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EXHIBIT 4.6
EXECUTION COPY
GUARANTEE AGREEMENT
Between
COLTEC INDUSTRIES INC
and
THE BANK OF NEW YORK
Dated as of April 14, 1998
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CROSS-REFERENCE TABLE */
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a).................................................... 4.01(a)
310(b).................................................... 4.01(c), 2.08
310(c).................................................... Inapplicable
311(a).................................................... 2.02(b)
311(b).................................................... 2.02(b)
311(c).................................................... Inapplicable
312(a).................................................... 2.02(a)
312(b).................................................... 2.02(b)
313 .................................................... 2.03
314(a).................................................... 2.04
314(b).................................................... Inapplicable
314(c).................................................... 2.05
314(d).................................................... Inapplicable
314(e).................................................... 1.01, 2.05, 3.02
314(f).................................................... 2.01, 3.02
315(a).................................................... 3.01(d)
315(b).................................................... 2.07
315(c).................................................... 3.01
315(d).................................................... 3.01(d)
316(a).................................................... 1.01, 2.06, 5.04
316(b).................................................... 5.03
316(c).................................................... 8.02
317(a).................................................... Inapplicable
317(b).................................................... Inapplicable
318(a).................................................... 2.01(b)
318(b).................................................... 2.01
318(c).................................................... 2.01(a)
--------
*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions....................................... 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application.................. 5
SECTION 2.02. Lists of Holders.................................. 6
SECTION 2.03. Reports by the Guarantee
Trustee......................................... 6
SECTION 2.04. Periodic Reports to the Guarantee
Trustee......................................... 7
SECTION 2.05. Evidence of Compliance with
Conditions Precedent............................ 7
SECTION 2.06. Events of Default; Waiver......................... 7
SECTION 2.07. Event of Default; Notice.......................... 7
SECTION 2.08. Conflicting Interests............................. 8
ARTICLE III
Powers, Duties and Rights of the
Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee
Trustee........................................... 8
SECTION 3.02. Certain Rights of Guarantee Trustee.............. 10
SECTION 3.03. Indemnity........................................ 12
SECTION 3.04. Expenses ........................................ 12
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Page
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee;
Eligibility.................................... 12
SECTION 4.02. Appointment, Removal and
Resignation of the Guarantee
Trustee........................................ 13
ARTICLE V
Guarantee
SECTION 5.01. Guarantee........................................ 13
SECTION 5.02. Waiver of Notice and Demand...................... 14
SECTION 5.03. Obligations Not Affected......................... 14
SECTION 5.04. Rights of Holders................................ 15
SECTION 5.05. Guarantee of Payment............................. 15
SECTION 5.06. Subrogation...................................... 15
SECTION 5.07. Independent Obligations.......................... 16
ARTICLE VI
Covenants and Subordination
SECTION 6.01. Subordination.................................... 16
SECTION 6.02. Pari Passu Guarantees............................ 16
ARTICLE VII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 7.01. Company May Consolidate, Etc., Only
on Certain Terms................................ 17
ARTICLE VIII
Termination
SECTION 8.01. Termination...................................... 17
ARTICLE IX
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Page
Miscellaneous
SECTION 9.01. Successors and Assigns............................ 18
SECTION 9.02. Amendments........................................ 18
SECTION 9.03. Notices........................................... 18
SECTION 9.04. Benefit........................................... 19
SECTION 9.05. Interpretation.................................... 19
SECTION 9.06. Governing Law..................................... 20
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GUARANTEE AGREEMENT, dated as of April 14,
1998, executed and delivered by COLTEC INDUSTRIES
INC, a Pennsylvania corporation (the "Guarantor") and
THE BANK OF NEW YORK, a New York banking corporation,
as trustee (the "Guarantee Trustee"), for the benefit
of the Holders (as defined herein) from time to time
of the Convertible Preferred Securities (as defined
herein) of COLTEC CAPITAL TRUST, a Delaware statutory
business trust (the "Issuer").
