FIFTH AMENDMENT TO CREDIT
AND GUARANTY AGREEMENT
THIS FIFTH AMENDMENT, dated as of June 1, 1998 (this "Amendment") to the
Existing Credit Agreement referred to below, is among IMO INDUSTRIES INC., a
Delaware corporation (the "Borrower"), II ACQUISITION CORP., a Delaware
corporation (the "Parent") and the Lenders (as defined below) signatories
hereto.
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, certain financial institutions from
time to time parties thereto (collectively, the "Lenders"), The Bank of Nova
Scotia, as the Administrative Agent and the Documentation Agent and NationsBanc
Capital Markets, Inc., as the Syndication Agent have entered into the Credit and
Guaranty Agreement, dated as of August 29, 1997 (as amended, supplemented,
amended and restated or otherwise modified prior to the date hereof, the
"Existing Credit Agreement" and, as amended by this Amendment, the "Credit
Agreement"); and
WHEREAS, the Borrower and the Parent have requested that the Existing
Credit Agreement be amended in certain respects and that the Lenders grant
limited waivers of certain provisions of the Existing Credit Agreement and the
Lenders have agreed to amend the Existing Credit Agreement and to grant such
limited waivers (subject to the terms and conditions of this Amendment);
NOW, THEREFORE, in consideration of the premises and the other provisions
herein contained, the parties hereto hereby agree as follows.
PART I
DEFINITIONS
SUBPART I.1. Use of Defined Terms. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided therefor in the Existing Credit
Agreement.
PART II
AMENDMENTS AND WAIVERS TO
THE EXISTING CREDIT AGREEMENT
Effective upon (and subject to the occurrence of) the Fifth Amendment
Effective Date (as defined in Subpart 3.1), certain terms and provisions of the
Existing Credit Agreement are hereby amended, and the limited waivers described
below are hereby granted, all in accordance with this Part. Except as so
amended, modified or waived by this Amendment, the Existing Credit Agreement and
the Loan Documents shall continue in full force and effect in accordance with
their terms.
SUBPART II.1. Amendment to Article I. Article I of the Existing Credit
Agreement is hereby amended in accordance with Subparts 2.1.1 through 2.1.2.
SUBPART II.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by adding the following new definitions in their appropriate
alphabetical sequence:
"Relevant Period" means the period from April 23, 1998 through (and
including) July 15, 1998.
"VHC" means VHC Inc., a Texas corporation and a wholly-owned
Subsidiary of the Borrower.
"VHC Proceeding" means the involuntary bankruptcy proceeding case
(number 398-33624-RCM-7) with respect to VHC, filed in the United States
Bankruptcy Court, Northern District of Texas, Dallas Division on April 23,
1998.
SUBPART II.1.2. Section 1.1 of the Existing Credit Agreement is hereby
further amended by amending clause (a) of the definition of "Commitment
Termination Event" in its entirety to read as follows:
"(a) the occurrence of any Event of Default described in clauses
(a) through (d) of Section 8.1.9; or"
SUBPART II.2. General Amendment to Existing Credit Agreement and Other
Loan Documents. The parties hereto agree that, notwithstanding the terms of the
Credit Agreement (but subject to Subpart 2.3.4 below) and other Loan Documents
to the contrary (including the definitions of "Commitment Termination Event" and
"Revolving Loan Commitment Termination Date" and Section 8.2, in each case
contained in the Credit Agreement, and the terms of the Subsidiary Guaranty), a
Commitment Termination Event and acceleration of the Obligations shall not
automatically occur (or be deemed to have occurred) during or after the Relevant
Period with respect to VHC and the VHC Proceeding unless the VHC Proceeding has
not been discharged and the Required Lenders deliver a written notice to the
Administrative Agent in which they declare that a Commitment Termination Event
has occurred and they require the Obligations to be accelerated pursuant to
Section 8.3 of the Credit Agreement, and the Credit Agreement and other Loan
Documents are hereby amended mutatis mutandis to the extent necessary to effect
such amendments.
SUBPART II.3. Waivers of Certain Provisions of the Existing Credit
Agreement. The limited waivers set forth below are hereby granted in accordance
with Subparts 2.3.1 through 2.3.4.
SUBPART II.3.1. Waiver Regarding Section 5.2.1 and Section 8.1.2 of the
Existing Credit Agreement ("Compliance with Warranties, No Default, etc.";
"Breach of Warranty"). The Lenders hereby waive any Event of Default under
Section 8.1.2 of the Existing Credit Agreement resulting from any breach of the
representation made by the Borrower pursuant to Section 5.2.2 of the Existing
Credit Agreement (including under clause (d) of Section 5.2.1 of the Existing
Credit Agreement) on the occasion of the making of any Credit Extension to the
extent that such breach of representation was in respect of the VHC Proceeding.
SUBPART II.3.2. Waiver Regarding Section 7.1.1 of the Existing Credit
Agreement ("Financial Information, Reports, Notices, etc."). The Lenders hereby
waive each Event of Default under clause (c) of Section 7.1.1 of the Existing
Credit Agreement resulting from the Borrower's failure to inform the
Administrative Agent of (i) the Default under Section 8.1.9 of the Existing
Credit Agreement caused by the VHC Proceeding and (ii) the other Defaults waived
by the Lenders in this Part.
SUBPART II.3.3. Waiver Regarding Section 7.2.6 of the Existing Credit
Agreement ("Restricted Payments, etc."). The Lenders hereby waive any Default
under Section 7.2.6 of the Existing Credit Agreement resulting from the payment
on or about May 1, 1998 of accrued interest on the Senior Subordinated Notes, to
the extent that such payment would (by the terms of Section 7.2.6) be prohibited
by the institution of the VHC Proceeding or any of the Defaults waived by the
Lenders in this part.
