1
Exhibit 10.3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
GUARANTY AND SURETYSHIP AGREEMENT
dated as of December 20, 2000
made by
THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN
in favor of
DEUTSCHE BANK AG, NEW YORK BRANCH
as Administrative Agent
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2
TABLE OF CONTENTS
SECTION TITLE PAGE
c
ARTICLE I DEFINITIONS
1.01 Certain Definitions................................................... 1
ARTICLE II GUARANTY AND SURETYSHIP
2.01 Guaranty and Suretyship............................................... 2
2.02 Obligations Absolute.................................................. 2
2.03 Waiver, etc........................................................... 3
2.04 Reinstatement......................................................... 4
2.05 No Stay............................................................... 4
2.06 Payments.............................................................. 4
2.07 Subrogation, etc...................................................... 4
2.08 Continuing Agreement.................................................. 4
2.09 Limitation on Payments................................................ 4
2.10 Limitation on Obligations............................................. 5
2.11 Taxes................................................................. 5
2.12 Release of Subsidiary Guarantor....................................... 6
ARTICLE III REPRESENTATIONS AND WARRANTIES
3.01 Credit Agreement...................................................... 6
3.02 Representations and Warranties Remade at Each Extension of Credit..... 7
ARTICLE IV COVENANTS
4.01 Covenants Generally................................................... 7
ARTICLE V MISCELLANEOUS
5.01 Amendments, etc....................................................... 7
5.02 No Implied Waiver; Remedies Cumulative................................ 7
5.03 Notices............................................................... 7
5.04 Expenses.............................................................. 7
5.05 Entire Agreement...................................................... 8
5.06 Survival.............................................................. 8
5.07 Counterparts.......................................................... 8
5.08 Setoff................................................................ 8
5.09 Construction.......................................................... 8
5.10 Successors and Assigns................................................ 8
5.11 Joint and Several Obligations......................................... 9
5.12 Credit Agreement...................................................... 9
5.13 Additional Subsidiary Guarantors...................................... 9
5.14 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Limitation of Liability............................................. 9
-i-
3
Annex A Form of Additional Subsidiary Guarantor Supplement
Annex B Form of Opinion of Counsel to Additional Subsidiary Guarantor
-ii-
4
GUARANTY AND SURETYSHIP AGREEMENT
THIS AGREEMENT, dated as of December 20, 2000, made by each of
the Persons executing this Agreement as a Subsidiary Guarantor and each other
Person which from time to time becomes a Subsidiary Guarantor party hereto
(each, a "Subsidiary Guarantor"), in favor of Deutsche Bank AG, New York Branch,
as Administrative Agent for the Lenders party to the Credit Agreement referred
to below (in such capacity, together with its successors, the "Administrative
Agent").
RECITALS:
A. Kennametal Inc., a Pennsylvania corporation (the
"Borrower") has entered into a Credit Agreement of even date herewith with the
Lenders parties thereto from time to time and Deutsche Bank AG, New York Branch,
as Administrative Agent (as amended, modified or supplemented from time to time,
the "Credit Agreement"). Each Subsidiary Guarantor will derive substantial
direct and indirect benefit from the transactions contemplated by the Credit
Agreement, and each Subsidiary Guarantor may receive proceeds of extensions of
credit under the Credit Agreement from time to time.
B. It is a condition precedent to the extension of credit
under the Credit Agreement that the Subsidiary Guarantors execute and deliver
this Agreement. This Agreement, among other things, is made by the Subsidiary
Guarantors to induce the Lender Parties to enter into the Loan Documents and to
induce the Lender Parties to extend credit under the Credit Agreement.
C. Each Subsidiary Guarantor further acknowledges that it has,
independently and without reliance upon the Lender Parties or any representation
by or other information from the Lender Parties, made its own credit analysis
and decision to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, and
intending to be legally bound, each Subsidiary Guarantor hereby agrees as
follows:
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. Capitalized terms not otherwise defined
herein shall have the meanings given such terms in the Credit Agreement.
ARTICLE II
GUARANTY AND SURETYSHIP
2.01. GUARANTY AND SURETYSHIP. Each Subsidiary Guarantor
hereby absolutely, unconditionally and irrevocably guarantees and becomes surety
for the full and punctual payment and performance of the Obligations as and when
such payment or performance shall become due (at scheduled maturity, by
acceleration or otherwise) in accordance with the terms of the Loan Documents.
