Exhibit 10.4
FORM OF INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of ____________, 2002 (this
"Agreement"), by and among ▇▇▇▇▇▇▇▇ Corporation, a New York corporation
("▇▇▇▇▇▇▇▇"), EnPro Industries, Inc., a North Carolina corporation ("EnPro"),
Coltec Industries Inc, a Pennsylvania corporation ("Coltec"), and Coltec Capital
Trust, a Delaware statutory trust ("Coltec Capital Trust").
W I T N E S S E T H
WHEREAS, ▇▇▇▇▇▇▇▇ contemplates spinning off its EnPro subsidiary, of which
Coltec will be a subsidiary, through a distribution of EnPro stock to ▇▇▇▇▇▇▇▇
shareholders (the "Distribution");
WHEREAS, Coltec owns all of the common equity securities of Coltec Capital
Trust, which is the issuer of a class of 5 1/4% Convertible Preferred Securities
- Term Income Deferred Equity Securities ("TIDES")(1);
WHEREAS, in connection with the acquisition of Coltec by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
executed a Guarantee Agreement, dated as of July 12, 1999 (the "▇▇▇▇▇▇▇▇
Guarantee Agreement"), pursuant to which ▇▇▇▇▇▇▇▇ guaranteed certain obligations
of Coltec and Coltec Capital Trust under the TIDES and related agreements, and
executed a Supplemental Indenture, dated as of July 12, 1999 (the "Supplemental
Indenture"), pursuant to which the TIDES became convertible into the common
stock of ▇▇▇▇▇▇▇▇, par value $5 per share ("▇▇▇▇▇▇▇▇ Common Stock");
WHEREAS, prior to the consummation of the Distribution and in connection
therewith, EnPro will execute a Guarantee Agreement, dated as of
___________________, 2002 (the "EnPro Guarantee Agreement") pursuant to which
EnPro will guarantee certain obligations of Coltec and Coltec Capital Trust
under the TIDES and related agreements; and
WHEREAS, the parties agree that, subsequent to the Distribution, EnPro,
Coltec, and Coltec Capital Trust shall be exclusively responsible for the
fulfillment of all obligations of Coltec and Coltec Capital Trust under the
TIDES and the related agreements and that ▇▇▇▇▇▇▇▇ shall be held harmless from
any liabilities arising under the TIDES and the related agreements.
NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, and intending to be legally
bound, the parties hereto agree as follows:
1. Indemnification. Subject to the other provisions of this Agreement and
subject to and conditioned upon the consummation of the Distribution, EnPro,
Coltec, and Coltec Capital Trust (collectively, the "Indemnifying Parties")
shall indemnify ▇▇▇▇▇▇▇▇, its affiliates
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(1) The terms Term Income Deferrable Equity Securities and TIDES are registered
service marks of Credit Suisse First Boston Corporation.
and each of its officers, directors, employees, agents, representatives,
successors and assigns (collectively, the "Indemnified Parties") against and
hold such Indemnified Parties harmless from any and all losses, liabilities,
claims, damages, costs, expenses, penalties and fines (including, without
limitation, amounts paid in settlement, reasonable costs of investigation and
reasonable attorneys' fees and expenses) that any of the Indemnified Parties are
required to pay or incur pursuant to the ▇▇▇▇▇▇▇▇ Guarantee Agreement or the
Supplemental Indenture. For the purpose of the preceding sentence, in the event
that ▇▇▇▇▇▇▇▇ is required to issue ▇▇▇▇▇▇▇▇ common stock as a result of the
conversion of a TIDES, the cost to ▇▇▇▇▇▇▇▇ of such issuance shall be deemed to
be the fair market value of such common stock on the date of such conversion.
2. Indemnification Procedure.
(a) Promptly after receipt by an Indemnified Party of notice by a third
party of any complaint or the commencement of any action or proceeding with
respect to which indemnification may be sought hereunder, such Indemnified Party
will notify the Indemnifying Parties of such complaint or of the commencement of
such action or proceeding. The Indemnifying Parties may, at their discretion,
assume the defense of such action or proceeding, including the employment of
counsel and the payment of the fees and disbursements of such counsel. In the
event, however, that (i) the Indemnifying Parties fail to assume the defense of
the action or proceeding in a timely manner or (ii) the nature of any claim
presents a conflict of interest between the Indemnified Party and the
Indemnifying Parties, then such Indemnified Party may assume and control its own
defense, and the Indemnifying Parties shall be liable for all reasonable costs
and expenses paid or incurred by the Indemnified Party in connection therewith.
In any action or proceeding with respect to which indemnification may be sought
hereunder, the Indemnified Parties or the Indemnifying Parties, whichever are
not assuming the defense of such action, as the case may be, will have the right
to participate in such litigation and to retain its own counsel at such party's
own expense. The Indemnified Parties or the Indemnifying Parties, as the case
may be, shall at all times use reasonable efforts to keep the Indemnifying
Parties or the Indemnified Parties, as the case may be, reasonably apprised of
the status of the defense of any claim the defense of which they are
maintaining.
