EXHIBIT 4.2
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT (this "Amendment"), dated as of October 14, 1997,
among Coltec Industries Inc. a corporation organized and existing under
the laws of the State of Pennsylvania (the "Company"), the various
Banks from time to time party to the Credit Agreement referred to
below, BANK OF AMERICA ILLINOIS, as Documentation Agent. THE CHASE
MANHATTAN BANK, as Syndication Agent, and BANKERS TRUST COMPANY, as
Administrative Agent, and acknowledged and agreed to by each of the
Subsidiary Guarantors. All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings provided
such terms in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Company, the Banks, the Documentation Agent, the
Syndication Agent and the Administrative Agent are parties to the
Credit Agreement, dated as of March 24, 1992, amended and restated as
of January 11, 1994 and further amended and restated as of December 18,
1996, (as amended, modified or supplemented to the date hereof, the
"Credit Agreement");
WHEREAS, the Company desires to consummate a transaction in which
the Company and Jamco Products, LLC ("Jamco"), a limited liability
company indirectly wholly-owned by the Company, would purchase
substantially all of the assets of Marine & Petroleum Manufacturing,
Inc., Tex-o-lon, Inc. and Repro-lon, Inc. (collectively, the "M&P
Acquisition") for a purchase price of up to $42,000,000:
WHEREAS, the Company desires to sell or otherwise dispose (the "Alco
Asset Sale") of certain inventory, intellectual property (it being
understood that the Company may also license certain intellectual
property in accordance with Section 9.02 (xv) of the Credit Agreement)
and certain other assets previously identified (including, patterns,
dyes, tooling, drawings and plans), in each case which was previously
acquired by the Company pursuant to the purchase, dated as of September
27, 1997, of the Alco locomotive business from General Electric Co.;
WHEREAS, subject to the terms and conditions set forth herein, the
Banks desire to (i) permit the Company to consummate the M&P Acquisition,
the Alco Asset Sale and (ii) further amend the Credit Agreement as
provided herein; and
WHEREAS, subject to the terms and conditions set forth below, the
parties hereto agree as follows.
NOW, THEREFORE, it is agreed:
1. Notwithstanding anything to the contrary contained in Section 8.14
of the Credit Agreement, the Banks hereby (i) consent to the Company
consummating the M&P Acquisition, (ii) waive (solely in connection with
the M&P Acquisition) the limitation on transaction consideration set
forth in Section 8.14 (a) (A) of the Credit Agreement and (iii) agree
that (A) the M&P Acquisition shall constitute a Permitted Acquisition
under the Credit Agreement, (B) the aggregate principal amount of all
Permitted Acquired Debt incurred, and the aggregate amount of cash
expended, in each case pursuant to the M&P Acquisition, shall not be
included for purposes of calculating the Company's compliance (whether
in connection with the M&P Acquisition or Permitted Acquisitions
consummated thereafter) with the aggregate amount of transaction
consideration permitted by Section 8.14 (a) (B) of the Credit Agreement
and (C) the notice regarding the M&P Acquisition previously made by the
Company to the Administrative Agent shall constitute sufficient notice
for purposes of Section 8.14 (a) (E) of the Credit Agreement, so long
as (i) any Liens or Indebtedness issued or assumed in connection with
the M&P Acquisition are otherwise permitted under the Credit Agreement,
(ii) promptly after (but in no event later than 30 days after) the
consummation of the M&P Acquisition, 100% (or, in the case of a Foreign
Subsidiary, 65%) of the capital stock of, or membership interests in,
as the case may be, Jamco and any Subsidiary acquired pursuant to the
M&P Acquisition is pledged and delivered to the
Collateral Agent for the benefit of the Secured Creditors under the
Pledge Agreement, (iii) within 10 days after the M&P Acquisition, each
such new Domestic Subsidiary (including, without limitation, Jamco) (x)
executes and delivers a counterpart of the Subsidiaries Guaranty and
(y) secures the Company's obligations pursuant to the Credit Agreement
and the other Credit Documents (or such Subsidiary's obligations
pursuant to a Subsidiaries Guaranty) by executing a counterpart of the
Subsidiaries Security Agreement and the Subsidiaries Pledge Agreement
and (iv) no Default or Event of Default then exists or would result
therefrom.
2. Notwithstanding anything to the contrary contained in Section 9.02
of the Credit Agreement, the Banks hereby consent to the Company
consummating the Alco Asset Sale so long as the Net Sale proceeds
therefrom do not exceed $3,700,000. provided that, the Company shall
not be required to apply the proceeds of the Alco Asset Sale as a
mandatory commitment reduction as otherwise required by Section 3.03
(c).
3. Notwithstanding anything to the contrary contained in Section 9.04
of the Credit Agreement, the Banks hereby consent to Jamco incurring
Indebtedness, in aggregate principal amount not to exceed $2.6 million
outstanding at any time, consisting of seller note issued in connection
with the M&P Acquisition, which note shall be unsecured and otherwise
on terms and conditions satisfactory to Administrative Agent.
4. Section 11 of the Credit Agreement is hereby amended by inserting
at the end of the definition of "Consolidated ERITDA" appearing therein
the following new sentence:
"Notwithstanding anything to the contrary contained above.
Consolidated EBITDA shall be determined on a pro forma basis to
give effect to the consummation of all Permitted Acquisitions
effected during the respective such period as if such Permitted
Acquisitions had accrued on the first date of such period."