This Agreement is an agreement of suretyship as well as of guaranty, is a
guarantee of payment and performance and not merely of collectibility, and is in
no way conditioned upon any attempt to collect from or proceed against the
Borrower, any other Subsidiary Guarantor or any other Person or any other event
or circumstance. The obligations of each Subsidiary Guarantor under this
Agreement are direct and primary obligations of such Subsidiary Guarantor and
are independent of the Obligations, and a separate action or actions may be
brought against such Subsidiary Guarantor regardless of whether action
5
is brought against the Borrower, any other Subsidiary Guarantor or any other
Person or whether the Borrower, any other Subsidiary Guarantor or any other
Person is joined in any such action or actions.
2.02. OBLIGATIONS ABSOLUTE. Each Subsidiary Guarantor agrees
that the Obligations will be paid and performed strictly in accordance with the
terms of the Loan Documents, regardless of any Law, regulation or order now or
hereafter in effect in any jurisdiction affecting the Obligations, any of the
terms of the Loan Documents or the rights of any Loan Party or any other Person
with respect thereto. The obligations of each Subsidiary Guarantor under this
Agreement shall be absolute, unconditional and irrevocable, irrespective of any
of the following:
(a) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization, dissolution
or similar proceeding, or otherwise), or any avoidance or
subordination, in whole or in part, of any Loan Document or any of the
Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the
Obligations (whether or not such change is contemplated by the Loan
Documents as presently constituted, and specifically including any
increase in the Obligations, whether resulting from the extension of
additional credit to the Borrower or otherwise), any execution of any
additional Loan Documents, or any amendment or waiver of or any consent
to departure from any Loan Document;
(c) any taking, exchange, release, impairment or nonperfection
of any collateral, or any taking, release, impairment or amendment or
waiver of or consent to departure from any other guaranty or other
direct or indirect security for any of the Obligations;
(d) any manner of application of any collateral or other
direct or indirect security for any of the Obligations, or proceeds
thereof, to any of the Obligations or to other obligations secured
thereby, or any manner of sale or other disposition of any collateral
for any of the Obligations or any other assets of any Loan Party;
(e) any impairment by any Lender Party or any other Person of
any recourse of such Subsidiary Guarantor against any Loan Party or any
other Person, or any other impairment by any Lender Party or any other
Person of the suretyship status of such Subsidiary Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, any Loan Party,
such Subsidiary Guarantor or any other Person;
(g) any failure of any Lender Party or any other Person to
disclose to such Subsidiary Guarantor any information pertaining to the
business, operations, condition (financial or other) or prospects of
any Loan Party or any other Person, or to give any other notice,
disclosure or demand; or
(h) any other event or circumstance (excluding only the
defense of full, strict and indefeasible payment and performance) that
might otherwise constitute a defense available to, a discharge of, or a
limitation on the obligations of, any Loan Party, such Subsidiary
Guarantor or a guarantor or surety.
2.03. WAIVERS, ETC. Each Subsidiary Guarantor hereby
irrevocably waives any defense to or limitation on its obligations under this
Agreement arising out of or based upon any matter referred
-2-
6
to in Section 2.02. Without limiting the generality of the foregoing, each
Subsidiary Guarantor hereby irrevocably waives each of the following:
(a) all notices, disclosures and demands of any nature which
otherwise might be required from time to time to preserve intact any
rights against such Subsidiary Guarantor, including (i) any notice of
any event or circumstance described in Section 2.02, (ii) any notice
required by any law, regulation or order now or hereafter in effect in
any jurisdiction, (iii) any notice of nonpayment, nonperformance,
dishonor, or protest under any Loan Document or any of the Obligations,
(iv) any notice of the incurrence of any Obligation, (v) any notice of
any default or any failure on the part of any Loan Party or any other
Person to comply with any Loan Document or any of the Obligations or
any direct or indirect security for any of the Obligations, and (vi)
any notice of any information pertaining to the business, operations,
condition (financial or other) or prospects of any Loan Party or any
other Person;
(b) any right to any marshalling of assets, to the filing of
any claim against any Loan Party or any other Person in the event of
any bankruptcy, insolvency, reorganization, dissolution or similar
proceeding, or to the exercise against any Loan Party or any other
Person of any other right or remedy under or in connection with any
Loan Document or any of the Obligations or any direct or indirect
security for any of the Obligations; any requirement of promptness or
diligence on the part of the Lender Parties or any other Person; any
requirement to exhaust any remedies under or in connection with, or to
mitigate the damages resulting from default under, any Loan Document or
any of the Obligations or any direct or indirect security for any of
the Obligations; and any requirement of acceptance of this Agreement,
and any requirement that such Subsidiary Guarantor receive notice of
such acceptance; and
(c) any defense or other right arising by reason of any Law
now or hereafter in effect in any jurisdiction pertaining to election
of remedies (including anti-deficiency laws, "one action" laws or
similar laws), or by reason of any election of remedies or other action
or inaction by the Lender Parties (including commencement or completion
of any judicial proceeding or nonjudicial sale or other action in
respect of any collateral security for any of the Obligations), which
results in denial or impairment of the right of the Lender Parties to
seek a deficiency against any Loan Party any other Person, or which
otherwise discharges or impairs any of the Obligations or any recourse
of such Subsidiary Guarantor against any Loan Party or any other
Person.
