SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 17, 1997
GREENFIELD INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21828 04-2917072
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2743 Perimeter Parkway 30909
Building One Hundred, Suite 100 (Zip Code)
Augusta, Georgia
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (706) 863-7708
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant
(a) On November 17, 1997, Kennametal Inc., a Pennsylvania corporation
("Parent"), announced that its wholly-owned subsidiary, Kennametal Acquisition
Corp., a Delaware corporation ("Purchaser"), had accepted for payment
16,179,976, or approximately 98%, of the outstanding shares of common stock, par
value $0.01 per share, including the associated preferred stock purchase rights
issued pursuant to the Restated Rights Agreement between the Greenfield
Industries, Inc. (the "Company" or the "Registrant") and First Chicago Trust
Company of New York, as Rights Agent, dated as of February 6, 1996, as amended
on October 10, 1997 (the "Shares"), of the Company, tendered in response to
Purchaser's tender offer (the "Offer") for all outstanding Shares of the Company
at a price of $38.00 per Share, net to the seller in cash, without interest
thereon, less any required withholding taxes. The Offer expired, as scheduled,
at 12:00 midnight, New York City time, on Friday, November 14, 1997.
The Offer, commenced on October 17, 1997, was made pursuant to an Agreement
and Plan of Merger, dated as of October 10, 1997 (the "Merger Agreement"), by
and among Parent, Purchaser and the Company. The merger of the Purchaser into
the Company (the "Merger") occurred on November 18, 1997. In accordance with
Delaware law, Purchaser, as the beneficial owner of at least 90% of the
outstanding Shares of the Company, was able to effect the Merger without a
meeting of the stockholders of the Company. Holders of Shares which were not
tendered in the Offer have statutory appraisal rights under Delaware law with
respect to the Merger. Each Share of the Company outstanding which was not
tendered and purchased pursuant to the Offer and with respect to which appraisal
is not properly demanded by virtue of the Merger has been canceled and converted
automatically into and represents the right to receive $38.00 per Share, net to
such holder in cash, without interest thereon, less any required withholding
taxes, upon the surrender of the certificate formerly representing such Share.
The Company has been advised by Purchaser and Parent that the total amount
of funds required by Purchaser to purchase all Shares on a fully diluted basis
is approximately $780 million. The total amount of funds required to consummate
the Offer and the Merger, to refinance certain of the Company's and Parent's
existing indebtedness, and to pay related fees and expenses is estimated by
Purchaser to be approximately $1.1 billion.
The Company has been advised that Parent obtained the funds necessary for
the foregoing and for Parent's, the Company's and their respective subsidiaries'
working capital and capital expenditure requirements and general corporate
purposes pursuant to a credit facility (the "Credit Agreement") entered into
between Parent and Mellon Bank, N.A., as Administrative Agent, and, as
initial lenders, BankBoston, N.A., Deutsche Bank AG, New York Branch and/or
Cayman Islands Branch and PNC
<PAGE>
Bank, National Association providing for up to $1.4 billion in the aggregate in
the form of a revolving credit facility and a term loan facility, substantially
on the terms set forth in Section 10 ("Source and Amount of Funds") on pages
15-16 of the Offer to Purchase, a copy of the form of which is attached as
Exhibit (a)(1) to the Schedule 14D-1 and which Section 10 is incorporated herein
by reference.
As a result of the consummation of the Merger, the directors of Purchaser
are the directors of the Company until their successors have been duly elected
or appointed and qualified or their earlier death, resignation or removal in
accordance with the Company' Certificate of Incorporation and By-Laws.
(b) In connection with the Credit Agreement, Purchaser pledged, on the date
of the Merger, all of the shares of common stock, par value $0.01 per share (the
"Survivor Shares"), of Greenfield Industries, Inc., as the surviving corporation
of the Merger (the "Surviving Corporation"), to Mellon Bank, N.A., as Collateral
Agent for the benefit of the Secured Parties (as defined in the Credit
Agreement). In the event the Secured Parties were to foreclose their security
interest in the Survivor Shares, a change in control with respect to the
Surviving Corporation would result. To the knowledge of the Surviving
Corporation, there are no other arrangements, including any pledge by any person
of securities of the Surviving Corporation, the operation of which may at a
subsequent date result in a change in control of the Surviving Corporation.
Item 7. Exhibits
(c) Exhibits
Exhibit No. Description
----------- -----------
10.1 Guaranty and Suretyship Agreement, dated as of November 17, 1997,
made by the Subsidiary Guarantor named therein in favor of Mellon
Bank, N.A., as Collateral Agent (incorporated herein by reference
to Exhibit (b)(3) of the Schedule 14D-1 filed by Parent on
October 17, 1997, as amended (the "Schedule 14D-1")).
10.2 Additional Subsidiary Guarantor Supplement by the Company dated
as of November 18, 1997.
10.3 Subsidiary Pledge Agreement by the Company dated as of November
18, 1997.
10.4 Borrower Pledge Agreement, dated as of November 17, 1997, made by
Parent, as Guarantor, in favor of Mellon Bank, N.A., as
Collateral Agent (incorporated herein by reference to Exhibit
(b)(4) of the Schedule 14D-1).
10.5 Additional Designated Collateral Supplement by Parent dated as of
November 18, 1997.
10.6 Agreement and Plan of Merger, dated as of October 10, 1997, by
and among Parent, Purchaser and the Company (incorporated herein
by reference to Exhibit 1 of the Schedule 14D-9).
<PAGE>
10.7 Credit Agreement, dated as of November 17, 1997, by and among
Parent, as Borrower, the Lender Parties named therein, and Mellon
Bank, N.A., as Administrative Agent (incorporated herein by
reference to Exhibit (b)(2) of the Schedule 14D-1).
99.1 Press Release, dated November 17, 1997, by Parent regarding
completion of the Offer (incorporated herein by reference to
Exhibit (a)(12) to Amendment No. 4, dated November 17, 1997 to
the Tender Offer Statement on Schedule 14D-1, dated October 17,
1997, as amended, filed by Parent and Purchaser).
99.2 Section 10 ("Source and Amount of Funds") on pages 15- 16 of the
Offer to Purchase (incorporated herein by reference to Exhibit
(a)(1) to the Schedule 14D-1).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREENFIELD INDUSTRIES, INC.
