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Exhibit 10(b)
CORPORATE AGREEMENT
THIS CORPORATE AGREEMENT ("Agreement") is made and entered into this
______ day of ____________, 1997, by and between Kennametal Inc., a
Pennsylvania corporation ("Kennametal"), and JLK Direct Distribution Inc., a
Pennsylvania corporation ("JLK").
RECITALS
A. Kennametal owns all of the issued and outstanding Class B
Common Stock, par value $0.01 per share, of JLK ("Class B
Common Stock"), and JLK is a member of Kennametal's
"affiliated group" of corporations ("Kennametal Group") for
federal income tax purposes.
B. JLK is effecting an initial public offering (the "Initial
Public Offering") of shares of Class A Common Stock, par
value $.01 per share, of JLK ("Class A Common Stock").
C. Upon completion of the Initial Public Offering, JLK will
cease to be a wholly-owned subsidiary of Kennametal.
D. The parties desire to enter into this Agreement to set forth
their agreement regarding: (i) the rights of Kennametal and
its Affiliates (as defined below) to purchase additional
shares of Class B Common Stock or Class A Common Stock to
permit Kennametal and its Affiliates to maintain, in the
aggregate, their then current percentage ownership interest
in JLK so long as Kennametal and its Affiliates, in the
aggregate, maintain beneficial ownership of at least 40% of
the combined number of outstanding shares of Class A Common
Stock and Class B Common Stock; (ii) certain registration
rights with respect to Class A Common Stock and Class B
Common Stock (and any other securities issued in respect
thereof or in exchange therefor); and (iii) certain
representations, warranties, covenants and agreements
applicable to JLK and Kennametal so long as Kennametal and
its Affiliates, in the aggregate, maintain beneficial
ownership of at least 40% of the combined number of
outstanding shares of Class A Common Stock and Class B Common
Stock.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, Kennametal and JLK, for themselves, their successors and assigns,
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms will
have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"AFFILIATE" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person. For purposes
of this definition, "control" means the possession, directly or
indirectly, of the power to vote a majority of the securities having
voting power for the election of directors of such Person or otherwise
to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that for the purposes of
this Agreement, JLK and its subsidiaries shall not be deemed to be an
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Affiliate of Kennametal, and Kennametal and its subsidiaries (other
than JLK and its subsidiaries) shall not be deemed to be an Affiliate
of JLK.
"AGREEMENT" has the meaning ascribed hereto in the preamble, as such
agreement may be amended and supplemented from time to time in
accordance with its terms.
"APPLICABLE STOCK" means at any time the shares of Common Stock owned
by Kennametal or its Affiliates.
"CLASS A COMMON STOCK" has the meaning ascribed thereto in the
recitals to this Agreement.
"CLASS B COMMON STOCK" has the meaning ascribed thereto in the
recitals to this Agreement.
"COMMON STOCK" means the Class B Common Stock, the Class A Common
Stock, any other class of JLK capital stock having the right to vote
generally for the election of directors and, for so long as JLK
continues to be a subsidiary corporation includible in a consolidated
federal income tax return of the Kennametal Group, any other security
of JLK treated as stock for purposes of Section 1504 of the Internal
Revenue Code of 1986, as amended.
"COMPANY SECURITIES" has the meaning ascribed thereto in Section
3.2(b).
"DISADVANTAGEOUS CONDITION" has the meaning ascribed thereto in
Section 3.1(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"HOLDER" means Kennametal and any Transferee.
"HOLDER SECURITIES" has the meaning ascribed thereto in Section 3.2(b).
"INITIAL PUBLIC OFFERING" has the meaning ascribed thereto in the
recitals to this Agreement.
"INITIAL PUBLIC OFFERING DATE" means the date of completion of the
sale of Class A Common Stock in the Initial Public Offering.
"ISSUANCE EVENT" has the meaning ascribed thereto in Section 2.2.
"ISSUANCE EVENT DATE" has the meaning ascribed thereto in Section 2.2.
"JLK" has the meaning ascribed thereto in the preamble hereto.
"KENNAMETAL" has the meaning ascribed thereto in the preamble hereto.
"KENNAMETAL GROUP" has the meaning ascribed thereto in the recitals to
this Agreement.
"KENNAMETAL OWNERSHIP REDUCTION" means any decrease at any time in the
Ownership Percentage to less than 80%.
"KENNAMETAL TRANSFEREE" has the meaning ascribed thereto in Section
3.9.
"MARKET PRICE" of any shares of Class A Common Stock on any date means
(i) the average of the last sale price of such shares on each of the
five (5) trading days immediately preceding such date on the New York
Stock Exchange or such other securities exchange or inter-dealer
automated quotation system on
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which such securities are listed; or (ii) if such sale prices are
unavailable or such shares are not so traded, the value of such shares
on such date determined in accordance with agreed-upon procedures
reasonably satisfactory to JLK and Kennametal.
"OPTION" has the meaning ascribed thereto in Section 2.1(a).
"OPTION NOTICE" has the meaning ascribed thereto in Section 2.2.
"OTHER HOLDERS" has the meaning ascribed thereto in Section 3.2(c).
"OTHER SECURITIES" has the meaning ascribed thereto in Section 3.2.
"OWNERSHIP PERCENTAGE" means, at any time, the fraction, expressed as
a percentage and rounded to the next highest one-thousandth of a
percent, whose numerator is the aggregate Value of the Applicable
Stock and whose denominator is the sum of the aggregate Value of the
then outstanding shares of Common Stock of JLK plus Repurchased
Shares; provided, however, that any shares of Common Stock issued by
JLK in violation of its obligations under Article II of this Agreement
shall not be deemed outstanding for the purpose of determining the
Ownership Percentage.
"PERSON" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization,
government (and any department or agency thereof) or other entity.
