1
EXHIBIT 4(4.5)
FIFTH AMENDMENT
THIS FIFTH AMENDMENT (this "Amendment") dated as of February 14, 2000
is to the Amended and Restated Credit Agreement (as previously amended or
otherwise modified, the "Credit Agreement") dated as of July 25, 1997 among
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ COMPANY (the "Company"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AUSTRALIA PTY
LIMITED ("Layne Australia"), various financial institutions and BANK OF AMERICA,
N.A. (f/k/a Bank of America National Trust and Savings Association), as Agent
(in such capacity, the "Agent"). Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein as defined therein.
WHEREAS, the parties hereto have entered into the Credit Agreement
which provides for (i) the Banks to make U.S. Loans to the Company from time to
time, (ii) the Australian Banks to make Australian Loans to Layne Australia from
time to time, and (iii) the Issuer to issue Letters of Credit for the account of
the Company (or jointly for the account of the Company and any Subsidiary) from
time to time and for the Banks to purchase participations therein; and
WHEREAS, the parties hereto desire to amend the Credit Agreement in
certain respects, and the Banks have agreed to waive certain provisions of the
Credit Agreement, in each case as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1 AMENDMENTS. Effective on the date of the effectiveness of
this Amendment pursuant to SECTION 4 below, the Credit Agreement shall be
amended as set forth in this SECTION 1.
1.1 ADDITIONAL DEFINITIONS. The following definitions are added to
Section 1.1 in appropriate alphabetical sequence:
"BENEFITED OBLIGATIONS has the meaning set forth in the
Intercreditor Agreement."
"BENEFITED PARTIES has the meaning set forth in the
Intercreditor Agreement."
"COLLATERAL AGENT means BofA in its capacity as collateral agent
under the Intercreditor Agreement, together with any successor thereto
in such capacity."
"COLLATERAL DOCUMENTS means the Security Agreement, the Pledge
Agreement and any other document or instrument pursuant to which the
Company or any Subsidiary grants to the Collateral Agent, for the
benefit of the Benefited Parties, a security interest in any of its
property to secure the payment of any of the Benefited Obligations."
2
"INTERCREDITOR AGREEMENT means the Intercreditor Agreement
dated as of February 14, 2000 among the Agent, the Collateral Agent and
various other parties substantially in the form of EXHIBIT E to the
Fifth Amendment to this Agreement; provided that upon the release of
collateral pursuant to clause (i) of the first sentence of subsection
9(g) of such Intercreditor Agreement, "Intercreditor Agreement" shall
mean the Existing Intercreditor Agreement referred to in such
subsection 9(g)."
"PLEDGE AGREEMENT means the Pledge Agreement among the
Company, various Subsidiaries and the Collateral Agent substantially in
the form of EXHIBIT C to the Fifth Amendment to this Agreement."
"SECURITY AGREEMENT means the Security Agreement among the
Company, various subsidiaries and the Collateral Agent substantially in
the form of EXHIBIT B to the Fifth Amendment to this Agreement."
1.2 AMENDMENTS TO DEFINITIONS. The definition of "Interest Coverage
Ratio" in Section 1.1 is amended by deleting the words "Adjusted EBITA" therein
and substituting the words "Adjusted EBITDA" therefor; and the definitions of
"Aggregate Australian Commitment" and "Loan Documents" in Section 1.1 are
amended in their entirety to read as follows:
"AGGREGATE AUSTRALIAN COMMITMENT means at any time an amount
equal to the lesser of (a) the Aggregate Commitment and (b) a Dollar Equivalent
amount of U.S.$15,000,000.
LOAN DOCUMENTS means this Agreement, the Notes, the Letter of
Credit Applications, the Guaranty and the Collateral Documents."
1.3 AMENDMENT TO MINIMUM INTEREST COVERAGE RATIO. Section 10.6.1 is
amended in its entirety to read as follows:
"10.6.1 MINIMUM INTEREST COVERAGE. Not permit the Interest
Coverage Ratio for any Computation Period to be less than the applicable
ratio set forth below for such Computation Period:
Computation Period Minimum Interest
Ending Coverage Ratio
------------------ -----------------
04/30/00 - 10/31/00 2.65 to 1
01/31/01 - 04/30/01 3.00 to 1
Thereafter 3.50 to 1."
1.4 AMENDMENT TO MAXIMUM LEVERAGE RATIO. Section 10.6.2 is amended in
its entirety to read as follows:
69
3
"10.6.2 MAXIMUM LEVERAGE. Not permit the Leverage Ratio as of
the end of any Fiscal Quarter to exceed the applicable ratio set forth
below for such Fiscal Quarter:
Fiscal Quarter Maximum
Ending Leverage Ratio
04/30/00 - 7/31/00 4.75 to 1
10/31/00 4.50 to 1
01/31/01 - 04/30/01 4.00 to 1
07/31/01 3.50 to 1
10/31/01 - 01/31/02 3.00 to 1
04/30/02 and thereafter 2.75 to 1."
1.5 AMENDMENT TO LIEN COVENANT. Section 10.8 is amended by deleting the
word "and" after clause (m) thereof and replacing the existing clause (n)
thereof with the following clauses (n) and (o):
"(n) Liens arising under the Collateral Documents;
and
(o) other Liens, in addition to Liens permitted by
CLAUSES (a) through (d) and (f) through (n), securing
aggregate Debt which, when aggregated with the Debt permitted
to be outstanding pursuant to SECTION 10.7(u), shall not
exceed a Dollar Equivalent amount of U.S.$7,500,000."
1.6 AMENDMENT TO SECTION 10.9. Section 10.9 is amended by (i) deleting
the amount "U.S.$5,000,000" therein and (ii) substituting the amount
"U.S.$7,500,000" therefor.
1.7 AMENDMENT TO SECTION 10.11(i). Clause (i) of Section 10.11 is
amended in its entirety to read as follows:
"(i) Investments made by the Company in joint
ventures or corporations that are not Subsidiaries; PROVIDED
that the aggregate Dollar Equivalent amount of all such
Investments made after the date of this Agreement (other than
Investments in the Company's joint venture with Hobic Bit
Industries Corporation involving bit manufacturing which do
not exceed $7,500,000 in the aggregate) shall not at any time
exceed 15% of Stockholders' Equity (calculated for each such
Investment as at the date such Investment is made)."
1.8 AMENDMENT TO SECTION 10.11(j). Clause (j) of Section 10.11 is
amended by (i) deleting the amount "U.S.$20,000,000" therein and (ii)
substituting the amount "U.S.$25,000,000" therefor.
1.9 AMENDMENT TO SECTION 10.15. Section 10.15 is amended in its entirety
to read as follows:
70
4
"10.15 FURTHER ASSURANCES. (a) Cause all Material Subsidiaries
to guaranty the obligations of the Borrowers hereunder pursuant to the
Guaranty; and in furtherance of the foregoing, immediately upon the
creation or acquisition of any Material Subsidiary cause such Material
Subsidiary to execute and deliver a counterpart of the Guaranty.
(b) Take, and cause each of its domestic Material Subsidiaries
to take, such actions as are necessary or as the Agent or the Required
Banks may reasonably request from time to time (including the execution
and delivery of security agreements, pledge agreements, financing
statements and other documents, the filing or recording of any of the
foregoing, the delivery of stock certificates and other collateral with
respect to which perfection is obtained solely by possession, the
notation of the Agent's Liens on certificates of title for vehicles and
the delivery of opinions of counsel) to ensure that the obligations of
the Company and each domestic Material Subsidiary hereunder and under
the Guaranty, as applicable, are secured by perfected security
interests in substantially all of the personal property of each such
entity (including, promptly upon the acquisition or creation thereof,
any domestic Material Subsidiary acquired or created after the date
hereof); PROVIDED that unless the Required Banks otherwise request,
neither the Company nor any domestic Material Subsidiary shall be
required (a) to cause the Agent's Lien to be noted on the certificate
of title for any vehicle with a net book value of less than U.S.$2,000;
(b) to pledge the stock of any Subsidiary which has assets of less than
$5,000 and is not actively engaged in any business; or (c) pledge more
than 65% of the stock of Layne Australia or any Foreign Subsidiary."
1.10 ADDITION TO SECTION 10. Section 10 is amended by adding the
following Section 10.23 thereto:
"10.23 NORTH AMERICAN ASSETS. Not permit the net book value of
all inventory and equipment of the Company and its domestic Material
Subsidiaries which is located in the United States or in a province of
Canada in which all required steps have been taken to perfect the
Collateral Agent's Lien on such assets to be less than
U.S.$25,000,000."
1.11 ADDITION TO SECTION 12. Section 12 is amended by adding the
following Section 12.1.12 thereto:
"12.1.12 INVALIDITY OF COLLATERAL DOCUMENTS. Any Collateral
Document shall cease to be in full force and effect with
respect to the Company or any Guarantor (other than as a
result of a transaction permitted hereunder), the Company or
any Guarantor shall fail (subject to any applicable grace
period) to comply with or to perform any applicable provision
of any Collateral Document to which such entity is a party, or
the Company or
71
5
any Guarantor (or any Person by, through or on
behalf of the Company or such Guarantor) shall contest in any
manner the validity, binding nature or enforceability of any
Collateral Document."
1.12 ADDITION TO SECTION 13. Section 13 is amended by adding the
following Section 13.11 thereto:
"Section 13.11 COLLATERAL MATTERS. The Banks irrevocably
authorize the Agent, at its option and in its discretion, (a)
to release any Lien on any property granted to or held by the
Agent under any Collateral Document (i) upon termination of
the Commitments and payment in full of all Loans and all other
obligations of the Company and Layne Australia hereunder and
the expiration or termination of all Letters of Credit; (ii)
which is sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder or (iii)
subject to SECTION 15.1, if approved, authorized or ratified
in writing by the Required Banks; (b) to subordinate any Lien
on any property granted to or held by the Agent under any
Collateral Document to the holder of any Lien on such property
which is permitted by SECTION 10.8 hereof; and (c) to release
any Subsidiary from its obligations under the Guaranty if such
entity ceases to be a Subsidiary as a result of a transaction
permitted hereunder. Upon request by the Agent at any time,
the Required Banks will confirm in writing the Agent's
authority to release or subordinate its interest in particular
types or items of property, or to release any Subsidiary from
its obligations under the Guaranty, pursuant to this SECTION
13.11."
1.13 SCHEDULE 1.1(a). Schedule 1.1(a) is amended in its entirety by
substituting the attached SCHEDULE 1.1(a) therefor.
1.14 SCHEDULE 1.1(b). Schedule 1.1(b) is amended in its entirety by
substituting the attached SCHEDULE 1.1(b) therefor.
1.15 EXHIBIT F. (i) Section II(a)(1) of Exhibit F is amended by
deleting the words "Adjusted EBITA" therein and substituting the words "Adjusted
EBITDA" therefor and (ii) Section II(B)(4) of Exhibit F is amended by deleting
the ratio "2.75 to 1" therein and substituting "_____ to 1" therefor.
SECTION 2 WAIVER. The Required Banks hereby waive any non-compliance
with Section 10.6.1 of the Credit Agreement for the Computation Periods ending
October 31, 1999 and January 31, 2000 and any non-compliance with Section 10.6.2
of the Credit Agreement for the Fiscal Quarter ending January 31, 2000.
SECTION 3 REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Agent and the Banks (a) as to the matters set forth in
72
6
Section 11.2.1 of the Credit Agreement, as if the representations and warranties
set forth therein were made on the date hereof (and after giving effect hereto),
(b) that the execution and delivery by the Company and Layne Australia of this
Amendment and by the Company and each Material Subsidiary of each document
referred to in SECTION 4 below to which such entity is a party, and the
performance by the Company and Layne Australia of their respective obligations
under the Credit Agreement as amended hereby (as so amended, the "Amended Credit
Agreement") and by the Company and each Material Subsidiary of each document
referred to in SECTION 4 below to which such entity is a party, (i) are within
the corporate powers of the Company, Layne Australia and each Material
Subsidiary, as applicable, (ii) have been duly authorized by all necessary
corporate action on the part of the Company, Layne Australia and each Guarantor,
(iii) have received all necessary governmental approval and (iv) do not and will
not violate any provision of law or contravene or conflict with, or result in a
breach of any provision of, the certificate of incorporation or by-laws of the
Company, Layne Australia or any Guarantor or of any material agreement,
indenture or other contract, or any material order or decree, which is binding
upon the Company or any Subsidiary, and (c) that the Amended Credit Agreement is
the legal, valid and binding obligation of the Company and Layne Australia,
enforceable against the Company and Layne Australia in accordance with its
terms.
SECTION 4 EFFECTIVENESS. The amendments set forth in SECTION 1 above
shall become effective, as of the day and year first above written, on the date
(the "Fifth Amendment Effective Date") that the Agent shall have received (a) an
amendment fee for the account of each Bank which has executed and delivered a
counterpart of this Amendment on or before February 14, 2000, in each case in an
amount equal to 0.25% of such Bank's Commitment, (b) an Agent's fee for the
account of the Agent in an amount separately agreed to by the Company and the
Agent and (c) each of the following documents:
4.1 FIFTH AMENDMENT. Counterparts of this Amendment signed by the
Company, Layne Australia and the Required Banks.
4.2 CONFIRMATION AND AMENDMENT OF GUARANTY. A Confirmation and Amendment
substantially in the form of EXHIBIT A signed by each Material Subsidiary.
4.3 SECURITY AGREEMENT. A security agreement substantially in the form
of EXHIBIT B signed by each of the Company and each domestic Material
Subsidiary, together with all UCC financing statements (or similar documents)
required to perfect the Agent's Lien on substantially all of the personal
property of the Company and each domestic Material Subsidiary in which a Lien
may be perfected by filing a financing statement under the Uniform Commercial
Code of any applicable jurisdiction (or the equivalent thereof in any applicable
province of Canada).
73
7
4.4 PLEDGE AGREEMENT. A pledge agreement substantially in the form of
EXHIBIT C signed by each of the Company and each domestic Material Subsidiary
which has one or more Subsidiaries, together with all stock certificates
required to be delivered thereunder and appropriate related stock powers
executed in blank.
4.5 TRUST AGREEMENT. A trust agreement substantially in the form of
EXHIBIT D signed by the Company, each domestic Material Subsidiary, the trustees
thereunder and the Agent.
4.6 CORPORATE DOCUMENTS. A certificate of the Secretary or an Assistant
Secretary of each of the Company, Layne Australia and each domestic Material
Subsidiary as to (a) resolutions of the Board of Directors of such entity
authorizing the execution and delivery of this Amendment (in the case of the
Company and Layne Australia) and the other documents contemplated hereby to
which such entity is a party, (b) the incumbency and signatures of the officers
of such entity which are to sign the documents referred to in CLAUSE (A) above
and (c) a good standing certificate (or equivalent document) issued by the
Secretary of State (or other appropriate governmental official) of the state of
organization of such entity.
4.7 OPINIONS. The opinions of (a) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Company and the Guarantors, substantially in the form of EXHIBIT F, (b) ▇▇▇▇ ▇.
▇▇▇▇▇▇, Vice President-General Counsel and Secretary of the Company,
substantially in the form of EXHIBIT G and (c) Prince, Yeates & ▇▇▇▇▇▇▇▇▇▇, Utah
counsel to ▇▇▇▇▇▇ Bros. Drilling Company, substantially in the form of EXHIBIT
H.
