without
retiring funded debt, or enter into a combination of such
transactions, if the sum of the principal amount of all such
Indebtedness and the aggregate value of all such sale and
leaseback transactions does not at any such time exceed 10% of
the consolidated total assets of the Company and its
consolidated subsidiaries as shown in the consolidated balance
sheet contained in the latest annual or quarterly report filed
with the Securities and Exchange Commission (the
"Commission").
SECTION 1013. WAIVER OF CERTAIN COVENANTS.
<PAGE> 12
9
Compliance with Sections 1010 and 1011 may not be
waived by the Trustee unless the holders of at least a
majority in aggregate principal amount of all Senior Debt
Securities consent to such waiver; provided, however, that the
Company need not comply with Sections 1010 and 1011 in the
event it elects to comply with Section 1302 or Section 1303 of
the Base Indenture.
ARTICLE V
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER
SECTION 5.1. Amendments to Article 8 of the Indenture.
Article 8 of the Indenture is hereby amended in respect of the
Senior Debt Securities and only in respect of the Senior Debt Securities by
deleting Section 801 in its entirety and replacing it with Section 801 as
follows:
SECTION 801. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate or merge with or into, or
sell, lease, convey or otherwise dispose of all or substantially all of
its assets or assign any of its obligations unless:
(1) the entity formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, lease,
conveyance or other disposition shall have been made (the "Surviving
Entity"), is a corporation organized and existing under the laws of the
United States, any state thereof, or the District of Columbia;
(2) the Surviving Entity assumes by supplemental indenture all
of the obligations of the Company under the Senior Debt Securities and
the Indenture; and
(3) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.
ARTICLE VI
FORM OF SENIOR DEBT SECURITIES
SECTION 6.1. Form of Senior Debt Securities.
The Senior Debt Securities and the Trustee's Certificates of
Authentication to be endorsed thereon are to be substantially in the form of
Exhibit A, Exhibit B and Exhibit C hereto which forms are hereby incorporated in
and made a part of this Second Supplemental Indenture.
The terms and provisions contained in the Senior Debt
Securities shall constitute, and are hereby expressly made, a part of this
Second Supplemental Indenture, and
<PAGE> 13
10
the Company and the Trustee, by their execution and delivery of this Second
Supplemental Indenture, expressly agree to such terms and provisions and to be
bound thereby.
ARTICLE VII
ORIGINAL ISSUE OF SENIOR DEBT SECURITIES
SECTION 7.1. Original Issue of Senior Debt Securities.
2001 Notes in the aggregate principal amount of $150,000,000,
2008 Notes in the aggregate principal amount of $150,000,000, and 2028
Debentures in the aggregate principal amount of $150,000,000 may, upon execution
of this Second Supplemental Indenture, be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Senior Debt Securities to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and attested by its Secretary or one of its Assistant Secretaries,
without any further action by the Company.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Ratification of Indenture.
The Indenture as supplemented by this Second Supplemental
Indenture, is in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 8.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not
by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency
of this Second Supplemental Indenture.
SECTION 8.3. Governing Law.
This Second Supplemental Indenture and each 2001 Note, 2008
Note and 2028 Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of said State.
SECTION 8.4. Separability.
In case any one or more of the provisions contained in this
Second Supplemental Indenture or in the 2001 Notes, the 2008 Notes or the 2028
Debentures shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Second Supplemental
<PAGE> 14
11
Indenture or of the 2001 Notes, the 2008 Notes or the 2028 Debentures, but this
Second Supplemental Indenture and the 2001 Notes, the 2008 Notes and the 2028
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 8.5. Counterparts.
This Second Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
<PAGE> 15
12
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
KENNAMETAL INC., as Issuer
By: ______________________________
Name:
Title:
Attest:
By:_______________________________
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By: ______________________________
Name:
Title:
Attest:
By:_______________________________
<PAGE> 1
Exhibit 4.12
Form of Senior Notes due 2001
(FORM OF FACE OF 2001 SENIOR NOTES)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a
Global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of the Depositary or a nominee of the Depositary. This
2001 Note is exchangeable for 2001 Notes registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Note (other than a transfer
of this Note as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. _________________________ $____________________________
CUSIP No.____________________
<PAGE> 2
KENNAMETAL INC.
__% Senior Notes due 2001
KENNAMETAL INC., a corporation duly organized and existing
under the laws of the Commonwealth of Pennsylvania (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of _______________ ($______________) on _______ __, 2001 (such
date is hereinafter referred to as the "Maturity Date"), and to pay interest on
said principal sum from January __, 1998, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually in arrears on _______ __ and
_______ __ of each year, commencing on _______ __, 1998, at the rate of __% per
annum until the principal hereof shall have become due and payable. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the person in whose name
this Note (or one or more Predecessor Securities, as defined in said Indenture)
is registered at the close of business on the regular record date for such
interest which shall be the close of business on the _______ __ or _______ __,
as the case may be, preceding such Interest Payment Date. Any such interest not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to the registered Holders of this series of Notes not
less than 10 days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange all as more fully provided in the Indenture.
The principal of, and premium, if any, and the interest on this Note shall be
payable at the office or agency of the Trustee maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, senior and unsecured and will rank in right of
payment on parity with all other senior unsecured obligations of the Company.
Each Holder of this Note by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
<PAGE> 3
2
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated
KENNAMETAL INC.
By:______________________________
Name:
Title:
Attest:
By:______________________________
Name:
Title:
<PAGE> 4
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in
the within-mentioned Indenture.
Dated___________________________
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By______________________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
KENNAMETAL INC.
__% Senior Notes due 2001
This Note is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of January __, 1998 (the "Base Indenture"), duly
executed and delivered between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee") (as supplemented by a Second Supplemental
Indenture, dated January __, 1998), (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Securities is limited in aggregate principal amount as specified in said Second
Supplemental Indenture.
The Notes are not entitled to the benefit of any sinking fund.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Note and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of
<PAGE> 5
2
the Notes of each series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of, among other
things, adding any provisions to or changing or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying the
rights of the Holders of the Notes; provided, however, that, among other things,
no such supplemental indenture shall (i) reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon (subject to
the Company's right to defer such payments in the manner set forth herein), or
reduce any premium payable upon the redemption thereof, without the consent of
the Holder of each Note so affected, or (ii) reduce the aforesaid percentage of
Notes, the Holders of which are required to consent to any such supplemental
indenture, without the consent of the Holders of each Note then outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders
of a majority in aggregate principal amount of the Securities of any series at
the time outstanding affected thereby, on behalf of all of the Holders of the
Notes of such series, to waive a Default or Event of Default with respect to
such series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the registered Holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Note
and of any Note issued in exchange for or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Note at the time and place and at the rate and in the
money herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in The
City of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any Paying Agent and the Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
<PAGE> 6
3
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, and such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Indenture imposes certain limitations on the ability of
the Company to, among other things, merge or consolidate with any other Person,
sell, assign, transfer or lease all or substantially all of its properties or
assets or create or incur liens on certain of its property. All such covenants
and limitations are subject to a number of important qualifications and
exceptions. The Company must report periodically to the Trustee on compliance
with the covenants in the Indenture.
The Notes of this series are issuable only in fully registered
book-entry form without coupons in denominations of $1,000 and any integral
multiple thereof. This Global Note is exchangeable for Notes in definitive form
only under certain limited circumstances set forth in the Indenture. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series so issued are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
This Note shall be governed by and construed in accordance
with the laws of the State of New York.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE> 7
4
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Note to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Note on the books of the Trustee. The agent may
substitute another to act for him or her.
Date:___________________________________
Signature:_________________________________
Signature Guarantee:________________________
(Sign exactly as your name appears on the other side of this Note)
<PAGE> 1
Exhibit 4.13
Form of Senior Notes due 2008
(FORM OF FACE OF 2008 SENIOR NOTES)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a
Global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of the Depositary or a nominee of the Depositary. This
2008 Note is exchangeable for 2008 Notes registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Note (other than a transfer
of this Note as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]
No. _________________________ $____________________________
CUSIP No.____________________
<PAGE> 2
KENNAMETAL INC.
__% Senior Notes due 2008
KENNAMETAL INC., a corporation duly organized and existing
under the laws of the Commonwealth of Pennsylvania (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of _______________ ($______________) on _______ __, 2008 (such
date is hereinafter referred to as the "Maturity Date"), and to pay interest on
said principal sum from January __, 1998, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually in arrears on _______ __ and
_______ __ of each year, commencing on _______ __, 1998, at the rate of __% per
annum until the principal hereof shall have become due and payable. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the person in whose name
this Note (or one or more Predecessor Securities, as defined in said Indenture)
is registered at the close of business on the regular record date for such
interest which shall be the close of business on the _______ __ or _______ __,
as the case may be, preceding such Interest Payment Date. Any such interest not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to the registered Holders of this series of Notes not
less than 10 days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange all as more fully provided in the Indenture.
The principal of, and premium, if any, and the interest on this Note shall be
payable at the office or agency of the Trustee maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, senior and unsecured and will rank in right of
payment on parity with all other senior unsecured obligations of the Company.
Each Holder of this Note by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
<PAGE> 3
2
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated
KENNAMETAL INC.
By:______________________________
Name:
Title:
Attest:
By:______________________________
Name:
Title:
<PAGE> 4
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in
the within-mentioned Indenture.
Dated___________________________
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By______________________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
KENNAMETAL INC.
__% Senior Notes due 2008
This Note is one of a duly authorized series of Securities of
the Company (herein sometimes referred to as the "Securities"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of January __, 1998 (the "Base Indenture"), duly
executed and delivered between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee") (as supplemented by a Second Supplemental
Indenture, dated January __, 1998), (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities. By the terms of the Indenture, the Securities are
issuable in series that may vary as to amount, date of maturity, rate of
interest and in other respects as provided in the Indenture. This series of
Securities is limited in aggregate principal amount as specified in said Second
Supplemental Indenture.
The Notes are not entitled to the benefit of any sinking fund.
The Notes may be redeemed at any time at the option of the
Company, in whole or from time to time in part, upon not less than 30 and not
more than 60 days' notice to the Holders thereof, on any date prior to maturity
(the "Redemption Date") at a price (the "Redemption Price") equal to (i) 100% of
the principal amount of the Notes, plus (ii) accrued interest to the Redemption
Date (subject to the right of Holders of record of such Notes on the relevant
record date to receive interest due on an Interest Payment Date that is on or
prior to the Redemption Date) plus (iii) a Make-Whole Premium (as defined
below), if any. In no event will the Redemption Price of the Notes be less than
100% of the principal amount of the applicable series of Notes being redeemed,
respectively, plus accrued interest to the applicable Redemption Date.
<PAGE> 5
2
As used herein:
"Make-Whole Premium," means an amount equal to the excess, if
any, of:
(i) the sum of the present values, calculated as of the
applicable Redemption Date, of:
(A) each interest payment that, but for such
redemption, would have been payable on any such Note (or
portion thereof) being redeemed on each Interest Payment Date
occurring after the Redemption Date (excluding any accrued
interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such
redemption, would have been payable at the final maturity of
any such Note (or portion thereof) being redeemed; over
(ii) the principal amount of such Note (or portion thereof)
being redeemed.
The present values of interest and principal payments referred to in clause (i)
above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the applicable
Redemption Date at a discount rate equal to the applicable Treasury Yield (as
defined herein) plus __ basis points.
"Treasury Yield" means a rate of interest per annum equal to
the weekly average yield to maturity of United States Treasury securities that
have a constant maturity that corresponds to the remaining term to maturity of
the Notes, calculated to the nearest 1/12th of a year (the "Remaining Term").
The Treasury Yield will be determined as of the third business day immediately
preceding the applicable Redemption Date.
The weekly average yields to maturity of United States
Treasury securities will be determined by reference to the most recent
statistical release published by the Federal Reserve Bank of New York and
designated "H.15(519) Selected Interest Rates" or any successor release (the
"H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield to maturity for United States Treasury securities having a
constant maturity that is the same as the Remaining Term, then the Treasury
Yield will be equal to such weekly average yield to maturity. In all other
cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields to maturity on the United
States Treasury securities that have a constant maturity closest to and greater
than the Remaining Term and the United States Treasury securities that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields to
maturity as calculated by interpolation will be rounded to the nearest 1/100th
of 1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields to maturity for United States Treasury securities are not
available in the H.15 Statistical Release or otherwise, then the
<PAGE> 6
3
Treasury Yield will be calculated by interpolation of comparable rates selected
by the Independent Investment Banker.
If less than all of the Notes of a series are to be redeemed,
the Trustee will select the Notes to be redeemed by such method as the Trustee
shall deem fair and appropriate. The Trustee may select for redemption Notes and
portions of Notes in amounts of whole multiples of $1,000.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Note and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying the rights of the Holders of the Notes; provided,
however, that, among other things, no such supplemental indenture shall (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon (subject to the Company's right to defer such
payments in the manner set forth herein), or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Note so affected,
or (ii) reduce the aforesaid percentage of Notes, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Securities of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Notes of such series,
to waive a Default or Event of Default with respect to such series, and its
consequences, except a Default or Event of Default in the payment of the
principal of or premium, if any, or interest on any of the Securities of such
series. Any such consent or waiver by the registered Holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Note and of any Note
issued in exchange for or in place hereof (whether by registration of transfer
or otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Note at the time and place and at the rate and in the
money herein prescribed.
<PAGE> 7
4
As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in The
City of New York accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee, any Paying Agent and the Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, and such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Indenture imposes certain limitations on the ability of
the Company to, among other things, merge or consolidate with any other Person,
sell, assign, transfer or lease all or substantially all of its properties or
assets or create or incur liens on certain of its property. All such covenants
and limitations are subject to a number of important qualifications and
exceptions. The Company must report periodically to the Trustee on compliance
with the covenants in the Indenture.
The Notes of this series are issuable only in fully registered
book-entry form without coupons in denominations of $1,000 and any integral
multiple thereof. This Global Note is exchangeable for Notes in definitive form
only under certain limited circumstances set forth in the Indenture. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series so issued are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
This Note shall be governed by and construed in accordance
with the laws of the State of New York.
<PAGE> 8
5
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE> 9
6
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Note to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Note on the books of the Trustee. The agent may
substitute another to act for him or her.
Date:___________________________________
Signature:_________________________________
Signature Guarantee:________________________
(Sign exactly as your name appears on the other side of this Note)
<PAGE> 1
Exhibit 4.14
Form of Senior Debentures due 2028
(FORM OF FACE OF 2028 SENIOR DEBENTURES)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depositary or a nominee of the
Depositary. This 2028 Debenture is exchangeable for 2028 Debentures registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
No. _________________________ $____________________________
CUSIP No.____________________
<PAGE> 2
KENNAMETAL INC.
__% Senior Debenture due 2028
KENNAMETAL INC., a corporation duly organized and existing
under the laws of the Commonwealth of Pennsylvania (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of _______________ ($______________) on _______ __, 2028 (such
date is hereinafter referred to as the "Maturity Date"), and to pay interest on
said principal sum from January __, 1998, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually in arrears on _______ __ and
_______ __ of each year, commencing on _______ __, 1998, at the rate of __% per
annum until the principal hereof shall have become due and payable. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the person in whose name
this Debenture (or one or more Predecessor Securities, as defined in said
Indenture) is registered at the close of business on the regular record date for
such interest which shall be the close of business on the _______ __ or _______
__, as the case may be, preceding such Interest Payment Date. Any such interest
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such regular record date and may be paid to the Person
in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to the registered Holders of this series of
Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange all as more fully
provided in the Indenture. The principal of, and premium, if any, and the
interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of New
York, in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall appear in the
Security Register.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, senior and unsecured and will rank in right of
payment on parity with all other senior unsecured obligations of the Company.
Each Holder of this Debenture by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
<PAGE> 3
2
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated
KENNAMETAL INC.
By:______________________________
Name:
Title:
Attest:
By:______________________________
Name:
Title:
<PAGE> 4
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated___________________________
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By______________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
KENNAMETAL INC.
__% Senior Debenture
due 2028
This Debenture is one of a duly authorized series of
Securities of the Company (herein sometimes referred to as the "Securities"),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of January __, 1998 (the "Base
Indenture"), duly executed and delivered between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee") (as supplemented by a
Second Supplemental Indenture, dated January __, 1998), (the Base Indenture as
so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. By the terms of the
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Securities is limited in aggregate principal amount as
specified in said Second Supplemental Indenture.
The Debentures are not entitled to the benefit of any sinking
fund.
The Debentures may be redeemed at any time at the option of
the Company, in whole or from time to time in part, upon not less than 30 and
not more than 60 days' notice to the Holders thereof, on any date prior to
maturity (the "Redemption Date") at a price (the "Redemption Price") equal to
(i) 100% of the principal amount of the Debentures, plus (ii) accrued interest
to the Redemption Date (subject to the right of Holders of record of such
Debentures on the relevant record date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date) plus (iii) a Make-Whole
Premium (as defined below), if any. In no event will the Redemption Price of the
Debentures be less than 100% of the principal amount of the applicable series of
Debentures being redeemed, respectively, plus accrued interest to the applicable
Redemption Date.
<PAGE> 5
2
As used herein:
"Make-Whole Premium," means an amount equal to the excess, if
any, of:
(i) the sum of the present values, calculated as of the
applicable Redemption Date, of:
(A) each interest payment that, but for such
redemption, would have been payable on any such Debenture (or
portion thereof) being redeemed on each Interest Payment Date
occurring after the Redemption Date (excluding any accrued
interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such
redemption, would have been payable at the final maturity of
any such Debenture (or portion thereof) being redeemed; over
(ii) the principal amount of such Debenture (or portion
thereof) being redeemed.
The present values of interest and principal payments referred to in clause (i)
above will be determined in accordance with generally accepted principles of
financial analysis. Such present values will be calculated by discounting the
amount of each payment of interest or principal from the date that each such
payment would have been payable, but for the redemption, to the applicable
Redemption Date at a discount rate equal to the applicable Treasury Yield (as
defined herein) plus __ basis points.
"Treasury Yield" means a rate of interest per annum equal to
the weekly average yield to maturity of United States Treasury securities that
have a constant maturity that corresponds to the remaining term to maturity of
the Debentures, calculated to the nearest 1/12th of a year (the "Remaining
Term"). The Treasury Yield will be determined as of the third business day
immediately preceding the applicable Redemption Date.
The weekly average yields to maturity of United States
Treasury securities will be determined by reference to the most recent
statistical release published by the Federal Reserve Bank of New York and
designated "H.15(519) Selected Interest Rates" or any successor release (the
"H.15 Statistical Release"). If the H.15 Statistical Release sets forth a weekly
average yield to maturity for United States Treasury securities having a
constant maturity that is the same as the Remaining Term, then the Treasury
Yield will be equal to such weekly average yield to maturity. In all other
cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields to maturity on the United
States Treasury securities that have a constant maturity closest to and greater
than the Remaining Term and the United States Treasury securities that have a
constant maturity closest to and less than the Remaining Term (in each case as
set forth in the H.15 Statistical Release). Any weekly average yields to
maturity as calculated by interpolation will be rounded to the nearest 1/100th
of 1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields to maturity for United States
<PAGE> 6
3
Treasury securities are not available in the H.15 Statistical Release or
otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
If less than all of the Debentures of a series are to be
redeemed, the Trustee will select the Debentures to be redeemed by such method
as the Trustee shall deem fair and appropriate. The Trustee may select for
redemption Debentures and portions of Debentures in amounts of whole multiples
of $1,000.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Debenture and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of, among other things, adding any provisions to or changing or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying the rights of the Holders of the Debentures; provided,
however, that, among other things, no such supplemental indenture shall (i)
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon (subject to the Company's right to defer such
payments in the manner set forth herein), or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected, or (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture then outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding affected thereby, on behalf of all of the Holders of the Debentures
of such series, to waive a Default or Event of Default with respect to such
series, and its consequences, except a Default or Event of Default in the
payment of the principal of or premium, if any, or interest on any of the
Securities of such series. Any such consent or waiver by the registered Holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Debenture and of any Debenture issued in exchange for or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place and at the
rate and in the money herein prescribed.
<PAGE> 7
4
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee in
The City of New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any Paying Agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security Registrar)
for the purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, and such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Indenture imposes certain limitations on the ability of
the Company to, among other things, merge or consolidate with any other Person,
assign, transfer or lease all or substantially all of its properties or assets
or create or incur liens on certain of its property. All such covenants and
limitations are subject to a number of important qualifications and exceptions.
The Company must report periodically to the Trustee on compliance with the
covenants in the Indenture.
The Debentures of this series are issuable only in fully
registered book-entry form without coupons in denominations of $1,000 and any
integral multiple thereof. This Global Debenture is exchangeable for Debentures
in definitive form only under certain limited circumstances set forth in the
Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Debentures of this series so issued are exchangeable for a
like aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
This Debenture shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 8
5
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
<PAGE> 9
6
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Debenture to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Debenture on the books of the Trustee. The agent may
substitute another to act for him or her.
Date:___________________________________
Signature:_________________________________
Signature Guarantee:________________________
(Sign exactly as your name appears on the other side of this Debenture)
<PAGE> 1
EXHIBIT 5.1
Buchanan Ingersoll One Oxford Center
Professional Corporation 301 Grant Street, 20th Floor
Attorneys Pittsburgh, PA 15219-1410
January 20, 1998
Kennametal Inc.
Route 981 South at Westmoreland County Airport
Latrobe, Pennsylvania 15650
Re: Kennametal Inc.
Kennametal Financing I
Ladies and Gentlemen:
We have acted as counsel to Kennametal Inc., a Pennsylvania corporation
(the "Company"), and Kennametal Financing I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), in connection with the
preparation of a Registration Statement on Form S-3, File No. 333-40809 (as
amended and supplemented, the "Registration Statement"), including the form of
prospectus included therein (as supplemented, the "Prospectus"), filed by the
Company and the Trust with the Securities and Exchange Commission (the
"Commission") on November 21, 1997, under the Securities Act of 1933, as amended
(the "Act"), relating to the public offering of : (i) shares of the Company's
capital stock, par value $1.25 per share ("Common Stock"); (ii) stock purchase
contracts ("Stock Purchase Contracts") to purchase Common Stock; (iii) stock
purchase units ("Stock Purchase Units"), each representing ownership of a Stock
Purchase Contract and Preferred Securities (defined below) or debt obligations
of third parties, including U.S. Treasury securities, securing the holder's
obligation to purchase Common Stock under the Stock Purchase Contracts; (iv) the
Company's debentures (the "Debentures") to be purchased with the proceeds from
the sale of preferred securities representing preferred undivided beneficial
interests in the Trust ("Preferred Securities"), debentures, notes and other
debt securities in one or more series, which may be either senior debt
securities or subordinated debt securities (together with the Debentures, the
"Debt Securities"); and (v) the Preferred Securities, which the Trust may issue,
from time to time, in each case in amounts, at prices and on terms to be
determined at the time or times of offering. The Stock Purchase Contracts, Stock
Purchase Units, Debt Securities, Common Stock and Preferred Securities are
collectively called the "Securities." Certain payment obligations with respect
to the Preferred Securities will be guaranteed by a guarantee of the Company
(the "Guarantee") to the extent set forth in the related guarantee agreement to
be entered into by the Company (the "Guarantee Agreement"). The aggregate
initial offering price of all of the Securities which may be sold pursuant to
the Prospectus will not exceed $1.4 billion.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
certificates or records as we have deemed necessary or appropriate as bases for
the opinions set forth herein. In our examination, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents
<PAGE> 2
of all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies.
Based on the foregoing, and subject to the other qualifications and
limitations set forth herein, we are of the following opinion:
1. When (a) the issuance, execution and delivery by the
Company of any of the Debt Securities shall have been duly authorized by all
necessary corporate actions of the Company and (b) such Debt Securities shall
have been duly executed and delivered by the Company, authenticated by the
Trustee (the "Trustee") under the indenture (the "Indenture") pursuant to which
the Debt Securities shall be issued and sold as contemplated by each of the
Registration Statement, the Prospectus, and any prospectus supplement relating
to such Debt Securities and the Indenture, assuming that the terms of such Debt
Securities are in compliance with then applicable law, such Debt Securities will
be validly issued and will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors generally and
by general principles of equity (whether considered in a proceeding at law or
equity).
2. When (a) the terms of the issuance and sale of the Common
Stock shall have been duly authorized by all necessary corporate actions of the
Company and (b) the shares of Common Stock shall have been duly issued and
delivered as contemplated by each of the Registration Statement, the Prospectus,
and any prospectus supplement relating thereto and paid for with the
consideration fixed therefor by the Board of Directors or a duly authorized
committee therefor, assuming that the Company has reserved for issuance the
requisite number of shares of Common Stock, the Common Stock will be duly
authorized, validly issued, fully paid and nonassessable.
3. When (a) the terms of the issuance and sale of the Stock
Purchase Contracts or Stock Purchase Units shall have been duly authorized by
all necessary corporate actions of the Company and (b) such Stock Purchase
Contracts or Stock Purchase shall have been duly issued and delivered as
contemplated by each of the Registration Statement, the Prospectus, and any
prospectus supplement relating thereto and paid for with the consideration fixed
therefor by the Board of Directors or a duly authorized committee therefor,
assuming that the terms of such Stock Purchase Contracts or Stock Purchase Units
are in compliance with then applicable law, such Stock Purchase Contracts or
Stock Purchase Units will be duly authorized, validly issued, fully paid and
nonassessable.
4. When (a) the issuance of any Guarantee, and the execution
and delivery of the related Guarantee Agreement, by the Company shall have been
authorized by all necessary corporate actions of the Company and (b) such
Guarantee Agreement shall have been duly executed and delivered by the Company,
assuming that the terms of such Guarantee Agreement are in compliance with then
applicable law, such Guarantee Agreement will constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity (whether considered in a
proceeding at law or equity).
<PAGE> 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the Prospectus contained therein.
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
By: /s/ LEWIS U. DAVIS, JR.
----------------------------
Lewis U. Davis, Jr.
<PAGE> 1
Exhibit 5.2
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
P.O. Box 636
Wilmington, DE 19899-0636
January 20, 1998
Kennametal Inc.
Kennametal Financing I
c/o Kennametal Inc.
State Route 981 South
P.O. Box 231
Latrobe, Pennsylvania 15650-0231
Re: Kennametal Inc.;
Kennametal Financing I;
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to (1) Kennametal Inc. (the
"Company"), a corporation organized under the laws of the Commonwealth of
Pennsylvania and (2) Kennametal Financing I (the "Trust"), a statutory business
trust formed under the Business Trust Act of the State of Delaware, in
connection with the preparation of a Registration Statement on Form S-3 (File
No. 333-40809), filed by the Company and the Trust with the Securities and
Exchange Commission (the "Commission") on November 21, 1997 under the
Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto filed
with the Commission on January 2, 1998 and Amendment No. 2 thereto being filed
with the Commission on the date hereof (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement") in
connection with the public offering of 4,500,000 FELINE PRIDES(sm) (the
"Securities"), each initially comprised of (a) a purchase contract under which
(i) the holders of the Securities (the "Holders") agree to purchase from the
Company on February 16, 2001, a number of shares of the Company's common stock
and (b) beneficial
<PAGE> 2
Kennametal Inc.
January 20, 1998
Page 2
ownership of one Trust Originated Preferred Security(SM) (the "Preferred
Security") of the Trust, having a stated liquidation amount of $50 and
representing a preferred undivided beneficial interest in the assets of the
Trust.
The Preferred Securities of the Trust are to be issued pursuant to the
Amended and Restated Agreement of Trust of the Trust (the "Declaration"), such
Declaration being among the Company, as sponsor, The First National Bank of
Chicago, as the institutional trustee (in such capacity, the "Institutional
Trustee"), First Chicago Delaware Inc., as Delaware trustee, and Robert L.
McGeehan, David T. Cofer and James E. Morrison, as regular trustees.
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate
of trust of the Trust, dated November 12, 1997 (as amended by the Amended and
Restated Certificate of Trust, dated January 14, 1998, the "Certificate of
Trust") as filed with the Secretary of State of the State of Delaware; (ii) the
form of the Declaration (including the form of the designation of the terms of
the Preferred Securities annexed thereto); and (iii) the form of the Preferred
Securities. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such other documents, certificates and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all
<PAGE> 3
Kennametal Inc.
January 20, 1998
Page 3
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. In
making our examination of documents executed by parties other than the Trust, we
have assumed that such parties had the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and that such documents constitute
valid and binding obligations of such parties. In addition, we have assumed that
the Declaration and the Preferred Securities, when executed, will be in
substantially the form reviewed by us. As to any facts material to the opinions
expressed herein which were not independently established or verified, we have
relied upon oral or written statements and representations of officers, trustees
and other representatives of the Company, the Trust and others.
Members of our firm are admitted to the bar in the State of Delaware, and
we express no opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing and to the other qualifications and
limitations set forth herein, we are of the opinion that the Preferred
Securities, when the Declaration has been duly executed and delivered and the
terms of the Preferred Securities have been established in accordance with the
terms of the Declaration, the Preferred Securities will be duly authorized for
issuance and, when issued, executed and authenticated in accordance with the
terms of the Declaration and delivered and paid for as contemplated by the form
of prospectus supplement included in the Registration Statement, will be validly
issued, fully paid and
<PAGE> 4
Kennametal Inc.
January 20, 1998
Page 4
nonassessable, representing undivided beneficial interests in the assets of the
Trust. We bring to your attention, however, that the Preferred Securities
holders may be obligated, pursuant to the Declaration, to (i) provide indemnity
and/or security in connection with and pay taxes or governmental charges arising
from transfers of Preferred Securities and (ii) provide security and indemnity
in connection with the requests of or directions to the Institutional Trustee
to exercise its rights and powers under the Declaration.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the use of our name
under the heading "Legal Matters" in the prospectus supplement included in the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission promulgated thereunder.
This opinion is expressed as of the date hereof unless otherwise expressly
stated and we disclaim any undertaking to advise you of any subsequent changes
in the facts stated or assumed herein or of any subsequent changes in applicable
law.
Very truly yours,
/S/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
---------------------------------------------
Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
----------------------
Kennametal Financing I
(Exact name of obligors as specified in their trust agreements)
Pennsylvania 52-2064104
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
c/o Kennametal Inc.
Route 981 South at Westmoreland County Airport
Latrobe, Pennsylvania 15650
(Address of principal executive offices) (Zip Code)
Preferred Securities of Kennametal Financing I
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 12th day of
January, 1998.
The First National Bank of Chicago,
Trustee
By /s/ STEVEN M. WAGNER
-------------------------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 12, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Amended and Restated Agreement of
Trust of Kennametal Financing I Dated as of January ___, 1998, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ STEVEN M. WAGNER
--------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in C400
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1).............. 0081 4,499,157 1.a.
b. Interest-bearing balances(2)....................................... 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A).......... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)....... 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C).................................................................. RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses........................... RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve............................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)................................... 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D).................................... 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases)............... 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M)........................... 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)......................................... 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding........... 2155 614,921 9.
10. Intangible assets (from Schedule RC-M)................................. 2143 277,105 10.
11. Other assets (from Schedule RC-F)...................................... 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11)............................... 2170 56,108,875 12.
</TABLE>
- -------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)...................................... RCON 2200 21,496,468 13.a
(1) Noninterest-bearing(1)....................................... RCON 6631 8,918,843 13.a.1
(2) Interest-bearing............................................. RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................... RCFN 2200 14,164,129 13.b.
(1) Noninterest bearing.......................................... RCFN 6631 352,399 13.b.1
(2) Interest-bearing............................................. RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D).......................... RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less................... RCFD 2332 2,608,057 16.a
b. With a remaining maturity of than one year through three years.. A547 379,893 16.b
. c. With a remaining maturity of more than three years .............. A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding............. RCFD 2920 614,921 18
19. Subordinated notes and debentures (2)............................... RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G).............................. RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20)...................... RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus....................... RCFD 3838 0 23
24. Common stock........................................................ RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock)............ RCFD 3839 2,989,408 25
26. a. Undivided profits and capital reserves........................... RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities....................................................... RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments................. RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27)................... RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28)....... RCFD 3300 56,108,875 29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that best describes the most Number
comprehensive level of auditing work performed for the bank by independent external -------
auditors as of any date during 1996 . . . . . . . . . . . . . . . . . . . . . . .RCFD 6724.... N/A. M.1
-------
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4.= Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- --------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
----------------
Kennametal Inc.
(Exact name of obligors as specified in their trust agreements)
Pennsylvania 25-0900168
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
Route 981 South at Westmoreland County Airport
Latrobe, Pennsylvania 15650
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantee of Preferred Securities of Kennametal Financing I
(Title of Indenture Securities)
<PAGE> 2
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Chicago and State of Illinois, on the 12th day of
January, 1998.
The First National Bank of Chicago,
Trustee
By /s/ STEVEN M. WAGNER
-------------------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 12, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of (i) the Indenture of Kennametal Inc. to
The First National Bank of Chicago, as Trustee, relating to the Debt Securities
of Kennametal Inc., and (ii) the Preferred Securities Guarantee Agreement of the
Preferred Securities of Kennametal Financing I, the undersigned, in accordance
with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by Federal or
State authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ STEVEN M. WAGNER
----------------------------------
Steven M. Wagner
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400
Dollar Amounts in ----
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1).................... 0081 4,499,157 1.a.
b. Interest-bearing balances(2)............................................. 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)....................................................................... RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses................................ RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve.................................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D)......................................... 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases).................... 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 614,921 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 277,105 10.
11. Other assets (from Schedule RC-F)........................................... 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11).................................... 2170 56,108,875 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)......................................... RCON 2200 21,496,468 13.a
(1) Noninterest-bearing(1).......................................... RCON 6631 8,918,843 13.a.1
(2) Interest-bearing................................................ RCON 6636 12,577,625 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).................................. RCFN 2200 14,164,129 13.b.
(1) Noninterest bearing............................................. RCFN 6631 352,399 13.b.1
(2) Interest-bearing................................................ RCFN 6636 13,811,730 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3,894,469 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 68,268 15.a
b. Trading Liabilities(from Schedule RC-D)............................. RCFD 3548 5,247,232 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less...................... RCFD 2332 2,608,057 16.a
b. With a remaining maturity of than one year through three years..... A547 379,893 16.b
. c. With a remaining maturity of more than three years ................. A548 323,042 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding................ RCFD 2920 614,921 18
19. Subordinated notes and debentures (2).................................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G)................................. RCFD 2930 1,222,121 20
21. Total liabilities (sum of items 13 through 20)......................... RCFD 2948 51,718,600 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......................... RCFD 3838 0 23
24. Common stock........................................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred stock)............... RCFD 3839 2,989,408 25
26. a. Undivided profits and capital reserves.............................. RCFD 3632 1,175,518 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.......................................................... RCFD 8434 26,750 26.b.
27. Cumulative foreign currency translation adjustments.................... RCFD 3284 (2,259) 27
28. Total equity capital (sum of items 23 through 27)...................... RCFD 3210 4,390,275 28
29. Total liabilities and equity capital (sum of items 21 and 28).......... RCFD 3300 56,108,875 29
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that best describes the most Numner
comprehensive level of auditing work performed for the bank by independent external ------
auditors as of any date during 1996 . . . . . . . . . . . . . . . . . . . . . . . . . .RCFD 6724.... N/A. M.1
------
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4.= Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