"PURCHASE AGREEMENT" means the Purchase Agreement among Kennametal,
JLK, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx, Sachs
& Co. and the other underwriters filed as an exhibit to JLK's
Registration Statement on Form S-1, Registration No. 333-25989.
"REGISTRABLE SECURITIES" means Class A Common Stock, Class B Common
Stock, and any stock or other securities into which or for which such
Class A Common Stock or Class B Common Stock may hereafter be changed,
converted or exchanged and any other shares or securities issued to
Holders of such Class A Common Stock or Class B Common Stock (or such
shares or other securities into which or for which such shares are so
changed, converted or exchanged) upon any reclassification, share
combination, share subdivision, share dividend, share exchange,
merger, consolidation or similar transaction or event. As to any
particular Registrable Securities, such Registrable Securities shall
cease to be Registrable Securities when (i) a registration statement
with respect to the sale by the Holder thereof shall have been
declared effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement;
(ii) they shall have been distributed to the public in accordance with
Rule 144; (iii) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further
transfer shall have been delivered by JLK and subsequent disposition
of them shall not require registration or qualification of them under
the Securities Act or any state securities or blue sky law then in
effect; or (iv) they shall have ceased to be outstanding.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with any registration of securities
pursuant to Article III, including, without limitation: (i) the fees,
disbursements and expenses of JLK's counsel and accountants and the
reasonable fees and expenses of counsel selected by the Holders in
accordance with this Agreement in connection with the registration of
the securities to be disposed of; (ii) all expenses, including filing
fees, in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and supplements
thereto and the mailing and delivering of copies thereof to any
underwriters and dealers; (iii) the cost of printing or producing any
agreements among underwriters, underwriting agreements, and blue sky
or legal investment memoranda, any selling agreements and any other
documents in connection with the offering, sale or delivery of the
securities to be disposed of; (iv) all expenses in connection with the
qualification of the securities to be disposed of for offering and
sale under state securities laws, including the fees and disbursements
of counsel for the underwriters or the Holders of securities in
connection with such qualification and in connection with any blue sky
and legal investment surveys; (v) the filing fees incident to securing
any required review of the terms of the sale of the securities to be
disposed of by each securities exchange and automated inter-dealer
quotation system
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which a class of common equity securities of JLK is listed; (vi)
transfer agents' and registrars' fees and expenses and the fees and
expenses of any other agent or trustee appointed in connection with
such offering; (vii) all security engraving and security printing
expenses; (viii) all fees and expenses payable in connection with the
listing of the securities on any securities exchange or automated
inter-dealer quotation system or the rating of such securities; (ix)
any other fees and disbursements of underwriters customarily paid by
the issuers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any; and (x) other reasonable
out-of-pocket expenses of Holders other than legal fees and expenses
referred to in clause (i) and (iv) above.
"REPURCHASED SHARES" mean the aggregate Value of shares of Common
Stock that are, from and after the date hereof, repurchased by JLK
from its shareholders, less the aggregate Value of shares of Common
Stock (up to the aggregate Value so repurchased) that are reissued
from and after the date hereof upon the exercise of stock options or
otherwise.
"RULE 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute.
"SELLING HOLDER" has the meaning ascribed thereto in Section 3.4(e).
"SUBSIDIARY" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than
50% of the voting capital stock or other voting ownership interests is
owned or controlled directly or indirectly by such Person or by one or
more of the Subsidiaries of such Person or by a combination thereof.
"TRANSFEREE" has the meaning ascribed thereto in Section 3.9.
"VALUE" means, with respect to any share of stock, the value of such
share determined by Kennametal under principles applicable for
purposes of Section 1504 of the Internal Revenue Code of 1986, as
amended.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to articles, sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.
ARTICLE II
OPTION
2.1 OPTIONS.
(a) JLK hereby grants to Kennametal, on the terms and conditions set
forth herein, a continuing right (the "Tax Consolidation Option")
to purchase from JLK, at the times set forth herein, such number
of shares of Class A Common Stock and Class B Common Stock as is
necessary to allow Kennametal to maintain the then-current
Ownership Percentage.
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(b) JLK hereby also grants to Kennametal, on the terms and conditions
set forth herein, a continuing right (the "Spin-Off Option" and,
collectively with the Tax Consolidation Option, the "Options" or
individually an "Option") to purchase from JLK, such number of
shares of Class B Common Stock and Class A Common Stock as is
necessary to allow Kennametal to effect a distribution of the
stock of JLK to the shareholders of Kennametal in a transaction
intended to be on a tax-free basis under the Internal Revenue
Code of 1986, as amended (a "Tax-Free Spin-Off"). The Spin-Off
Option shall be exercisable at any time prior to and in
conjunction with a Tax-Free Spin-Off.
(c) Each Option shall be assignable, in whole or in part and from
time to time, by Kennametal to any Affiliate of Kennametal. The
exercise price for the shares of Common Stock purchased pursuant
hereto shall be the Market Price of the Class A Common Stock as
of the date of first delivery of notice of exercise of the Option
by Kennametal (or its permitted assignee hereunder) to JLK as set
forth in Section 2.3 hereof.
(d) JLK shall not be required to issue any Class B Common Stock if
issuance would violate any law, rule or regulation to which JLK
is subject.
2.2 NOTICE. At least twenty (20) business days prior to the issuance
of any shares of Common Stock or the first date on which any event could occur
that, in the absence of a full or partial exercise of the Option, would result
in a reduction in the Ownership Percentage, JLK will notify the optionee(s)
(the "Optionee(s)") in writing (the "Option Notice") of any plans it has to
issue such shares or the date on which such event could first occur. The Option
Notice must specify the date on which JLK intends to issue additional shares of
Common Stock or on which such event could first occur (such issuance or event
being referred to herein as an "Issuance Event" and the date of such issuance
or event as an "Issuance Event Date"), the number of shares JLK intends to
issue or may issue and the other terms and conditions of such Issuance Event.
