EXHIBIT 10.3
AMENDMENT
TO CREDIT AGREEMENT
This AMENDMENT NO. 1 to Credit Agreement (this "Amendment") dated
and effective as of April 29, 1997 by and among KENNAMETAL INC., a
Pennsylvania corporation (the "Borrower"), and DEUTSCHE BANK AG, New York
Branch and/or Cayman Islands Branch, MELLON BANK, N.A., and PNC BANK, NATIONAL
ASSOCIATION (the "Lenders"):
RECITALS:
---------
A. The Borrower and the Lenders entered into a Credit Agreement
dated as of April 19, 1996, (the "Credit Agreement").
B. The Borrower has requested the Lenders to amend the Credit
Agreement in certain respects and the Lenders have agreed to such amendments
as are set forth herein.
NOW THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree, as follows:
SECTION 1. Definitions. In addition to other words and terms
defined in this Amendment, capitalized terms not otherwise defined herein
shall have the meanings given to them in the Credit Agreement.
SECTION 2. Amendments to Credit Agreement. The Credit Agreement
is amended in the following respects:
(a) Additions and Amendments to Definitions.
( i) The following new definitions are added in
alphabetical order to Section 1.01:
"Amendment" shall mean Amendment No. 1 to Credit
Agreement dated as of April 29, 1997 among the
Borrower and the Lenders.
"Commitment Reduction Date" shall mean
April 28, 1998.
(ii) The definition of Bid Loan Notes in Section 1.01 shall
be deleted and replaced with the following: "Bid Loan Notes"
shall mean the promissory notes of the Borrower executed and
delivered under Section 2.02(k) and/or pursuant to the
Amendment, and any promissory note issued in substitution
therefor pursuant to Section 8.14(c), together with all
extensions, renewals, refinancings or refundings thereof in
whole or in part.
(iii) The definition of Revolving Credit Note in Section
shall be deleted and replaced with the following:
"Revolving Credit Note" shall mean the promissory notes of the
Borrower executed and delivered under Section 2.01(c) hereof
and/or pursuant to the Amendment, any promissory note issued
in substitution therefor pursuant to Sections 2.13(b) or
8.14(c) hereof, together with all extensions, renewals,
refinancings or refundings thereof in whole or in part.
(b) The following shall be added as a new Section 2.06(d):
"(d) Mandatory Repayments - Commitment Reduction. If
the amount of Loans outstanding at any time exceeds
the Total Committed Amounts for any reason, including
by reason of the reduction in the Total Committed
Amounts on the Commitment Reduction Date, then
Borrower shall repay an aggregate principal amount of
Loans so that after such repayment, the outstanding
principal amount of Loans shall not exceed the Total
Committed Amounts."
(c) The last sentence of Section 2.01(A) shall be deleted and
replaced with the following: "Each Lender's Revolving Credit Committed Amount
shall be equal to (i) a tranche in an amount equal to $20,000,000 for the
period from and after the effective date of the Amendment to but excluding the
Commitment Reduction Date and (ii) an additional tranche in an amount equal to
$30,000,000 from and after the Closing Date to but excluding the Maturity
Date, in each case as such amount may have been reduced under Section 2.01(e)
hereof at such time, and subject to transfer to another Lender as provided in
Section 8.14 hereof and termination in accordance with Section 7.02 hereof."
(d) Section 6.01(a) is deleted and replaced with the following:
"Section 6.01(a). (a) Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth shall not at any time be less than
for the period from the effective date of the Amendment to
October 31, 1997, $300,000,000 plus 40% of Consolidated Net
Income for Borrower's 1997 fiscal year ending June 30,
1997 (with no downward adjustment if such Consolidated Net Income
is negative) (such sum is hereafter referred to as the "1997 Net
Worth Covenant Amount") and (ii) for periods from and after
October 31, 1997, the greater of (x) 75% of Consolidated Tangible
Net Worth on September 30, 1997, or (y) the 1997 Net Worth
Covenant Amount. The applicable amount referred to in clause (ii)
above shall be increased by 40% of Consolidated Net Income for
each fiscal year of Borrower from and after (and including)1998,
with no downward adjustment for any fiscal year in which
Consolidated Net Income is negative."
(e) Section 2.02(j) and Section 2.04 (b) (iii) shall each be
amended by replacing the period at the end thereof with a comma and inserting
the following after such comma: "including, without limitation, by reason of
the reduction in each Lender's Revolving Credit Committed Amount on the
Commitment Reduction Date."
(f) The date "June 30, 1995" in each of Sections 3.06, 3.08 and
3.09 is deleted and replaced in each case with "June 30, 1996."
(g) The date "July 1, 1995" in Section 3.07 is deleted and
replaced with "July 1, 1996."
(h) Schedule 3.10 is deleted and is replaced with Schedule 3.10
attached hereto.
SECTION 3. Representations and Warranties. The Borrower
represents and warrants to the Lenders that:
(a) Power and Authority. The Borrower has power and authority
to execute, deliver and carry out the provisions of this Amendment and the
Loan Documents, as amended hereby (collectively, the "Amended Credit
Documents") including the Notes referred to in Section 4(b) hereof (for
purposes of this Amendment, the "Notes") and to borrow the Total Committed
Amounts thereunder. The execution and delivery of this Amendment and the
Notes have been duly authorized by all necessary action on the part of the
Borrower. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Authority is required in
connection with the execution and delivery of this Amendment or the Notes.
(b) Enforceability. This Amendment and the Notes have been duly
and validly executed and delivered by the Borrower and the Amended Credit
Documents constitute legal, valid and binding agreements of the Borrower
enforceable in accordance with their respective terms, except as
enforceability of the foregoing may be limited by bankruptcy, insolvency or
other laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies.
(c) Conflict with Other Instruments. Neither the execution and
delivery of this Amendment or the Notes nor consummation of the transactions
contemplated herein or in the Amended Credit Documents or compliance with the
terms and provisions hereof or thereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the articles of
incorporation or by-laws (or other constituent documents) of the Borrower or
any of its Subsidiaries, any Law or any agreement or instrument which is
material to the Borrower and its Subsidiaries taken as a whole or constitute a
default thereunder.
(d) Representations and Warranties under the Credit Agreement.
The representations and warranties contained in the Amended Credit Documents
are true on and as of the date hereof with the same effect as though such
representations and warranties had been made on and as of the date hereof.
(e) Events of Default. No Event of Default and no Potential
Default has occurred and is continuing or exists under the Credit Documents or
will occur or exist after giving effect to this Amendment.
For purposes of Section 7.01(c) of the Credit Agreement, the
foregoing representations and warranties shall be deemed to have been made in
connection with the Credit Agreement.
SECTION 4. Conditions of Amendment. Subject to the following
conditions, the provisions of Section 2 of this Amendment shall become
effective:
(a) Corporate Action. The Borrower shall have furnished to each
Lender a certificate certifying as to (i) the corporate action referred to in
Section 3 (a) hereof, (ii) any amendments to the Borrower's articles of
incorporation or by-laws since April 19, 1996 (or a statement that there have
been no such amendments), and (iii) the incumbency of the officers authorized
to sign this Amendment, the Notes and any other documents, instruments or
certificates required under this Amendment, together with true signatures of
such officers. The Lenders may conclusively rely on such certificate.
(b) Notes. The Borrower shall have furnished duly executed Notes
to each Lender, in the forms attached hereto as Exhibit A and Exhibit B.
(c) Opinion of Counsel. Each Lender shall have received an
opinion to each Lender dated the date hereof, of David Cofer, Esquire, General
Counsel of Borrower in substantially the same form originally delivered in
connection with the Credit Agreement, but taking into account the execution
and delivery hereof and the Notes in connection herewith.
(d) Additional Matters. Each Lender shall have received such
other certificates, opinions, documents and instruments as may be requested by
any Lender. All corporate and other proceedings, and all documents,
instruments and other matters in connection with the transactions contemplated
by this Agreement and the other Loan Documents shall be satisfactory in form
and substances to each Lender.
SECTION 5. Miscellaneous. The Borrower agrees to reimburse the
Lenders for their reasonable out-of-pocket expenses arising in connection with
the negotiation, preparation and execution of this Amendment, including the
reasonable fees and expenses of internal counsel for Mellon Bank, N.A..
Except as amended or waived hereby, the provisions of the Loan
Documents shall remain in full force and effect.
