Exhibit 4.10
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GUARANTEE AGREEMENT
Between
THE ▇.▇.▇▇▇▇▇▇▇▇ COMPANY
and
THE BANK OF NEW YORK
Dated as of July 12, 1999
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CROSS-REFERENCE TABLE*
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Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
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310(a) .......................... 4.01(a)
310(b) .......................... 4.01(c), 2.08
310(c) .......................... 4.01(a)
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
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
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Page
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ARTICLE I
Definitions
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SECTION 1.01. Definitions .................................... 2
ARTICLE II
Trust Indenture Act
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SECTION 2.01. Trust Indenture Act; Application ............... 6
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 .......................... 7
ARTICLE Ill
Powers, Duties and Rights of the
--------------------------------
Guarantee Trustee
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SECTION 3.01. Powers and Duties of the Guarantee Trustee ..... 8
SECTION 3.02. Certain Rights of Guarantee Trustee ............ 9
SECTION 3.03. Indemnity ...................................... 11
SECTION 3.04. Expenses ....................................... 11
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ARTICLE IV
Guarantee Trustee
-----------------
SECTION 4.01. Guarantee Trustee; Eligibility ............ 11
SECTION 4.02. Appointment, Removal and
Resignation of the Guarantee
Trustee ................................. 12
ARTICLE V
Guarantee
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SECTION 5.01. Guarantee ................................. 12
SECTION 5.02. Waiver of Notice and Demand ............... 13
SECTION 5.03. Obligations Not Affected .................. 13
SECTION 5.04. Rights of Holders ......................... 14
SECTION 5.05. Guarantee of Payment ...................... 14
SECTION 5.06. Subrogation ............................... 14
SECTION 5.07. Independent Obligations ................... 14
ARTICLE VI
Covenants and Subordination
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SECTION 6.01. Subordination ............................. 15
SECTION 6.02. Pari Passu Guarantees ..................... 15
ARTICLE VII
Consolidation, Merger, Conveyance, Transfer or Lease
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SECTION 7.01. Company May Consolidate, Etc., Only
on Certain Terms ........................ 15
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ARTICLE VIII
Termination
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SECTION 8.01. Termination .............................. 16
ARTICLE IX
Miscellaneous
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SECTION 9.01. Successors and Assigns ................... 16
SECTION 9.02. Amendments ............................... 16
SECTION 9.03. Notices .................................. 16
SECTION 9.04. Benefit .................................. 18
SECTION 9.05. Interpretation ........................... 18
SECTION 9.06. Governing Law ............................ 18
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GUARANTEE AGREEMENT, dated as of July 12, 1999, executed and delivered
by THE ▇.▇.▇▇▇▇▇▇▇▇ COMPANY, a New York 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 ("Coltec Industries"), 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 issued $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 were issued by the Issuer and the
proceeds thereof were 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 Coltec Industries which were
deposited with the Property Trustee under the Declaration, as trust assets;
WHEREAS, Coltec Industries owns all of the outstanding Common
Securities of Coltec Capital Trust and each Convertible Preferred Security is
convertible, at the option of the Holder, into 1.7058 shares of Coltec
Industries common stock, subject to certain adjustments;
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of
November 22, 1998 among Guarantor, Runway Acquisition Corporation, a wholly
owned subsidiary of Guarantor, and Coltec Industries (the "Merger Agreement"),
Coltec Industries merged with Runway Acquisition Corporation, and Coltec
Industries became a wholly owned subsidiary of Guarantor;
WHEREAS, in the Merger Agreement, Guarantor agreed to take those
actions required to permit Coltec Industries to give the Holders of Convertible
Preferred Securities the right to convert each of those securities into
0.955248 of a share of Guarantor common stock, subject to certain adjustments;
and
___________________________
* The terms Term Income Deferrable Equity Securities (TIDES)(SM) and TIDES(SM)
are registered service marks of Credit Suisse First Boston Corporation.
WHEREAS, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth herein, to provide certain assurances with
respect to the Trust Securities, including its agreement (i) 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 and
(ii) to otherwise guarantee the performance of the obligations of Coltec
Industries under (w) the Guarantee Agreement, dated as of April 14, 1998 (the
"Coltec Guarantee Agreement"), between Coltec Industries and The Bank of New
York, (x) the Indenture, (y) the Convertible Junior Subordinated Debentures, and
(z) the Declaration;
NOW, THEREFORE, 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
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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.
"Coltec Guarantee Agreement" has the meaning specified in the sixth
recital to this Guarantee Agreement.
"Coltec Industries" has the meaning specified in the first recital to
this Guarantee Agreement.
"Common Securities" has the meaning specified in the first recital of
this Guarantee Agreement.
"Convertible Junior Subordinated Debentures" has the meaning specified
in the second recital of this Guarantee Agreement.
"Convertible Preferred Securities" has the meaning specified in the
first recital of this Guarantee Agreement.
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"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 Guarantor 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 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
Guarantor 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" has 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 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.
3
"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" has 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 Coltec Industries and The Bank of New York, as trustee,
relating to the issuance of Convertible Junior Subordinated Debentures.
"Issuer" has 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.
"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 brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in the Officers' Certificate are based;
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(c) 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
(d) 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 Guarantor, 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 include (a) any Debt of the Guarantor 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 Guarantor,
(b) trade accounts payable and accrued liabilities arising in the ordinary
course of business, (c) any Debt of the Guarantor to any of its subsidiaries,
(d) any Debt to any employee of the Guarantor or (e) any obligations of
Guarantor pursuant to a guarantee agreement or any other agreement or
arrangement relating to ▇.▇.▇▇▇▇▇▇▇▇ Capital Trust's 8.3% Cumulative Quarterly
Income Preferred Securities, Series A issued on June 29, 1995 (the "BFG
QUIPS(SM)")*.
"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.
secs. 77aaa-77bbbb), as amended.
"Trust Securities" has the meaning specified in the first recital of
this Guarantee Agreement.
_______________________________
* QUIPS(SM) is a service ▇▇▇▇ of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
5
ARTICLE II
Trust Indenture Act
-------------------
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee
Agreement will be qualified under the Trust Indenture Act upon the effectiveness
of a registration statement with respect to this Guarantee Agreement. This
Guarantee Agreement incorporates certain provisions of the Trust Indenture Act
identified in the Cross-Reference Table set forth in this Guarantee Agreement.
(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 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, 2000.
(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.
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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 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 3 14(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
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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) hereof 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.
(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 willful 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
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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 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
9
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 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 Guarantor
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.
(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
10
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.
ARTICLE IV
Guarantee Trustee
-----------------
SECTION 4.0 1. 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.
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(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 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 (i) 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 and (ii) to otherwise pay or perform on a subordinated basis all
obligations of Coltec Industries under the Coltec Guarantee Agreement, the
Indenture, the Convertible Junior Subordinated Debentures, and the Declaration,
to the extent not paid or performed by Coltec Industries. The Guarantor's
obligation to make a Guarantee Payment may
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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.
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
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that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders 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. If the Issuer fails to make payments
as required, any Holder may immediately bring suit directly against the
Guarantor for payment of all amounts due and payable under this Guarantee
Agreement. This Guarantee Agreement will apply only to the extent that the
Issuer has funds sufficient to make such payments. If Coltec Industries 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 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
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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.
SECTION 6.02. PARI PASSU GUARANTEES. The obligations under this
Guarantee Agreement shall rank PARI PASSU with the obligations of the Guarantor
relating to the BFG QUIPS(SM) and any similar guarantee agreements issued by the
Guarantor on behalf of the holders of securities issued by a trust or similar
entity created by the Guarantor and, similar to Coltec Capital Trust, which
securities have substantially equivalent terms to those of the Trust Securities.
ARTICLE VII
Consolidation, Merger, Conveyance, Transfer or Lease
----------------------------------------------------
SECTION 7.01. GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Guarantor 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
Guarantor is merged or the Person which acquires by sale or lease, the
assets of the Guarantor as, or 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 Guarantor 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 Guarantor 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.
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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.
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:
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The ▇.▇.▇▇▇▇▇▇▇▇ Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
(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 Centre
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Secretary
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.:
Attention: Corporate Trust Administration
(c) if given to the Guarantee Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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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.
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.
THE ▇.▇.▇▇▇▇▇▇▇▇ COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Treasurer
THE BANK OF NEW YORK,
AS GUARANTEE TRUSTEE
By /s/ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President