2.3 TAX CONSOLIDATION OPTION EXERCISE AND OPTION PAYMENT.
(a) The Tax Consolidation Option may be exercised by the Optionee(s)
for a number of shares equal to or less than the number of shares
that are necessary for the Optionee(s) to maintain, in the
aggregate, the Ownership Percentage. The Tax Consolidation Option
may be exercised at any time after receipt of an applicable
Option Notice and prior to the applicable Issuance Event Date by
the delivery to JLK of a written notice to such effect
specifying: (i) the number and class of shares of Common Stock to
be purchased by the Optionee(s); and (ii) a calculation of the
exercise price for such shares.
2.4 OPTION PAYMENT. Upon any such exercise of an Option, JLK will
deliver to the Optionee(s), against payment therefor, certificates issued in
the name of the Optionee(s) representing the shares of Common Stock being
purchased upon such exercise. Payment for such shares shall be made by wire
transfer or intrabank transfer to such account as shall be specified by JLK for
the full purchase price for such shares.
2.5 EFFECT OF FAILURE TO EXERCISE. Any failure by the Optionee(s) to
exercise an Option, or any exercise for less than all of the shares purchasable
under the Option, in connection with any particular Issuance Event shall not
affect the Optionee's(s') right to exercise an Option in connection with any
subsequent Issuance Event or in connection with a Tax-Free Spin-Off.
2.6 INITIAL PUBLIC OFFERING. Notwithstanding the foregoing, the
Optionee(s) shall not be entitled to exercise an Option in connection with the
Initial Public Offering of the Class A Common Stock, including the exercise of
the underwriters' over-allotment option.
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2.7 TERMINATION OF TAX CONSOLIDATION OPTION. The Tax Consolidation
Option shall terminate upon the occurrence of the first Issuance Event that
results in the Kennametal Ownership Reduction, excluding any Issuance Event in
violation of this Agreement.
ARTICLE III
REGISTRATION RIGHTS
3.1 DEMAND REGISTRATION/REGISTRABLE SECURITIES.
(a) Upon written notice provided at any time after the Initial Public
Offering Date from any Holder of Registrable Securities
requesting that JLK effect the registration under the Securities
Act of any or all of the Registrable Securities held by such
Holder, which notice shall specify the intended method or methods
of disposition of such Registrable Securities, JLK shall use its
best efforts to effect the registration under the Securities Act
and applicable state securities laws of such Registrable
Securities for disposition in accordance with the intended method
or methods of disposition stated in such request (including in a
Rule 415 Offering, if JLK is then eligible to register such
Registrable Securities on Form S-3 (or a successor form) for such
offering); provided that:
(i) With respect to any registration statement filed, or to be
filed, pursuant to this Section 3.1, if JLK shall furnish to
the Holders of Registrable Securities that have made such
request a certified resolution of the board of directors of
JLK (adopted by the affirmative vote of a majority of the
directors) stating that in the board of directors' good
faith judgment it would, because of the existence of, or in
anticipation of, any acquisition or financing activity, or
the unavailability for reasons beyond JLK's reasonable
control of any required financial statements, or any other
event or condition of similar significance to JLK, be
significantly disadvantageous (a "Disadvantageous
Condition") to JLK for such a registration statement to be
maintained effective, or to be filed and become effective,
and setting forth the general reasons for such judgment, JLK
shall be entitled to cause such registration statement not
to be filed or to be withdrawn and the effectiveness of such
registration statement terminated. In the event no
registration statement has yet been filed, JLK shall be
entitled not to file any such registration statement, until
such Disadvantageous Condition no longer exists (notice of
which JLK shall promptly deliver to such Holders). Upon
receipt of any such notice of a Disadvantageous Condition,
such Holders shall forthwith discontinue use of the
prospectus contained in such registration statement and, if
so directed by JLK, each such Holder will deliver to JLK all
copies, other than permanent file copies then in such
Holder's possession, of the prospectus then covering such
Registrable Securities current at the time of receipt of
such notice; provided, that the filing of any such
registration statement may not be delayed for a period in
excess of six (6) months due to the occurrence of any
particular Disadvantageous Condition;
(ii) After Kennametal ceases to beneficially own (within the
meaning of Rule 13d-3 of the Exchange Act or any successor
provision) less than 40% of the outstanding Common Stock,
the Holders of Registrable Securities may collectively
exercise their rights under this Section 3.1 on not more
than three (3) occasions (it being acknowledged that prior
thereto there shall be no limit to the number of occasions
on which such Holders (other than any of the Kennametal
Transferees and their Affiliates (and any subsequent direct
or indirect Transferees of Registrable Securities from such
Kennametal Transferee and any of its Affiliates)) may
exercise such rights); and
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(iii) The Holders of Registrable Securities shall not have the
right to exercise registration rights pursuant to this
Section 3.1 in any six-month period following the
registration and sale of Registrable Securities effected
pursuant to a prior exercise of the registration rights
provided in this Section 3.1.
(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable
Securities pursuant to this Section 3.1 shall not be deemed to
have been effected (and, therefore, not requested for purposes of
paragraph (a), above): (i) unless it has become effective; (ii)
if after it has become effective such registration is interfered
with by any stop order, injunction or other order or requirement
of the SEC or other governmental agency or court for any reason
other than a misrepresentation or an omission by such Holder and,
as a result thereof, the Registrable Securities requested to be
registered cannot be completely distributed in accordance with
the plan of distribution set forth in the related registration
statement; or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived
other than by reason of some act or omission by such Holder of
Registrable Securities.
