EXHIBIT 4.1
AMENDMENT NO. 2 TO THE
CREDIT AGREEMENT
Dated as of June 17, 2002
AMENDMENT NO. 2 TO THE CREDIT AGREEMENT among DRESSER, INC.,
a Delaware corporation (the "U.S. BORROWER") and D.I. LUXEMBOURG S.A.R.L., a
corporation organized and existing under the laws of Luxembourg (the "EURO
BORROWER", and, collectively with the U.S. Borrower, the "BORROWERS"), DEG
ACQUISITIONS, LLC, a limited liability company organized and existing under the
laws of Delaware ("DEG ACQUISITIONS"), the Subsidiary Guarantors party to the
Credit Agreement referred to below (the "SUBSIDIARY GUARANTORS"), the banks,
financial institutions and other institutional lenders party to the Credit
Agreement referred to below (collectively, the "LENDERS") XXXXXX XXXXXXX & CO.
INCORPORATED, as collateral agent (the "COLLATERAL AGENT"), XXXXXX XXXXXXX
SENIOR FUNDING, INC., as administrative agent (the "ADMINISTRATIVE AGENT") for
the Lenders and CREDIT SUISSE FIRST BOSTON ("CSFB"), as syndication agent (the
"SYNDICATION AGENT", and together with the Collateral Agent and the
Administrative Agent, the "AGENTS").
PRELIMINARY STATEMENTS:
(1) The Borrowers, DEG Acquisitions, the Subsidiary
Guarantors, the Lenders and the Agents have entered into a Credit Agreement
dated as of April 10, 2001, as amended by Amendment No. 1 thereto dated as of
March 13, 2002 (such Credit Agreement, as amended, supplemented or otherwise
modified through the date hereof, the "CREDIT AGREEMENT"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement.
(2) The Borrowers and the Required Lenders have agreed to
amend the Credit Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 4, hereby amended as follows:
(a) The definitions of "Change of Control" and
"Parent" in Section 1.01 thereof are amended in full to read as
follows:
"CHANGE OF CONTROL" means the occurrence of any of the
following: (a) the Permitted Investors and their Related
Parties cease to own, directly or indirectly, more than 50% of
the Voting Interests of the U.S. Borrower, or (b) the first
date during any consecutive two-year period on which a
majority of the members of the board of directors of DEG
Acquisitions are not Continuing Directors, or (c) prior to an
IPO, the Parent shall cease to own, at least 90% of the Voting
Interests, other than Excluded Voting Interests, in each of
the Borrowers (provided that the
Parent shall in no event cease to own more than 50% of the
Voting Interests in the U.S. Borrower on a fully diluted basis
(such percentage to be calculated taking into account the
Excluded Voting Interests)), or (d) after an IPO, the Parent
shall cease to own more than 50% of the Voting Interests in
the U.S. Borrower.
"PARENT" means (a) prior to the effectiveness (in accordance
with its terms) of Amendment No. 2 to this Agreement, dated as
of June 17, 2002, the entity defined as "Parent" in the
recital of parties to this Agreement; and (b) upon and after
the effectiveness (in accordance with its terms) of Amendment
No. 2 to this Agreement, dated as of June 17, 2002, Delaware
Intermediate HoldCo; provided, however, that DEG Acquisitions
shall in any case remain a guarantor of all Obligations of the
Loan Parties existing under or arising in respect of the Loan
Documents.
(b) Section 1.01 thereof is further amended by inserting
therein the following definitions in appropriate alphabetical order:
"DEG ACQUISITIONS" means DEG Acquisitions, LLC, a limited
liability company organized and existing under the laws of
Delaware.
"DELAWARE INTERMEDIATE HOLDCO" means Dresser Holdings, Inc., a
Delaware corporation.
"PARENT COMPANIES" means, collectively, (i) Delaware
Intermediate HoldCo., (ii) Dresser Holdings, Ltd., a
corporation organized and existing under the laws of Bermuda,
and (iii) Dresser, Ltd., a corporation organized and existing
under the laws of Bermuda.
(c) The definition of "NET CASH PROCEEDS" appearing in Section
1.01 thereof is amended by inserting therein after the phrase "the sale
or issuance of any Equity Interests to any Person other than", the
words "by any Parent Company to another Parent Company or DEG
Acquisitions".
(d) Section 2.06(b)(ii) thereof is amended by inserting
therein after the introductory phrase "The Applicable Borrower shall,
on the date of receipt of the Net Cash Proceeds by the Parent or any of
its Subsidiaries", the parenthetical "(or by DEG Acquisitions or any of
its Subsidiaries in the case of clause (C) below)".
