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EXHIBIT 4
SECOND AMENDMENT, dated as of February 27, 1998 (this "Amendment"), to
that certain Credit Agreement (the "Credit Agreement") which became effective
pursuant to the terms of the Termination, Replacement and Restatement Agreement
dated as of June 7, 1995 (the "Restatement Agreement"), among DETROIT DIESEL
CORPORATION, a Delaware corporation (the "Borrower"), the several banks and
other financial institutions parties thereto (the "Lenders") and Chemical Bank,
a New York banking corporation, as agent for the Lenders and the predecessor in
interest of The Chase Manhattan Bank, a New York banking corporation, now
acting as agent for the Lenders (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the parties hereto originally entered into a credit agreement
(the "Original Credit Agreement"), dated as of January 7, 1994; and
WHEREAS, the parties subsequently entered into the Restatement Agreement
whereby the Original Credit Agreement was terminated, subject to applicable
survival provisions, and simultaneously replaced by the Credit Agreement; and
WHEREAS, pursuant to the Original Credit Agreement and the Credit
Agreement, the Lenders have agreed to make, and have made, certain loans to the
Borrower; and
WHEREAS, the Borrower has requested, and, upon this Amendment becoming
effective, the Majority Lenders have agreed, that certain provisions of the
Credit Agreement be amended in the manner provided for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. DEFINED TERMS. Except as otherwise specifically defined herein,
capitalized terms defined in the Credit Agreement and used herein and therein
shall have the meanings given to them in the Credit Agreement. References to
sections and subsections in this Amendment shall be to the Credit Agreement.
II. AMENDMENTS TO CREDIT AGREEMENT.
A. Amendments to Section 1. Subsection 1.1 of the Credit Agreement
is hereby amended by (i) deleting the definition of "Reportable Event" contained
therein and (ii) inserting in their correct alphabetic order the following new
definitions:
"'Reportable Event': any of the events set forth in Section 4043 of
ERISA, other than those events as to which the thirty day notice period
is waived under subsections .22, .23, .25, .27, .28, .29, .31 or .32 of
PBGC Reg. Section 4043.
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"'Second Amendment Effective Date': the date on which the conditions
to effectiveness of the Second Amendment, dated as of February 27, 1998,
to this Credit Agreement have been satisfied."
"'Total Basket Amount': the sum of the following amounts:
(a) the aggregate outstanding principal amount of all Indebtedness
secured by Liens permitted under Section 7.2(g);
(b) the aggregate amount of Attributable Debt under Section 7.3(b);
and
(c) the aggregate outstanding principal amount of all Indebtedness
of all Subsidiaries, excluding (i) the Excluded Indebtedness, and (ii)
for so long as the applicable Subsidiary Guarantee remains in effect,
Indebtedness for which the Subsidiary executes and delivers (A) a
Subsidiary Guarantee in favor of the Agent for the benefit of the
Lenders, substantially in the form of Exhibit I, and (B) as reasonably
requested by the Agent, one or more certificates, resolutions and
opinions of counsel, in each case, in form and substance reasonably
acceptable to the Agent."
B. Amendments to Section 4. Section 4 of the Credit Agreement is hereby
amended by deleting in its entirety Section 4.12 thereof and substituting in
lieu thereof a new paragraph to read as follows:
"4.12 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code and any applicable
regulations thereof. No distress termination (as provided in Section 4041
of ERISA) and no termination as provided in Section 4042 of ERISA of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period. The present value of all
accrued benefits under each Single Employer Plan maintained by the
Borrower or any Commonly Controlled Entity (based on those assumptions
used to fund the Plans and calculated in accordance with FASB 35) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan such that such entity by virtue of such
withdrawal became subject to any material liability under ERISA, nor does
the Borrower nor any Commonly Controlled Entity presently intend to
completely or partially withdraw from any Multiemployer Plan such that
such entity would thereby become subject to any material liability under
ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or
any such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent. There is no pending
or, to the best of the Borrower's
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knowledge, threatened litigation or investigation questioning the form or
operation of any Plan nor is there any basis for any such litigation or
investigation which if adversely determined could have a Material Adverse
Effect."