(c) In the event that any registration pursuant to this Section 3.1
shall involve, in whole or in part, an underwritten offering, the
Holders of a majority of the Registrable Securities to be
registered shall have the right to designate an underwriter or
underwriters, reasonably acceptable to JLK, as the lead or
managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 3.1,
such Holders may select one legal counsel to represent all such
Holders.
(d) JLK shall have the right to cause the registration of additional
equity securities for sale for the account of any Person
(including, without limitation, JLK and any existing or former
directors, officers or employees of JLK) in any registration of
Registrable Securities requested by the Holders pursuant to
paragraph (a), above; provided, that if such Holders are advised
in writing (with a copy to JLK) by a nationally recognized
investment banking firm selected by such Holders reasonably
acceptable to JLK (which shall be the lead underwriter or a
managing underwriter in the case of an underwritten offering)
that, in such firm's good faith view, all or a part of such
additional equity securities cannot be sold and the inclusion of
such additional equity securities in such registration would be
likely to have an adverse effect on the price, timing or
distribution of the offering and sale of the Registrable
Securities then contemplated by any Holder, the registration of
such additional equity securities or part thereof shall not be
permitted. The Holders of the Registrable Securities to be
offered may require that any such additional equity securities be
included in the offering proposed by such Holders on the same
conditions as the Registrable Securities that are included
therein. In the event that the number of Registrable Securities
requested to be included in a registration statement by the
Holders thereof exceeds the number which, in the good faith view
of such investment banking firm, can be sold without adversely
affecting the price, timing, distribution or sale of securities
in the offering, the number shall be allocated pro rata among the
requesting Holders on the basis of the relative number of
Registrable Securities then held by each such Holder (provided
that any number in excess of a Holder's request may be
reallocated among the remaining requesting Holders in a like
manner).
3.2 PIGGYBACK REGISTRATION. In the event that JLK at any time after
the Initial Public Offering Date proposes to register any of its Common Stock,
any other of its equity securities or securities convertible into or
exchangeable for its equity securities (collectively, including Common Stock,
"Other Securities") under the Securities Act, whether or not for sale for its
own account, in a manner that would permit registration of Registrable
Securities for sale for cash to the public under the Securities Act, it shall
at each such time give prompt written notice to each Holder of Registrable
Securities of its intention to do so and of the rights of such Holder under
this Section 3.2. Subject to the terms and conditions hereof, such notice shall
offer each such Holder the
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opportunity to include in such registration statement such number of
Registrable Securities as such Holder may request. Upon the written request of
any such Holder made within 15 days after the receipt of JLK's notice (which
request shall specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), JLK shall use its
best efforts to effect, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which JLK has been so requested to register, to the extent required
to permit the disposition (in accordance with such intended methods thereof) of
the Registrable Securities so requested to be registered; provided, that:
(a) If, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date
of the registration statement filed in connection with such
registration, JLK shall determine for any reason not to register
the Other Securities, JLK may, at its election, give written
notice of such determination to such Holders and thereupon JLK
shall be relieved of its obligation to register such Registrable
Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the
Holders of Registrable Securities immediately to request that
such registration be effected as a registration under Section 3.1
to the extent permitted thereunder;
(b) If the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten registration on behalf of
JLK, and a nationally recognized investment banking firm selected
by JLK advises JLK in writing that, in such firm's good faith
view, the inclusion of all or a part of such Registrable
Securities in such registration would be likely to have an
adverse effect upon the price, timing or distribution of the
offering and sale of the Other Securities then contemplated, JLK
shall include in such registration:
(i) first, all Other Securities which JLK proposes to sell for
its own account ("Company Securities");
(ii) second, up to the full number of Registrable Securities held
by Kennametal or its Affiliates that are requested to be
included in such registration (Registrable Securities that
are so held being sometimes referred to herein as "Holder
Securities") in excess of the number of Company Securities
to be sold in such offering which, in the good faith view of
such investment banking firm, can be sold without adversely
affecting such offering and the sale of the Other Securities
then contemplated (and (x) if such number is less than the
full number of such Holder Securities, such number shall be
allocated by Kennametal or (y) in the event that such
investment banking firm advises that less than all of such
Holder Securities may be included in such offering,
Kennametal and its Affiliates may withdraw its or their
request for registration of their Registrable Securities
under this Section 3.2 and 90 days subsequent to the
effective date of the registration statement for the
registration of such Other Securities request that such
registration be effected as a registration under Section 3.1
to the extent permitted thereunder);
(iii) third, up to the full number of the Other Securities (other
than Company Securities), if any, in excess of the number of
Company Securities and Registrable Securities to be sold in
such offering which, in the good faith view of such
investment banking firm, can be so sold without so adversely
affecting such offering (and, if such number is less than
the full number of such Other Securities, such number shall
be allocated pro rata among the holders of such Other
Securities (other than Company Securities) on the basis of
the number of securities requested to be included therein by
each such holder);
(c) If the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten secondary registration on
behalf of holders of Other Securities (the "Other Holders"), and
the
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lead underwriter or managing underwriter advises JLK in writing
that in their good faith view, all or a part of such additional
securities cannot be sold and the inclusion of such additional
securities in such registration would be likely to have an
adverse effect on the price, timing or distribution of the
offering and sale of the Other Securities then contemplated, JLK
shall include in such registration the number of securities
(including Registrable Securities) that such underwriters advise
can be so sold without adversely affecting such offering,
allocated pro rata among the Other Holders and the Holders of
Registrable Securities on the basis of the number of securities
(including Registrable Securities) requested to be included
therein by each Other Holder and each Holder of Registrable
Securities; provided, that if such registration statement is to
be filed at any time after Kennametal ceases to beneficially own
less than 40% of the outstanding Common Stock, and if such Other
Holders have requested that such registration statement be filed
pursuant to demand registration rights granted to them by JLK,
JLK shall include in such registration:
(i) first, Other Securities sought to be included therein by the
Other Holders pursuant to the exercise of such demand
registration rights; and
(ii) second, the number of Holder Securities sought to be
included in such registration in excess of the number of
Other Securities sought to be included in such registration
by the Other Holders which in the good faith view of such
investment banking firm, can be so sold without so adversely
affecting such offering (and (x) if such number is less than
the full number of such Holder Securities, such number shall
be allocated by Kennametal or (y) in the event that such
investment banking firm advises that less than all of such
Holder Securities may be included in such offering,
Kennametal and its Affiliates may withdraw its or their
request for registration of their Registrable Securities
under this Section 3.2 and 90 days subsequent to the
effective date of the registration statement for the
registration of such Other Securities request that such
registration be effected as a registration under Section 3.1
to the extent permitted thereunder).