(b) No Indemnified Party may settle or compromise any claim with respect to
which indemnification is being sought hereunder without the prior written
consent of the Indemnifying Parties, which consent shall not be unreasonably
withheld; provided, however, that no such consent shall be required in the case
of any performance by ▇▇▇▇▇▇▇▇ of its obligations under the ▇▇▇▇▇▇▇▇ Guarantee
Agreement. The Indemnifying Parties may not, without the prior written consent
of the Indemnified Parties, settle or compromise or consent to the entry of any
judgment in any claim with respect to which indemnification is being sought
hereunder unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Party from all liability arising out of
such claim.
(c) In the event that an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written notice of
such claim to the Indemnifying Parties. Such notice shall specify the basis for
such claim.
3. Representations and Warranties of the Indemnifying Parties. The
Indemnifying Parties hereby represent and warrant to ▇▇▇▇▇▇▇▇ that this
Agreement has been duly authorized, executed and delivered by the Indemnifying
Parties and is the legal, valid and
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binding agreement of the Indemnifying Parties, enforceable against the
Indemnifying Parties in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting the rights and remedies of creditors generally and to general
principles of equity (regardless of whether in equity or at law).
4. Representations and Warranties of ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ hereby represents
and warrants to the Indemnifying Parties that this Agreement has been duly
authorized, executed and delivered by ▇▇▇▇▇▇▇▇, and is the legal, valid and
binding agreement of ▇▇▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇▇▇ in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the rights and remedies of
creditors generally and to general principles of equity (regardless of whether
in equity or at law).
5. Coltec Call Rights on ▇▇▇▇▇▇▇▇ Stock.
(a) For the purposes of this Agreement:
(i) "Closing Price" for each Trading Day shall be the last reported
sale price regular way, during regular trading hours, or, in case no such
reported sale takes place on such day, the average of the closing bid and
asked prices regular way, during regular trading hours, for such day, in
each case on the New York Stock Exchange or, if not listed or quoted on
such market, on the principal national securities exchange on which the
shares of the subject security are listed or admitted to trading or, if not
listed or admitted to trading on a national securities exchange, the last
sale price regular way for the subject security as published by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or, if such last sale price is not so published by NASDAQ or if
no such sale takes place on such day, the mean between the closing bid and
asked prices for the subject security as published by NASDAQ. If the
subject security is not publicly held or so listed or publicly traded,
"Closing Price" shall mean the fair market value per share as determined in
good faith by the Board of Directors of ▇▇▇▇▇▇▇▇ or, if such determination
cannot be made, by a nationally recognized independent investment banking
firm selected in good faith by the Board of Directors of ▇▇▇▇▇▇▇▇.
(ii) "Current Market Price" per share of the subject security on any
date shall be deemed to be the Closing Price on the Trading Day immediately
preceding such date.
(iii) "Trading Day" shall mean a day on which the securities exchange
utilized for the purpose of calculating the Closing Price shall be open for
business or, if the shares of the subject security shall not be listed on
such exchange during such period, a day on which The Nasdaq Stock Market is
open for business.
(b) In the event that Coltec or EnPro become obligated (either directly as
a result of their guarantees of the TIDES obligations or indirectly through an
obligation of Coltec Capital Trust) to supply shares of ▇▇▇▇▇▇▇▇ Common Stock to
a holder of TIDES (a "Holder") as a result of the conversion of a TIDES
subsequent to the consummation of the Distribution, and it is not reasonably
practicable for Coltec or EnPro, as the case may be, to obtain the necessary
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shares of ▇▇▇▇▇▇▇▇ Common Stock through any other means, Coltec or EnPro, as the
case may be, shall have the right to purchase from ▇▇▇▇▇▇▇▇ such shares of
▇▇▇▇▇▇▇▇ Common Stock at a price per share (the "Exercise Price") equal to the
Current Market Price of ▇▇▇▇▇▇▇▇ Common Stock on the date that the Conversion
Agent received the Notice of Conversion from the Holder (as such terms are
defined in the TIDES Indenture).
(c) Coltec or EnPro, as the case may be, may exercise its call rights
pursuant to this Section 6 on one or more occasions by completing an Election to
Purchase, in substantially the form attached hereto, by duly executing the same,
and by delivering the same, together with payment in full of the Exercise Price
multiplied by the number of shares of ▇▇▇▇▇▇▇▇ Common Stock being purchased, in
lawful money of the United States of America, in cash or by certified or
official bank check or by bank wire transfer, to ▇▇▇▇▇▇▇▇.
(d) Upon receipt of the Election to Purchase and the payment specified by
subsection (c), ▇▇▇▇▇▇▇▇ shall, as soon as reasonably practicable, issue the
shares of ▇▇▇▇▇▇▇▇ Common Stock specified on the Election to Purchase, such
shares to be registered in the name of the converting Holder as such name is
designated on the Election to Purchase, and such shares to be validly registered
under the Securities Exchange Act of 1933 under a then-effective registration
statement.