WHEREAS pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of April 14, 1998, executed by Coltec
Industries Inc, as Sponsor, The Bank of New York (Delaware), as Delaware
Trustee, The Bank of New York, as Property Trustee, and the Administrative
Trustees named therein, the Issuer is issuing $150,000,000 aggregate liquidation
amount of its 5 1/4% Convertible Preferred Securities, Term Income Deferrable
Equity Securities (TIDES(sm)), liquidation amount $50 per security, (the
"Convertible Preferred Securities") and $4,639,200 aggregate liquidation amount
of its Common Securities, liquidation amount $50 per security (the "Common
Securities" and, collectively with the Convertible Preferred Securities, the
"Trust Securities") representing undivided beneficial ownership interests in the
assets of the Issuer and having the terms set forth in the Declaration;
WHEREAS the Trust Securities will be issued by the Issuer and
the proceeds thereof will be used to purchase the 5 1/4% Convertible Junior
Subordinated Debentures due April 15, 2028 (as defined in the Declaration) (the
"Convertible Junior Subordinated Debentures") of the Guarantor which will be
deposited with the Property Trustee under the Declaration, as trust assets; and
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WHEREAS as incentive for the Holders to purchase Trust
Securities the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Trust Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Trust Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, intending to be legally bound hereby, the Guarantor
executes and delivers this Guarantee Agreement for the benefit of the Holders
from time to time of the Trust Securities.
ARTICLE I
Definitions
SECTION 1.01. Definitions. As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. Capitalized or otherwise defined terms
used but not otherwise defined herein shall have the meanings assigned to such
terms in the Declaration as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person; provided, however, that the Issuer
shall be deemed not to be an Affiliate of the Guarantor. For the purposes of
this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; the terms "controlling" and "controlled" have meanings correlative to
the foregoing.
"Common Securities" shall have the meaning specified in the
first recital of this Guarantee Agreement.
"Convertible Preferred Securities" shall have the meaning
specified in the first recital of this Guarantee Agreement.
"Debt" means, (i) the principal of, premium, if any, unpaid
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the relevant
contracted rate specified in the documentation for the relevant Debt whether or
not such claim for post-petition interest is allowed in such proceeding) on, and
all other Obligations relating to, indebtedness for money borrowed (including
any guarantee relating to
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the foregoing obligations), (ii) purchase money and similar obligations, (iii)
obligations under capital lease, letters of credit and reimbursement obligations
relating thereto, (iv) guarantees, assumptions or purchase commitments relating
to, or other transactions as a result of which the Company is responsible for
the payment of such indebtedness of others, (v) renewals, extensions and
refundings of any such indebtedness, (vi) interest or obligations in respect of
any such indebtedness accruing after the commencement of any insolvency or
bankruptcy proceedings (at the relevant contractual rate specified in the
documentation therefor, whether or not such claim for post-petition interest is
allowed in such proceeding), (vii) all obligations to make payment pursuant to
the terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts and (c) similar financial instruments and (viii) any
deferrals, renewals or extensions of any such Debt.
"Declaration" shall have the meaning specified in the first
recital to this Guarantee Agreement.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Convertible Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accrued and unpaid Distributions (as defined in the Declaration) required to
be paid on the Trust Securities, to the extent the Issuer shall have funds on
hand available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Trust Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
such time and (iii) upon a voluntary or involuntary dissolution, winding-up or
liquidation of the Issuer, unless Convertible Junior
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Subordinated Debentures are distributed to the Holders of the Trust Securities
or all the Trust Securities are redeemed, the lesser of (a) the aggregate of the
liquidation amount of $50 per Trust Security plus accrued and unpaid
Distributions on the Trust Securities to the date of payment (the "Liquidation
Distribution") to the extent the Issuer shall have funds on hand available to
make such payment at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders of the Trust Securities upon
liquidation of the Issuer after satisfaction of liabilities to creditors of the
Issuer as required by applicable law.
"Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Trust Securities; provided, however, that in
determining whether the holders of the requisite percentage of Trust Securities
have given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indenture" means the Indenture dated as of April 14, 1998, as
amended or supplemented, between the Guarantor and The Bank of New York, as
trustee, relating to the issuance of Convertible Junior Subordinated Debentures.
"Issuer" shall have the meaning specified in the first recital
of this Guarantee Agreement.
"List of Holders" has the meaning specified in Section
2.02(a).
"Majority in liquidation amount of the Trust Securities"
means, except as provided by the Trust Indenture Act, a vote by the Holders,
voting separately as a class, of more than 50% of the aggregate liquidation
amount of all then outstanding Trust Securities issued by the Issuer.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under, or with respect to, the documentation governing any
Debt.
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"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, the President or
any Vice President, and by the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each 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
(c) a statement as to whether, in the opinion of each 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.