(d) JLK shall not be required to effect any registration of
Registrable Securities under this Section 3.2 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend
reinvestment plans or stock option or other executive or employee
benefit or compensation plans; and
(e) No registration of Registrable Securities effected under this
Section 3.2 shall relieve JLK of its obligation to effect a
registration of Registrable Securities pursuant to Section 3.1.
3.3 EXPENSES. Except as provided herein, JLK shall pay all
Registration Expenses with respect to a particular offering (or proposed
offering). Notwithstanding the foregoing, each Holder and JLK shall be
responsible for its own internal administrative and similar costs, which shall
not constitute Registration Expenses.
3.4 REGISTRATION AND QUALIFICATION. If and whenever JLK is required
to effect the registration of any Registrable Securities under the Securities
Act as provided in Section 3.1 or 3.2, and subject to Section 3.1(a)(i), as
applicable, JLK shall as promptly as practicable:
(a) Prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act
relating to the Registrable Securities to be offered;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act
with respect to the
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10
disposition of all Registrable Securities until the earlier of:
(A) such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of
disposition set forth in such registration statement; (B) the
expiration of six-months after such registration statement
becomes effective; provided, that such six-month period shall be
extended for such number of days that equals the number of days
elapsing from (x) the date the written notice contemplated by
paragraph (f) below is given by JLK to (y) the date on which JLK
delivers to the Holders of Registrable Securities the supplement
or amendment contemplated by paragraph (f) below;
(c) Furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of
conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary
prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, such documents incorporated
by reference in such registration statement or prospectus, and
such other documents, as the Holders of Registrable Securities or
such underwriter may reasonably request, and a copy of any and
all transmittal letters or other correspondence to or received
from, the SEC or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic or
foreign securities exchange) relating to such offering;
(d) Use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Holders
of such Registrable Securities or any underwriter of such
Registrable Securities shall request, and use its best efforts to
obtain all appropriate registrations, permits and consents in
connection therewith, and do any and all other acts and things
which may be necessary or advisable to enable the Holders of
Registrable Securities or any such underwriter to consummate the
disposition in such jurisdictions of its Registrable Securities
covered by such registration statement; provided, that JLK shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any such jurisdiction
wherein it is not so qualified or to consent to general service
of process in any such jurisdiction;
(e) Use its best efforts to: (i) furnish to each Holder of
Registrable Securities included in such registration (each, a
"Selling Holder") and to any underwriter of such Registrable
Securities an opinion of counsel for JLK addressed to each
Selling Holder and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration
statement); and (ii) furnish to each Selling Holder a "cold
comfort" letter addressed to each Selling Holder and signed by
the independent public accountants who have audited the financial
statements of JLK included in such registration statement; in
each such case covering substantially the same matters with
respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and
such other matters as the Selling Holders may reasonably request
and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements;
(f) As promptly as practicable, notify the Selling Holders in
writing: (i) at any time when a prospectus relating to a
registration pursuant to Section 3.1 and 3.2 is required to be
delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; and (ii) of any request by the SEC or any other
regulatory body or other body
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11
having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such
offering, and in either such case, at the request of the Selling
Holders prepare and furnish to the Selling Holders a reasonable
number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(g) If reasonably requested by the lead or managing underwriters, use
its best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and automated
inter-dealer quotation system on which the Common Stock of JLK is
then listed;
(h) To the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of JLK to attend any
"road shows" scheduled in connection with any such registration,
with all out-of-pocket costs and expense incurred by JLK or such
officers in connection with such attendance to be paid by JLK;
(i) Furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration
effected pursuant to Sections 3.1 or 3.2 unlegended certificates
representing ownership of the Registrable Securities being sold
in such denominations as shall be requested by the Selling
Holders or the underwriters; and
(j) JLK may require each Selling Holder of Registrable Securities as
to which any registration is being effected to furnish JLK with
such information regarding such seller and pertinent to the
disclosure requirements relating to the registration and the
distribution of such securities as JLK may from time to time
reasonably request in writing.
3.5 CONVERSION OF OTHER SECURITIES, ETC. In the event that any Holder
offers any options, rights, warrants or other securities issued by it or any
other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 3.1 and 3.2.
3.6 UNDERWRITING; DUE DILIGENCE.
(a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under
this Article III, JLK shall enter into an underwriting agreement
with such underwriters for such offering, which agreement will
contain such representations and warranties by JLK and such other
terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including,
without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section
3.7, and agreements as to the provision of opinions of counsel
and accountants' letters to the effect and to the extent provided
in Section 3.4(e). The Selling Holders on whose behalf the
Registrable Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on
the part of, JLK to and for the benefit of such underwriters,
shall also be made to and for the benefit of such Selling
Holders. Such underwriting agreement shall also contain such
representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions,
including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided
in Section 3.7.