6. ▇▇▇▇▇▇▇▇ Right to Make Payments.
(a) In the event that Coltec, or EnPro pursuant to its obligations under
the EnPro Guarantee Agreement, intends not to make any payment to Coltec Capital
Trust that Coltec or EnPro, as the case may be, is obligated to make, or fails
to make any such payment (and such failure or intended omission gives or will
give rise to any claim by Coltec Capital Trust or any other person against
▇▇▇▇▇▇▇▇ pursuant to the ▇▇▇▇▇▇▇▇ Guarantee Agreement), Coltec or EnPro, as the
case may be, shall notify ▇▇▇▇▇▇▇▇ of such intention or failure as soon as
reasonably practicable. ▇▇▇▇▇▇▇▇ shall have the option, but not the obligation,
to make any payment to Coltec Capital Trust that Coltec or EnPro, as the case
may be, failed to make. The Indemnifying Parties shall be obligated to reimburse
▇▇▇▇▇▇▇▇ for any costs and expenses incurred by ▇▇▇▇▇▇▇▇ pursuant to this
Section 6(a), including the amount of any payments made by ▇▇▇▇▇▇▇▇ to Coltec
Capital Trust.
(b) In the event that Coltec Capital Trust intends not to make any payment
or distribution to the Holders that Coltec Capital Trust will be obligated to
make, or fails to make any such obligatory payment or distribution, Coltec
Capital Trust shall notify ▇▇▇▇▇▇▇▇ of such intention or failure as soon as
reasonably practicable. ▇▇▇▇▇▇▇▇ shall have the option, but not the obligation,
to make any payment or distribution to the Holders that Coltec Capital Trust
failed to make. The Indemnifying Parties shall be obligated to reimburse
▇▇▇▇▇▇▇▇ for any costs and expenses incurred by ▇▇▇▇▇▇▇▇ pursuant to this
Section 6(b), including the amount of any payments or distributions made by
▇▇▇▇▇▇▇▇ to the Holders.
7. Notices. Unless specified otherwise in this Agreement, all requests,
notices or other communications hereunder shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier
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service, by telecopy or telegram, or upon electronic transmission, if sent via
facsimile (with confirmation of receipt without error), to the respective
Parties at the following addresses:
(a) if to ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇▇ Corporation
Four Coliseum Centre
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Treasurer
(b) if to any of the Indemnified Parties:
EnPro Industries, Inc.
____ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ___
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ _____
Fax: (704) ___-____
Attention: General Counsel and Treasurer
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
8. Miscellaneous. Nothing in this Agreement is intended to or shall confer
upon anyone other than the parties hereto any legal or equitable right, remedy
or claim. This Agreement shall be governed by, and its provisions construed in
accordance with, the laws of the State of New York applicable to contracts made
and to be wholly performed within such state and may be modified only in writing
signed by each of the parties hereto. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and all such counterparts shall constitute one and the same
instrument. Paragraph headings contained in this Agreement are solely for
convenience of reference and shall not affect the meaning or interpretation of
any term or provision hereof.
9. Severability. If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held invalid, illegal
or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
choice of law principles thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
▇▇▇▇▇▇▇▇ CORPORATION
By:
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Name:
Title:
ENPRO INDUSTRIES, INC.
By:
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Name:
Title:
COLTEC INDUSTRIES INC
By:
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Name:
Title:
COLTEC CAPITAL TRUST
By:
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Name:
Title:
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FORM OF ELECTION TO PURCHASE
▇▇▇▇▇▇▇▇ Corporation
Four Coliseum Centre
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: _________________
Reference is made to the Indemnification Agreement, dated as of January __,
2002, by and among ▇▇▇▇▇▇▇▇ Corporation, EnPro Industries, Inc., and Coltec
Industries Inc (the "Agreement"). Unless otherwise defined, all capitalized
terms herein shall have the meanings ascribed thereto in the Agreement.
The undersigned hereby irrevocably elects to exercise the right to purchase
______ shares of ▇▇▇▇▇▇▇▇ Common Stock in connection with the conversion of
_______ TIDES by the Holder identified below. The applicable Notice of
Conversion was received by the Conversion Agent (as such terms are defined in
the TIDES Indenture) on ______________. Accordingly, the Exercise Price is
$_____, and the sum of $________ is being contemporaneously delivered to
▇▇▇▇▇▇▇▇ in accordance with the terms of the Agreement. The undersigned
certifies that it is not reasonably practicable for the undersigned to obtain
the necessary shares of ▇▇▇▇▇▇▇▇ Common Stock through any means other than this
Election to Purchase, and understands that the shares of ▇▇▇▇▇▇▇▇ Common Stock
purchased hereby will be issued in the name of the Holder identified below.
ENPRO INDUSTRIES, INC.
By:
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Name:
Title:
CONVERTING HOLDER
(please type name and address, including zip code and social security or other
identifying number of the converting Holder, as such information was set forth
in such Holder's Notice of Conversion)
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