(e) Section 2.06(b)(ii)(C) thereof is amended in full to read
as follows:
(C) the issuance and sale by DEG Acquisitions or any of its
Subsidiaries of any Equity Interests (including, without
limitation, receipt of any capital contribution but excluding
(i) any issuance of Equity Interests of the Parent Companies
or DEG Acquisitions solely for the purpose of repaying the
Senior Subordinated Notes or any other Debt permitted by
Section 5.02(b), (ii) any issuance of Equity Interests by a
Parent Company to another Parent Company or DEG Acquisitions,
by the U.S. Borrower to the Parent or by any Subsidiary of the
U.S. Borrower to the U.S. Borrower or another Subsidiary of
the U.S. Borrower, (iii) 50% of any
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Net Cash Proceeds from any issuance of Equity Interests of DEG
Acquisitions or any of its Subsidiaries pursuant to a bona
fide underwritten initial public offering if the Total
Debt/EBITDA Ratio at such time is equal to or greater than
2.00:1.00 (calculated after giving effect to the application
of the proceeds of such issuance), (iv) 100% of any Net Cash
Proceeds from any issuance of Equity Interests of DEG
Acquisitions or any of its Subsidiaries pursuant to a bona
fide underwritten initial public offering if the Total
Debt/EBITDA Ratio at such time is less than 2.00:1.00
(calculated after giving effect to the application of the
proceeds of such issuance), and (v) any issuance of Equity
Interests of DEG Acquisitions or any of its Subsidiaries
solely to finance a Permitted Acquisition or the Pending
Acquisition)
SECTION 2. Consent to the merger of U.S. Borrower into Dresser
Mergerco, Inc. Notwithstanding anything provided to the contrary in Sections
5.02(d) or 5.02(g) of the Credit Agreement, the Lenders hereby consent,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 4, to the merger of the U.S. Borrower
into Dresser Mergerco, Inc., a Delaware corporation (the "MERGER"); provided
that, after giving effect to the Merger, (i) the U.S. Borrower shall be the
surviving corporation, and (ii) the U.S. Borrower shall be a wholly-owned
Subsidiary of Delaware Intermediate HoldCo.
SECTION 3. Release of Collateral consisting of Equity
Interests in the U.S. Borrower. Effective as of the date hereof and subject to
the satisfaction of the conditions precedent set forth in Section 4, the
Collateral Agent shall, at DEG Acquisitions' expense, execute and deliver to DEG
Acquisitions such documents as DEG Acquisitions shall reasonably request to
evidence the release of the lien and security interest granted by DEG
Acquisitions to the Collateral Agent, for the benefit of the Lenders, in the
Equity Interests of the U.S. Borrower owned by DEG Acquisitions.
SECTION 4. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written when, and only when, (A) the
Administrative Agent shall be satisfied with the corporate and legal structure
and capitalization of each of (i) Dresser, Ltd., a corporation organized and
existing under the laws of Bermuda, (ii) Dresser Holdings, Ltd., a corporation
organized and existing under the laws of Bermuda, (iii) Delaware Intermediate
HoldCo and (iv) Dresser Mergerco, Inc., including in each case the terms and
conditions of the charter, bylaws and other constituent documents and of each
agreement or instrument relating to such structure and capitalization, and (B)
the Administrative Agent shall have received each of the following:
(i) counterparts of this Amendment executed by the Borrowers
and the Required Lenders or, as to any of the Lenders, advice
satisfactory to the Administrative Agent that such Lender has executed
this Amendment;
(ii) the consent attached hereto duly executed by each
Guarantor and each Grantor;
(iii) a Guaranty Supplement in the form of Exhibit H to the
Credit Agreement duly executed by DEG Acquisitions;
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(iv) an assumption agreement in form and substance
satisfactory to the Administrative Agent duly executed by Delaware
Intermediate HoldCo with respect to the assumption by Delaware
Intermediate HoldCo of all of the Obligations of DEG Acquisitions
arising under the Loan Documents (including, without limitation, as
Guarantor or Grantor thereunder), together with evidence that all
action the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority lien and security
interest created under the Collateral Documents in the assets of
Delaware Intermediate HoldCo have been taken;
(v) a merger agreement in form and substance satisfactory to
the Administrative Agent with respect to the Merger, duly executed by
each of the parties thereto; and
(vi) a favorable opinion of Xxxxxx & Xxxxxxx, United States
counsel for the Loan Parties, in form and substance satisfactory to the
Administrative Agent.