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12
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under
the Securities Act pursuant to this Article III, JLK shall give
the Holders of such Registrable Securities and the underwriters,
if any, and their respective counsel and accountants, such
reasonable and customary access to its books and records and such
opportunities to discuss the business of JLK with its officers
and the independent public accountants who have certified the
financial statements of JLK as shall be necessary, in the opinion
of such Holders and such underwriters or their respective
counsel, to conduct a reasonable investigation within the meaning
of the Securities Act; provided, that such Holders and the
underwriters and their respective counsel and accountants shall
use their reasonable best efforts to coordinate any such
investigation of the books and records of JLK and any such
discussions with JLK's officers and accountants so that all such
investigations occur at the same time and all such discussions
occur at the same time.
3.7 INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities made
pursuant to this Article III, JLK agrees to indemnify and hold
harmless, to the extent permitted by law, each Selling Holder,
each underwriter of Registrable Securities so offered and each
Person, if any, who controls any of the foregoing Persons within
the meaning of the Securities Act and the officers, directors,
affiliates, employees and agents of each of the foregoing,
against any and all losses, liabilities, costs (including
reasonable attorney's fees and disbursements), claims and
damages, joint or several, to which they or any of them may
become subject, under the Securities Act or otherwise, including
any amount paid in settlement of any litigation commenced or
threatened, insofar as such losses, liabilities, costs, claims
and damages (or actions or proceedings in respect thereof,
whether or not such indemnified Person is a party thereto) arise
out of or are based upon any untrue statement by JLK or alleged
untrue statement by JLK of a material fact contained in the
registration statement (or in any preliminary or final prospectus
included therein) or in any offering memorandum or other offering
document relating to the offering and sale of such Registrable
Securities prepared by JLK or at its direction, or any amendment
thereof or supplement thereto, or in any document incorporated by
reference therein, or any omission by JLK or alleged omission by
JLK to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, that JLK shall not be liable to any Person
in any such case to the extent that any such loss, liability,
cost, claim or damage arises out of or relates to any untrue
statement or alleged untrue statement, or any omission, if such
statement or omission shall have been made in reliance upon and
in conformity with information relating to a Selling Holder or
another holder of securities included in such registration
statement and furnished to JLK by or on behalf of such Selling
Holder, other holder or underwriter, as the case may be,
specifically for use in the registration statement (or in any
preliminary or final prospectus included therein), offering
memorandum or other offering document, or any amendment thereof
or supplement thereto. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf
of any Selling Holder or any other holder and shall survive the
transfer of such securities. The foregoing indemnity agreement is
in addition to any liability that JLK may otherwise have to each
Selling Holder, other holder or underwriter of the Registrable
Securities or any controlling person of the foregoing and the
officers, directors, affiliates, employees and agents of each of
the foregoing; provided, further, that, in the case of an
offering with respect to which a Selling Holder has designated
the lead or managing underwriters (or a Selling Holder is
offering Registrable Securities directly, without an
underwriter), this indemnity does not apply to any loss,
liability, cost, claim or damage arising out of or relating to
any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus or offering
memorandum if a copy of a final prospectus or offering memorandum
was not sent or given by or on behalf of any underwriter (or such
Selling Holder or other holder, as the case may be) to
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13
such Person asserting such loss, liability, cost, claim or damage
at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such
untrue statement or omission had been corrected in such final
prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights
hereunder, agrees to indemnify and hold harmless, and to cause
each underwriter of Registrable Securities included in such
offering (in the same manner and to the same extent as set forth
in Section 3.7(a)) to agree to indemnify and hold harmless as
follows:(i) each Selling Holder agrees to indemnify and hold
harmless JLK, each underwriter who participates in such offering,
each other Selling Holder or other holder with securities
included in such offering; and, , (ii) each underwriter agrees to
indemnify and hold harmless JLK, each Selling Holder or other
holder with securities included in such offering. The foregoing
indemnified parties shall include, and each Selling Holder and
each underwriter shall indemnify and hold harmless, each Person,
if any, who controls any of the foregoing within the meaning of
the Securities Act and the officers, directors, affiliates,
employees and agents of each of the foregoing, against any and
all losses, liabilities, costs (including reasonable attorneys'
fees and disbursements), claims and damages to which they or any
of them may become subject, under the Securities Act or
otherwise, including any amount paid in settlement of any
litigation commenced or threatened, insofar as such losses,
liabilities, costs, claims and damages (or actions or proceedings
in respect thereof, whether or not such indemnified Person is a
party thereto) arise out of or are based upon any untrue
statement or alleged untrue statement by such Selling Holder or
underwriter, as the case may be, of a material fact contained in
the registration statement (or in any preliminary or final
prospectus included therein) or in any offering memorandum or
other offering document relating to the offering and sale of such
Registrable Securities prepared by JLK, or at its direction, or
any amendment thereof or supplement thereto, or any omission by
such Selling Holder or underwriter, as the case may be, or
alleged omission by such Selling Holder or underwriter, as the
case may be, of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in
each case only to the extent that such untrue statement of a
material fact is contained in, or such material fact is omitted
from, information relating to such Selling Holder or underwriter,
as the case may be, and was furnished to JLK by or on behalf of
such Selling Holder or underwriter, as the case may be,
specifically for use in such registration statement (or in any
preliminary or final prospectus included therein), offering
memorandum or other offering document. The foregoing indemnity
is in addition to any liability which such Selling Holder or
underwriter, as the case may be, may otherwise have to JLK, or
controlling persons or the officers, directors, affiliates,
employees, and agents of each of the foregoing; provided, that,
in the case of an offering made pursuant to the Agreement with
respect to which JLK has designated the lead or managing
underwriters (or JLK is offering securities directly, without an
underwriter), this indemnity does not apply to any loss,
liability, cost, claim, or damage arising out of or based upon
any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus or offering
memorandum if a copy of a final prospectus or offering memorandum
was not sent or given by or on behalf of any underwriter (or JLK,
as the case may be ) to such Person asserting such loss,
liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as
required by the Securities Act and such untrue statement or
omission had been corrected in such final prospectus or offering
memorandum.