5. Section 11 of the Credit Agreement is hereby further amended by
inserting at the end of the definition of "Consolidated Interest
Expense" appearing therein the following new sentence:
"Notwithstanding anything to the contrary contained above,
Consolidated Interest Expense shall be determined on a pro forma
basis to give effect to the consummation of all Permitted
Acquisitions effected during the respective such period as if such
Permitted Acquisitions had occurred on the first day of such
period."
6. The Banks hereby waive any Default or Event of Default arising
solely from the Company's failure to deliver the officer's
certificates, otherwise required to be delivered pursuant to Sections
8.14 (a) (B) and 8.14 (c), in connection with the Permitted
Acquisitions effected prior to the date hereof, so long as, within 10
days after the Second Amendment Effective Date (as defined below), the
Company shall deliver to the Administrative Agent a certificate of the
Company's chief financial officer showing (in reasonable detail) that
after giving effect to all Permitted Acquisitions effected prior to the
date hereof, the Company is in compliance with the requirements of
Section 8.14 (a) (B) and 8.14 (c).
7. In order to induce the Banks to enter into this Amendment, the
Company hereby represents and warrants that (i) all representations and
warranties contained in the Section 7 of the Credit Agreement are true
and correct in all material respects on as of the Second Amendment
Effective Date and after giving effect to the Amendment (unless such
representations and warranties relate to a specific earlier date, in
which case such representations and warranties shall be true and
correct as of such earlier date) and (ii) there exists no Default or
Event or Default on the Second Amendment Effective Date after giving
effect to this Amendment.
8. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
9. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A
complete set of counterparts shall be lodged with the Company and the
Administrative Agent.
10. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
11. This Amendment shall become effective on the date (the "Second
Amendment Effective Date") when each Credit Party and the Required
Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of
facsimile transmission) the same to the Administrative Agent at its
Notice Office.
12. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of the Credit Documents to
the Credit Agreement shall be deemed to be references to the Credit
Agreement as amended hereby.
* * *
IN WITNESS WHEREOF, the parties hereto have caused a counter part of
this Amendment to be duly executed and delivered as of the date first
above written.
COLTEC INDUSTRIES INC
By_____________________
Title:
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By_____________________
Title:
BANK OF AMERICA NATIONAL TRUST
& SAVING ASSOCIATION
Individually and as
Documentation Agent
By____________________
Title:
THE CHASE MANHATTAN BANK
Individually and as Syndication Agent
By____________________
Title:
ABN AMRO BANK N.V.
NEW YORK BRANCH
By___________________
Title:
ALLIED IRISH BANK, PLC,
CAYMAN ISLANDS BRANCH
By___________________
Title:
BANK OF IRELAND
By___________________
Title:
BANK COMMERCIALE ITALIANA
NEW YORK BRANCH
By____________________
Title:
BANK LEUMI TRUST COMPANY
OF NEW YORK
By___________________
Title:
THE BANK OF NEW YORK
By___________________
Title:
THE BANK OF MONTREAL
By__________________
Title:
BANK OF SCOTLAND
By__________________
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By__________________
Title:
BANQUE FRANCAISE
DU COMMERCE EXTERIEUR
By_________________
Title:
CIBC INC.
By_________________
Title:
COMMERCIAL LOAN FUNDING TRUST
By________________
Title:
CORESTATES BANK
By________________
Title:
CREDIT LYONNAIS ATLANTA AGENCY
By________________
Title:
CREDIT LYONNAIS NEW YORK
BRANCH
By________________
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By________________
Title:
FIRST UNION NATIONAL BANK
(f/k/a First Union National Bank of
North Carolina)
By________________
Title:
THE FUJI BANK, LIMITED,
ATLANTA AGENCY
By________________
Title:
GIROCREDIT BANK AG
DER SPARKASSEN,
GRAND CAYMAN ISLAND BRANCH
By________________
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By________________
Title:
XXXXXX COMMERCIAL PAPER INC.
By________________
Title:
LLOYDS BANK PLC
By_________________
Title:
MELLON BANK, N.A.
By_________________
Title:
NATIONSBANK, N.A.
By_________________
Title:
THE SAKURA BANK, LTD
By________________
Title:
THE SANWA BANK, LIMITED
By_________________
Title:
SOCIETE GENERALE
By________________
Title:
THE SUMITOMO BANK, LIMITED
By_________________
Title:
WACHOVIA BANK, N.A.
By_________________
Title:
THE YASUDA TRUST & BANKING
COMPANY, LTD.
By_________________
Title:
Acknowledged and agreed:
CII HOLDINGS INC
COLTEC CANADA INC
COLTEC INDUSTRIAL PRODUCTS INC
COLTEC TECHNICAL SERVICES INC
DELAVAN-DELTA INC.
DELAVAN INC
GARLOCK INC
XXXXXXX INTERNATIONAL INC
XXXXXXX OVERSEAS CORPORATION
XXXXXX PERFORMANCE PRODUCTS INC
XXXXXXX AEROSYSTEMS INC
COLTEC INTERNATIONAL SERVICES CO.
STEMCO INC
WALBAR INC
By_____________________
Title:
On behalf of each of the above
Subsidiary Guarantors
ANNEX I
Proposed Receivables Transaction Term Sheet.