C. Amendments to Section 7. Section 7 of the Credit Agreement is hereby
amended as follows:
1. by deleting in its entirety paragraph (g) of subsection 7.2
thereof and substituting in lieu thereof a new paragraph to read as follows:
"(g) Liens not otherwise permitted hereunder which secure
Indebtedness in an aggregate principal amount at any time outstanding if,
after giving effect thereto, the Total Basket Amount does not exceed 40%
of Net Worth at such time."
2. by deleting in its entirety subsection 7.3 thereof and
substituting in lieu thereof a new subsection to read as follows:
"7.3 Limitation on Sales and Leasebacks. Enter into any
Sale/Leaseback Transaction (a) other than the Sale/Leaseback Transactions
in existence on the Second Amendment Effective Date and listed on
Schedule 7.3 (and any replacements thereof on comparable terms) or (b)
unless (i) after giving effect thereto, the Total Basket Amount does not
exceed 40% of Net Worth at such time, (ii) immediately before and
immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing and (iii) the gross sale
proceeds received by the Borrower or the selling Subsidiary are not less
than the subject property's fair market value at such time, as determined
by the Board of Directors of the Borrower or such Subsidiary."
3. by deleting in its entirety the subsection 7.7 thereof and
substituting in lieu thereof a new subsection to read as follows:
"7.7 Limitation on Subsidiary Indebtedness. Permit any Subsidiary to
create, incur, assume or suffer to exist any Indebtedness (other than (i)
Indebtedness of such Subsidiary to the Borrower or any other Subsidiary,
(ii) and Indebtedness secured by Liens permitted under subsection 7.2 and
(iii) Indebtedness of such Subsidiary that is supported by the Italian
Letter of Credit (collectively, "Excluded Indebtedness")) if, after
giving effect thereto, the Total Basket Amount would exceed 40% of Net
Worth at such time."
III. Conditions to Effectiveness. This Amendment shall become effective on
the date (the "Second Amendment Effective Date") on which the Borrower, the
Majority Lenders and the Agent shall have executed and delivered to the Agent
this Amendment.
IV. General.
A. Representations and Warranties. In order to induce the Agent and the
Lenders parties hereto to enter into this Amendment, the Borrower hereby
represents and warrants to the Agent and all of the Lenders as of the Second
Amendment Effective Date that the representations
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and warranties made by the Borrower in the Credit Agreement are true and
correct in all material respects on and as of the Second Amendment Effective
Date, before and after giving effect to the effectiveness of this Amendment, as
if made on and as of the Second Amendment Effective Date (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
B. Payment of Expenses. The Borrower agrees to pay or reimburse the Agent
for all of its reasonable out-of-pocket costs and expenses incurred in
connection with this Amendment, including, without limitation, the reasonable
fees and disbursements of counsel to the Agent.
C. No Other Amendments Confirmation. Except as expressly amended, modified
and supplemented hereby, the provisions of the Credit Agreement and the Notes
are and shall remain in full force and effect.
D. Governing Law: Counterparts. 1. This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
2. This Amendment may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Amendment signed by all the parties shall be lodged with
the Borrower and the Agent. This Amendment may be delivered by facsimile
transmission of the relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
DETROIT DIESEL CORPORATION
By: /s/ Xxxxxx X. XxXxxxx
Name: Xxxxxx X. XxXxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK, as Agent, as
Issuing Bank and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA NT&SA
(formerly known as Bank of America
Illinois)
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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BANK OF MONTREAL
By: /s/ X. Xxxxxxx
Name: X. Xxxxxxx
Title: Portfolio Manager
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Xxxxx
Name: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
CIBC INC.
By: /s/ Xxxxxxxxx Xxxxxxx-Xxxxxx
Name: Xxxxxxxxx Xxxxxxx-Xxxxxx
Title: Executive Director, CIBC
Xxxxxxxxxxx Corp., as agent
CITIBANK, N.A.
By: /s/ Xxxxx Xxx
Name: Xxxxx Xxx
Title: Attorney-In-Fact
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ S. Xxxxx Xxxxx
Name: S. Xxxxx Xxxxx
Title: Vice President
CREDIT LYONNAIS CHICAGO BRANCH
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK DG
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
(formerly known as First Union National
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Bank of North Carolina)
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
NBD BANK
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Joint General Manager
XXXXX FARGO BANK, N.A.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Assistant Vice President
