EX-4.2 LETTER AMENDMENT 2 TO MASTER SHELF AGREEMENT

Exhibit 4.2

Cover Page    

[Execution Copy]

LAYNE CHRISTENSEN COMPANY

$100,000,000

SENIOR NOTES

MASTER SHELF AGREEMENT

Dated as of July 31, 2003

(As amended by Letter Amendment No. 1 to Master Shelf Agreement dated as of May 15, 2004 and Letter Amendment No. 2 to Master Shelf Agreement dated as of September 28 , 2005)

Exhibit 4.2

EXECUTION VERSION

LETTER AMENDMENT NO. 2
TO
MASTER SHELF AGREEMENT

September 28, 2005

Prudential Investment Management, Inc.
The Prudential Insurance Company of America
Pruco Life Insurance Company
Security Life of Denver Insurance Company
American Skandia Life Assurance Corporation
Prudential Retirement Insurance and Annuity Company
Time Insurance Company (f/k/a Fortis Insurance Company)
American Memorial Life Insurance Company
Physicians Mutual Insurance Company

c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, Texas 75201

Ladies and Gentlemen:

     We refer to the Master Shelf Agreement dated as of July 31, 2003 and amended by Letter Amendment No. 1 to Master Shelf Agreement dated May 15, 2004 (as amended, the “ Agreement ”) among Layne Christensen Company (the “ Company ”), Prudential Investment Management, Inc., The Prudential Insurance Company of America, Pruco Life Insurance Company, Security Life of Denver Insurance Company, American Skandia Life Assurance Corporation, Prudential Retirement Insurance and Annuity Company, Time Insurance Company (f/k/a Fortis Insurance Company), American Memorial Life Insurance Company and Physicians Mutual Insurance Company pursuant to which the Company has issued and the Purchasers have purchased (i) Series A Notes of the Company in the aggregate principal amount of $40,000,000 and (ii) Series B Notes of the Company in the aggregate principal amount of $20,000,000. The Facility provided for in the Agreement expires on the date hereof and there is no Available Facility Amount remaining under the Agreement. Unless otherwise defined herein, the terms defined in the Agreement shall be used herein as therein defined.

     The Company desires to (i) increase the amount of the Notes available to be issued under the Agreement to an aggregate principal amount of $100,000,000 (creating an Available Facility Amount of $40,000,000 as of the date hereof) and (ii) reinstate and extend the Issuance Period under the Agreement to September 15, 2007.

     It is hereby agreed by you and us as follows:

      (a) Paragraph 1. AUTHORIZATION OF ISSUE OF NOTES. Paragraph 1 of the Agreement is amended in full to read as follows:

     “1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the issue of its senior promissory notes (the ‘ Notes ‘) in the aggregate principal amount of $100,000,000, to be dated the date of issue thereof; to mature, in the case of each Note so issued, no more than eight years after the date of original issuance thereof; to have an average life, in the case of each Note so issued, of no more than six years after the date of original issuance thereof; to bear interest on the unpaid balance thereof from the date thereof at the rate per annum, and to have such other particular terms, as shall be set forth, in the case of each Note so issued, in the Confirmation of Acceptance with respect to such Note delivered pursuant to paragraph 2F; and to be substantially in the form of Exhibit A-1 attached hereto. The term ‘ Notes ’ as used herein shall include each Note delivered pursuant to any provision of this Agreement and each Note delivered in substitution or exchange for any such Note pursuant to any such provision. Notes which have (i) the same final maturity, (ii) the same principal prepayment dates, (iii) the same principal prepayment amounts (as a percentage of the original principal amount of each Note), (iv) the same interest rate, (v) the same interest payment periods, and (vi) the same original date of issuance are herein called a ‘ Series ’ of Notes. Capitalized terms used herein have the meanings specified in paragraph 10. ”

      (b) Paragraph 2B. Issuance Period. Paragraph 2B of the Agreement is amended in full to read as follows:

     “2B. Issuance Period. Notes may be issued and sold pursuant to this Agreement until the earlier of (i) September 15, 2007 and (ii) the thirtieth day after Prudential shall have given to the Company, or the Company shall have given to Prudential, written notice stating that it elects to terminate the issuance and sale of Notes pursuant to this Agreement (or if such thirtieth day is not a Business Day, the Business Day next preceding such thirtieth day). The period during which Notes may be issued and sold pursuant to this Agreement is herein called the ‘ Issuance Period ‘.”

      (c) Paragraph 2I(1). Structuring Fee/Closing Legal Fee. Paragraph 2I(1) of the Agreement is amended in full to read as follows:

     “2I(1). Structuring Fee/Closing Legal Fee. At the time of the execution and delivery of Letter Amendment No. 2 to Master Shelf Agreement by the Company, Prudential and the Purchasers, the Company will pay to Prudential in immediately available funds a fee (herein called the ‘ Structuring Fee ‘) in the amount of $25,000.”