"Responsible Officer" when used with respect to the Guarantee
Trustee means any officer assigned to the Corporate Trust Office, including any
vice president, assistant vice president, assistant treasurer, assistant
secretary or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Guarantee Agreement,
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Senior Debt" means any Debt of the Company, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, except such Debt that is expressly stated to rank junior in
right of payment to, or pari passu in right of payment with, the Convertible
Junior Subordinated Debentures (or any guarantee thereof); provided, however,
that Senior Debt shall not be deemed to
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include (a) any Debt of the Company which, when incurred and without respect to
any election under Section 1111(b) of the United States Bankruptcy Code of 1978,
was without recourse to the Company, (b) trade accounts payable and accrued
liabilities arising in the ordinary course of business, (c) any Debt of the
Company to any of its subsidiaries or (d) any Debt to any employee of the
Company.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb), as amended.
"Trust Securities" shall have the meaning specified in the
first recital of this Guarantee Agreement.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Guarantee Agreement will not be qualified under the Trust Indenture Act except
upon the effectiveness of a registration statement with respect to this
Guarantee Agreement pursuant to a registration rights agreement as contemplated
in Article X of the Indenture. However, this Guarantee Agreement does
incorporate certain provisions of the Trust Indenture Act.
(b) Upon qualification under the Trust Indenture Act as
contemplated in clause (a) above, if and to the extent that any provision of
this Guarantee Agreement limits, qualifies or conflicts with the duties imposed
by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.02. List of Holders. (a) At the request of the
Guarantee Trustee, the Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (i) semiannually, on or before February 1st and August 1st of
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (ii) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time
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such list is furnished, in each case to the extent such information is in the
possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.03. Reports by the Guarantee Trustee.
(a) The Guarantee Trustee shall transmit to Holders such
reports concerning the Guarantee Trustee and its actions under this Guarantee as
may be required pursuant to the Trust Indenture Act, at the times and in the
manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals
of not more than 12 months shall be transmitted no later than May 15th in each
calendar year, commencing with May 15, 1999.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Guarantee Trustee with each securities
exchange upon which the Convertible Preferred Securities are listed and also
with the Securities and Exchange Commission. The Guarantor will promptly notify
the Guarantee Trustee whenever the Convertible Preferred Securities are listed
on any securities exchange.
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, and, if required by the Trust
Indenture Act, to the Securities and Exchange Commission and the Holders, such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act 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. The Guarantor shall file annually with
the Guarantee Trustee a certificate as to whether or not the Guarantor is in
compliance with all the conditions and covenants applicable to it under this
Guarantee Agreement.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee
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Agreement 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 any
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a
Majority in liquidation amount of the Convertible Preferred Securities may, by
vote, on behalf of the 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 Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.07. Event of Default; Notice. (a) The 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 known to a Responsible Officer of the Guarantee Trustee,
unless such Events of Default actually have been cured before the giving of such
notice; provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers in good faith determine
that the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of the Guarantee shall have received written notice of such Event
of Default.
SECTION 2.08. Conflicting Interests. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement 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 of the
Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit
of the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, 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
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.06), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, 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.
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(d) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of any 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 Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the 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 Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated
therein);
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the 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 Trust relating to the time,
method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee, or exercising any trust or power
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conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require
the 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.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.01:
(i) The 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 (whether in
its original or facsimile form) reasonably 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 Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
relating to compliance by the Guarantor with any of its obligations
contained in this Guarantee Agreement be proved or established before
taking, suffering or omitting to take any action hereunder, the
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 (with respect to the
Guarantor) which, upon receipt of such request from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of
its selection, and the advice or written opinion of such legal counsel
with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to
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seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such security and
indemnity reasonably satisfactory to it, against the costs, expenses
(including attorneys' fees and expenses) 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 Guarantee Trustee;
provided that nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement.
(vi) The 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 Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Guarantor,
personally or by agent or attorney at the sole cost of the Company and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
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(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received and (C) shall be fully protected in acting in accordance with
such instructions.
(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the 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 Guarantee 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 Guarantee Trustee shall
be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify
each of the Guarantee Trustee, any predecessor Guarantee Trustee and its
directors, officers, agents and employees for, and to hold them harmless
against, any and all loss, damage, claim, liability or expense (including taxes
other than taxes based upon the income of the Guarantee Trustee) incurred
without negligence or bad faith on the part of the Guarantee Trustee, arising
out of or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and reasonable expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Guarantee Trustee will not claim or
exact any lien or charge on any Guarantee Payments as a result of any amount due
to it under this Guarantee Agreement. This indemnity shall survive the
termination of this Guarantee Agreement or the resignation or removal of the
Guarantee Trustee.