2.04. REINSTATEMENT. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Obligations is avoided, rescinded or must otherwise be
returned by any Lender Party for any reason, all as though such payment had not
been made.
2.05. NO STAY. Without limiting the generality of any other
provision of this Agreement, if any acceleration of the time for payment or
performance of any Obligation, or any condition to any such acceleration, shall
at any time be stayed, enjoined or prevented for any reason (including stay or
injunction resulting from the pendency against any Loan Party or any other
Person of a bankruptcy, insolvency, reorganization, dissolution or similar
proceeding), each Subsidiary Guarantor agrees that, for purposes of this
Agreement and its obligations hereunder, at the option of the Administrative
Agent, such Obligation shall be deemed to have been accelerated and such
condition to acceleration shall be deemed to have been met.
-3-
7
2.06. PAYMENTS. All payments to be made by each Subsidiary
Guarantor pursuant to this Agreement (other than payments to a Lender Party
under Section 2.11) shall be made to the Administrative Agent at the time
prescribed for payments of the underlying Obligation in the applicable Loan
Document, without setoff, counterclaim, withholding or other deduction of any
nature. The Administrative Agent shall apply such payments received by it in
accordance with the applicable terms of the Credit Agreement.
2.07. SUBROGATION, ETC. Any rights which any Subsidiary
Guarantor may have or acquire by way of subrogation, reimbursement, restitution,
exoneration, contribution or indemnity, and any similar rights (whether arising
by operation of law, by agreement or otherwise), against the Borrower, any other
Subsidiary Guarantor or any other Person arising from the existence, payment,
performance or enforcement of any of the obligations of such Subsidiary
Guarantor under or in connection with this Agreement, shall be subordinate in
right of payment to the Obligations, and such Subsidiary Guarantor shall not
exercise any such rights until all Obligations and all other obligations under
this Agreement have been paid in cash and performed in full and all commitments
to extend credit under the Loan Documents shall have terminated. If,
notwithstanding the foregoing, any amount shall be received by a Subsidiary
Guarantor on account of any such rights at any time prior to the time at which
all Obligations and all other obligations under this Agreement shall have been
paid in cash and performed in full and all commitments to extend credit under,
the Loan Documents shall have terminated, such amount shall be held by such
Subsidiary Guarantor in trust for the benefit of the Lender Parties, segregated
from other funds held by such Subsidiary Guarantor, and shall be forthwith
delivered to the Administrative Agent in the exact form received by such
Subsidiary Guarantor (with any necessary endorsement), to be applied to the
Obligations, whether matured or unmatured, in accordance with the applicable
terms of the Credit Agreement, or at the option of the Administrative Agent,
held by the Administrative Agent on behalf of the Lender Parties as security for
the Obligations to be disposed of by the Administrative Agent in accordance with
the applicable collateral agency agreement.
2.08. CONTINUING AGREEMENT. This Agreement is a continuing
guaranty and shall continue in full force and effect until all Obligations and
all other amounts payable under this Agreement have been paid in cash and
performed in full, and all commitments to extend credit under, the Loan
Documents have terminated, subject in any event to reinstatement in accordance
with Section 2.04. Without limiting the generality of the foregoing, each
Subsidiary Guarantor hereby irrevocably waives any right to terminate or revoke
this Agreement.
2.09. LIMITATION ON PAYMENTS. The parties hereto intend to
conform to all applicable Laws limiting the maximum rate of interest that may be
charged or collected by the Lender Parties from any Subsidiary Guarantor.
