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EXHIBIT 10.1
AMENDMENT TO TRANSACTION DOCUMENTS
THIS AMENDMENT, dated as of October 1, 1999, by and among
KENNAMETAL INC., a Pennsylvania corporation (the "Borrower"), the Lenders
parties to the Credit Agreement referred to below, and MELLON BANK, N.A., as
Administrative Agent under such Credit Agreement.
RECITALS:
WHEREAS, the Borrower has entered into a Credit Agreement,
dated as of November 17, 1997, by and among the Borrower, the Lenders parties
thereto from time to time, and Mellon Bank, N.A., as Administrative Agent (as
amended by an Amendment to Transaction Documents, dated as of November 26, 1997,
an Amendment to Transaction Documents, dated as of December 19, 1997, an
Amendment to Transaction Documents, dated as of March 19, 1998, an Amendment to
Transaction Documents, dated as of December 15, 1998, and an Amendment to
Transaction Documents, dated as of March 31, 1999, the "Credit Agreement"); and
WHEREAS, the parties hereto desire to amend further the Credit
Agreement as set forth herein.
NOW THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. AMENDMENTS RELATING TO STANDARD NOTICE. In Section
1.01 of Annex A of the Credit Agreement, the definition of "Standard Notice" is
amended by deleting clause (a) and replacing it with the following:
(a) On the same Business Day in the case of selection of,
conversion to or renewal of the Base Rate Option or prepayment of any
Base Rate Portion; and
SECTION 2. AMENDMENTS RELATING TO EQUITY HYBRID SECURITIES.
(a) Section 2.07(b)(i) to the Credit Agreement is amended by
deleting the second sentence and replacing it with the following:
If a Reduction Event shall occur, an amount not less than the
corresponding Reduction Event Application Amount shall be applied (x)
first, to prepayment of the unpaid principal amount of outstanding Term
Loans, if any, and then (y) the balance, if any, shall be applied to
reduction of the aggregate Revolving Credit Committed Amounts;
provided, that the Borrower shall not be obligated to make any
application pursuant to the foregoing clause (y) in the event that
(A) the Investment Grade Rating Condition is satisfied on the
Reduction Event Date corresponding to such Reduction Event;
(B) such Reduction Event arises under Section 2.07(b)(iv)
(relating to equity issuance) or Section 2.07(b)(v) (relating to
issuance of Equity Hybrid Securities and settlement of Purchase
Contracts), the Equity Recapture Condition is satisfied on the
Reduction Event Date corresponding to such Reduction Event, and
such Reduction Event Date is on or before March 31, 2000; or
(C) such Reduction Event arises under Section 2.07(b)(vi)
(relating to Excess Cash Flow).
(b) Section 2.07(b)(v) of the Credit Agreement is deleted and
replaced with the following:
(v) ISSUANCE OF EQUITY HYBRID SECURITIES AND SETTLEMENT OF
PURCHASE CONTRACTS. "Reduction Event" shall include the following: (i)
issuance, sale or other disposition by the Borrower or any of its
Subsidiaries of any Equity Hybrid Securities, and (ii) settlement of,
or other receipt of proceeds by the Borrower or any of its Subsidiaries
in connection with, a Purchase Contract (whether such settlement or
receipt occurs by reason of cash payment by the holder of such Purchase
Contract, receipt of proceeds of remarketing or other disposition of
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Equity Hybrid Securities pledged to secure such Purchase Contracts,
receipt of proceeds of cash collateral for Purchase Contracts upon
maturity or liquidation thereof, or otherwise), excluding from clause
(ii) the following: (x) the portion of the aggregate proceeds received
(in cash or marketable securities, valued at their fair market value)
by the Borrower in settlement of Purchase Contracts, if any, equal to
the amount concurrently paid by the Borrower or its Subsidiaries to
redeem Equity Hybrid Securities in a redemption permitted under clause
(i)(y) of the definition of "Equity Hybrid Securities" and (y) Equity
Hybrid Securities acquired by the Borrower in satisfaction of the
obligation of the owners of such Equity Hybrid Securities under
Purchase Contracts. The "Reduction Event Application Amount"
corresponding to the foregoing Reduction Event shall be 100% of the Net
Proceeds thereof. The "Reduction Event Date" corresponding to the
foregoing Reduction Event shall be five Business Days after the
Borrower or its Subsidiaries receives Net Proceeds from such event.
