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EXHIBIT 10.19
AMENDMENT TO TRANSACTION DOCUMENTS
THIS AMENDMENT, dated as of December 19, 1997, by and among KENNAMETAL
INC., a Pennsylvania corporation (the "Borrower"), the Lenders party to the
Credit Agreement referred to below, and MELLON BANK, N.A., as Administrative
Agent under such Credit Agreement.
RECITALS:
A. The Borrower has entered into a Credit Agreement (as amended, the
"Credit Agreement") dated as of November 17, 1997 among the Borrower, the
Lenders parties thereto from time to time, and Mellon Bank, N.A., as
Administrative Agent. The Credit Agreement has been amended by an Amendment to
Transaction Documents dated as of November 26, 1997.
B. 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 RECAPTURE INDEBTEDNESS.
(a) Section 2.07(b)(i) of the Credit Agreement is hereby amended by deleting the
first two sentences thereof and replacing them with the following:
"Reduction Event" shall mean any of the events defined as such
in Section 2.07(b)(ii), (iii), (iv), (v), (vi) or (vii). 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) such Reduction Event does not arise
under Section 2.07(b)(vii) (relating to Recapture Indebtedness) and the
Investment Grade Rating Condition is satisfied on the Reduction Event
Date corresponding to such Reduction Event, or (B) such Reduction Event
arises under Section 2.07(b)(vi) (relating to Excess Cash Flow).
(b) Section 2.07(b) of the Credit Agreement is hereby amended by adding the
following new Section 2.07(b)(vii) following Section 2.07(b)(vi):
(vii) RECAPTURE INDEBTEDNESS. "Reduction Event" shall include
the following: incurrence by the Borrower of any Recapture
Indebtedness; provided, that incurrence of successor Recapture
Indebtedness to refinance predecessor Recapture Indebtedness shall not
constitute a Reduction Event to the extent of the principal amount of
the predecessor Recapture Indebtedness so refinanced. The "Reduction
Event Application Amount" corresponding to the foregoing Reduction
Event shall be the principal amount of such Recapture Indebtedness. The
"Reduction Event Date" corresponding to the foregoing Reduction Event
shall be five Business Days after the date the Borrower incurs such
Recapture Indebtedness.
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(c) Section 7.02 of the Credit Agreement is hereby amended as follows: (i) in
Section 7.02(h), the word "and" following the semicolon is deleted, (ii) in
Section 7.02(i), the period at the end thereof is replaced with a semicolon, and
(iii) the following new Section 7.02(j) is added following Section 7.02(i):
(j) Other unsecured Indebtedness ("Recapture Indebtedness")
for borrowed money of the Borrower (and not of any Subsidiary) incurred
by the Borrower after the date of this Agreement; provided, that
Recapture Indebtedness may not be Disqualified Indebtedness, unless
(i) at the time the Borrower incurred such Recapture
Indebtedness the Investment Grade Rating Condition was
satisfied, or
(ii) such Recapture Indebtedness is incurred to
refinance predecessor Recapture Indebtedness which was
incurred in compliance with this subsection (j), the principal
amount of such successor Recapture Indebtedness does not
exceed that of the predecessor Recapture Indebtedness so
refinanced, and by the terms of such successor Recapture
Indebtedness no direct or indirect payment, prepayment,
purchase, redemption, retirement, defeasance, acquisition, or
other payment on account of principal of such successor
Recapture Indebtedness shall be required (whether at stated
maturity or upon the happening of an event) earlier or in
greater amount than under the terms of the predecessor
Recapture Indebtedness so refinanced; and
further provided, that the Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, directly or indirectly, pay, prepay,
purchase, redeem, retire, defease or acquire, or otherwise make any
payment on account of principal of, any Recapture Indebtedness, except
(x) as and when required to do so by the mandatory
terms thereof,
(y) at a time when the Investment Grade Rating
Condition is satisfied, or
(z) as part of a refinancing of predecessor Recapture
Indebtedness by successor Recapture Indebtedness incurred in
compliance with this subsection (j).
