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EXHIBIT 10.1
AMENDMENT TO TRANSACTION DOCUMENTS
This Amendment, dated as of March 31, 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:
A. 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 and an Amendment to
Transaction Documents, dated as of December 15, 1998, the "Credit Agreement");
and
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 PROPOSED RECEIVABLES
SECURITIZATION PROGRAM.
(a) Section 2.07(b)(ii) is hereby deleted in its entirety and replaced with the
following:
(ii) ASSET SALES. "Reduction Event" shall include the
following (each, a "Reduction Event Asset Sale"): any sale, lease or
other disposition (including without limitation (x) any such
transaction effected by way of merger or consolidation, and (y) any
sale-leaseback transaction whether or not involving a capitalized
lease) by the Borrower or any of its Subsidiaries of any property
(including without limitation any capital stock or other equity
interest held by the Borrower or such Subsidiary), but excluding (A)
any disposition to the Borrower or to a Subsidiary of the Borrower, (B)
any sale, transfer or other disposition in the ordinary course of
business of inventory or of obsolete equipment or equipment which has
been replaced by upgraded equipment (it being understood that
dispositions of equipment which has become redundant as a result of the
Acquisition or any other acquisition of a business shall not be deemed
to be in the ordinary course), (C) any sale, lease or other disposition
(or series of related sales, leases or other dispositions), other than
an Asset Securitization Transfer, the Net Proceeds of which do not
exceed $5,000,000, (D) any leases of tangible personal property entered
into in the ordinary course of business, (E) any sale, transfer or
other disposition of temporary cash investments in the ordinary course
of business, (F) any sale, transfer or other disposition of any
property (other than an Asset Securitization Transfer) if the Borrower
notifies the Administrative Agent promptly after the receipt of the Net
Proceeds thereof that such proceeds will be used by the Borrower and
its Subsidiaries to purchase similar properties within twelve months
after the date of such notice, but only to the extent such proceeds are
actually so used, (G) any sale, transfer or other disposition of any
Margin Stock for fair value on or before the Merger Date (provided,
that if the proceeds thereof are not applied to the Loan Obligations,
they will be held as cash or cash equivalent investments), (H) any
disposition in a Reduction Event described in Section 2.07(b)(iii), (I)
any leases or subleases of unoccupied space, (J) any factoring of trade
receivables originated by a Foreign Subsidiary; provided, that the
aggregate amount of all transactions described in this clause (J) from
and after the date hereof shall not exceed $25,000,000 (or the
equivalent in any currency at any time), and (K) any Asset
Securitization Transfer representing the reinvestment of cash
collections from accounts or notes receivable or interests therein
which have been previously the subject of an Asset Securitization
Transfer, but only to the extent of such reinvestment of cash
collections. 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.
(b) Section 6.13(a) of the Credit Agreement is hereby amended by adding before
clause (x) the following new clause (w): "(w) a Subsidiary which is an Asset
Securitization SPE,".
(c) Section 7.03 of the Credit Agreement is hereby amended by deleting the word
"and" at the end of Section 7.03(k), redesignating Section 7.03(l) as Section
7.03(m), and adding a new Section 7.03(l) as follows:
(l) Liens (contingent or otherwise) customarily granted in
connection with an Asset Securitization Program; and
(d) Section 7.09 is amended by deleting the word "and" following clause (f)
thereof, replacing the period at the end of clause (g) with a semicolon, and
adding the following new clause (h):
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(h) with respect the foregoing clause (x), restrictions
relating to accounts or notes receivable or interests therein or any
related collateral which are the subject of an Asset Securitization
Program, and with respect to the foregoing clause (y), restrictions
imposed on a Subsidiary of the Borrower serving as an Asset
Securitization SPE.
(e) Annex A to the Credit Agreement, Section 1.01, is amended by adding the
following new definitions in their appropriate places in alphabetical order:
"Asset Securitization Program" means a program of Asset
Securitization Transfers each of which, at the time of such Asset
Securitization Transfer, is either (i) to the Borrower or a
consolidated Subsidiary of the Borrower or (ii) qualifies as a sale
under GAAP for purposes of the consolidated financial statements of the
Borrower.
"Asset Securitization SPE" means a limited-purpose Subsidiary
of the Borrower which serves as a special purpose entity to which the
Borrower or any Subsidiary of the Borrower from time to time makes
Asset Securitization Transfers in connection with an Asset
Securitization Program.
"Asset Securitization Transfer" means a sale, transfer or
other disposition of accounts or notes receivable, or of interests
therein, pursuant to an Asset Securitization Program.
(f) In Annex A to the Credit Agreement, Section 1.01, the definition of "Net
Proceeds" is amended by deleting the phrase "(b) if such Reduction Event is a
Reduction Event Asset Sale," and replacing it with the phrase "(b) if such
Reduction Event is a Reduction Event Asset Sale (other than an Asset
Securitization Transfer),".
SECTION 2. 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, 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 3. 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 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.
[This Space Intentionally Left Blank.]
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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/ James E. Morrison
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Name: James E. Morrison
Title: Vice President and Treasurer
MELLON BANK, N.A.,
individually and as Administrative Agent
By: /s/ Peter K. Lee
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Name: Peter K. Lee
Title: Vice President
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LENDER CONSENT AND ACKNOWLEDGMENT
The undersigned, a "Lender" under that certain Credit
Agreement, dated as of November 17, 1997, by and among Kennametal Inc., a
Pennsylvania corporation (the "Borrower"), the Lenders parties thereto from time
to time, and Mellon Bank, N.A., as Administrative Agent (as amended, the "Credit
Agreement"), hereby (a) acknowledges receipt of a counterpart of the Amendment
to Transaction Documents, dated as of March 31, 1999, by and among the Borrower,
the Lenders parties to the Credit Agreement and Mellon Bank, N.A., as
Administrative Agent, and (b) pursuant to Section 10.03 of the Credit Agreement,
consents and agrees to such Amendment to Transaction Documents and directs the
Administrative Agent to enter into it.
_________________________________________, as
Lender
By_______________________________________
Name:
Title:
Date:______________________
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