This Amendment is subject to the provisions of Section 9.01 of
the Credit Agreement.
SECTION 5. Representations and Warranties of the Borrower.
Each Borrower represents and warrants as follows:
(a) On the date hereof, after giving effect to this
Amendment, (i) no event has occurred and is continuing, or would result
from the effectiveness of this Amendment, that constitutes a Default
and (ii) all representations and warranties set forth in the Loan
Documents shall be true and correct in all material respects.
(b) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for the due
execution, delivery or performance by the Borrowers of this Amendment
and by the Guarantors and the Grantors of the consent attached hereto
or other transactions contemplated hereby.
(c) This Amendment has been duly executed and
delivered by the Borrowers. The consent attached hereto has been duly
executed and delivered by each of the Guarantors and the Grantors. This
Amendment and each of the other Loan Documents, as amended hereby, to
which each Borrower, each Guarantor and each Grantor is a party are
legal, valid and binding obligations of such Borrower, such Guarantor
and such Grantor, as applicable, enforceable against such Borrower,
such Guarantor and such Grantor, as applicable, in accordance with
their respective terms.
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SECTION 6. Reference to and Effect on the Credit Agreement and
the Notes. (a) On and after the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the Notes
and each of the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Amendment.
(a) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended by this Amendment.
(b) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Administrative Agent under any
of the Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents.
SECTION 7. Costs, Expenses. Each Borrower agrees to pay on
demand all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent) in accordance with the terms of Section
9.04 of the Credit Agreement.
SECTION 8. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 9. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.
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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 above written.
DRESSER, INC., as U.S. Borrower
By
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Name:
Title:
6
D.I. LUXEMBOURG S.A.R.L.,
as Euro Borrower
By
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Name:
Title:
DEG ACQUISITIONS, LLC
By First Reserve Corporation, its
Manager
By
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Name:
Title:
By
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Name:
Title:
XXXXXX XXXXXXX SENIOR FUNDING, INC., as
Administrative Agent
By
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Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED, as
Collateral Agent
By
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Name:
Title:
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent
By
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Name:
Title:
By
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Name:
Title:
UBS WARBURG LLC,
as Co-Documentation Agent
By
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Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agent
By
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Name:
Title:
REVOLVING CREDIT LENDERS, TRANCHE A EURO
TERM LENDERS AND TRANCHE A U.S. TERM
LENDERS
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[Print Name of Financial Institution]
By
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Name:
Title:
TRANCHE B TERM LENDERS
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[Print Name of Financial Institution]
By
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Name:
Title:
ISSUING BANKS
XXXXX FARGO BANK, N.A.
By
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Name:
Title:
2
CREDIT SUISSE FIRST BOSTON
By
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Name:
Title:
By
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Name:
Title:
SWING LINE BANK
XXXXX FARGO BANK TEXAS, N.A.
By
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Name:
Title:
CONSENT
Dated as of June 17, 2002
Each of the undersigned as a Loan Party under the Credit
Agreement referred to in the foregoing Amendment and as Grantor under the
Security Agreement dated as of April 10, 2001 (as amended, supplemented or
otherwise modified from time to time, the "SECURITY AGREEMENT") in favor of the
Collateral Agent, for its benefit and the benefit of the Lenders party to the
Credit Agreement referred to in the foregoing Amendment, hereby consents to such
Amendment and hereby confirms and agrees that (a) notwithstanding the
effectiveness of such Amendment, each Loan Document is, and shall continue to
be, in full force and effect and is hereby ratified and confirmed in all
respects, except that, on and after the effectiveness of such Amendment, each
reference in each Loan Document to the "Credit Agreement", "thereunder",
"thereof" or words of like import shall mean and be a reference to the Credit
Agreement, as amended by such Amendment, and (b) the Collateral Documents to
which such Grantor is a party and all of the Collateral described therein do,
and shall continue to, secure the payment of all of the Secured Obligations (in
each case, as defined therein).
DRESSER INTERNATIONAL, INC.
By
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Name:
Title:
DRESSER RE, INC.
By
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Name:
Title:
DRESSER RUSSIA, INC.
By
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Name:
Title:
2
LVF HOLDING CORPORATION
By
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Name:
Title:
MODERN ACQUISITIONS, INC.
By
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Name:
Title:
3