Accordingly, notwithstanding any other provision hereof, a Subsidiary Guarantor
shall not be required to make any payment to or for the account of a Lender
Party, and such Lender Party shall refund any payment made by such Subsidiary
Guarantor, to the extent that such requirement or such failure to refund would
violate or conflict with mandatory and nonwaivable provisions of applicable Law
limiting the maximum amount of interest which may be charged or collected by
such Lender Party from such Subsidiary Guarantor.
2.10. LIMITATION ON OBLIGATIONS. Notwithstanding any other
provision hereof, to the extent that mandatory and nonwaivable provisions of
applicable Law pertaining to fraudulent transfer or fraudulent conveyance
otherwise would render the full amount of the obligations of a Subsidiary
Guarantor under this Agreement avoidable, invalid or unenforceable, the
obligations of such Subsidiary Guarantor under this Agreement shall be limited
to the maximum amount which does not result in such avoidability, invalidity or
unenforceability. In any action, suit or proceeding pertaining to this
Agreement, it is agreed by the parties hereto that the burden of proof, by clear
and convincing evidence,
-4-
8
shall be on the Person claiming that this Section 2.10 applies to limit any
obligation of such Subsidiary Guarantor under this Agreement, or claiming that
any obligation of such Subsidiary Guarantor under this Agreement is avoidable,
invalid or unenforceable, as to each element of such claim.
2.11. TAXES.
(a) PAYMENTS NET OF TAXES. All payments made by each
Subsidiary Guarantor under this Agreement or any other Loan Document shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding (x) in the case of each Lender Party, net income
taxes imposed on such Lender Party by the United States, and net income taxes
and franchise taxes imposed on such Lender Party by the jurisdiction under the
Laws of which such Lender Party is organized or by any political subdivision
thereof, and (y) in the case of each Lender Party, net income taxes and
franchise taxes imposed on such Lender Party by the jurisdiction in which is
located the Lender Party's Lending Office or other office which makes or books a
particular extension of credit or transaction under the Loan Documents or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deduction, charges, withholdings and liabilities being referred to as "Taxes").
If any Subsidiary Guarantor shall be required by Law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Loan Document to
any Lender Party, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11) such Lender Party receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Subsidiary Guarantor shall make such deductions, and (iii) such
Subsidiary Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Law.
(b) OTHER TAXES. Each Subsidiary Guarantor agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document to which it is party or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document to which it is party (hereinafter referred to as "Other
Taxes").
(c) INDEMNITY. Each Subsidiary Guarantor hereby indemnifies
each Lender Party for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.11) paid by such Lender Party and any
liability (including, without limitation, penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 15 days from the date such Lender Party makes written demand therefor
(which demand shall identify in reasonable detail the nature and the amount of
Taxes and Other Taxes for which indemnification is being sought).
(d) RECEIPTS, ETC. Within 30 days after the date of any
payment of Taxes or Other Taxes, each Subsidiary Guarantor will furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof.
(e) OTHER. Without prejudice to the survival of any other
agreement of any Subsidiary Guarantor hereunder, the obligations of each
Subsidiary Guarantor contained in this Section 2.11 shall survive the payment in
full of all other obligations of the Subsidiary Guarantor under this Agreement
and the other Loan Documents, termination of all commitments to extend credit
under, the Loan Documents, and all other events and circumstances. Nothing in
this Section 2.11 or otherwise in this Agreement shall
-5-
9
require any Lender Party to disclose to any Subsidiary Guarantor any of its tax
returns (or any other information that it deems to be confidential or
proprietary).
2.12. RELEASE OF SUBSIDIARY GUARANTOR. Upon the sale or other
disposition of all of the capital stock of and other equity interests in a
Subsidiary Guarantor to a Person or Persons other than the Borrower or a
Subsidiary of the Borrower, which sale or other disposition is in compliance
with the Loan Documents, the Administrative Agent will, at such Subsidiary
Guarantor's expense, release such Subsidiary Guarantor from its obligations
under this Agreement; provided, however, that (a) at the time of such request
and such release no Event of Default or Potential Default shall have occurred
and be continuing, (b) such Subsidiary Guarantor shall have delivered to the
Administrative Agent, at least five Business Days prior to the date of the
proposed release, a written request for release describing the terms of the sale
or other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a form for release for execution
by the Administrative Agent and a certification by a Responsible Officer of the
Borrower to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Administrative Agent may in good
faith request, (c) no Lender Party shall have given to the Administrative Agent,
prior to the proposed release, a notice to the effect that the conditions set
forth in this Section 2.12 have not been satisfied and specifically requesting
that the Administrative Agent not effect such release, and (d) the proceeds of
any such sale or other disposition required to be applied in accordance with
Section 2.07 of the Credit Agreement, or any successor provision of similar
import, shall be paid to, or in accordance with the instructions of, the
Administrative Agent in accordance with the Credit Agreement. The obligations of
the Subsidiary Guarantor under Sections 2.11 and 5.04 of this Agreement shall
survive any termination or release hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01. CREDIT AGREEMENT. The provisions of Article III of the
Credit Agreement are hereby incorporated by reference (together with all related
definitions and cross references), insofar as such provisions relate to a
Subsidiary Guarantor or any Subsidiary of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby represents and warrants to the Lender Parties as
provided therein.
