SIXTH AMENDMENT TO CREDIT
AND GUARANTY AGREEMENT
THIS SIXTH AMENDMENT, dated as of October 15, 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) parties 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 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, and together with, 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 the Lenders have agreed to
amend the Existing Credit Agreement 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 set forth in the Existing Credit Agreement.
PART II
AMENDMENTS TO
THE EXISTING CREDIT AGREEMENT
Effective upon (and subject to) the occurrence of the Sixth Amendment
Effective Date (as defined in Subpart 3.1), certain terms and provisions of the
Existing Credit Agreement are hereby amended in accordance with this Part.
Except as so amended or modified by this Amendment, the Existing Credit
Agreement shall continue in full force and effect in accordance with its terms.
SUBPART II.1. Amendments to Article I. Article I of the Existing Credit
Agreement is hereby amended in accordance with Subparts 2.1.1 and 2.1.2.
SUBPART II.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in the appropriate alphabetical
order:
"Amendment No. 6" means the Sixth Amendment, dated as of October
14, 1998, to this Agreement among the Borrower, the Parent and the
Lenders parties thereto.
"Sixth Amendment Effective Date" is defined in Subpart 3.1 of
Amendment No. 6.
SUBPART II.1.2. Section 1.1 of the Existing Credit Agreement is hereby
further amended by amending the definition of "Permitted Amount" in its entirety
to read as follows:
"Permitted Amount" means in the case of (a) the permitted maximum
amount of Revolving Loans which may be applied by the Borrower to purchase
outstanding Senior Subordinated Notes "put" to the Borrower pursuant to
the "put" provision contained in the Senior Subordinated Notes in the
event of a Change of Control (as defined therein) pursuant to the terms of
Section 4.10, $40,000,000, (b) the permitted maximum aggregate amount of
Revolving Loans which may be applied from time to time by the Borrower to
open market purchases or redemptions of outstanding Senior Subordinated
Notes pursuant to the terms of Section 4.10 (whether or not the Borrower
has repaid or prepaid Revolving Loans subsequent to the date such
Revolving Loans were made (even if all Revolving Loans are repaid or
prepaid in full on any given date)), the sum of (i) $85,000,000 (payable
in respect of the face amount of Senior Subordinated Notes purchased or
redeemed) plus (ii) an amount (referred to as the "Additional Amount")
payable in respect of any premium over the face amount of the Senior
Subordinated Notes purchased or redeemed by it in the open market (with
the payment of such Additional Amount being in all events subject to the
terms of clause (iv) of Section 4.10), (c) the permitted maximum amount of
Revolving Loans which may be applied by the Borrower to make intercompany
loans to Non-U.S. Subsidiaries to refinance existing Indebtedness of such
Non-U.S. Subsidiaries, $25,000,000, and (d) guarantees by the Borrower of
Indebtedness of Non-U.S. Subsidiaries, in an amount not to exceed
$20,000,000; provided, however, that the sum of clauses (a), (b), (c) and
(d) above shall not at any time exceed $85,000,000 plus (in the case of
clause (b) only), the Additional Amount.
SUBPART II.2. Amendment to Article IV. Clause (iv)(B) of Section 4.10 of
the Existing Credit Agreement is hereby amended by (i) deleting the figure
"$75,000,000" in such clause, and inserting the figure "$85,000,000" in its
place, (ii) deleting the percentage "115%" in such clause, and inserting the
percentage "114%" in its place and (iii) amending the final proviso in such
clause in its entirety to read as follows:
"provided, further, that on a pro forma basis after giving effect to each
Subordinated Debt Refunding and the aggregate amount of Revolving Loans
used to make intercompany loans to Non-U.S. Subsidiaries, the Borrower
must maintain availability under the Revolving Loan Commitment of not less
than for all periods prior to the Sixth Amendment Effective Date, the
amount required by this Agreement before giving effect to the Sixth
Amendment, (B) $10,000,000 for the period from the Sixth Amendment
Effective Date through (and including) the 60th day thereafter, (C)
$15,000,000 from the 61st day through (and including) the 90th day
subsequent to the Sixth Amendment Effective Date, and (D) $20,000,000 on
each day thereafter."
SUBPART II.3. Amendment to Article VII. Clause (b)(ii) of Section 7.2.6 of
the Existing Credit Agreement is hereby amended by deleting the figure
"$75,000,000" in such clause and inserting the figure "$85,000,000" in its
place.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART III.1. This Amendment shall become effective on the date (the
"Sixth Amendment Effective Date") that the Administrative Agent delivers a
notice to the Borrower stating that 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 Required 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 the Parent and each other 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 Agents and its counsel.
PART IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders 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. The representations and
warranties set forth herein, in Article VI of the Credit Agreement and in each
other Loan Document delivered in connection herewith or therewith 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).
SUBPART IV.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower, the Parent and the Guarantors of this
Amendment and other documents delivered pursuant hereto are within the
Borrower's, the Parent's and the Guarantors' corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene either
the Borrower's, the Parent's or the Guarantors' 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, the Parent or the Guarantors, 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 Sixth
Amendment Effective Date, and both before and after giving effect to the terms
of this Amendment, no Default has occurred and is continuing.
PART V
MISCELLANEOUS PROVISIONS
SUBPART V.1. Ratification of and Limited Amendment to the Credit
Agreement. This Amendment shall be deemed to be an amendment to the Existing
Credit Agreement, and the Existing Credit Agreement, as amended hereby, is
hereby ratified, approved and confirmed in each and every respect. Except as
specifically amended or modified herein, the Existing Credit Agreement 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.
SUBPART V.2. 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.3. Expenses. The Borrower agrees to pay all out-of-pocket
expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, execution and delivery of this Amendment.
SUBPART V.4. 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.5. 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.6. 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.