      (d) Paragraph 3A. Certain Documents. Paragraph 3A of the Agreement is amended as follows:

     (I) by adding the following immediately prior to the period at the end of clause (viii) thereof:

“(provided, that for any Closing Day occurring after the Series A Closing, such Subsidiary Guarantor may certify that there has been no change to any applicable authorization or approval since the date on which it was most recently delivered to such Purchaser under this clause (viii) as an alternative to the further delivery thereof)”;

     (II) by adding the following immediately prior to the period at the end of clause (ix) thereof:

“(provided, that for any Closing Day occurring after the Series A Closing, the Secretary or an Assistant Secretary and one other officer of such Subsidiary Guarantor may certify that there has been no change to the officers of such Subsidiary Guarantor authorized to sign the Subsidiary Guaranty Agreement and other documents to be delivered therewith since the date on which a certificate setting forth the names and true signatures of such officers, as described above, was most recently delivered to such Purchaser under this clause (ix) as an alternative to the further delivery thereof)”; and

     (III) by adding the following immediately prior to the period at the end of clause (x) thereof:

“(provided, that for any Closing Day occurring after the Series A Closing, such Subsidiary Guarantor may certify that there has been no change to any applicable constitutive document since the date on which it was most recently delivered to such Purchaser under this clause (x) as an alternative to the further delivery thereof)”.

      (e) Paragraph 6. NEGATIVE COVENANTS. Paragraph 6 of the Agreement is amended by:

     (I) in Paragraph 6A(1), replacing “2.00 to 1.00” with “1.50 to 1.00”;

     (II) in Paragraph 6A(2), deleting “for any date through January 31, 2005, and 2.75 to 1.00 on any date thereafter”;

     (III) in Paragraph 6A(3), replacing “$64,158,000” with “$71,600,000” and “fiscal year ended January 31, 2004” with “period from August 1, 2005 through January 31, 2006”;

     (IV) in Paragraph 6A, adding the following new paragraph at the end thereof (following paragraph 6A(4) and immediately prior to paragraph 6B):

     “Upon completion of an Acquisition, the Target shall be included in calculations with respect to the covenants contained in the foregoing paragraphs 6A(1) — 6A(4) for periods prior to the completion of such Acquisition on a pro-forma basis in such amounts as may be agreed to by the Company and Prudential. For purposes of this paragraph, ‘ Acquisition ’ shall mean any acquisition by the Company or any of its Subsidiaries of stock, membership interests, or other equity interests of any other Person or the assets of another Person, and ‘ Target ’ shall mean the Person whose assets or stock, membership interests, or other equity interests are acquired in an Acquisition.”

     (V) in Paragraph 6B(1), (A) deleting “and” at the end of clause (viii) thereof, (B) replacing “(viii)” with “(x)” in existing clause (ix) thereof, (C) renumbering such existing clause (ix) as clause (xi), and (D) adding the following new clauses (ix) and (x) thereto:

     “(ix) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and cash equivalents on deposit in one or more accounts maintained by the Company or any Subsidiary with banks that are parties to the Sharing Agreement, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements;

     (x) Liens securing Hedging Obligations; provided that the Company is in compliance with paragraph 6A(4); and”;

     (VI) in clause (iv) of Paragraph 6B(4), replacing “(c) the Tangible Net Worth” therein with “(c) except with respect to the Reynolds Acquisition, the Tangible Net Worth”;

     (VII) in Paragraph 6B(5), (A) deleting “and” at the end of clause (iii) thereof, (B) renumbering existing clause (iv) thereof as clause (vi), and (C) adding the following new clauses (iv) and (v) thereto:

     “(iv) the Company may Transfer assets to any Subsidiary Guarantor;

     (v) if an Investment permitted pursuant to Paragraph 6B(2) is deemed to constitute a Transfer of assets by the Company or a Subsidiary, the Company or such Subsidiary may make such Transfer; and”;

     (VIII) in Paragraph 6B(8), replacing the proviso at the end thereof with the following:

     “ provided that the foregoing shall not apply to: (i) any transaction between the Company and any Wholly Owned Subsidiary or between Wholly Owned Subsidiaries, (ii) Investments in Related Parties permitted under clauses (viii) and (x) of Paragraph 6B(2), (iii) reasonable and customary director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements and (iv) sales to, or purchases from, any such Related Party of shares of common stock for cash consideration equal to the fair market value thereof (except pursuant to employee stock option, stock appreciation and similar stock-based incentive plans applicable to employees of the Company that have been approved by a majority of the Company’s outside directors)”;

     (IX) in paragraph 6E, replacing the first occurrence of “on the date hereof” with “immediately after giving effect to the Reynolds Acquisition” and replacing “as presently carried on” with “as carried on immediately after giving effect to the Reynolds Acquisition”;

     (X) in paragraph 6F, replacing “on the date hereof” with “on the Amendment No. 2 Effective Date” in the last sentence thereof;

     (XI) in paragraph 6H, adding the following immediately before the period at the end thereof:

     “ provided that this Paragraph 6H shall not apply to the Amendment and Restatement of the Bank Agreement, in the form provided to the Purchasers, on the Amendment No. 2 Effective Date (“the Amended and Restated Bank Agreement ”), but, for avoidance of doubt, shall apply to amendments, modifications, supplements, restatements, replacements or changes to the Amended and Restated Bank Agreement”; and

     (XII) adding at the end thereof new paragraphs 6J and 6K to read as follows:

     “6J. Terrorism Sanctions Regulations. The Company will not and will not permit any Subsidiary to (i) become a Person described or designated in