(c) In Article VII of the Credit Agreement, the following new
Section 7.12 is added:
7.12. LIMITATION ON PAYMENTS ON CERTAIN OBLIGATIONS. The
Borrower shall not, and shall not permit any Subsidiary to, directly or
indirectly, pay, prepay, purchase, redeem, retire, defease or acquire,
or otherwise make any payment (on account of principal, interest,
premium or otherwise) of, any obligation under or evidenced by any
Equity Hybrid Security, except that the Borrower may
(a) make payments on and purchases of the Equity Hybrid
Securities as and when required to do so by the mandatory terms
of such Equity Hybrid Security, consistent with the definition
of that term in this Agreement, and
(b) purchase or redeem Equity Hybrid Securities from time
to time, provided that the aggregate principal or face amount of
all such purchases and redemptions of any class or series of
Equity Hybrid Securities shall not exceed 5% of the aggregate
principal or face amount of Equity Hybrid Securities of such
class or series originally issued.
(d) In Article VIII of the Credit Agreement, Section 8.01(f)
is amended as follows:
(i) In Section 8.01(f)(i), the word "and" at the end is
deleted and replaced with the following: "or (C) an event or condition shall
occur which gives any holder the right to put any Equity Hybrid Security to the
issuing trust or the Borrower (other than a put in accordance with clause (i) of
the definition of "Equity Hybrid Security"), and".
(ii) In Section 8.01(f)(ii), the word "and" before clause (C)
is deleted and the semicolon at the end of Section 8.01(f)(ii) is deleted and
replaced with the following: ", and (D) any Equity Hybrid Security (or set of
related Equity Hybrid Securities) having an aggregate principal or face amount
in excess of $10,000,000 (or the equivalent thereof in one or more foreign
currencies);"
(d) In Section 1.01 of Annex A of the Credit Agreement, the
definition of "Equity Hybrid Security" is deleted and replaced with the
following:
"Equity Hybrid Security" means (a) a beneficial interest
issued by a trust which constitutes a Subsidiary of the Borrower,
substantially all the assets of which trust are unsecured Indebtedness
of the Borrower or proceeds thereof, and all payments of which
Indebtedness are required to be, and are, distributed to the holders of
beneficial interests in such trust, or (b) a note, bond or debenture
issued by, and evidencing unsecured Indebtedness of, the Borrower, or
any combination of one or more of the Equity Hybrid Securities in
clauses (a) and (b); provided, however, that no Equity Hybrid Security
shall by its terms (or by the terms of any security into which it is
convertible or exchangeable) impose (either absolutely or upon the
happening of an event or the passage of time) any payment, prepayment,
redemption, repurchase, put or similar obligation on the Borrower or
any Subsidiary of the Borrower on or prior to the Revolving Credit
Maturity Date, except as follows:
(i) The holders of an Equity Hybrid Security may be
given the right to put, convert, exchange or exercise such
Equity Hybrid Security on or before the Revolving Credit
Maturity Date, provided that either (x) the consideration
payable by the Borrower or the issuing trust in connection
with such put, conversion, exchange or exercise is common
stock of the Borrower, or (y) the Borrower or the issuing
trust shall have received or shall concurrently receive
aggregate net proceeds (in cash or marketable securities,
valued at their fair market value) from Purchase Contracts
issued concurrently
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with the issuance of such Equity Hybrid Security at least
equal to the aggregate principal or face amount, as the case
may be, of such Equity Hybrid Security;
(ii) The holders of an Equity Hybrid Security may be
given the right to put such Equity Hybrid Security to the
issuing trust or the Borrower, or to accelerate the maturity
of such Equity Hybrid Security, upon (x) the occurrence of a
change of control or an event of default (as such terms may be
defined in the documentation relating to such Equity Hybrid
Security), so long as such change of control or event of
default also constitutes an Event of Default under Section
8.01 (other than solely under Section 8.01(f), except in the
case of an event of default arising solely from breach of a
purely ministerial requirement imposed by the terms of the
Equity Hybrid Security, including but not limited to such
matters as a requirement to maintain a New York payment office
for the Equity Hybrid Securities and customary representations
and warranties made at closing with respect to the Equity
Hybrid Security), or (y) a payment default with respect to
such Equity Hybrid Securities; and
(iii) obligations to make payments other than
payments that reduce the outstanding principal or face amount
of the Equity Hybrid Securities.