(c) Each party indemnified under paragraph (a) or (b), above, shall,
promptly after receipt of notice of a claim or action against
such indemnified party in respect of which indemnity may be
sought hereunder, notify the indemnifying party in writing of the
claim or action; provided, that the failure to notify the
indemnifying party shall not relieve it from any liability that
it may have to
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14
an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b), above, except to the extent
that the indemnifying party was actually prejudiced by such
failure, and in no event shall such failure relieve the
indemnifying party from any other liability that it may have to
such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified
the indemnifying party thereof, unless in such indemnified
party's reasonable judgment a conflict of interest between such
indemnified party and indemnifying parties may exist in respect
of such claim, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume
the defense thereof with counsel satisfactory to the indemnified
party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 3.7 for any legal or
other expenses of the defense subsequently incurred by the
indemnified party in connection with the defense thereof other
than (i) if a conflict of interest between the indemnifying party
and an indemnified party exists, in which case, the indemnifying
party shall pay the costs of one legal counsel to the indemnified
party and (ii) the reasonable costs of investigation. Any
indemnifying party against whom indemnity may be sought under
this Section 3.7 shall not be liable to indemnify an indemnified
party if such indemnified party settles such claim or action
without the consent of the indemnifying party. The indemnifying
party may not agree to any settlement of any such claim or
action, other than solely for monetary damages for which the
indemnifying party shall be responsible hereunder, the result of
which any remedy or relief shall be applied to or against the
indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably
withheld. In any action hereunder as to which the indemnifying
party has assumed the defense thereof with counsel satisfactory
to the indemnified party, the indemnified party shall continue to
be entitled to participate in the defense thereof, with counsel
of its own choice, but the indemnifying party shall not be
obligated hereunder to reimburse the indemnified party for the
costs thereof.
(d) If the indemnification provided for in this Section 3.7 shall for
any reason be unavailable (other than in accordance with its
terms) to an indemnified party in respect of any loss, liability,
cost, claim or damage referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, cost, claim or damage
(i) as between JLK and the Selling Holders on the one hand and
the underwriters on the other, in such proportion as shall be
appropriate to reflect the relative benefits received by JLK and
the Selling Holders on the one hand and the underwriters on the
other hand or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of JLK and the
Selling Holders on the one had and the underwriters on the other
with respect to the statements or omissions which resulted in
such loss, liability, cost, claim or damage as well as any other
relevant equitable considerations; and (ii) as between JLK on the
one hand and each Selling Holder on the other, in such proportion
as is appropriate to reflect the relative fault of JLK and of
each Selling Holder in connection with such statements or
omissions as well as any other relevant equitable considerations.
The relative benefits received by JLK and the Selling Holders on
the one hand and the underwriters on the other shall be deemed to
be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before
deducting expenses) received by JLK and the Selling Holders bear
to the total underwriting discounts and commissions received by
the underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of JLK and the
Selling Holders on the one hand and of the underwriters on the
other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information
supplied by JLK and the Selling Holders or by the underwriters.
The relative fault of JLK on the one hand and of each Selling
Holder on
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15
the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission,
but not by reference to any indemnified party's stock ownership
in JLK. The amount paid or payable by an indemnified party as a
result of the loss, cost, claim, damage or liability, or action
in respect thereof, referred to above in this paragraph (d) shall
be deemed to include, for purposes of this paragraph (d), any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such
action or claim. JLK and the Selling Holders agree that it would
not be just and equitable if contribution pursuant to this
Section 3.7 were determined by pro rata allocation (even if the
underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to in this paragraph.
Notwithstanding any other provision of this Section 3.7, no
Selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the
Registrable Securities of such Selling Holder were offered to the
public exceeds the amount of any damages which such Selling
Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. Each Selling Holder's obligations to contribute
pursuant to this Section 3.7 are several in proportion to the
proceeds of the offering received by such Selling Holder bears to
the total proceeds of the offering received by all the Selling
Holders and not joint. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 3.7 (with appropriate
modifications) shall be given by JLK, the Selling Holders and
underwriters with respect to any required registration or other
qualification of securities under any state law or regulation or
governmental authority.
(f) The obligations of the parties under this Section 3.7 shall be in
addition to any liability which any party may otherwise have to
any other party.
3.8 RULE 144 AND FORM S-3. Commencing 90 days after the Initial
Public Offering Date, JLK shall use its best efforts to ensure that the
conditions to the availability of Rule 144 set forth in paragraph (c) thereof
shall be satisfied. Upon the request of any Holder of Registrable Securities,
JLK will deliver to such Holder a written statement as to whether it has
complied with such requirements. JLK further agrees to use its reasonable
efforts to cause all conditions to the availability of Form S-3 (or any
successor form) under the Securities Act for the filing of registration
statements under this Agreement to be met as soon as practicable after the
Initial Public Offering Date. Notwithstanding anything contained in this
Section 3.8, JLK may deregister under Section 12 of the Exchange Act, if it
then is permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder.