SUBPART II.3.4. Time Limited Waiver Regarding Section 8.1.9 of the
Existing Credit Agreement ("Bankruptcy, Insolvency, etc."). For purposes of (i)
exercising any of their rights and remedies (including their rights to declare
the Commitments terminated and the Obligations due and payable pursuant to
Sections 8.2 and 8.3 of the Existing Credit Agreement) under the Loan Documents
and (ii) enabling the Borrower to satisfy the conditions precedent to further
Credit Extensions set forth in Sections 5.2.1 and 5.2.2 of the Existing Credit
Agreement, the Lenders hereby waive through (and including), the Relevant
Period, the Default under clause (d) of Section 8.1.9 of the Existing Credit
Agreement resulting from the VHC Proceeding (including as a result of the
Default caused by the VHC Proceeding potentially developing into an Event of
Default on or around June 22, 1998).
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART III.1. This Amendment shall become effective on the date first set
forth above (the "Fifth Amendment Effective Date") when all of the following
conditions have been satisfied to the satisfaction of the Administrative Agent.
SUBPART III.1.1. Execution of Counterparts. The Administrative Agent shall
have received copies of this Amendment, duly executed and delivered by the
Borrower, the Parent and the Lenders.
SUBPART III.1.2. Affirmation and Consent. The Administrative Agent shall
have received an affirmation and consent in form and substance satisfactory to
it, duly executed and delivered by each Subsidiary Guarantor.
SUBPART III.1.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its counsel
shall have received all information and such counterpart originals or such
certified or other copies or such materials, as the Administrative Agent or its
counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
PART IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Issuers to enter into this
Amendment, the Borrower and the Parent represent and warrant to the
Administrative Agent, each Issuer and each Lender as set forth in this Part.
SUBPART IV.1. Compliance with Warranties. After giving effect to the terms
of this Amendment, the representations and warranties set forth herein, in
Article VI of the Credit Agreement and in each other Loan Document are true and
correct in all material respects with the same effect as if made on and as of
the date hereof (unless stated to relate solely to an earlier date, in which
case they were true and correct as of such earlier date). Furthermore, the VHC
Proceeding will not have a material adverse effect on the financial condition,
operations, assets, business, properties, revenues or prospects of the Borrower
and its Subsidiaries, taken as a whole.
SUBPART IV.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower and the Parent of this Amendment and
other documents delivered pursuant hereto are within the Borrower's and the
Parent's corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene either the Borrower's or the Parent's Organic
Documents, (ii) contravene or result in a default under any contractual
restriction, law or governmental regulation or court decree or order binding on
or affecting either the Borrower or the Parent, or (iii) result in, or require
the creation or imposition of, any Lien (except as contemplated in or created by
the Loan Documents).
SUBPART IV.3. Validity, etc. This Amendment has been duly executed and
delivered by the Borrower and the Parent and constitutes the legal, valid and
binding obligation of the Borrower and the Parent enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and to
general principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.
SUBPART IV.4. Compliance With Existing Credit Agreement. As of the Fifth
Amendment Effective Date, after giving effect to the terms of this Amendment, no
Event of Default has occurred and is continuing.
PART V
MISCELLANEOUS PROVISIONS
SUBPART V.1. Ratification of and Limited Amendment to the Credit
Agreement. The Existing Credit Agreement, as amended hereby, is hereby ratified,
approved and confirmed in each and every respect by the parties hereto. Except
as specifically amended or modified herein, the Existing Credit Agreement and
the other Loan Documents shall continue in full force and effect in accordance
with the provisions thereof and except as expressly set forth herein the
provisions hereof shall not operate as a waiver of or amendment of any right,
power or privilege of the Administrative Agent and the Lenders nor shall the
entering into of this Amendment preclude the Lenders from refusing to enter into
any further or future amendments.
SECTION V.2. Consent and Acknowledgment of Guarantor, etc. By its
signature below, the Parent in its capacity as a guarantor and as grantor of
collateral security under certain Loan Documents, hereby acknowledges, consents
and agrees to this Amendment and hereby ratifies and confirms its obligations
under its guaranty and each Loan Document executed and delivered by it in all
respects.
SUBPART V.3. Credit Agreement, References, etc. All references to the
Credit Agreement in any other document, instrument, agreement or writing shall
hereafter be deemed to refer to the Existing Credit Agreement as amended hereby.
As used in the Credit Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after the
date hereof, the Existing Credit Agreement as amended by this Amendment.
SUBPART V.4. Expenses. The Borrower agrees to pay all out-of-pocket
expenses incurred by the Administrative Agent (including fees and expenses of
counsel to the Administrative Agent) in connection with the preparation,
negotiation, execution and delivery of this Amendment.
SUBPART V.5. Headings; Counterparts. The various headings of this
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof. This Amendment may be
signed in any number of separate counterparts, each of which shall be an
original, and all of which taken together shall constitute one instrument.
SUBPART V.6. Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Amendment constitutes the entire understanding among the parties
hereto with respect to the subject matter hereof and supersedes any prior
agreements, written or oral, with respect thereto.
SUBPART V.7. Loan Document Pursuant to Credit Agreement. This Amendment is
a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
IMO INDUSTRIES INC.
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
II ACQUISITION CORP.
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Relationship Manager
NATIONSBANK, N.A.
By: Chitt A. Swamidasan
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FLEET CAPITAL CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE
By: ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: First Vice President
CRESTAR BANK
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By: ▇▇▇▇▇▇ Von Finckenstein
Title: Vice President
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
US TRUST
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CIBC INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