3.02. REPRESENTATIONS AND WARRANTIES REMADE AT EACH EXTENSION
OF CREDIT. Each request (including any deemed request) by the Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by each Subsidiary Guarantor to the Lender Parties
that the representations and warranties made by such Subsidiary Guarantor in
this Article III are true and correct on and as of the date of such request with
the same effect as though made on and as of such date. The absence of notice to
the Administrative Agent from a Subsidiary Guarantor to the contrary before any
extension of credit under any Loan Document shall constitute a further
representation and warranty by such Subsidiary Guarantor to the Lender Parties
that the representations and warranties made by such Subsidiary Guarantor in
this Article III are true and correct on and as of the date of such extension of
credit with the same effect as though made on and as of such date.
ARTICLE IV
COVENANTS
4.01. COVENANTS GENERALLY. Reference is hereby made to the
provisions of Articles V and VI of the Credit Agreement (together with all
related definitions and cross-references). Each
-6-
10
Subsidiary Guarantor hereby agrees that, to the extent such provisions impose
upon the Borrower a duty to cause any Subsidiary Guarantor to do or refrain
from doing certain acts or things or to meet or refrain from meeting certain
conditions, such Subsidiary Guarantor shall do or refrain from doing such acts
or things, or meet or refrain from meeting such conditions, as the case may be.
ARTICLE V
MISCELLANEOUS
5.01. AMENDMENTS, ETC. No amendment to or waiver of any
provision of this Agreement, and no consent to any departure by any Subsidiary
Guarantor herefrom, shall in any event be effective unless in a writing manually
signed by or on behalf of such Subsidiary Guarantor and the Administrative
Agent. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Such amendments, waivers
and consents shall be made in accordance with, and shall be subject to, Section
9.03 of the Credit Agreement.
5.02. NO IMPLIED WAIVER; REMEDIES CUMULATIVE. No delay or
failure of the Administrative Agent or any other Lender Party in exercising any
right or remedy under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right or remedy.
The rights and remedies of the Administrative Agent or any other Lender Party
under this Agreement are cumulative and not exclusive of any other rights or
remedies available hereunder, under any other agreement, at law, or otherwise.
5.03. NOTICES. Except to the extent, if any, otherwise
expressly provided herein, all notices and other communications (collectively,
"notices") under this Agreement shall be given, shall be effective, and may be
relied upon, in the same way as notices under the Credit Agreement.
5.04. EXPENSES. Each Subsidiary Guarantor agrees to pay upon
demand all reasonable expenses (including reasonable fees and expenses of
counsel) which the Administrative Agent or any other Lender Party may incur from
time to time arising from or relating to the administration of, or exercise,
enforcement or preservation of rights or remedies under, this Agreement.
5.05. ENTIRE AGREEMENT. This Agreement and the other Loan
Documents constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior and
contemporaneous understandings and agreements.
5.06. SURVIVAL. All representations and warranties of the each
Subsidiary Guarantor contained in or made in connection with this Agreement
shall survive, and shall not be waived by, the execution and delivery of this
Agreement, any investigation by or knowledge of any Lender Party, any extension
of credit, termination of this Agreement, or any other event or circumstance
whatsoever.
5.07. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same agreement.