SECTION 3.04. Expenses. The Guarantor shall from time to time
reimburse the Guarantee Trustee for its expenses and costs incurred in
connection with the performance of its duties hereunder. This reimbursement
obligation shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
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ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall
at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(c) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining
authority, then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, 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 Guarantee Trustee shall cease to be
eligible to so act under Section 4.10(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of the
Guarantee Trustee. (a) Subject to Section 4.02(b), in the absence of the
existence of an Event of Default, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The
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Guarantee Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 30
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full on a subordinated basis to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert other than the
defense of payment. 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. The
Guarantor shall give written notice to the Guarantee Trustee as promptly as
practicable in the event it makes any direct payment hereunder.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of the Guarantee Agreement and, with respect
to its obligations under Section 5.01, hereby waives presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
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.
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SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee Agreement
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(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 Trust
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 (other than any extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Convertible Junior Subordinated
Debentures as so provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of
the Trust Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Trust Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Trust 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 Trust
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 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
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There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in aggregate liquidation amount of the
Trust Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee Agreement or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee Agreement
will apply only to the extent that the Issuer has funds sufficient to make such
payments. If the Guarantor does not make interest payments on the Convertible
Junior Subordinated Debentures held by the Issuer, the Issuer will not be able
to pay Distributions on the Trust Securities and will not have funds legally
available therefor. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon distribution of Convertible Junior
Subordinated Debentures to Holders as provided in the Declaration.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement and
shall have the right to waive payment by the Issuer pursuant to Section 5.01;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount
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in trust for the Holders and to pay over such amount to the Holders. Any amounts
paid over to and not subsequently recovered from the Holders pursuant to any
insolvency law shall be deemed to have been applied by the Holders to the
Guarantee Payments.
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Trust Securities and that the Guarantor shall
(without duplication of amounts paid by or on behalf of the Issuer) be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
Covenants and Subordination
SECTION 6.01. Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and junior in right of payment to all Senior Debt of the Guarantor to the same
extent as the Convertible Junior Subordinated Debentures rank subordinate and
junior in right of payment to all Senior Debt of the Company.
SECTION 6.02. Pari Passu Guarantees. This Guarantee Agreement
shall rank pari passu with any similar guarantee agreements issued by the
Guarantor on behalf of the holders of trust securities issued by a trust created
by the Guarantor similar to Coltec Capital Trust.
ARTICLE VII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 7.01. Company May Consolidate, Etc., Only on Certain
Terms. The Company shall not consolidate with or merge with or into any other
Person or sell or lease its assets as, or substantially as, an entirety to any
Person, unless:
(a) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by sale or lease, the
assets of the Company as, or
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substantially as, an entirety, shall be a corporation, partnership or
trust, shall be organized under the laws of the United States of
America, any State thereof or the District of Columbia and (if other
than the Company) such successor Person shall expressly assume the
performance or observance of every covenant of this Guarantee on the
part of the Company to be performed or observed;
(b) Immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale or lease comply with this Article and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
ARTICLE VIII
Termination
SECTION 8.01. Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon (i) full payment of the
Redemption Price of all Trust Securities, (ii) the distribution of Convertible
Junior Subordinated Debentures to the Holders in exchange for all of the Trust
Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must repay any sums paid with respect to
Trust Securities or this Guarantee Agreement.
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ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Trust Securities then outstanding.
Except in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article VIII of the Indenture and pursuant to
which the assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not materially adversely affect the rights of the Holders of
Convertible Preferred Securities (in which case no consent of the Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority of the aggregate liquidation
amount of the outstanding Convertible Preferred Securities. The provisions of
Article VI of the Declaration concerning meetings of the Holders shall apply to
the giving of such approval.
SECTION 9.03. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied
(confirmed by delivery of the original) or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth below
or such other address, facsimile number or to the attention of such
other Person as the Guarantor may give notice to the Holders:
Coltec Industries Inc
3 Coliseum Center
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Secretary
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(b) if given to the Issuer, in care of the Guarantee Trustee,
at the Issuer's (and the Guarantee Trustee's) address set forth below
or such other address as the Guarantee Trustee on behalf of the Issuer
may, at the Issuer's direction, give notice to the Holders:
Coltec Capital Trust
c/o Coltec Industries Inc
3 Coliseum Center
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Secretary
with a copy to:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.:
Attention: Corporate Trust Administration
(c) if given to the Guarantee Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth
on the books and records of the Issuer.
All notices hereunder 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 9.04. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and is not separately transferable from the
Convertible Preferred Securities.
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SECTION 9.05. Interpretation. In this Guarantee Agreement,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 9.06 Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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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THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
Coltec Industries Inc,
by
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Name:
Title:
The Bank of New York,
as Guarantee Trustee,
by
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Name:
Title:
