Document:

Amendment No.3 to the Credit Agreement

 
 Exhibit 4.1 

 
  
 EXECUTION COPY 
  

AMENDMENT NO. 3 TO THE 
 CREDIT AGREEMENT 
  
 Dated as of December 11, 2002         
  
 AMENDMENT NO. 3 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”), DRESSER HOLDINGS, INC., a Delaware corporation (“Dresser Holdings”), 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”), WELLS
FARGO BANK TEXAS, N.A., as the swing line bank, MORGAN STANLEY & CO. INCORPORATED, as collateral agent (the “Collateral Agent”), MORGAN STANLEY SENIOR FUNDING, INC., as administrative agent (the “Administrative
Agent”) for the Lenders and CREDIT SUISSE FIRST BOSTON, 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 and Amendment No. 2 thereto dated as of June 17, 2002 (such Credit Agreement, as amended, supplemented or otherwise modified through the date hereof, the “Credit
Agreement”). Dresser Holdings has entered into an Assignment and Assumption Agreement dated as of July 3, 2002 with DEG Acquisitions whereby Dresser Holdings assumed the duties and liabilities of DEG Acquisitions under the Credit
Agreement and Security Agreement. Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement. 
  
 (2)    he 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 2, hereby amended as follows: 
  
 (a)    The definitions of “Asset Securitization” and “Receivables Subsidiary” in Section 1.01 of the Credit Agreement are amended in full to read as follows: 
  
 “ ‘Asset Securitization’ means any transaction or series of transactions that may be entered
into by the U.S. Borrower, the Euro Borrower or any Subsidiary 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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 pursuant to which the U.S. Borrower, the Euro Borrower or such
Subsidiary, as the case may be, may sell, convey or otherwise transfer to a Receivables Subsidiary (in the case of a transfer by the U.S. Borrower, the Euro Borrower or any Subsidiary) or may grant a security interest in any Accounts Receivable and
any assets related thereto, including, without limitation, all collateral securing such Accounts Receivable, all contracts and contract rights and all guarantees or other obligations in respect of such Accounts Receivable, proceeds of such Accounts
Receivable and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable, which
Asset Securitization shall be consummated pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent. 
  
 ‘Receivables Subsidiary’ means any person in which the U.S. Borrower, the Euro Borrower or any Subsidiary makes an Investment and to which the U.S. Borrower, the Euro Borrower
or any Subsidiary transfers Accounts Receivable (and related assets including contract rights) in connection with an Asset Securitization which engages in no activities other than in connection with the financing of Accounts Receivable or related
assets (including contract rights) and which is designated by the Board of Directors of the U.S. Borrower (as provided below) as a “Receivables Subsidiary”: (i) no portion of the Debt or any other Obligations (contingent or otherwise) of
which (A) is guaranteed by the U.S. Borrower, the Euro Borrower or any Subsidiary (excluding guarantees of Obligations (other than the principal of, and interest on, Debt)) other than pursuant to Standard Securitization Undertakings, (B) is recourse
to or obligates the U.S. Borrower, the Euro Borrower or any Subsidiary in any way other than pursuant to Standard Securitization Undertakings or (C) subjects any property or asset of the U.S. Borrower, the Euro Borrower or any Subsidiary, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (ii) with which neither the U.S. Borrower, the Euro Borrower nor any Subsidiary has any material contractual,
agreement, arrangement or understanding other than on terms no less favorable to the U.S. Borrower, the Euro Borrower or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the U.S. Borrower or the
Euro Borrower, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity; and (iii) to which neither the U.S. Borrower, the Euro Borrower nor any Subsidiary has any obligation to maintain or
preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the U.S. Borrower shall be evidenced to the Administrative Agent by filing with
the Administrative Agent a certified copy of a resolution of the Board of Directors of the U.S. Borrower giving effect to such designation and an Officer’s Certificate of the U.S. Borrower certifying that such designation complied with the
foregoing conditions. Any Receivables Subsidiary shall not be a Subsidiary for purposes of the Credit Agreement, except with respect to the affirmative covenants set forth in Sections 5.01(a) through and including 5.01(h), 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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 except that the Collateral Agent (for the benefit of the Secured Parties)
shall be granted a security interest in all of the Equity Interests in any Receivables Subsidiary to the extent owned by any Loan Party; provided, however, that, in respect of any and all security interests at any time held by the Collateral
Agent or any of the other Secured Parties in any Equity Interest in any Receivables Subsidiary owned by any Loan Party: (1) the Collateral Agent and other Secured Parties shall not be entitled (whether before or after the occurrence of any Event of
Default), unless the required consents and rating confirmations under the documentation in respect of the applicable Asset Securitization have been obtained by them, to (a) transfer and register such Equity Interests in the name of a Secured Party
or any designee or nominee of a Secured Party, (b) foreclose such security interest regardless of the bankruptcy or insolvency of any Loan Party, (c) exercise any voting rights granted or appurtenant to such Equity Interests, (d) enforce any right
that the holder of any such Equity Interest might otherwise have to liquidate, consolidate, combine, collapse or disregard the entity status of such Receivables Subsidiary, or (e) exercise or enforce any other right or remedy whatsoever that
otherwise might be granted or held (by law or contract, including the Collateral Documents) by a secured party holding a security interest in such Equity Interest, except only the right (i) to perfect such security interest in any manner permitted
by law, (ii) to retain such security interest and maintain control over such Equity Interests, until all of the principal, interest and fees constituting Secured Obligations are paid in full in cash and (iii) to assert and enforce, in any bankruptcy
case, the right to have the Secured Obligations allowed in such case as a secured claim to the extent of the value of such Equity Interests, and (2) the Collateral Agent and other Secured Parties hereby waive and forever release (and agree never to
claim, demand, sue upon or enforce) any right to require (a) that any Receivables Subsidiary be in any manner merged, combined, collapsed or consolidated with or into any Loan Party, including by way of substantive consolidation in a bankruptcy case
or (b) that the status of any Receivables Subsidiary as a separate entity be in any respect disregarded. 
  
 (b)    The definition of “Securitization Receivables” in Section 1.01 of the Credit Agreement is deleted in its entirety. 
  
 (c)    Section 1.01 of the Credit Agreement is further amended by inserting the following definitions in appropriate alphabetical order:

  
 “ ‘Accounts Receivable” means any obligation owing to any of the
U.S. Borrower, the Euro Borrower or any Subsidiary (whether now existing or arising or acquired in the future) for the payment of goods or services provided by the U.S. Borrower, the Euro Borrower or any Subsidiary.’ 
  
 ‘Fair Market Value’ means, with respect to any asset or property, the price which could be
negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined by
the Board of Directors of the U.S. Borrower acting 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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 reasonably and in good faith and shall be evidenced by a resolution of
the Board of Directors of the U.S. Borrower delivered to the Administrative Agent. 
  
 ‘Standard Securitization Undertaking’ means representations, warranties, covenants, repurchase obligations and indemnities entered into by the U.S. Borrower, the Euro Borrower or any Subsidiary
which are reasonable and customary in accounts receivable transactions.” 
  
 (d)    Section 5.01(j) is amended by deleting the parenthetical “(other than the Receivables Subsidiary)” in clause (y) thereof. 
  
 (e) Section 5.02(a) is amended by deleting clause (ix) thereof in its entirety and substituting therefor the following: 
  
 “(ix)    Liens arising in connection with any Asset Securitization.” 

 
 (f)    Section 5.02(b)(i) is amended by deleting subclause (D) thereof in its entirety and
substituting therefor the following: 
  
 “(D)    Debt incurred in any Asset
Securitization, which Debt is non-recourse to the U.S. Borrower and its Subsidiaries (other than any Receivables Subsidiary) to the extent customary in structured finance transactions of such type; and” 
  
 (g)    Section 5.02(b)(ii) is amended by deleting the word “and” at the end of subclause (N)
thereof, deleting the period at the end of subclause (O) thereof and substituting therefor “; and”, and inserting a new subclause (P) to read as follows: 
  
 “(P)    Debt incurred in any Asset Securitization, which Debt is non-recourse to the U.S. Borrower and its Subsidiaries (other than
any Receivables Subsidiary) to the extent customary in structured finance transactions of such type.” 
  
 (h)    Section 5.02(e) is amended by: 
  
 (i)    deleting clause (v) thereof in its entirety and substituting therefor the following: 
  

	 	“(v)
	 
	sales of Accounts Receivable and related assets (including contract rights) of the type specified in the definition of Asset Securitization to a Receivables
Subsidiary for the Fair Market Value thereof, each of which shall include cash in an amount at least equal to 65% of the Fair Market Value thereof, provided that the U.S. Borrower shall, on the date of receipt by any Loan Party or any of its
Subsidiaries of any Net Cash Proceeds (without taking into account the last proviso of the definition of “Net Cash Proceeds”) from any initial sale and, to the extent of any subsequent net increase in the aggregate receivables pool
funded by any Asset 
 

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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	 	Securitization, any incremental sale, of such Accounts Receivable prepay the Advances as an optional prepayment under Section 2.06(a) (it being understood that
(i) any such optional prepayment of the Revolving Credit Facility shall also be accompanied by a permanent reduction in the Revolving Credit Commitments in an amount equal to such prepayment and (ii) no mandatory prepayment shall be required under
Section 2.06(b)(ii) in respect of any such Net Cash Proceeds); and”; and 
 

  
 (ii)    adding a new clause (vi) immediately after clause (v) thereof to read as follows: 
  

	 	“(vi)
	 
	the sale or discount for fair value, in each case without recourse, of accounts receivable of any Foreign Subsidiary.” 
 

 
 (i)    Section 5.02(f)(i) is amended by (i) deleting the word “and” immediately
before clause (E) thereof and substituting therefor a comma; and (ii) adding a new clause (F) immediately after clause (E) thereof to read as follows: 
  
 “and (F) Investments in any Receivables Subsidiary in connection with any Asset Securitization, so long as such Investments are reasonably necessary to
implement such Asset Securitization.” 
  
 (j)    Section 5.02(q) is amended
in its entirety to read as follows: 
  
 “(q)    Proceeds of
Securitization Receivables.    Commingle or permit any Subsidiary of the Borrowers to commingle, amounts constituting collections on and proceeds of Accounts Receivable and related assets sold pursuant to any Asset
Securitization with cash or any other amounts of the Borrowers and their respective Subsidiaries other than the temporary commingling of collections on and proceeds of Accounts Receivable and related assets, in each case as may be necessary to
identify and sort such collections and proceeds.” 
  
 (k)    Section 5.03(e)
of the Credit Agreement is amended in full to read as follows: 
  
 “(e)    Annual
Business Plan.    As soon as available and in any event no later than the end of each Fiscal Year, a business plan prepared by management of the U.S. Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, including balance sheets, income statements and cash flow statements on a monthly basis for the Fiscal Year following such Fiscal Year and on an annual basis for each Fiscal Year thereafter until the Termination Date.”

  
 (l)    Section 5.04(a) is amended by deleting the table set forth therein in
its entirety and substituting therefor the following table: 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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	  	 	 Quarter Ending
 
	    	       Ratio      
 
	    	  
	  	 	 March 31, 2002
 	    	 4.90:1.00
 	    	  
	  	 	 June 30, 2002
 	    	 4.90:1.00
 	    	  
	  	 	 September 30, 2002
 	    	 4.90:1.00
 	    	  
	  	 	 December 31, 2002
 	    	 5.50:1.00
 	    	  
	 
	  	 	 March 31, 2003
 	    	 5.40:1.00
 	    	  
	  	 	 June 30, 2003
 	    	 5.40:1.00
 	    	  
	  	 	 September 30, 2003
 	    	 5.30:1.00
 	    	  
	  	 	 December 31, 2003
 	    	 5.30:1.00
 	    	  
	 
	  	 	 March 31, 2004
 	    	 5.00:1.00
 	    	  
	  	 	 June 30, 2004
 	    	 4.80:1.00
 	    	  
	  	 	 September 30, 2004
 	    	 4.50:1.00
 	    	  
	  	 	 December 31, 2004
 	    	 4.10:1.00
 	    	  
	 
	  	 	 March 31, 2005
 	    	 3.75:1.00
 	    	  
	  	 	 June 30, 2005
 	    	 3.75:1.00
 	    	  
	  	 	 September 30, 2005
 	    	 3.75:1.00
 	    	  
	  	 	 December 31, 2005
 	    	 3.75:1.00
 	    	  
	 
	  	 	 March 31, 2006
 	    	 3.25:1.00
 	    	  
	  	 	 June 30, 2006
 	    	 3.25:1.00
 	    	  
	 
	  	 	 September 30, 2006
 	    	 3.25:1.00
 	    	  
	  	 	 December 31, 2006
 	    	 3.25:1.00
 	    	  
	 
	  	 	 For each fiscal quarter thereafter
 	    	 3.00:1.00
 	    	  

 
  
 (m)    Section 5.04(b) is
amended by deleting the table set forth therein in its entirety and substituting therefor the following table: 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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	  	 	 Quarter Ending
 
	    	       Ratio      
 
	    	  
	  	 	 March 31, 2002
 	    	 2.00:1.00
 	    	  
	  	 	 June 30, 2002
 	    	 2.00:1.00
 	    	  
	  	 	 September 30, 2002
 	    	 2.00:1.00
 	    	  
	  	 	 December 31, 2002
 	    	 2.00:1.00
 	    	  
	 
	  	 	 March 31, 2003
 	    	 2.00:1.00
 	    	  
	  	 	 June 30, 2003
 	    	 2.00:1.00
 	    	  
	  	 	 September 30, 2003
 	    	 2.00:1.00
 	    	  
	  	 	 December 31, 2003
 	    	 2.00:1.00
 	    	  
	 
	  	 	 March 31, 2004
 	    	 2.15:1.00
 	    	  
	  	 	 June 30, 2004
 	    	 2.15:1.00
 	    	  
	  	 	 September 30, 2004
 	    	 2.30:1.00
 	    	  
	  	 	 December 31, 2004
 	    	 2.30:1.00
 	    	  
	 
	  	 	 March 31, 2005
 	    	 2.60:1.00
 	    	  
	  	 	 June 30, 2005
 	    	 2.60:1.00
 	    	  
	  	 	 September 30, 2005
 	    	 2.60:1.00
 	    	  
	  	 	 December 31, 2005
 	    	 2.60:1.00
 	    	  
	 
	  	 	 March 31, 2006
 	    	 2.90:1.00
 	    	  
	  	 	 June 30, 2006
 	    	 2.90:1.00
 	    	  
	 
	  	 	 September 30, 2006
 	    	 2.90:1.00
 	    	  
	  	 	 December 31, 2006
 	    	 2.90:1.00
 	    	  
	 
	  	 	 For each fiscal quarter thereafter
 	    	 3.00:1.00
 	    	  

 
  
 (n)    Schedule I to the Credit
Agreement is amended by deleting the amount “US$25,000,000.00” set forth opposite “Wells Fargo Bank Texas, N.A.” under the caption “Letter of Credit Commitment” and replacing it with the amount of
“US$35,000,000.00”. 
  
 (o)    Schedule IV to the Credit Agreement is
deleted in its entirety. 
  
 SECTION 2.    Conditions of
Effectiveness.    This Amendment shall become effective as of the first date on which each of the following conditions precedents shall have been satisfied: 
  
 (a)    The Administrative Agent shall have received counterparts of this Amendment executed by the Borrowers, DEG Acquisitions, Dresser
Holdings and the Required Lenders or, as to any of the Lenders, advice satisfactory to the Administrative Agent that such Lender has executed this Amendment. 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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 (b)    All of the accrued fees and
expenses of the Administrative Agent and the Lender Parties (including the accrued fees and expenses of counsel for the Administrative Agent) shall have been paid in full. 
  
 (c)    The Administrative Agent shall have received the consent attached hereto duly executed by each Guarantor and each Grantor.

  
 (d)    The U.S. Borrower shall have deposited in a segregated account with
the Administrative Agent or one of its Affiliates an amount equal to $7,500,000.00 on or before the date hereof, to be applied by the Administrative Agent at the direction of the U.S. Borrower as an optional prepayment to the Tranche B Term Facility
on or before January 15, 2003. 
  
 (e)    The U.S. Borrower shall have paid to
the Administrative Agent, for the benefit of the applicable Lenders, a fee equal to 0.15% of the aggregate Commitments of each Lender that has executed and delivered this Amendment on or before December 11, 2002. 
  
 This Amendment is subject to the provisions of Section 9.01 of the Credit Agreement. 
  

SECTION 3.    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. 
  
 SECTION 4.    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 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
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 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. 
  
 (b)    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. 
  
 (c)    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 5.    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 6.    Governing Law.    This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York. 
  
 [SIGNATURE PAGES IMMEDIATELY FOLLOW] 

 Amendment No. 3 to the 
 Dresser Credit Agreement 

 
 Exhibit 4.1 

 
  
 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                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 D.I. LUXEMBOURG S.A.R.L., 
 as Euro Borrower 
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 DEG ACQUISITIONS, LLC 
  
  
 By:    FIRST RESERVE FUND VIII, L.P., 
           a Delaware limited partnership, its Manager 
 By:    FIRST RESERVE GP VIII, L.P., 
           a Delaware limited partnership, its general 
           partner 
 By:    FIRST RESERVE
CORPORATION, 
           a Delaware corporation, its general 
           partner 
  
 By:                                     
                                        
                                        
                   
           Name: 
           Title: 
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 DRESSER HOLDINGS, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 MORGAN STANLEY SENIOR FUNDING, INC., 
 as Administrative Agent 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 MORGAN STANLEY & CO. INCORPORATED, 

as Collateral Agent 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 CREDIT SUISSE FIRST BOSTON, 
 as Syndication Agent 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 UBS WARBURG LLC, 
 as Co-Documentation Agent 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 GENERAL ELECTRIC CAPITAL 
 CORPORATION, as Co-Documentation Agent 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 REVOLVING CREDIT LENDERS, TRANCHE A
EURO         
 TERM LENDERS AND TRANCHE A U.S. TERM LENDERS 
  
  
                                      
                                        
                                        
   
 [Print Name of Financial Institution] 
  

By                                     
                                        
                                     
         Name: 
         Title: 
  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 TRANCHE B TERM LENDERS 
  
  
                                      
                                        
                                        
                           
 [Print Name of Financial Institution] 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 ISSUING BANKS 
  
  
 WELLS FARGO BANK, N.A. 
  

 
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 CREDIT SUISSE FIRST BOSTON 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 SWING LINE BANK 
  
  
 WELLS FARGO BANK TEXAS, N.A. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 CONSENT 
  
 Dated as of December 11, 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).

  
  
 DEG ACQUISITIONS, LLC 
  
  
 By:    FIRST RESERVE FUND VIII, L.P., 
           a Delaware limited partnership, its Manager 
 By:    FIRST RESERVE GP VIII, L.P., 
           a Delaware limited partnership, its general 
           partner 
 By:    FIRST RESERVE
CORPORATION, 
           a Delaware corporation, its general partner 

 
  
 By:                                     
                                        
                                        
                    
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 DRESSER HOLDINGS, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 DRESSER INTERNATIONAL, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 DRESSER RE, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 DRESSER RUSSIA, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 LVF HOLDING CORPORATION 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
 MODERN ACQUISITION, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

 
 Amendment No. 3 to the 
 Dresser Credit Agreement 

 

 
  
 DRESSER ENTECH, INC. 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
  
  
 RING-O VALVE,
INCORPORATED 
  
  
 By                                     
                                        
                                        
                     
         Name: 
         Title:

  
 
 Amendment No. 3 to the 
 Dresser Credit Agreement5th Amd. to Revolving Credit Agreement

  
 Exhibit 10.29.5 
  
 FIFTH AMENDMENT TO 
 REVOLVING CREDIT, TERM LOAN, CAPITAL 
 EXPENDITURE LOAN, GUARANTY AND SECURITY AGREEMENT 
  
 Preamble.     THIS FIFTH AMENDMENT TO REVOLVING CREDIT, TERM LOAN, CAPITAL EXPENDITURE LOAN, GUARANTY AND SECURITY AGREEMENT (hereinafter, together with all schedules and exhibits hereto, and any
supplements, additions, modifications or amendments thereto made from time to time called the “Fifth Amendment”), dated as of December 11, 2002 (the “Fifth Amendment Date”), is made by and among HLM DESIGN, INC., a
Delaware corporation, as borrower (“Borrower”); all those parties identified in the Credit Agreement (defined below) as the “Affiliate Guarantors” (the “Affiliate Guarantors”); WHITEHALL BUSINESS CREDIT
CORPORATION, a New York corporation (hereinafter, together with its successors and permitted assigns, called “WBCC”), as successor-in-interest to IBJ WHITEHALL BUSINESS CREDIT CORPORATION, as sole Lender thereunder and as agent for
all Lenders from time to time party thereto and any Issuer (WBCC, acting in such latter capacity, the “Agent”). 
  
 The Borrower, and the Affiliate Guarantors (collectively, the “Obligors”), and WBCC (the foregoing parties herein sometimes collectively called the “Parties” and individually called a
“Party”) are parties to a certain Revolving Credit, Term Loan, Capital Expenditure Loan, Guaranty and Security Agreement, dated as of February 7, 2000 (which is, as amended to date, including pursuant to this Fifth Amendment, called
herein the “Credit Agreement”), pursuant to which, among other things, WBCC, as sole Lender, has agreed to extend credit and other financial accommodations to the Borrower. 
  
 The Parties have agreed to modify and amend the Credit Agreement in the manner, and subject to the terms and conditions, set forth hereinbelow. 
  
 NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the Parties, each intending to be legally bound, hereby agree as follows: 
  
 SECTION 1.    Definitions. Capitalized terms used in this Fifth Amendment and not defined herein are defined in the Credit Agreement. 
  
 SECTION 2.    Amendments. 
  
 2.1     Change in Supplemental Availability.   The “Supplemental Availability” provision, added to the Credit Agreement
pursuant to the Third Amendment in Section 2(a) thereto, and modified pursuant to Section 2(a) of the Fourth Amendment, shall be modified further, retroactive to October 31, 2002, to reflect an extension in the duration of “Supplemental
Availability” from October 31, 2002 through the Fifth Amendment Date (which latter date shall be the new “End Date” for “Supplemental Availability”). 
  
 2.2     Changes in Reserves.   The following reserves, imposed by the Agent in respect of the “Formula Amount” pursuant to
Section 2.1(a) of the Credit Agreement, shall be modified as follows: 

 

 (i)   the reserve in respect of the UK Parent Limited Guaranty is suspended, subject to
reinstatement, in Agent’s credit judgment, at any time or from time to time after January 31, 2003; and 
  
 (ii)   the reserve for Billed Eligible Receivables, equal in amount to 100% of the amount by which the face amounts thereof exceed actual costs (determined in accordance with GAAP), shall be reduced to 65% of such amount.

  
 2.3     Interest Rate Calculation.   The interest rate payable on Revolving
Advances shall be modified as follows: 
  
 (i)   the definition of “Applicable
Margin,” appearing in Section 1.1 of the Credit Agreement, is deleted; and 
  
 (ii)  
the definition of “Revolving Interest Rate”, appearing in Section 1.1 of the Credit Agreement is amended to read, in its entirety, as follows: 
  
 “Revolving Interest Rate” shall mean an interest rate per annum equal to (a) with respect to Domestic Rate Loans, the sum of the Alternate Base Rate plus 50/100ths of one percent
(.50%), and (b) with respect to Eurodollar Rate Loans, the sum of the Eurodollar Rate plus two and 75/100ths of one percent (2.75%). 
  
 The
interest rate payable on the Term Loan shall remain unchanged. The interest rate payable on the “New Term Loan,” as that term is defined in Section 2.9 of this Amendment, shall be as set forth and described therein. 

 
 2.4     Increase in Audit Fees.   The sum “Seven Hundred Dollars ($700),”
appearing in Section 3.5(b) of the Credit Agreement, is increased to “Seven Hundred Fifty Dollars ($750)” in respect of the payment of audit fees. 
  
 2.5     Change in Financial Covenants.   The financial covenants, set forth in Sections 6.5 through Section 6.10A of the Credit Agreement shall be modified as
follows and, in connection therewith, compliance by Borrower with Sections 6.9 and 6.10 of the Credit Agreement for the fiscal quarter ending on or closest to October 31, 2002, is hereby irrevocably waived: 
  
 (a)     Change to Net Worth.   Existing Section 6.5 is deleted and the following revised Section 6.5
is substituted in its place: 
  
 6.5     Net Worth.   Maintain a Net Worth of
Borrower and its Domestic Subsidiaries, on a consolidated basis, on the last day of each fiscal quarter of the Borrower, equal to: (i) $10,600,000, on the last day of the fiscal quarter ending on or closest to October 31, 2002, (ii) beginning on the
last day of the fiscal quarter ending closest to January 31, 2003, and continuing thereafter, on a quarterly basis, on the last day of each succeeding fiscal quarter, an amount equal to the sum of (A) $12,000,000 plus (B) a cumulative sum,
determined by adding together for each fiscal quarter of the Borrower ending on and after the fiscal quarter ending on or closest to January 31, 2003, an amount equal to seventy-five
 

 
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percent (75%) of net income, determined on a consolidated basis for Borrower and its Domestic Subsidiaries in accordance with GAAP (without giving credit for any losses, however) for each such
fiscal quarter. 
  
 (b)     Change to Leverage Ratio.   Existing Section 6.6 of
the Credit Agreement is deleted and the following revised Section 6.6 is substituted in its place. 
  
 6.6     Leverage Ratio.   Maintain as of the end of each fiscal quarter of the Borrower, a Leverage Ratio, determined for the four (4) consecutive fiscal quarters ending on each such fiscal
quarter end date, for Borrower and its Domestic Subsidiaries, on a consolidated basis, not to exceed: (i) 3.50:1, at the end of the fiscal quarter ending on or closest to October 31, 2002, and (ii) 3.00:1, at the end of each fiscal quarter ending
subsequent to the fiscal quarter ending on or closest to October 31, 2002, provided, however, that in calculating the Leverage Ratio for all such fiscal quarters ending subsequent to the fiscal quarter ending on or closest to October
31, 2002, the denominator thereof (EBITDA) shall be adjusted in the same manner and to the same extent as set forth in Section 6.9. 
  
 (c)     Change to Senior Leverage Ratio.   Existing Section 6.7 of the Credit Agreement is deleted and the following revised Section 6.7 is substituted in its place. 

 
 6.7     Senior Leverage Ratio.   Maintain as of the end of each fiscal quarter of the
Borrower, a Senior Leverage Ratio, determined for the four (4) consecutive fiscal quarters ending on each such fiscal quarter end date, for Borrower and its Domestic Subsidiaries, on a consolidated basis, not to exceed 2.50:1, provided,
however, that, in making the calculation of Senior Leverage Ratio for all fiscal quarters of Borrower ending after the fiscal quarter ending on or closest to October 31, 2002, the denominator thereof (EBITDA) shall be adjusted in the same
manner and to the same extent as is provided in the provisos to clause (ii) of Section 6.9. 
  
 (d)     Change to Capital Expenditures Limit.   Existing Section 6.8 of the Credit Agreement is deleted and the following revised Section 6.8 is substituted in its place. 
  
 6.8     Capital Expenditures.   Contract for, purchase or make any expenditure or commitments for
fixed or capital assets (including capitalized development costs and capitalized leases) in an amount not to exceed for Borrower and its Domestic Subsidiaries, on a consolidated basis, for each fiscal year, $750,000. 
  
 (e)     Change to Fixed Charge Coverage Ratio.   Existing Section 6.9 of the Credit Agreement is
deleted and the following revised Section 6.9 is substituted in its place. 
  
 6.9     Fixed
Charge Coverage Ratio.   Maintain as of the end of each fiscal quarter of the Borrower, a Fixed Charge Coverage 

 
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Ratio, for Borrower and its Domestic Subsidiaries on a consolidated basis, determined for the four (4) consecutive fiscal quarters ending on each such date, of not less than: (i) 1.00:1, at the
end of each fiscal quarter of the Borrower ending between (and including) the fiscal quarter ending on or closest to January 31, 2003 and April 30, 2004, respectively; and (ii) 1.10:1, at the end of each fiscal quarter of the Borrower ending
subsequent to the fiscal quarter ending on or closest to April 30, 2004, provided, however, that in making the calculation of the Fixed Charge Coverage Ratio for all fiscal quarters ending after the fiscal quarter ending on or closest
to October 31, 2002, the numerator thereof (Operating Cash Flow) shall be adjusted by adding to or deducting from EBITDA as used therein (as appropriate) the following amounts for the period in question; that is to say: (i) adding net cash proceeds
received from contributions of equity (including pursuant to the issuance of preferred stock); (ii) deducting any increase (net), in capitalized development costs, and (iii) deducting all expenses (including acquisition costs) incurred for the
period in question by Borrower’s domestic (U.S.) operations and allocated to any foreign operations of Borrower (including any Foreign Subsidiary); offset by payments received during any such period from a Foreign Subsidiary to reimburse
Borrower for funds previously provided by Borrower; provided, however, that in making the adjustments described in clauses (i) through (iii) above, each such adjustment shall be made only to the extent the adjustable event occurred (or
was incurred) both (A) in the relevant period for which EBITDA is being measured and (B) after May 3, 2002 in any event. 
  
 (f)     Change to Senior Fixed   Charge Coverage Ratio. Existing Section 6.10 of the Credit Agreement is deleted and the following revised Section 6.10 is substituted in its place. 

 
 6.10     Senior Fixed Charge Coverage Ratio.   Maintain as of the end of each fiscal
quarter of the Borrower, a Senior Fixed Charge Coverage Ratio for Borrower and its Domestic Subsidiaries, on a consolidated basis, determined for the four (4) consecutive fiscal quarters ending on each such date, of not less than: (i) 01.40:1, at
the end of the fiscal quarter of Borrower ending between (and including) the fiscal quarter ending on or closest to January 31, 2003 and October 31, 2003, respectively; and (ii) 1.20:1, at the end of each fiscal quarter of the Borrower ending
subsequent to the fiscal quarter ending on or closest to October 31, 2003; provided, however, that for each fiscal quarter of the Borrower ending after the fiscal quarter ending on or closest to October 31, 2002, in calculating Senior
Fixed Charge Coverage Ratio, the numerator thereof (Operating Cash Flow) shall be adjusted in the same manner and to the same extent as is provided in the provisos to Section 6.9. 

 
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 (g)     Change to EBITDA Covenant.  
Existing Section 6.10A of the Credit Agreement is deleted and the following revised Section 6.10A is substituted in its place: 
  
 6.10A     EBITDA.   EBITDA of the Borrower and its Domestic Subsidiaries, on a consolidated basis, for each fiscal period prescribed below, shall be at least the following: (i) for the trailing
two (2) fiscal quarters ending on or closest to October 31, 2002, $1,635,000, and (ii) for the each single fiscal quarter ending on or closest to (A) January 31, 2003 and April 30, 2003, $500,000, (B) July 31, 2003, October 31, 2003, January 31,
2004 and April 30, 2004, $600,000, and (D) July 31, 2004 and each succeeding fiscal quarter ending thereafter, $700,000; provided, however, that in calculating EBITDA for each covenanted fiscal period ending on and after the fiscal
quarter of Borrower ending on or closest to January 31, 2003, there shall be deducted therefrom the amount of all expenses (including acquisition expenses) incurred in the period in question (but subsequent to the fiscal year of Borrower ended on or
closest to April 30, 2002) by Borrower’s consolidated domestic (U.S.) operations and allocated to any foreign operations of Borrower (including any Foreign Subsidiary) offset by payments received during any such period from a Foreign Subsidiary
to reimburse Borrower for funds previously provided by Borrower. 
  
 2.6     Change in Method
of Reporting on Eligible Receivables.   Notwithstanding the terms of Section 9.2 of the Credit Agreement, henceforth, reporting of Eligible Receivables shall be done as follows: 
  

(i)     Billed Receivables shall be reported at the midpoint and again at the end of each fiscal month, as soon as practicable
thereafter, but not later than twenty (20) days thereafter; 
  
 (ii) Unbilled Receivables shall be
reported at the end of each fiscal month of the Borrower, as soon as practicable after, but not later than twenty (20) days after, the last day of such fiscal month. 
  
 2.7     Addition to Quarterly Reporting.   Together with the quarterly financial statements of Borrower and its Subsidiaries required
to be delivered pursuant to Section 9.8 of the Credit Agreement, henceforth, Borrower shall include a “cash flow” statement for its domestic (U.S.) operations and related explanatory schedules, to be compiled and presented in a manner
reasonably satisfactory to the Agent. 
  
 2.8     Addition to Monthly Reporting.
  Together with the monthly financial statements of Borrower and its Subsidiaries required to be delivered pursuant to Section 9.9 of the Credit Agreement, henceforth, Borrower shall include monthly consolidating balance sheets and income
statements on both domestic and foreign operations. 
  
 2.9     New Term Loan.  
Section 2.4 of the Credit Agreement shall be modified to reflect the addition of a new term Loan, by the addition thereto of a new Section 2.4A at the end of said Section 2.4, to read as follows: 

 
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 A.     New Term Loan.  
During the period commencing on the Fifth Amendment Date and ending on February 28, 2003 (the “Increase Period”), Borrower may, at its option, obtain a new term loan from WBCC (the “New Term Loan”), subject,
however, to meeting the following terms, covenants and conditions: 
  
 (i)     the maximum amount of the New Term Loan cannot exceed the lesser of (A) $1,000,000, or (B) 100% of the amount of each cash equity contribution received by Borrower between May 3, 2002 and February
28, 2003, to the extent in excess of $700,000 (rounded down to the nearest $10,000) to the extent applied, when received, to the payment of Revolving Advances (after which the same may be re-borrowed; 
  
 (ii)     Borrower may request and obtain no more than two (2) disbursements of the New Term Loan
during the Increase Period, with such disbursements to be obtained on, or within five (5) Business Days after, December 31, 2002 and February 28, 2003, respectively (unless in either or both cases, a sooner or later date is approved by the Agent)
and in amounts not less than $250,000 per disbursement (unless otherwise approved by the Agent); provided that the initial such disbursement cannot exceed $600,000 in any event; 
  
 (iii)     a disbursement of the New Term Loan (herein, an “Increase”) may not be requested and, if requested, shall not be
made available to the Borrower if a Default or Event of Default then exists; and 
  
 (iv)     the second disbursement of the New Term Loan may not be requested (or, if requested, shall not be granted) unless on or prior to its disbursement the Bank of Scotland shall have agreed, under the terms of
the Scotland Agreements (as hereinafter defined) to permit Foreign Subsidiaries to reimburse Borrower and/or its Domestic Subsidiaries, as appropriate, for any costs or expenses (including overhead) incurred by it or them for and on behalf of the
Foreign Subsidiaries, or any of them, in a manner satisfactory to Agent. 
  
 B.
    Application of Proceeds.   The proceeds of each Increase shall be applied to repay Revolving Advances (but may be re-borrowed subsequent thereto); 
  
 C.     Interest Rate.   The New Term Loan (including each Increase) shall bear interest from the date of its
disbursement at the same interest rate and be payable at the same time as interest payable on the Term Loan (regardless whether the Term Loan is or has been paid in full); 
  
 D.     Amortization.   On March 1, 2003, the then disbursed amount of all Increases shall be aggregated and such
aggregated sum thenceforth shall be the “New Term Loan” for all purposes of the Credit Agreement, and be repaid in equal installments, based on a twenty-four (24) month level principal amortization beginning on March 1, 2003, and
continuing on the first day of each succeeding calendar month, with the then unpaid principal balance thereof remaining at the end or the Term to be due and payable in full on such date. 
  
 E.     Commitment.   The Commitment of WBCC as sole Lender in respect of the New Term Loan shall increase by the amount
of each Increase. 

 
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 F.     New Note.   On the
Fifth Amendment Date, the Borrower shall execute a new Term Note in favor of WBCC equal in principal amount to the New Term Loan on the Fifth Amendment Date (such new note herein called the “New Note”). 
  
 G.     No Other Changes.   Except as expressly set forth hereinabove, the New Term
Loan shall be subject to the same terms, covenants and conditions as the Term Loan as if made an integral part thereof from its inception, provided that Section 2.15(b) (Excess Cash Flow recapture) shall not apply to the New Term Loan until
the fiscal year ending closest to April 30, 2004. 
  
 2.10     Change in Negative Covenant
Affecting Loans and Advances to Foreign Subsidiaries.   Subsequent to the Fifth Amendment Date, and notwithstanding Section 7.5 of the Credit Agreement or any other provisions hereof, no loans, advances or extensions of credit, whether
direct or indirect, shall be made to any Foreign Subsidiary by the Borrower or any Domestic Subsidiary, except that the foregoing shall not prohibit: (i) internal overhead allocations or (ii) the actual costs of materials, supplies or
services not part of overhead, so long as the total amount of all such costs does not exceed $100,000 per fiscal year of Borrower, net of cash reimbursements to Borrower or its Domestic Subsidiaries, as appropriate, by a Foreign Subsidiary.

  
 2.11     Change in Term of Agreement.   The stated Term of the Credit
Agreement, set forth in Section 13.1 of the Credit Agreement, shall be changed from February 7, 2003 to December 9, 2005. The current early termination fee, equal in amount to one percent (1%) of the aggregate Commitments, shall remain unchanged
through the end of the extended Term. 
  
 SECTION 3.     Waiver of Claims.   As
a specific inducement to WBCC without which the Obligors acknowledge WBCC would not enter into this Fifth Amendment, the Borrower hereby waives any and all claims that it may have against any other Party, as of the date hereof, arising out of or
relating to the Credit Agreement or any Other Document whether sounding in contract, tort, or any other basis. 
  
 SECTION 4.     Fees.   Borrower shall pay to WBCC a fully earned, non-refundable amendment fee equal to $50,000 on the Fifth Amendment Date as consideration for the modifications to the Credit
Agreement set forth herein. 
  
 SECTION 5.     Miscellaneous. 
  
 5.1     Reference to Credit Agreement.   Upon the effectiveness of this Fifth Amendment, each
reference in the Credit Agreement to “this Credit Agreement” and each reference in the Other Documents to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. 
  
 5.2     Effect on Other Documents.   Except as specifically amended by this Fifth Amendment, all
terms of the Credit Agreement and all Other Documents shall remain in full force and effect and are hereby ratified and confirmed. 
  
 5.3     No Waiver.   The execution, delivery and effectiveness of this Fifth Amendment shall not operate as a waiver of any right, power, or remedy of Lenders or the Agents under any of
the Other Documents, nor constitute a waiver of any provision of any of the Other Documents. 

 
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 5.4     Costs, Expenses and Taxes.   The
Borrowers agrees to pay on demand the costs and expenses of WBCC incurred in connection with the preparation, reproduction, execution, and delivery of this Fifth Amendment and the other instruments and documents to be delivered hereunder, including
the reasonable fees and out-of-pocket expenses of counsel for WBCC with respect hereto. 
  
 5.5     No Novation.   Nothing contained herein intended, or shall be construed, to constitute a novation to the Credit Agreement or any Other Document. 
  
 5.6     Governing Law.   This Fifth Amendment shall be governed by and construed in accordance with
the laws of the State of New York, without giving affect to conflict of law provisions. 
  
 5.7     Counterparts.   This Fifth Amendment may be executed in counterparts. Each counterpart shall bind the Party or Parties executing same. All counterparts, taken together, shall constitute
one and the same agreement. 
  
 SECTION 6.     Conditions Precedent.   The
following shall constitute express conditions precedent to any obligation of WBCC under this Amendment: (i) receipt by Agent of payment of the fee specified in Section 4; (ii) execution and delivery to the Agent (A) by the Obligors of this Amendment
(B) by the Borrower of the New Note and (C) by the Guarantors of their acknowledgement hereof appended hereto; (iii) satisfaction by Agent no Default or Event of Default shall exist; (iv) receipt by Agent of evidence satisfactory to Agent that any
defaults under or in respect of the financial covenants set forth in the loan contracts with the Foreign Subsidiaries (guaranteed by Borrower) from the Bank of Scotland (the “Scotland Agreements”) have been waived (pending their
subsequent modification, as described below); and (v) satisfaction by Agent that no change having, or which could reasonably be expected to have, a Material Adverse Effect has occurred. 
  
 SECTION 7.     Conditions Subsequent.   The following shall constitute express conditions subsequent to the continuing obligation of
WBCC under this Amendment, and the failure of Borrower to meet any one of such conditions subsequent by the date specified below shall, at the option of WBCC, constitute an Event of Default: 
  
 (i)     by not later than January 24, 2003, WBCC shall have received evidence satisfactory to it that the BL&P Notes have been
restructured to reflect a deferment of the payments owing thereon on terms and conditions satisfactory to WBCC; (ii) by not later than November 15, 2003, the financial covenants set forth in the Scotland Agreements shall have been modified to cover
future periods, each in a manner satisfactory to WBCC; and (iii) by not later than November 15, 2003, executed originals of all documentation between or among Borrower, WBCC and Bank of Scotland pertaining to the Bank of Scotland loan, including
particularly the intercreditor agreement, shall have been received by WBCC (to the extent not heretofore received by WBCC). 

 
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 IN WITNESS WHEREOF, the Parties have caused this Fifth Amendment to be duly
executed by their respective authorized officers as of the day and year first above written. 
  
  
 
	 WHITEHALL BUSINESS CREDIT
 CORPORATION, as Lender and as Agent
 
	 
	 By:
 	 	     /s/    OTTO BRUNKE        
 

	 Name:
 	 	     Otto Brunke        
 
	 Title:
 	 	     Assistant Vice President
 

 

 
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	 HLM DESIGN, INC., as Borrower and Borrowing Agent
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President & Chairman of the Board
 

 
  
 
	 JPJ ARCHITECTS, INC., as Affiliate Guarantor
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President
 

 
  
 
	 HLM DESIGN USA, INC., as Affiliate Guarantor
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President
 

 
  
 
	 HLM DESIGN ARCHITECTURE
 ENGINEERING AND PLANNING, P.C., as
 Affiliate Guarantor
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President
 

 
  
 
	 HLM DESIGN OF NORTHAMERICA, INC., as Affiliate Guarantor
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President, CEO & Chairman of the Board
 

 

 
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	 SOTA SOFTWARE SYSTEMS, INC., as Affiliate Guarantor
 
	 
	 By:
 	 	     /s/    JOSEPH M. HARRIS        

	 Name:
 	 	     Joseph M. Harris
 
	 Title:
 	 	     President
 
	  	 	  
	 ACKNOWLEDGED AND CONSENTED TO
 AS INDIVIDUAL GUARANTORS:
  
 The undersigned acknowledge and consent to the foregoing in
respect of their pre-existing guaranties, provided that their liabilities thereunder shall not be increased hereby.
 
	  
	 
	     /s/    VERNON B.
BRANNON        
 

	     Vernon B. Brannon
 
	     Individually
 	 	  
	  
	 
	     /s/    JOSEPH M. HARRIS
        
 

	     JOSEPH M. HARRIS
 
	     Individually
 	 	  

 
  

 
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