5.08. SETOFF. In the event that any obligation of a Subsidiary
Guarantor now or hereafter existing under this Agreement or any other Loan
Document shall have become due and payable, each Lender Party shall have the
right from time to time, without notice to such Subsidiary Guarantor, to set off
against and apply to such due and payable amount any obligation of any nature of
such Lender Party
-7-
11
to such Subsidiary Guarantor, including all deposits (whether time or demand,
general or special, provisionally or finally credited, however evidenced) now or
hereafter maintained by such Subsidiary Guarantor with such Lender Party. Such
right shall be absolute and unconditional in all circumstances and, without
limitation, shall exist whether such obligation to such Subsidiary Guarantor is
absolute or contingent, matured or unmatured (it being agreed that such Lender
Party may deem such obligation to be then due and payable at the time of such
setoff), regardless of the offices or branches through which the parties are
acting with respect to the offset obligations, and regardless of the existence
or adequacy of any other direct or indirect security or any other right or
remedy available to such Lender Party. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to a Lender Party under this Section 5.08, at law or
otherwise. Each Subsidiary Guarantor hereby agrees that any affiliate of a
Lender Party, and any holder of a participation in any obligation of such
Subsidiary Guarantor under this Agreement, shall have the same rights of setoff
as the Lender Parties as provided in this Section 5.08 (regardless of whether
such affiliate or participant otherwise would be deemed a creditor of such
Subsidiary Guarantor).
5.09. CONSTRUCTION. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; the neuter case includes the
masculine and feminine cases; and "or" is not exclusive. In this Agreement, any
references to property (or similar terms) include any interest in such property
(or other item referred to); "include," "includes," "including" and similar
terms are not limiting; and "hereof," "herein," "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision. Section
and other headings in this Agreement, and any table of contents herein, are for
reference purposes only and shall not affect the interpretation of this
Agreement in any respect. Section and other references in this Agreement are to
this Agreement unless otherwise specified. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties in favor of the Lender Party, nor any doctrine of construction of
ambiguities against the party controlling the drafting, shall apply to this
Agreement.
5.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each Subsidiary Guarantor and its successors and assigns, and shall inure
to the benefit of and be enforceable by the Administrative Agent and the other
Lender Parties and their respective successors and assigns. Without limitation
of the foregoing, each Lender Party (and any successive assignee or transferee)
from time to time may assign or otherwise transfer all or any portion of its
rights or obligations under the Loan Documents (including all or any portion of
any commitment to extend credit), or any Obligations, to any other Person, and
such Obligations (including any Obligations resulting from extension of credit
by such other Person under or in connection with the Loan Documents) shall be
and remain Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Obligations such other Person shall be vested
with all the benefits in respect thereof granted to the Lender Party in this
Agreement or otherwise.
5.11. JOINT AND SEVERAL OBLIGATIONS. The obligations of the
Subsidiary Guarantors hereunder are joint and several obligations of each of
them.
5.12. CREDIT AGREEMENT. This Agreement is a Loan Document
referred to in the Credit Agreement. The provisions of the Credit Agreement are
supplemental to the provisions of this Agreement. Each Subsidiary Guarantor
acknowledges receipt of a copy of the Credit Agreement.
5.13. ADDITIONAL SUBSIDIARY GUARANTORS. Upon execution by a
Person of a supplement in the form of Annex A, such Person shall become party
hereto as an additional Subsidiary Guarantor and shall be subject to and bound
by all of the provisions hereof. The addition of any additional Subsidiary
-8-
12
Guarantor as a party to this Agreement shall not require the consent of any
other Subsidiary Guarantor. The rights and obligations of each Subsidiary
Guarantor shall remain in full force and effect following the addition of any
additional Subsidiary Guarantor as a party to this Agreement. Such additional
Subsidiary Guarantor shall comply with the provisions of Section 5.12 of the
Credit Agreement and, without limiting the generality of the foregoing, shall
within the time prescribed therein deliver to the Administrative Agent an
opinion of counsel in substantially the form of Annex B, and covering such other
matters as the Administrative Agent may reasonably request.
5.14. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; LIMITATION OF LIABILITY.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) CERTAIN WAIVERS. EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(I) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY STATEMENT, COURSE OF
CONDUCT, ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH
(COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW
YORK, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST
EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING ANY RELATED
LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY LENDER PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN
ANY OTHER FORUM);
(II) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION OVER SUCH SUBSIDIARY GUARANTOR;
(III) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO SUCH SUBSIDIARY GUARANTOR AT
THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 9.05 OF THE CREDIT
AGREEMENT, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL
AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER
MANNER PERMITTED BY LAW); AND
(IV) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
(c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED
BY LAW, NO CLAIM MAY BE MADE BY ANY SUBSIDIARY GUARANTOR AGAINST ANY LENDER
PARTY OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF
THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN
RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT,
TORT OR ANY OTHER THEORY OF LIABILITY). EACH SUBSIDIARY GUARANTOR HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH
CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS
KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
-9-
13
[This Space Intentionally Left Blank]
-10-
14
IN WITNESS WHEREOF, the Subsidiary Guarantors have executed
and delivered this Agreement as of the date first above written.