This Amendment shall be deemed to be a contract under the laws of
the Commonwealth of Pennsylvania and for all purposes shall be construed in
accordance with and governed by the laws of such Commonwealth.
This Amendment may be executed in as many counterparts as may be
deemed necessary and convenient and by the separate parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed to
constitute an original, but all such separate counterparts shall constitute
but one and the same instrument.
If any provision of this Amendment, or the application thereof to
any party thereto, shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions or applications of this
Amendment which can be given effect without the invalid and unenforceable
provision or application, and to this end the parties hereto agree that the
provisions of this Amendment are and shall be severable.
IN WITNESS WHEREOF, the parties hereto by their officers thereunto
duly authorized have executed this Amendment as of the date and year first
above written.
[Corporate Seal]
Attest: KENNAMETAL INC.
_____________________________ By_______________________________
Title________________________ Title____________________________
DEUTSCHE BANK AG, MELLON BANK, N.A.
New York Branch and/or
Cayman Islands Branch
By_______________________ By_______________________________
Title________________________ Title____________________________
PNC BANK, NATIONAL ASSOCIATION
By___________________________
Title________________________
EXHIBIT A
KENNAMETAL INC.
REVOLVING CREDIT NOTE
$50,000,000 Pittsburgh, Pennsylvania
April 29, 1997
FOR VALUE RECEIVED, the undersigned, KENNAMETAL INC., a
Pennsylvania corporation (the "Borrower"), promises to pay to the order of
[NAME OF LENDER], (the "Lender") on or before the Maturity Date, and at such
earlier dates as may be required by the Agreement (as defined below), the
aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to the Borrower from time to time pursuant to the Agreement. The
Borrower further promises to pay to the order of the Lender interest on the
unpaid principal amount hereof from time to time outstanding at the rate or
rates per annum determined pursuant to the Agreement, payable on the dates set
forth in the Agreement.
This Note is one of the "Revolving Credit Notes" as referred to
in, and is entitled to the benefits of, the Credit Agreement, dated as of the
date hereof, by and among the Borrower and the Lenders (as the same may be
amended, modified or supplemented from time to time, the "Agreement") which
among other things provides for the acceleration of the maturity hereof upon
the occurrence of certain events and for repayments in certain circumstances
and upon certain terms and conditions. Terms defined in the Agreement have
the same meanings herein.
The Borrower hereby expressly waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note and the
Agreement, and an action for amounts due hereunder or thereunder shall
immediately accrue.
This Note shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without regard
to principles of choice of law.
KENNAMETAL INC.
By:_______________________
Title:
EXHIBIT B
KENNAMETAL INC.
BID LOAN NOTE
$150,000,000 Pittsburgh, Pennsylvania
April 29, 1997
FOR VALUE RECEIVED, the undersigned, KENNAMETAL INC., a Pennsylvania
corporation (the "Borrower"), promises to pay to the order of [NAME OF LENDER]
(the "Lender") (i) on the last day of the Funding Period, the aggregate unpaid
principal amount of all Bid Loans made by the Lender to the Borrower pursuant
to Section 2.02 of the Agreement to which such Funding Period applies and (ii)
on the Maturity Date, the lesser of the principal sum of ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000) or the aggregate unpaid principal amount of all
Bid Loans made by the Lender to the Borrower pursuant to Section 2.02 of the
Agreement. The Borrower further promises to pay to the order of the Lender
interest on the unpaid principal amount hereof from time to time outstanding
at the rate or rates per annum determined pursuant to the Agreement, payable
on the dates set forth in the Agreement.
This Note is one of the "Bid Loan Notes" as referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of the date
hereof, by and among the Borrower and the Lenders parties thereto from time to
time (as the same may be amended, modified or supplemented from time to time,
the "Agreement"), which among other things provides for the acceleration of
the maturity hereof upon the occurrence of certain events and for repayments
in certain circumstances and upon certain terms and conditions. Terms defined
in the Agreement have the same meanings herein.
The Borrower hereby expressly waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note and the
Agreement, and an action for amounts due hereunder or thereunder shall
immediately accrue.
This Note shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to
principles of choice of law.
KENNAMETAL INC.
By: ________________________________
Title ________________________________