(d) Section 7.09(e) of the Credit Agreement is hereby amended to read as
follows:
(e) with respect to the foregoing clause (x), (i) restrictions
on property subject to a Permitted Lien in favor of the holder of such
Permitted Lien, and (ii) restrictions contained in agreements governing
Recapture Indebtedness;
(e) Annex A to the Credit Agreement, Section 1.01, is hereby amended by adding
the following definitions of "Disqualified Indebtedness" and "Recapture
Indebtedness" in the appropriate places in alphabetical order:
"Disqualified Indebtedness" shall mean any Indebtedness that,
other than solely at the option of the issuer thereof, by its terms (or
by the terms of any security, instrument or obligation into which it is
convertible or exchangeable), (i) matures in whole or in part on or
prior to the Revolving Credit Maturity Date, (ii) is (or upon the
happening of an event or the passage of time would be) required to be
redeemed or repurchased, in whole or in part, on or prior to the
Revolving Credit Maturity Date, or (iii) has (or upon the happening of
an event or the passage of time would have) a redemption or similar
payment, in whole or in part, due on or prior to the Revolving Credit
Maturity Date.
"Recapture Indebtedness" has the meaning given that term in
Section 7.02(j).
(f) Exhibit D to the Credit Agreement (form of Compliance Certificate), is
hereby amended by inserting in paragraph 2 the term "7.02(j)," between the terms
"7.02(h)," and "7.04(f),".
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SECTION 2. AMENDMENT RELATING TO THE REQUIRED RATE HEDGE. Section
6.12(a) is hereby amended by deleting the first sentence thereof and replacing
it with the following:
The Borrower shall, not later than the 150th day after the Term Loans
are made, enter into one or more Interest Rate Hedging Agreements on
such terms as shall be reasonably satisfactory to the Administrative
Agent and which (when taken together with the Borrower's obligations
under the Term Loans) have the economic effect of fixing the Borrower's
effective interest cost on at least 50% of the scheduled outstanding
principal amount of Term Loans (taking into account any prepayments of
the Term Loans before such 150th day) for the period through and
including the thirteenth Quarterly Amortization Date.
SECTION 3. AMENDMENTS RELATING TO AVAILABILITY OF ADDITIONAL LIBOR
FUNDING PERIODS THROUGH MARCH 31, 1998. Section 2.03(c) of the Credit Agreement
is hereby amended to read as follows:
(c) FUNDING PERIODS. At any time when the Borrower shall
select, convert to or renew the Euro-Rate Option to apply to any part
of the Committed Loans, the Borrower shall specify one or more Funding
Periods during which such Option shall apply, such Funding Periods
being as set forth in the table below:
INTEREST RATE OPTION AVAILABLE FUNDING PERIODS
Euro-Rate Option One, two, three
or six months or,
subject to the
following clause (iv),
one, two or three weeks
(each, a "Euro-Rate
Funding Period");
provided, that:
(i) Each Euro-Rate Funding Period shall begin on a London
Business Day, and the terms "month" and "week," when used in
connection with a Euro-Rate Funding Period, shall be construed in
accordance with prevailing practices in the interbank eurodollar
market at the commencement of such Euro-Rate Funding Period, as
determined by the Administrative Agent (which determination shall
be conclusive absent manifest error);
(ii) The Borrower may not select a Euro-Rate Funding Period
that would end after the Revolving Credit Maturity Date;
(iii) The aggregate number of Funding Segments of the
Euro-Rate Portions of the Committed Loans at any time shall not
exceed 15, and
(iv) The Borrower may not select a Euro-Rate Funding Period
shorter than one month that would end after March 31, 1998.
SECTION 4. 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, the Administrative Agent and
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 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 5. 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
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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 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 above written.
KENNAMETAL INC.
By /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Vice President and Treasurer
MELLON BANK, N.A.,
individually and as Administrative Agent
By /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Vice President