SECTION 5 MISCELLANEOUS.
5.1 CONTINUING EFFECTIVENESS, ETC. As herein amended, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the effectiveness hereof, all references in the
Credit Agreement and each other Loan Document to the "Credit Agreement" or
similar terms shall refer to the Amended Credit Agreement.
5.2 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
5.3 EXPENSES. The Company agrees to pay the reasonable costs and
expenses of the Agent (including reasonable attorneys' fees and charges) in
connection with the negotiation, preparation, execution and delivery of this
Amendment and the other documents contemplated hereby.
74
8
5.4 GOVERNING LAW. This Amendment shall be a contract made under and
governed by the internal laws of the State of Illinois.
5.5 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon the
Company, Layne Australia, the Banks and the Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, Layne
Australia, the Banks and the Agent and the successors and permitted assigns of
the Banks and the Agent.
5.6 AUTHORIZATION TO SIGN INTERCREDITOR AGREEMENT. The Required Banks
hereby authorize (a) the Agent to execute and deliver an Intercreditor Agreement
substantially in the form of EXHIBIT D and (b) BofA to act as Collateral Agent
under such Intercreditor Agreement.
5.7 MISCELLANEOUS. No later than March 15, 2000, the Company shall, and
shall cause each of its domestic Material Subsidiaries to, take all steps
necessary to cause the Agent's Lien to be noted on the certificates of title for
substantially all of the vehicles owned by such entity with a net book value in
excess of U.S.$2,000.
5.8 WAIVER OF NOTICE OF COMMITMENT REDUCTION. The Company has requested
a permanent reduction in the Commitment Amount to U.S.$64,000,000 pursuant to
Section 6.1.3 of the Credit Agreement. The Required Banks hereby waive the five
day notice requirement set forth in such Section 6.1.3, and the Company and the
Required Banks agree that such reduction shall become effective immediately upon
the effectiveness of this Amendment.
75
9
Delivered at Chicago, Illinois, as of the day and year first above
written.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Pre
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ AUSTRALIA PTY LIMITED
ACN 078 167 610
By /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------------------
Title ▇. ▇. ▇▇▇▇▇▇▇, Director
BANK OF AMERICA, N.A., as Agent
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title ▇. ▇. ▇▇▇▇▇▇▇▇, Vice President
BANK OF AMERICA, N.A., as a Bank
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title ▇. ▇. ▇▇▇▇▇▇▇▇, Vice President
MERCANTILE BANK, as Co-Agent and as a Bank
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Title ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
MICHIGAN NATIONAL BANK, as Co-Agent and as a Bank
By /s/ ▇. ▇▇▇▇▇▇
------------------------------------
Title Senior Vice President
THE BANK OF NOVA SCOTIA
By /s/ F. C. H. ▇▇▇▇▇
------------------------------------
Title Senior Manager Loan Operations
76
10
SOCIETE GENERALE - CHICAGO BRANCH
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
77
11
SCHEDULE 1.1(a)
COMMITMENT LIMITS AND PERCENTAGES
Amount of Australian
Name of Bank Commitment Percentage Percentage
------------ ---------- ---------- ----------
Bank of America, NA U.S.$16,000,000.00 25.0% N/A
BA Australia Limited* N/A N/A 40%
Mercantile Bank U.S.$16,186,243.39 25.29100529% N/A
Michigan National Bank U.S.$12,800,000.00 20.0% N/A
Bank of New Zealand Australia, a N/A N/A 32%
Division of National Australia
Bank Limited*
The Bank of Nova Scotia U.S.$11,200,000.00 17.5% N/A
Societe Generale - Chicago Branch U.S. $7,813,756.61 12.20899471% N/A
Societe Generale Australia N/A N/A 28%
Limited*
---------------------------------------------------
TOTALS U.S.$64,000,000 100% 100%
*Designated as an Australian Bank by the Bank listed immediately above such
Australian Bank.