As used in this definition, "Purchase Contract" means a contract
between a holder of an Equity Hybrid Security (or a person who
purchased such Purchase Contract on the same date on which an Equity
Hybrid Security was issued, or the assignee or transferee of any such
person) and the Borrower whereby such holder (or such purchaser, or
such assignee or transferee, as the case may be) is obligated to
purchase, and the Borrower is obligated to sell, for an amount in cash
or marketable securities (valued at their fair market value) equal to
the principal or face amount of such Equity Hybrid Security, shares of
common stock of the Borrower.
(e) In Section 1.01 of Annex A of the Credit Agreement, the
definition of "Severed Equity Hybrid Security" is deleted, and the clause
defining the terms "Purchase Contract," "Purchase Contract Cash Collateral" and
"Purchase Contract Settlement Date" is revised to read as follows:
"Purchase Contract" has the meaning given that term in the
definition of "Equity Hybrid Securities.
(f) Section 1.01 of Annex A of the Credit Agreement is amended
by adding the following new definition in its appropriate place in alphabetical
order:
"Equity Recapture Condition": The Borrower shall be deemed to
satisfy the "Equity Recapture Condition" on a particular day if and
only if, on such day, the Borrower's senior unsecured long-term debt is
rated "BBB-" or higher by Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. (or a comparable rating
from a generally recognized successor to such rating agency) or "Baa3"
or higher by Xxxxx'x Investors Service, Inc. (or a comparable rating
from a generally-recognized successor to such rating agency).
SECTION 3. EFFECTIVENESS AND EFFECT, ETC. This Amendment shall
become effective when Mellon Bank, N.A., as Administrative Agent, shall have
received counterparts hereof duly executed by the Borrower and the
Administrative Agent and consents hereto duly executed by the Required Lenders
(as defined in the Credit Agreement). The Credit Agreement, as amended by the
Amendment to Transaction Documents dated as of November 26, 1997, the Amendment
to Transaction Documents dated as of December 19, 1997, the Amendment to
Transaction Documents dated as of March 19, 1998, the Amendment to Transaction
Documents dated as of December 15, 1998, the Amendment to Transaction Documents,
dated as of March 31, 1999, and as further amended hereby, is and shall continue
to be in full force and effect and is hereby in all respects ratified and
confirmed. Except to the extent expressly set forth herein, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy under the Credit Agreement or constitute a waiver of
any provision of the Credit Agreement.
SECTION 4. MISCELLANEOUS. This Amendment may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same document. Section and other headings herein are for reference purposes only
and shall not affect the interpretation of this Amendment in any respect. This
Amendment shall be governed by and
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construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to choice of law principles. This Amendment is a requested
amendment within the meaning of Section 10.06(a)(ii) of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
KENNAMETAL INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Treasurer
MELLON BANK, N.A.,
individually and as Administrative Agent
By: /s/ Xxxxx X. Xxx
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Name: Xxxxx X. Xxx
Title: Vice President
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