KENNAMETAL HOLDINGS EUROPE, INC.
as Subsidiary Guarantor
By /s/ David T. Cofer
------------------------------------------
Title: President
Address: 1600 Technology Way
P.O. Box 231
Latrobe, Pennsylvania 15650
Attn: Treasurer
Telephone: (412) 539-5180
Facsimile: (412) 539-4668
GREENFIELD INDUSTRIES, INC.
as Subsidiary Guarantor
By /s/ David T. Cofer
------------------------------------------
Title: Secretary
Address: 1600 Technology Way
P.O. Box 231
Latrobe, Pennsylvania 15650
Attn: Treasurer
Telephone: (412) 539-5180
Facsimile: (412) 539-4668
ROGERS TOOL WORKS, INC.
as Subsidiary Guarantor
By /s/ David T. Cofer
------------------------------------------
Title: Secretary
Address: 1600 Technology Way
P.O. Box 231
Latrobe, Pennsylvania 15650
Attn: Treasurer
Telephone: (412) 539-5180
Facsimile: (412) 539-4668
-11-
15
ANNEX A
TO
GUARANTY AND SURETYSHIP AGREEMENT
ADDITIONAL SUBSIDIARY GUARANTOR SUPPLEMENT
THIS SUPPLEMENT to the Guaranty and Suretyship Agreement dated
as of December __, 2000 made by the Subsidiary Guarantors referred to therein in
favor of Deutsche Bank AG, New York Branch, as Administrative Agent (such
Guaranty and Suretyship Agreement, as amended, modified or supplemented, being
referred to as the "Subsidiary Guaranty").
RECITALS:
A. Capitalized terms used herein and not otherwise defined
shall have the meanings given them in, or by reference in, the Subsidiary
Guaranty.
B. The Subsidiary Guaranty contemplates that a Person may
become party to the Subsidiary Guaranty as an additional Subsidiary Guarantor.
The Person executing this Supplement as Subsidiary Guarantor below (the
"Additional Subsidiary Guarantor") desires to become party to the Subsidiary
Guaranty as a Subsidiary Guarantor.
NOW, THEREFORE, the Additional Subsidiary Guarantor ,
intending to be legally bound hereby, represents, warrants and covenants to the
Lender Parties and the Loan Parties as follows:
SECTION 1. JOINDER. The Additional Subsidiary Guarantor hereby
becomes party to the Subsidiary Guaranty as a Subsidiary Guarantor thereunder,
and agrees that it shall be subject to and bound by all of the provisions
thereof.
SECTION 2. WARRANTIES, ETC. The Additional Subsidiary
Guarantor hereby represents and warrants to each Lender Party that each of the
representations and warranties set forth in Article III of the Subsidiary
Guaranty is true and correct, insofar as such provisions relate to the
Additional Subsidiary Guarantor or any Subsidiary of the Additional Subsidiary
Guarantor, after giving effect to this Supplement.
SECTION 3. GOVERNING LAW. This Supplement shall be governed
by, construed and enforced in accordance with the laws of the State of New York,
without regard to principles of conflicts of law.
SECTION 4. EXECUTION IN COUNTERPARTS. This Supplement may be
executed by the Additional Subsidiary Guarantor in any number of counterparts,
each of which shall be deemed to be an original, and all such counterparts shall
constitute but one and the same agreement.
16
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has
duly executed this Supplement.
-------------------------------------
as Subsidiary Guarantor
By
---------------------------------
Name:
Title:
Address:
Attn:
Telephone:
Facsimile:
Date:
-------------------------------
17
ANNEX B
TO
GUARANTY AND SURETYSHIP AGREEMENT
FORM OF OPINION OF COUNSEL TO ADDITIONAL SUBSIDIARY GUARANTOR
[Date]
To Deutsche Bank AG, New York Branch, as Administrative Agent under the
Credit Agreement referred to below and to each of the Lender Parties
from time to time referred to in the Credit Agreement
Ladies and Gentlemen:
We have acted as counsel for [name of Additional Subsidiary
Guarantor] (the "Additional Subsidiary Guarantor") and are rendering this
opinion in connection with (a) the Guaranty and Suretyship Agreement (the
"Subsidiary Guaranty," as further defined below), dated as of December 20, 2000,
made by the Subsidiary Guarantors referred to therein in favor of Deutsche Bank
AG, New York Branch, as Administrative Agent under the Credit Agreement referred
to below, and (b) the Additional Subsidiary Guarantor Supplement (the
"Supplement") executed by the Additional Subsidiary Guarantor, whereby the
Additional Subsidiary Guarantor has joined the Subsidiary Guaranty as a
Subsidiary Guarantor. Terms used herein, but not otherwise defined herein, have
the meaning ascribed thereto in the Subsidiary Guaranty. This opinion is being
delivered to you pursuant to Section 5.12 of the Credit Agreement.
