Exhibit 10.7
SUPPLEMENT NO. 1 TO DOMESTIC GUARANTEE
AND COLLATERAL AGREEMENT
SUPPLEMENT NO. 1 dated as of December 22, 2005 (this
"Supplement"), to the Domestic Guarantee and Collateral Agreement dated as of
October 29, 2004 (the "Domestic Guarantee and Collateral Agreement"), among D-R
INTERHOLDING, LLC, a Delaware limited liability company ("Holdings"),
DRESSER-RAND GROUP INC., a Delaware corporation ("Acquisition Corp." or the
"Domestic Borrower"), each Domestic Subsidiary Loan Party identified therein
(each, a "Domestic Subsidiary Loan Party") and CITICORP NORTH AMERICA, INC.
("CNAI"), as collateral agent (in such capacity, the "Collateral Agent") for the
Secured Parties.
A. Reference is made to the Credit Agreement dated as of October
29, 2004 (as amended, supplemented, waived or otherwise modified from time to
time, the "Credit Agreement"), among Holdings, the Domestic Borrower, the
Foreign Borrowers party thereto from time to time, the lenders party thereto
from time to time (the "Lenders"), CNAI as Administrative Agent and as
Collateral Agent for the Lenders, XXXXXX XXXXXXX SENIOR FUNDING, INC. ("MS") and
UBS SECURITIES LLC ("UBS"), as Co-Syndication Agents, CITIGROUP GLOBAL MARKETS
INC., MS and UBS, as Joint Lead Arrangers and Joint Book Managers and NATEXIS
BANQUES POPULAIRES and BEAR XXXXXXX CORPORATE LENDING INC, as Co-Documentation
Agents.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement and the
Domestic Guarantee and Collateral Agreement.
C. The Guarantors have entered into the Domestic Guarantee and
Collateral Agreement in order to induce the Lenders to make Loans and each
Issuing Bank to issue Letters of Credit. Section 7.15 of the Domestic Guarantee
and Collateral Agreement provides that additional Subsidiaries may become
Domestic Subsidiary Loan Parties under the Domestic Guarantee and Collateral
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Subsidiary") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Domestic Subsidiary Loan Party under the Domestic Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and each
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Subsidiary agree as
follows:
SECTION 1. In accordance with Section 7.15 of the Domestic
Guarantee and Collateral Agreement, the New Subsidiary by its signature below
becomes a Domestic Subsidiary Loan Party and a Guarantor under the Domestic
Guarantee and Collateral Agreement with the same force and effect as if
originally named therein as a Domestic Subsidiary Loan Party and a Guarantor,
and the New Subsidiary hereby (a) agrees to all the terms and provisions of the
Domestic Guarantee and Collateral Agreement applicable to it as a Domestic
Subsidiary Loan Party and Guarantor thereunder and (b) represents and warrants
that the representations and
warranties made by it as a Guarantor thereunder (as supplemented by the attached
supplemental Schedules to the Perfection Certificate) are true and correct, in
all material respects, on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Guaranteed Obligations, does hereby create and grant to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, their successors and assigns, a security interest in and Lien
on all the New Subsidiary's right, title and interest in and to the Collateral
(as defined in the Domestic Guarantee and Collateral Agreement) of the New
Subsidiary. Each reference to a "Domestic Subsidiary Loan Party" or a
"Guarantor" in the Domestic Guarantee and Collateral Agreement shall be deemed
to include the New Subsidiary. The Domestic Guarantee and Collateral Agreement
is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to (i) the effects of bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or other similar laws affecting creditors'
rights generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.
SECTION 3. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract. This Supplement shall become
effective when (a) the Collateral Agent shall have received a counterpart of
this Supplement that bears the signature of the New Subsidiary and (b) the
Collateral Agent has executed a counterpart hereof.
SECTION 4. The New Subsidiary has attached hereto supplemental
Schedules 1(a) through 17 to the Perfection Certificate in substantially the
same form as the equivalent Schedules to the Perfection Certificate, and the New
Subsidiary hereby represents and warrants that the attached Schedules are
complete and correct with respect to the New Subsidiary.
SECTION 5. Except as expressly supplemented hereby, the Domestic
Guarantee and Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In the event any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Domestic Guarantee and Collateral
Agreement shall not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Domestic Guarantee and
Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Collateral Agent.
(Remainder of paged intentionally left blank.)
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent
have duly executed this Supplement to the Domestic Guarantee and Collateral
Agreement as of the day and year first above written.
D-R STEAM LLC
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Secretary
CITICORP NORTH AMERICA, INC., as
Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxx III
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Name: Xxxxxxx X. Xxxxxxx III
Title: Vice President