3.9 TRANSFER OF REGISTRATION RIGHTS. Any Holder may transfer, sell or
assign all or any portion of its registration rights under Article III to any
transferee of a number of Registrable Securities owned by such Holder exceeding
three percent (3%) of the outstanding class or series of such securities at the
time of transfer (each transferee that receives such minimum number of
Registrable Securities, a "Transferee"); provided, that each Transferee of
Registrable Securities to which Registrable Securities are transferred, sold or
assigned directly by Kennametal or its Affiliates (such Transferee, a
"Kennametal Transferee"), together with any Affiliate of such Kennametal
Transferee (and any subsequent direct or indirect Transferees of Registrable
Securities from such Kennametal Transferee and any of its Affiliates (other
than Kennametal or its Affiliates) thereof), shall be entitled to request the
registration of Registrable Securities pursuant to Section 3.1 only once. Any
transfer of registration rights pursuant to this Section 3.9 shall be effective
upon receipt by JLK of (i) written notice from such Holder
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stating the name and address of any Transferee and identifying the number of
Registrable Securities with respect to which the rights under this Agreement
are being transferred and the nature of the rights so transferred; and (ii) a
written agreement from such Transferee to be bound by the terms of this Article
III and Article V of this Agreement as if an original party hereto. The Holders
may exercise their rights hereunder in such priority as they shall agree upon
among themselves.
3.10 HOLDBACK AGREEMENT. If any registration pursuant to this Article
III shall be in connection with an underwritten public offering of Registrable
Securities, each Selling Holder agrees not to effect any public sale or
distribution, including any sale under rule 144, of any equity security of JLK
(otherwise than through the registered public offering then being made), within
seven (7) days prior to or 180 days (or such lesser period as the lead or
managing underwriters may permit) after the effective date of the registration
statement (or the commencement of the offering to the public of such
Registrable Securities in the case of Rule 415 offerings). JLK hereby also so
agrees and agrees to cause each other holder of equity securities or securities
convertible into or exchangeable or exercisable for such securities (other than
in the case of equity securities, under dividend reinvestment plans or employee
stock plans) purchased from JLK otherwise than in a public offering to so
agree.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
4.1 NO VIOLATIONS.
(a) Until Kennametal beneficially owns less than 40% of the
outstanding Common Stock, JLK covenants and agrees that it will
not take any action or enter into any commitment or agreement
which may reasonably be anticipated to result, with or without
notice and with or without lapse of time or otherwise, in a
contravention or event of default by Kennametal of: (i) any
provisions of applicable law or regulation, including but not
limited to provisions pertaining to the Internal Revenue Code of
1986, as amended, or the Employee Retirement Income Security Act
of 1974, as amended; (ii) any provision of Kennametal's Articles
of Incorporation or By-Laws; (iii) any credit agreement or other
material instrument binding upon Kennametal; or (iv) any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over Kennametal or any of its
Affiliates or any of their respective assets.
(b) JLK and Kennametal agree to provide to the other any information
and documentation requested by the other for the purpose of
evaluating and ensuring compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and 4.1(b), nothing
in this Agreement is intended to limit or restrict in any way the
ability of Kennametal to effect, restrict or limit any action or
proposed action of JLK, including, but not limited to, the
incurrence by JLK of indebtedness, based upon Kennametal's
internal policies or other factors.
ARTICLE V
MISCELLANEOUS
5.1 LIMITATION OF LIABILITY. Neither Kennametal nor JLK shall be
liable to the other for any special, indirect, incidental or consequential
damages of the other arising in connection with this Agreement.
5.2 AMENDMENTS. This Agreement may not be amended or terminated
orally, but only by a writing duly executed by or on behalf of the parties
hereto. Any such amendment shall be validly and sufficiently
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authorized for purposes of this Agreement if it is signed on behalf of
Kennametal and JLK by their respective president or any vice presidents.
5.3 TERM. This Agreement shall remain in effect until all Registrable
Securities held by Holders have been transferred by them to Persons other than
Transferees; provided, that the provisions of Section 3.7 shall survive any
such expiration.
5.4 SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law
and shall not be affected thereby, unless such a construction would be
unreasonable.
5.5 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered: (a) in person; (b) by registered or certified
mail, postage prepaid, return receipt requested; or (c) by facsimile or other
generally accepted means of electronic transmission (provided that a copy of
any notice delivered pursuant to this clause (c) shall also be sent pursuant to
clause (b)), addressed as follows:
(a) IF TO JLK:
JLK Direct Distribution Inc.
Xxxxx Xxxxx 000 Xxxxx
X. X. Xxx 000
Xxxxxxx, XX 00000
Attn:
Fax:
(b) IF TO KENNAMETAL:
Kennametal Inc.
State Xxxxx 000 Xxxxx
X. X. Xxx 000
Xxxxxxx, XX 00000
Attn:
Fax:
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
5.6 FURTHER ASSURANCES. Kennametal and JLK shall execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any exhibit,
document or other instrument delivered pursuant hereto.
5.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same agreement.
5.8 GOVERNING LAW. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
Commonwealth of Pennsylvania without regard to the conflict of laws provisions
of any jurisdiction.
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5.9 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
5.10 SUCCESSORS. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns. Nothing contained in this Agreement, express or implied, is intended
to confer upon any other person or entity any benefits, rights or remedies.
5.11 SPECIFIC PERFORMANCE. The parties hereto acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, it is agreed that they shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction in the United States or any state thereof, in
addition to any other remedy to which they may be entitled at law or equity.
5.12 SURRENDER OF CLASS B COMMON STOCK IF IPO OVER-ALLOTMENT OPTION
EXERCISED. Kennametal hereby agrees that to the extent the underwriters option
in the Purchase Agreement to cover over-allotments up to 640,000 shares of
class A Common Stock is exercised, Kennametal will surrender to JLK
simultaneous with each exercise of such option to cover over-allotments,
a number of shares of Class B Common Stock equal to the number of shares
of Class A Common Stock for which such option to cover over-allotments
is exercised.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
KENNAMETAL INC. JLK DIRECT DISTRIBUTION INC.
By: _________________________________ By: ______________________________
Name: _______________________________ Name: ____________________________
Title: ______________________________ Title: ___________________________
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