Date: November 18, 1997 By: /s/ Gary L. Weller
----------------------------------
Gary L. Weller
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
10.1 Guaranty and Suretyship Agreement, dated as of November 17, 1997,
made by the Subsidiary Guarantor named therein in favor of Mellon
Bank, N.A., as Collateral Agent (incorporated herein by reference
to Exhibit (b)(3) of the Schedule 14D-1 filed by Parent on
October 17, 1997, as amended (the "Schedule 14D-1")).
10.2 Additional Subsidiary Guarantor Supplement by the Company dated
as of November 18, 1997.
10.3 Subsidiary Pledge Agreement by the Company dated as of November
18, 1997.
10.4 Borrower Pledge Agreement, dated as of November 17, 1997, made by
Parent, as Guarantor, in favor of Mellon Bank, N.A., as
Collateral Agent (incorporated herein by reference to Exhibit
(b)(4) of the Schedule 14D-1).
10.5 Additional Designated Collateral Supplement by Parent dated as of
November 18, 1997.
10.6 Agreement and Plan of Merger, dated as of October 10, 1997, by
and among Parent, Purchaser and the Company (incorporated herein
by reference to Exhibit 1 of the Schedule 14D-9).
10.7 Credit Agreement, dated as of November 17, 1997, by and among
Parent, as Borrower, the Lender Parties named therein, and Mellon
Bank, N.A., as Administrative Agent (incorporated herein by
reference to Exhibit (b)(2) of the Schedule 14D-1).
99.1 Press Release, dated November 17, 1997, by Parent regarding
completion of the Offer (incorporated herein by reference to
Exhibit (a)(12) to Amendment No. 4, dated November 17, 1997 to
the Tender Offer Statement on Schedule 14D-1, dated October 17,
1997, as amended, filed by Parent and Purchaser).
99.2 Section 10 ("Source and Amount of Funds") on pages 15- 16 of the
Offer to Purchase (incorporated herein by reference to Exhibit
(a)(1) to the Schedule 14D-1).
ADDITIONAL SUBSIDIARY GUARANTOR SUPPLEMENT
THIS SUPPLEMENT to the Guaranty and Suretyship Agreement dated as of
November 18, 1997 made by the Subsidiary Guarantors referred to therein in favor
of Mellon Bank, N.A., as Collateral Agent (such Guaranty and Suretyship
Agreement, as amended, modified or supplemented, being referred to as the
"Subsidiary Guaranty").
Recitals:
A. Capitalized terms used herein and not otherwise defined shall have the
meanings given them in, or by reference in, the Subsidiary Guaranty.
B. The Subsidiary Guaranty contemplates that a Person may become party to
the Subsidiary Guaranty as an additional Subsidiary Guarantor. The Person
executing this Supplement as Subsidiary Guarantor below (the "Additional
Subsidiary Guarantor") desires to become party to the Subsidiary Guaranty as a
Subsidiary Guarantor.
NOW, THEREFORE, the Additional Subsidiary Guarantor , intending to be
legally bound hereby, represents, warrants and covenants to the Secured Parties
and the Loan Parties as follows:
Section 1. Joinder.
(a) The Additional Subsidiary Guarantor hereby becomes party to the
Subsidiary Guaranty as a Subsidiary Guarantor thereunder, and agrees that it
shall be subject to and bound by all of the provisions thereof.
(b) Without limiting the generality of the foregoing, the Additional
Subsidiary Guarantor acknowledges and agrees that the provisions of the
Collateral Agency Agreement are supplemental to the provisions of the Subsidiary
Guaranty, as provided in the Collateral Agency Agreement. The Additional
Subsidiary Guarantor consents and agrees to the terms of the Collateral Agency
Agreement, and acknowledges and agrees that, by becoming party to the Subsidiary
Guaranty, the Additional Subsidiary Guarantor is and shall be party to the
Collateral Agency Agreement and shall be subject to and bound by all of the
provisions of the Collateral Agency Agreement. The Additional Subsidiary
Guarantor acknowledges receipt of a copy of the Collateral Agency Agreement.
Section 2. Warranties, etc. The Additional Subsidiary Guarantor hereby
represents and warrants to each Secured Party that each of the representations
and warranties set forth in Article III of the Subsidiary Guaranty is true and
correct, insofar as such provisions relate to the Additional Subsidiary
Guarantor or any Subsidiary of the Additional Subsidiary Guarantor, after giving
effect to this Supplement.
Section 3. Governing Law. This Supplement shall be governed by, construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to principles of conflicts of law.
Section 4. Execution in Counterparts. This Supplement may be executed by
the Additional Subsidiary Guarantor in any number of counterparts, each of which
shall be deemed to be an original, and all such counterparts shall constitute
but one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has duly executed
this Supplement.
GREENFIELD INDUSTRIES, INC.
as Subsidiary Guarantor
By/s/James E. Morrison
-------------------------------
Name: James E. Morrison
Title: Vice President and Assistant Treasurer
Address: State Route 981 South
P. O. Box 231
Latrobe, Pennsylvania 15650
Attn: James E. Morrison
Telephone: 412-539-5180
Facsimile: 412-539-4668
Telex:
(Answerback: )
Date: November 18, 1997
_______________________________________________________________________________
_______________________________________________________________________________
SUBSIDIARY PLEDGE AGREEMENT
dated as of November 18, 1997
made by
GREENFIELD INDUSTRIES, INC.,
as Grantor,
in favor of
MELLON BANK, N.A.,
as Collateral Agent
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
Table of Contents
Section Title Page
ARTICLE I DEFINITIONS
1.01 Definitions.................................... 1
1.02 UCC Definitions................................ 2
ARTICLE II THE SECURITY
2.01 Grant of Security ............................. 2
2.02 Continuing Agreement........................... 2
2.03 Additional Releases in Certain Circumstances... 2
2.04 Execution of this Agreement.................... 3
ARTICLE III REPRESENTATIONS AND WARRANTIES
3.01 Title........................................... 3
3.02 Validity, Perfection and Priority............... 3
3.03 Governmental Approvals and Filings.............. 3
3.04 Offices, etc.................................... 4
3.05 Names, etc...................................... 4
3.06 Taxes, etc...................................... 4
3.07 Designated Subsidiaries and Designated
Pledged Shares............................... 4
3.08 Margin Stock.................................... 4
3.09 Representations and Warranties Remade at
Each Extension of Credit...................... 4
ARTICLE IV COVENANTS
4.01 Transfers and Other Liens, etc.; Additional
Designated Subsidiaries, etc................. 5
4.02 Change in Name, etc............................. 5
4.03 Certain Covenants............................... 6
4.04 Further Assurances.............................. 7
ARTICLE V CERTAIN RIGHTS AND REMEDIES OF THE SECURED PARTIES
5.01 Collateral Agent May Perform.................... 8
5.02 No Duty to Exercise Powers...................... 8
5.03 Duties of Collateral Agent...................... 8
5.04 Power of Attorney............................... 8
5.05 Certain Remedies................................ 9
5.06 Application of Payments......................... 10
5.07 Registration Rights............................. 10
ARTICLE VI MISCELLANEOUS
<PAGE>
6.01 Amendments, etc................................. 11
6.02 No Implied Waiver; Remedies Cumulative.......... 11
6.03 Notices......................................... 11
6.04 Indemnity and Expenses.......................... 11
6.05 Entire Agreement................................ 11
6.06 Survival........................................ 12
6.07 Counterparts.................................... 12
6.08 Construction.................................... 12
6.09 Successors and Assigns.......................... 12
6.10 Collateral Agency Agreement..................... 12
6.11 Governing Law................................... 12
Schedule 3.04 Location of Offices, etc.
Schedule 3.05 Names, etc.
Schedule 3.07 Designated Subsidiaries and Designated Pledged Shares
Annex A Form of Additional Designated Collateral Supplement
Annex B Form of Opinion of Counsel to Grantor
ii
<PAGE>
SUBSIDIARY PLEDGE AGREEMENT
THIS AGREEMENT, dated as of November 18, 1997, made by GREENFIELD
INDUSTRIES, INC., a Delaware corporation (the "Grantor"), in favor of MELLON
BANK, N.A., as Collateral Agent under the Collateral Agency Agreement referred
to below (in such capacity, together with its successors, the "Collateral
Agent") for the Secured Parties (as defined in the Collateral Agency Agreement).
Recitals:
A. Kennametal Inc., a Pennsylvania corporation (the "Borrower") has entered
into a Credit Agreement dated as of November 17, 1997 with the Lenders parties
thereto from time to time and Mellon Bank, N.A., as Administrative Agent (as
amended, modified or supplemented from time to time, the "Credit Agreement").
The Grantor is a party to the Subsidiary Pledge Agreement (as defined in the
Credit Agreement), pursuant to which, as Subsidiary Guarantor, the Grantor has
guaranteed obligations of the Borrower under or in connection with the Credit
Agreement and the other Obligations referred to in the Collateral Agency
Agreement referred to below.
B. The Borrower, certain Subsidiary Guarantors (as defined therein),
certain Lender Parties (as defined therein), and certain Swap Parties, and
Mellon Bank, N.A., as Collateral Agent, have entered into a Collateral Agency
Agreement dated as of November 17, 1997 (as amended, modified or supplemented
from time to time, the "Collateral Agency Agreement"). Pursuant to the
Collateral Agency Agreement, the Collateral Agent has agreed to serve as the
collateral agent for the Facility Parties (as defined therein) with respect to
certain direct and indirect security (including this Agreement) for obligations
of the Borrower under or in connection with the Credit Agreement and the other
Obligations referred to in the Collateral Agency Agreement.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Grantor hereby agrees as follows:
Article I
Definitions
1.01. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings given such terms in the Collateral Agency Agreement or, if not
defined therein, in the Credit Agreement. In addition to the other terms defined
elsewhere in this Agreement, as used herein, the following terms shall have the
following meanings:
"Designated Pledged Shares" shall mean all shares of capital stock and
other equity interests identified as such in Schedule 3.07, as such Schedule may
be supplemented from time to time pursuant to this Agreement.
"Designated Subsidiaries" shall mean the Persons identified as such in
Schedule 3.07, as such Schedule may be supplemented from time to time pursuant
to this Agreement.
"Distributions" shall mean all property, rights and interests of any kind
or nature (whether cash, securities or other) from time to time received,
receivable or otherwise distributed
<PAGE>
with respect to or in exchange for any Collateral, including without limitation
all cash, securities or other property received or receivable as dividends, or
as a result of any stock splits, reclassifications, mergers or consolidations,
or as any other distributions (whether similar or dissimilar to the foregoing),
or as a result of exercise of any options, warrants or rights included in or
associated with any Collateral, or as principal, interest or premium.
"UCC" shall mean the Uniform Commercial Code as in effect in the
Commonwealth of Pennsylvania from time to time.
1.02. UCC Definitions. Unless otherwise defined herein, terms defined in
Article 8 or Article 9 of the UCC shall have the same meanings in this
Agreement.
Article II
The Security
2.01. Grant of Security. As security for the full and timely payment and
performance of the Obligations, the Grantor hereby assigns and pledges to the
Collateral Agent for the benefit of the Secured Parties, and grants to the
Collateral Agent for the benefit of the Secured Parties a security interest in,
all right, title and interest of the Grantor in, to and under the following,
whether now or hereafter existing or acquired (the "Collateral"):
(a) the Designated Pledged Shares,
(b) all additional shares of stock of, and all other equity interests
in, any Designated Subsidiary from time to time acquired by the Grantor in
any manner; provided, that the Collateral shall at no time contain more
than 65% of the voting stock of any Designated Subsidiary that is a Foreign
Subsidiary except to the extent such voting stock constitutes Designated
Pledged Shares;
(c) all Distributions; and
(d) all proceeds of any of the foregoing (including, without
limitation, proceeds which constitute property of the types described in
the foregoing clauses (a), (b) and (c)).
All Collateral hereunder constitutes "Shared Collateral," as such term is used
in the Collateral Agency Agreement.
2.02. Continuing Agreement. This Agreement creates a continuing Lien in the
Collateral. The Collateral Agent shall release the Liens created hereby as
provided in Section 6.08 of the Collateral Agency Agreement, and upon such
release the Collateral Agent will, at the Grantor's request and expense, return
to the Grantor, without any representations, warranties or recourse of any kind
whatsoever (except as to Liens created by the Collateral Agent), such of the
Collateral as then may be held by the Collateral Agent hereunder, and execute
and deliver to the Grantor such documents as the Grantor may reasonably request
to evidence such termination.
2.03. Additional Releases in Certain Circumstances. Upon any sale or other
disposition of any item of Collateral in accordance with the terms of the Credit
Agreement, the Collateral Agent will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor
-2-
<PAGE>
may reasonably request to release such item of Collateral from the Lien granted
hereby; provided, however, that (a) at the time of such request and such release
no Event of Default or Potential Default shall have occurred and be continuing,
(b) the Grantor shall have delivered to the Collateral Agent and the
Administrative Agent, at least five Business Days prior to the date of the
proposed release, a written request for release describing the item of
Collateral and the term of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a form for release for execution by the Collateral Agent and a
certification by the Grantor to the effect that the transaction is in compliance
with the Secured Party Documents and as to such matters as the Collateral Agent
may in good faith request, (c) the Administrative Agent shall not have given to
the Collateral Agent prior to the proposed release a notice to the effect that
the conditions set forth in this Section 2.03 have not been satisfied and
specifically requesting that the Collateral Agent not effect such release, and
(d) the proceeds of any such sale or other disposition required to be applied in
accordance with Section 2.07 of the Credit Agreement, or any successor provision
of similar import, shall be paid to, or in accordance with the instructions of,
the Administrative Agent in accordance with the Credit Agreement.
2.04. Execution of this Agreement. The Grantor hereby represents and
warrants to each Secured Party that each of the representations and warranties
set forth in Article IV of the Credit Agreement is true and correct, insofar as
such provisions relate to the Grantor, after giving effect to execution and
delivery of this Agreement by the Grantor. Concurrently with the execution and
delivery of this Agreement, the Grantor shall deliver to the Collateral Agent
(i) an opinion of counsel for the Grantor (which counsel may be an employee of
the Borrower or the Grantor) in substantially the form attached hereto as Annex
B and covering such other matters relating to this Agreement as the Collateral
Agent may reasonably request, and (ii) all documents which the Collateral Agent
may reasonably request relating to the existence of the Grantor, the corporate
authority for and the validity of this Agreement, and any other matters
reasonably determined by the Collateral Agent to be relevant thereto, all in
form and substance reasonably satisfactory to the Collateral Agent.
Article III
Representations and Warranties
The Grantor hereby represents and warrants to each Secured Party as
follows:
3.01. Title. The Grantor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest under
this Agreement in favor of the Collateral Agent securing the Obligations. No
effective financing statement or other item similar in effect covering any
Collateral is on file in any recording office, except such as may be filed in
favor of the Collateral Agent relating to this Agreement.
3.02. Validity, Perfection and Priority. This Agreement creates a valid
assignment of and security interest in the Collateral in favor of the Collateral
Agent securing the Obligations, which assignment and security interest has been
duly perfected and is prior to all other Liens. All filings and other actions
necessary or desirable to perfect and protect such assignment and security
interest in favor of the Collateral Agent have been duly made and taken.
3.03. Governmental Approvals and Filings. No authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority
(including, without limiting the generality of the foregoing, any Government
Authority in any jurisdiction in which a Designated
-3-
<PAGE>
Subsidiary is organized) is or will be necessary (a) for the grant by the
Grantor of the assignment of and security interest in the Collateral hereunder
or for the execution, delivery or performance of this Agreement by the Grantor,
(b) to ensure the validity, perfection or priority of the assignment of and
security interest in the Collateral granted hereunder, or (c) for the exercise
by the Collateral Agent of any of its rights or remedies hereunder, except for
completion of such actions as may be required in connection with any disposition
of Collateral constituting securities by Laws affecting the offering and sale of
securities generally.
3.04. Offices, etc. Schedule 3.04 identifies as of the date hereof the
address of the chief executive office of the Grantor and of each place of
business of the Grantor in the jurisdiction containing its chief executive
office. Schedule 3.04 also identifies all changes in the foregoing information
during the one year period ending on the date hereof.
3.05. Names, etc. During the one year period ending on the date hereof,
neither the Grantor nor any of its direct or indirect predecessors by merger,
consolidation or other corporate reorganization is or has been known by or used
any corporate or fictitious name or trade name (other than the corporate name of
the Grantor as of the date hereof), nor has the Grantor or any such predecessor
been the subject of any merger, consolidation or other corporate reorganization,
nor has the Grantor or any such predecessor otherwise changed its name, identity
or corporate structure, except as set forth in Schedule 3.05. For each such
direct and indirect predecessor of the Grantor, Schedule 3.05 also identifies
the addresses referred to in Section 3.04 for all times during such period.
3.06. Taxes, etc. There is no tax, levy, impost, deduction, charge,
withholding or similar duty, tax or fee imposed on, or by virtue of the
execution or delivery of, this Agreement or any other document to be furnished
hereunder or in connection herewith.
3.07. Designated Subsidiaries and Designated Pledged Shares. The Designated
Pledged Shares include all shares of capital stock of, and all other equity
interests in, each Designated Subsidiary owned (beneficially or of record) by
the Grantor; provided, that if the Designated Subsidiary which issued such
Designated Pledged Shares is a Foreign Subsidiary, then, subject to Section
4.01(e), the Designated Pledged Shares need not include more than 65% of the
voting stock of such Foreign Subsidiary. Schedule 3.07 accurately sets forth,
for each class of capital stock or other equity interest to which Designated
Pledged Shares belong, the total number of issued and outstanding shares or
other equity interests of such class, the percentage of such total number of
issued and outstanding shares or other equity interests represented by the
Designated Pledged Shares, the Designated Subsidiary which is the issuer of such
Designated Pledged Shares, and whether such Designated Subsidiary is a Foreign
Subsidiary. The Designated Pledged Shares have been duly authorized and validly
issued and are fully paid and nonassessable. All of the Designated Pledged
Shares are certificated securities (unless expressly stated otherwise on
Schedule 3.07).
3.08. Margin Stock. None of the Collateral is Margin Stock.
3.09. Representations and Warranties Remade at Each Extension of Credit.
Each request (including any deemed request) by the Grantor for any extension of
credit under any Secured Party Document shall be deemed to constitute a
representation and warranty by the Grantor to the Secured Parties that the
representations and warranties made by the Grantor in this Article III (other
than Sections 3.04 and 3.05) are true and correct on and as of the date of such
request with the same effect as though made on and as of such date. Failure by
the Collateral Agent to receive notice from the Grantor to the contrary before
any extension of credit under any Secured Party Document shall constitute a
-4-
<PAGE>
further representation and warranty by the Grantor to the Secured Parties that
the representations and warranties made by such Subsidiary Guarantor in this
Article III (other than Sections 3.04 and 3.05) are true and correct on and as
of the date of such extension of credit with the same effect as though made on
and as of such date.
Article IV
Covenants
4.01. Transfers and Other Liens, etc.; Additional Designated Subsidiaries,
etc.
(a) Transfers. The Grantor shall not sell, assign, pledge, lease, transfer
or otherwise dispose of any Collateral (voluntarily or involuntarily, by
operation of Law or otherwise) in contravention of any provision of any other
Secured Party Document (including but not limited to Section 7.07 of the Credit
Agreement).
(b) Other Liens. The Grantor shall not create or permit to exist any Lien
on any Collateral (voluntarily or involuntarily, by operation of Law or
otherwise).
(c) Additional Shares. The Grantor shall cause each Designated Subsidiary
not to issue any capital stock or other equity interests in Distributions on or
in substitution for the Designated Pledged Shares issued by such Designated
Subsidiary. All shares of capital stock and other equity interests in any
Designated Subsidiary which the Grantor owns (beneficially or of record) from
time to time shall constitute Collateral, and the Grantor shall immediately
deliver to the Collateral Agent all certificates and instruments constituting or
evidencing any such shares of capital stock and other equity interests;
provided, that the Collateral shall at no time contain more than 65% of the
voting stock of any Designated Subsidiary that is a Foreign Subsidiary except to
the extent such voting stock constitutes Designated Pledged Shares..
(d) Additional Designated Subsidiaries. The Grantor from time to time may,
and shall to the extent required by Section 6.13(b) of the Credit Agreement or
otherwise in the Secured Party Documents, designate additional Designated
Subsidiaries hereunder. Such designation shall be effected by the Grantor
executing and delivering to the Collateral Agent an Additional Designated
Collateral Supplement in the form of Annex A, duly completed in a manner
satisfactory to the Collateral Agent. Such Additional Designated Collateral
Supplement shall constitute a supplement to Schedule 3.07 to this Agreement.
(e) Designated Subsidiary which Ceases to be a Foreign Subsidiary. In the
event that a Designated Subsidiary ceases to be a Foreign Subsidiary, the
Grantor shall forthwith notify the Collateral Agent of such event and submit and
Additional Designated Collateral Supplement designating as additional Designated
Pledged Shares hereunder, and pledge to the Collateral Agent for the benefit of
the Secured Parties, all shares of stock of, and all other equity interests in,
such Designated Subsidiary.
4.02. Change in Name, etc. The Grantor shall
(a) not have, use or be known by any corporate or fictitious name or trade
name (other than its corporate name as of the date hereof and names set forth in
Schedule 3.04), nor be the subject of any merger, consolidation or other
corporate reorganization, nor otherwise change its name, identity or corporate
structure, except, upon 60 days' written notice to the Collateral Agent
(specifically referring to
-5-
<PAGE>
this Section 4.02), and after all actions referred to in Section 4.04(a) have
been completed (it being understood that, in the event such notice is given by
the Grantor and all actions referred to in Section 4.04(a) have been completed
to the satisfaction before the end of such 60 day period, the Collateral Agent
shall, at the Grantor's request, promptly confirm such fact to the Grantor, in
which case the Grantor may consummate the change referred to in such notice
before the end of such 60 day period),
(b) keep its chief executive office at the address identified in Schedule
3.04, and keep each place of business in the jurisdiction containing its chief
executive office at the address identified in Schedule 3.04, or, in each case,
upon 45 days' written notice to the Collateral Agent (specifically referring to
this Section 4.02), at such other locations in jurisdictions where all actions
referred to in Section 4.04(a) have been competed, and
(c) maintain its chief executive office in a state of the United States or
the District of Columbia.
4.03. Certain Covenants.
(a) Delivery of Certificates and Instruments. All certificates or
instruments at any time representing or evidencing any Collateral shall be
immediately delivered to and held by or on behalf of the Collateral Agent
pursuant hereto, and shall be in suitable form for transfer by delivery, or
shall be accompanied by instruments of transfer or assignment, duly executed in
blank, all in form and substance satisfactory to the Collateral Agent. The
Collateral Agent shall have the right, at any time in its discretion and without
notice to the Grantor, to transfer to or to register in the name of the
Collateral Agent or its nominee any Collateral in registered form. In addition,
the Collateral Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
(b) Voting Rights.
(i) General. Subject to Section 4.03(b)(ii), the Grantor shall be entitled
to exercise all voting and other consensual rights pertaining to the Collateral;
provided, that the Grantor shall not exercise or refrain from exercising any
such right if such action would (A) conflict with any provision of this
Agreement or any other Secured Party Document, or (B) in the Grantor's
reasonable judgment, impair the value of any Collateral, or (C) impair the
interest or rights of the Grantor or the Collateral Agent.
(ii) Certain Rights of Collateral Agent. If an Event of Default has
occurred and is continuing, the Collateral Agent may from time to time give
notice to the Grantor revoking in whole or in part the rights of the Grantor
under Section 4.03(b)(i). If and to the extent such notice has been given, and
such Event of Default is continuing, all voting and other consensual rights
pertaining to the Collateral shall thereupon be vested in the Collateral Agent,
who shall have the sole right to exercise or refrain from exercising such
rights.
(iii) Proxies, etc. The Collateral Agent shall execute and deliver to the
Grantor such proxies and other instruments as the Grantor may reasonably request
for the purpose of enabling the Grantor to exercise the voting and other
consensual rights which it is entitled to exercise pursuant to
Section 4.03(b)(i). The Grantor hereby grants the Collateral Agent an
irrevocable proxy, with full power of substitution, coupled with an interest, to
exercise all voting and other consensual rights pertaining to the Collateral,
exercisable if and to the extent that the Collateral Agent is entitled to
exercise such rights
-6-
<PAGE>
pursuant to Section 4.03(b)(ii). All third parties are entitled to rely
conclusively on a representation by the Collateral Agent that it is entitled to
exercise such power of attorney.
(c) Distributions.
(i) General. Subject to Section 4.03(c)(ii), the Grantor shall be entitled
to receive and retain all Distributions that are paid and payable in cash.
Distributions paid or payable other than in cash shall be Collateral, and shall
be forthwith delivered to the Collateral Agent to hold as such.
(ii) Certain Rights of Collateral Agent. If an Event of Default has
occurred and is continuing, all rights of the Grantor to receive and retain the
Distributions that it would otherwise be authorized to receive and retain
pursuant to Section 4.03(c)(i) shall automatically cease, and all such rights
shall thereupon vest in the Collateral Agent. Such Distributions shall be
Collateral, and shall be forthwith delivered to the Collateral Agent and applied
as provided in Section 5.06.
(iii) Payment Over. If the Grantor receives any payment or property which
it is not entitled to retain pursuant to Section 4.03(c)(i) or 4.03(c)(ii), such
payment or property shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds and property of the Grantor, and
shall be forthwith delivered to the Collateral Agent as Collateral in the same
form as so received (with any necessary endorsement).
4.04. Further Assurances.
(a) General. The Grantor shall from time to time, at its expense, promptly
execute and deliver all further instruments and agreements, and take all further
actions that may be necessary or appropriate, or that the Collateral Agent may
reasonably request, in order to perfect or protect any assignment, pledge or
security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise or enforce its rights and remedies hereunder.
(b) Foreign Subsidiaries. Without limiting the generality of Section
4.04(a), to the extent, if any, that Collateral consists of capital stock or
other equity interests of foreign issuers, the Grantor shall from time to time,
at its expense, promptly execute and deliver such additional or supplementary
security documentation, and all further instruments and agreements, satisfactory
in form and substance to the Collateral Agent, as may be necessary or
appropriate, or that the Collateral Agent may reasonably request, in order to
further grant, perfect or protect any assignment, pledge or security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise or enforce its rights and remedies hereunder, and provide such opinions
of foreign counsel to the Grantor (who shall be reasonably satisfactory to the
Collateral Agent), reasonably satisfactory in form and substance to the
Collateral Agent, as to such matters as the Collateral Agent may reasonably
request.
(c) Financing Statements, etc. The Grantor will execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the assignment,
pledge or security interest granted or purported to be granted hereby. The
Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, relating to any Collateral
without the signature of the Grantor where permitted by law. A photocopy or
other reproduction of this Agreement or any financing statement covering any
Collateral shall be sufficient as a financing statement where permitted by Law.
-7-
<PAGE>
Article V
Certain Rights and Remedies of the Secured Parties
5.01. Collateral Agent May Perform. If the Grantor fails to perform any
obligation under or in connection with this Agreement, the Collateral Agent may
(but shall have no duty to) itself perform or cause performance of such
obligation, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by the Grantor pursuant to Section 6.04. The
Collateral Agent may from time to time take any other action which the
Collateral Agent deems necessary or appropriate for the maintenance,
preservation or protection of any of the Collateral or of its Lien therein.
5.02. No Duty to Exercise Powers. The powers of the Collateral Agent under
and in connection with this Agreement are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
5.03. Duties of Collateral Agent. Except for exercise of reasonable care in
the custody and preservation of any Collateral in its possession and accounting
for moneys received by it pursuant to this Agreement, the Collateral Agent shall
have no duty as to any Collateral. In any event the Collateral Agent (a) shall
have no duty to take any steps to preserve rights against prior parties or any
other rights pertaining to any Collateral, (b) shall have no duty as to
ascertaining or taking action with respect to calls, conversions, exchanges,
tenders, maturities or other matters pertaining to any Collateral, whether or
not the Collateral Agent or any other Secured Party has any knowledge of such
matters, and (c) shall not be liable for any action, omission, insolvency or
default on the part of any agent or custodian (other than the Collateral Agent)
appointed by the Collateral Agent in good faith. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if it accords such Collateral treatment
substantially equivalent to that which the Collateral Agent accords its own
property (but failure to take any such action shall not in itself be deemed a
failure to exercise reasonable care or evidence of such failure). Subject only
to the performance by the Collateral Agent of its duties set forth in this
Section 5.03, risk of loss, damage and diminution in value of the Collateral, of
whatever nature and however caused, shall be on the Grantor.
5.04. Power of Attorney. The Grantor hereby irrevocably appoints the
Collateral Agent, with full power of substitution, to be the attorney-in-fact of
the Grantor, with full authority in the place and stead of the Grantor and in
the name of the Grantor or otherwise, from time to time in the Collateral
Agent's discretion, to take any action and to execute any instruments and
agreements which the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including the following:
(a) to demand, collect, enforce, file claims for, sue for, recover,
compromise, release, and take any action or institute any proceedings to collect
or enforce, all rights to payments due or to become due and all other rights of
the Grantor under or in connection with any Collateral,
(b) to receive, endorse and collect any checks, notes or other instruments,
documents, chattel paper or any other payment media in connection with the
foregoing clause (a), and
(c) to perform all obligations of the Grantor hereunder;
provided, however, that except for taking actions referred to in Section 4.04,
such power of attorney may be exercised only so long as an Event of Default has
occurred and is continuing. Such power of attorney
-8-
<PAGE>
is irrevocable and coupled with an interest. All third parties are entitled to
rely conclusively on a representation by the Collateral Agent that it is
entitled to exercise such power of attorney.
5.05. Certain Remedies. If an Event of Default shall have occurred and be
continuing, the Collateral Agent may exercise all rights and remedies which it
may have under this Agreement, any other agreement, at law or otherwise, and in
addition, the following provisions shall apply:
(a) The Collateral Agent may exercise all rights and remedies with
respect to the Collateral and each part thereof as are provided by the UCC
to a secured party on default (whether or not the UCC applies to the
affected Collateral). To the extent, if any, the Collateral Agent does not
otherwise have the right to do so, the Collateral Agent may (i) take
absolute possession and control of the Collateral or any part thereof, (ii)
transfer any Collateral into the name of the Collateral Agent or its
nominees, (iii) notify the parties obligated on the Collateral to make to
the Collateral Agent any payments due or to become due, (iv) receive any
payments made under or in connection with the Collateral, (v) exercise all
rights and remedies of the Grantor under or in connection with the
Collateral, (vi) demand, collect, enforce, file claims for, sue for,
recover, compromise, release, and take any action or institute any
proceedings to collect or enforce, all rights to payments due or to become
due and all other rights of the Grantor under or in connection with any
Collateral, and (vii) otherwise deal in and act with respect to the
Collateral in all respects as though it were the outright owner thereof;
(b) All payments received by the Grantor in respect of any Collateral
shall be received in trust for the benefit of the Secured Parties, shall be
segregated from other funds of the Grantor and shall be forthwith paid over
to the Collateral Agent in the same form as so received (with any necessary
endorsement);
(c) The Collateral Agent may, without notice except to the extent
required by Law, sell the Collateral or any part thereof, in one or more
parcels, at public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Collateral Agent may deem commercially reasonable.
The Grantor agrees that, to the extent notice of sale is required by Law,
at least ten days' notice to the Grantor of the time and place of any
public sale or the time after which any private sale is to be made, shall
constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale, regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned; and
(d) The Grantor agrees that the Collateral Agent may comply with any
limitation or restriction in connection with any sale of any Collateral as
the Collateral Agent may deem to be necessary or advisable in order to
comply with any Law, or in order to obtain or make, or avoid the need to
obtain or make, any approval or registration of the offering, sale or
purchaser by or with any governmental agency or regulatory body. The
Grantor agrees that (i) the Collateral Agent may make sales in compliance
with such limitations and restrictions, even though such sales may be at
prices and on other terms less favorable to the seller than if such
approvals or registrations were obtained or made, (ii) the Collateral Agent
shall have no obligation to delay sale of any Collateral in order to obtain
or make any such approval or registration, and (iii) it shall not be
commercially unreasonable to make sales in compliance with such limitations
and restrictions. Without limiting the generality of the foregoing, the
Grantor recognizes that the Collateral Agent may be unable, or may deem it
inadvisable, to effect a public sale of some or all
-9-
<PAGE>
of the Collateral by reason of requirements of applicable securities laws,
but may deem it advisable, for the purpose of complying with such laws, to
resort to one or more private sales to members of a restricted group of
offerees who will be obliged, among other things, to acquire such
Collateral for their own accounts for investment and not with a view to
distribution or resale. The Grantor agrees that (x) the Collateral Agent
may make private sales in such manner, even though such sales may be at
prices and on other terms less favorable to the seller than if such
Collateral were sold by public sale, (y) the Collateral Agent shall have no
obligation to delay sale of any Collateral in order to permit the issuers
of such Collateral, even if such issuers would agree, to register or
qualify such Collateral for public sale under applicable securities laws,
and (z) that it shall not be commercially unreasonable to make private
sales in such manner.
5.06. Application of Payments. Except to the extent otherwise provided by
this Agreement or the other Shared Security Documents, all cash held by the
Collateral Agent as Collateral and all cash proceeds received by the Collateral
Agent in respect of any sale of, collection from, or other realization upon any
of the Collateral, shall (after payment of any amounts payable to the Collateral
Agent pursuant to Section 6.04) be deposited in the Collateral Account and
applied as provided in the Collateral Agency Agreement. The Grantor shall remain
liable for any deficiency.
5.07. Registration Rights. If the Collateral Agent desires to exercise its
right pursuant to Section 5.05 to sell any Collateral, the Grantor agrees that,
upon request of the Collateral Agent, the Grantor will, at its own expense:
(a) execute and deliver, and cause each issuer of such Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as amended, to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be
furnished and to make all amendments and supplements thereto and to the
related prospectus that, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of such Act
and the rules and regulations applicable thereto;
(b) use its best efforts to qualify such Collateral under the
securities laws of any state or other jurisdiction and to obtain all
necessary governmental approvals for the sale of such Collateral, as
requested by the Collateral Agent;
(c) cause each such issuer to make available to its security holders,
as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act of 1933, as amended;
(d) provide the Collateral Agent with such other information and
projections as may be necessary or, in the opinion of the Collateral Agent,
advisable to enable the Collateral Agent to effect the sale of such
Collateral;
(e) execute and deliver, and cause each such issuer to execute and
deliver, one or more underwriting agreements in connection with any such
sale, containing such reasonable terms and provisions (including
indemnities and contribution provisions for the benefit of the
underwriters,
-10-
<PAGE>
the Collateral Agent and related Persons) as the Collateral Agent may deem
necessary or desirable in connection with the sale of such Collateral; and
(f) do or cause to be done all such other acts and things as may be
necessary to make the sale of such Collateral valid and binding and in
compliance with applicable law.
The Collateral Agent is authorized, in connection with any sale of any
Collateral, to deliver or otherwise disclose to any prospective purchaser of
such Collateral (i) any registration statement or prospectus, and all
supplements and amendments thereto, prepared pursuant to clause (a) above,
(ii) any information and projections provided to it pursuant to clause (d) above
and (iii) any other information in its possession relating to such Collateral.
Article VI
Miscellaneous
6.01. Amendments, etc. No amendment to or waiver of any provision of this
Agreement, and no consent to any departure by the Grantor herefrom, shall in any
event be effective unless in a writing manually signed by or on behalf of the
Grantor and the Collateral Agent. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. Such
amendments, waivers and consents shall be made in accordance with, and shall be
subject to, Section 6.01 of the Collateral Agency Agreement.
6.02. No Implied Waiver; Remedies Cumulative. No delay or failure of the
Collateral Agent in exercising any right or remedy under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies of the Collateral
Agent under this Agreement are cumulative and not exclusive of any other rights
or remedies available hereunder, under any other agreement, at law, or
otherwise.
6.03. Notices. Except to the extent, if any, otherwise expressly provided
herein, all notices and other communications (collectively, "notices") under
this Agreement shall be given, shall be effective, and may be relied upon, in
the same way as notices under the Collateral Agency Agreement.
6.04. Indemnity and Expenses.
(a) Indemnity. The Grantor agrees to indemnify each Secured Party from and
against any and all claims, losses, liabilities and expenses (including
reasonable attorney's fees) arising out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses, liabilities and expenses resulting solely from the gross negligence or
willful misconduct of a Secured Party.
(b) Expenses. The Grantor will upon demand pay to the Collateral Agent the
amount of all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, which the Collateral Agent may incur
in connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection of or other
realization upon, any Collateral, (iii) the exercise or enforcement of any of
the rights of the Collateral Agent hereunder, or (iv) the failure by the Grantor
to perform or observe any of the provisions hereof.
-11-
<PAGE>
6.05. Entire Agreement. This Agreement and the other Secured Party
Documents constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior and
contemporaneous understandings and agreements.
6.06. Survival. All representations and warranties of the Grantor contained
in or made in connection with this Agreement shall survive, and shall not be
waived by, the execution and delivery of this Agreement, any investigation by or
knowledge of any Secured Party, any extension of credit, termination of this
Agreement, or any other event or circumstance whatever. The obligations of the
Grantor under Section 6.04 shall survive termination of this Agreement and the
other Secured Party Documents.
6.07. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same agreement.
6.08. Construction. In this Agreement, unless the context otherwise clearly
requires, references to the plural include the singular, the singular the
plural, and the part the whole; the neuter case includes the masculine and
feminine cases; and "or" is not exclusive. In this Agreement, any references to
property (or similar terms) include any interest in such property (or other item
referred to); "include," "includes," "including" and similar terms are not
limiting; and "hereof," "herein," "hereunder" and similar terms refer to this
Agreement as a whole and not to any particular provision. Section and other
headings in this Agreement, and any table of contents herein, are for reference
purposes only and shall not affect the interpretation of this Agreement in any
respect. Section and other references in this Agreement are to this Agreement
unless otherwise specified. This Agreement has been fully negotiated between the
applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of security agreements in favor
of the secured party, nor any doctrine of construction of ambiguities against
the party controlling the drafting, shall apply to this Agreement.
6.09. Successors and Assigns. This Agreement shall be binding upon the
Grantor and its successors and assigns, and shall inure to the benefit of and be
enforceable by the Collateral Agent and the other Secured Parties and their
respective successors and assigns. Without limitation of the foregoing, each
Secured Party (and any successive assignee or transferee) from time to time may
assign or otherwise transfer all or any portion of its rights or obligations
under the Secured Party Documents (including all or any portion of any
commitment to extend credit), or any Obligations, to any other Person, and such
Obligations (including any Obligations resulting from extension of credit by
such other Person under or in connection with the Secured Party Documents) shall
be and remain Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Obligations such other Person shall be vested
with all the benefits in respect thereof granted to the Secured Party in this
Agreement or otherwise.
6.10. Collateral Agency Agreement. This Agreement is a Shared Security
Document referred to in the Collateral Agency Agreement. The provisions of the
Collateral Agency Agreement are supplemental to the provisions of this
Agreement, as provided in the Collateral Agency Agreement.
6.11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, exclusive of
choice of law principles.
[Remainder of page intentionally left blank]
-12-
<PAGE>
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered as of the date first above written.
GREENFIELD INDUSTRIES, INC.
By /s/ James E. Morrison
-------------------------------
Name: James E. Morrison
Title: Vice President and Assistant
Treasurer
ADDITIONAL DESIGNATED COLLATERAL SUPPLEMENT
THIS SUPPLEMENT to the Borrower Pledge Agreement, dated as of November 18,
1997, made by Kennametal Inc., a Pennsylvania corporation (the "Grantor") in
favor of Mellon Bank, N.A., as Collateral Agent (such Borrower Pledge Agreement,
as amended, modified or supplemented, being referred to as the "Borrower Pledge
Agreement").
Recitals:
A. Capitalized terms used herein and not otherwise defined shall have the
meanings given them in, or by reference in, the Borrower Pledge Agreement.
B. The Borrower Pledge Agreement contemplates that the Grantor may, and in
some circumstances shall, supplement Schedule 3.07 thereto from time to time to
add additional Designated Subsidiaries or additional Designated Pledged Shares
or both. The Grantor desires to supplement Schedule 3.07 to the Borrower Pledge
Agreement for such purposes.
NOW, THEREFORE, the Grantor, intending to be legally bound hereby,
represents, warrants and covenants to the Secured Parties as follows:
Section 1. Additional Designated Subsidiary. The Grantor hereby supplements
Schedule 3.07 to the Borrower Pledge Agreement by adding thereto the Designated
Subsidiary or Designated Subsidiaries and Designated Pledged Shares referred to
in the Schedule to this Supplement.
Section 2. Warranties, etc. The Grantor represents and warrants to each
Secured Party that (a) the representation and warranty set forth in Section 3.07
of the Borrower Pledge Agreement is true and correct after giving effect to this
Supplement, (b) each of the other representations and warranties set forth in
Article III of the Borrower Pledge Agreement (other than Sections 3.04 and 3.05)
is true and correct after giving effect to this Supplement, and (c) each of the
representations and warranties set forth in Article IV of the Credit Agreement
is true and correct after giving effect to this Supplement.
Section 3. Governing Law. This Supplement shall be governed and construed
in accordance with the laws of the Commonwealth of Pennsylvania, exclusive of
choice of law principles.
Section 4. Execution in Counterparts. This Supplement may be executed by
the Grantor in any number of counterparts, each of which shall be deemed to be
an original, and all such counterparts shall constitute but one and the same
agreement.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the Grantor has duly executed this Supplement.
KENNAMETAL INC.
By: /s/James E. Morrison
----------------------------------
Name: James E. Morrison
Title: Vice President and Treasurer
Date: November 18, 1997