In connection with opinion set forth herein, we have reviewed
originals or copies, identified to my satisfaction, of the following:
(i) the Subsidiary Guaranty, as initially executed and as
amended, modified and supplemented to date (the "Subsidiary Guaranty"),
(ii) the Supplement,
(iii) the Credit Agreement dated as of December 20, 2000 by
and among Kennametal Inc., as Borrower, the Lenders parties thereto
from time to time, and Deutsche Bank AG, New York Branch, as
Administrative Agent, as initially executed and as amended, modified
and supplemented to date (the "Credit Agreement")
(iv) the other Loan Documents (as defined in the Credit
Agreement and the Credit Agreement),
(v) the articles of incorporation and bylaws of the Additional
Subsidiary Guarantor, each as in effect on the date hereof, and
(vi) such other documents, records, certificates and
instruments as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed.
In our examination, we have assumed the genuineness of all
signatures on original documents, the authenticity of all documents submitted to
us as originals, the conformity to the originals of all copies submitted to us
as certified, conformed or photostatic copies, and the authenticity of the
18
originals of such copies. As to various questions of fact material to this
opinion, we have relied, without independent investigation or verification, upon
statements, representations and certificates of officers and other
representatives of the Additional Subsidiary Guarantor and certificates of
public officials.
Based upon the foregoing, and subject to the qualifications
and assumptions set forth herein, it is our opinion that:
1. The Additional Subsidiary Guarantor is a corporation duly
incorporated, validly existing and in good standing under the laws of [state].
2. The execution, delivery and performance by the Additional
Subsidiary Guarantor of the Supplement and the Subsidiary Guaranty (a) are
within the Additional Subsidiary Guarantor's corporate powers; (b) have been
duly authorized by all necessary corporate action on the part of the Additional
Subsidiary Guarantor; (c) require no action by or in respect of, or filing on
the part of the Additional Subsidiary Guarantor with, any governmental body,
agency or official, in each case, on the part of the Additional Subsidiary
Guarantor; and (d) do not violate or conflict with, or constitute a default by
the Additional Subsidiary Guarantor under, any provision of (i) any applicable
law, regulation, judgment, injunction, order, decree, (ii) the articles of
incorporation or bylaws of the Additional Subsidiary Guarantor, or (iii) any
material agreement or instrument to which the Additional Subsidiary Guarantor or
any of its Subsidiaries is a party or by which any of them or any of their
respective properties may be subject or bound.
3. The Supplement has been duly executed and delivered by the
Additional Subsidiary Guarantor. The Supplement and the Subsidiary Guaranty
constitute the legal, valid and binding obligation of the Additional Subsidiary
Guarantor, enforceable in accordance with their respective terms.
4. The Additional Subsidiary Guarantor is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
The opinions set forth herein are subject to the following
qualifications and limitations:
(a) The enforceability of the Supplement and the Subsidiary
Guaranty may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws relating to or affecting the rights
of creditors generally.
(b) The enforceability of the Supplement and the Subsidiary
Guaranty may be limited by general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law). In
applying such principles a court, among other things, might not allow a creditor
to accelerate maturity of a debt under certain circumstances including, without
limitations, upon the occurrence of a default deemed immaterial. Such principles
as applied by a court might include a requirement that a creditor act with
reasonableness and in good faith.
(c) The remedy of specific performance and injunctive and
other forms of equitable relief are subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
In rendering the foregoing opinion, we do not express any
opinion as to any laws other than the laws of [the jurisdiction of incorporation
of the Additional Subsidiary Guarantor], the laws of the State of New York, and
the federal laws of the United States of America.
-2-
19
The opinion expressed herein is based upon the laws in effect
on the date hereof, and we assume no obligation to revise or supplement this
opinion should any such law be changed by legislative action, judicial decision,
or otherwise.
The opinion is being delivered to you solely for your benefit,
and neither this opinion nor any part hereof may be delivered to, or used,
referred to or relied upon, by any other person without our express prior
written consent.
Very truly yours,
-3-