FIRST AMENDMENT TO CREDIT
AND GUARANTY AGREEMENT
FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT, dated as of November 6,
1997 (this "First Amendment"), among IMO INDUSTRIES INC., a Delaware corporation
(the "Borrower"), II ACQUISITION CORP., a Delaware corporation (the "Parent") as
a guarantor, VHC INC., as a guarantor, XXXXXX PUMPS INC., as a guarantor (VHC
Inc. and Xxxxxx Pumps Inc., collectively, the "Guarantors"), the various
financial institutions parties hereto (collectively, the "Lenders") and THE BANK
OF NOVA SCOTIA ("Scotiabank"), as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the Lenders, the Administrative Agent
and NATIONSBANC CAPITAL MARKETS, INC. ("NationsBanc"), as syndication agent for
the Lenders have heretofore entered into a certain Credit and Guaranty
Agreement, dated as of August 29, 1997 (the "Existing Credit Agreement" and, as
amended by, and together with, this First Amendment, the "Credit Agreement");
and
WHEREAS, the Borrower, the Parent and the Lenders desire to amend the
Existing Credit Agreement to modify certain provisions thereto;
NOW, THEREFORE, in consideration of the premises and the other provisions
herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. Use of Defined Terms. Unless otherwise defined herein or the
context otherwise requires, terms used in this First Amendment, including its
preamble and recitals, have the respective meanings provided therefor in the
Credit Agreement.
ARTICLE II
AMENDMENT TO CERTAIN PROVISIONS OF
THE CREDIT AGREEMENT
Subject to receipt by the Administrative Agent of counterparts of this
First Amendment duly executed by the Borrower, the Parent, the Guarantors and
the Required Lenders, certain terms and provisions of the Existing Credit
Agreement are hereby modified and amended in accordance with this Article II.
Except as so amended, the Existing Credit Agreement shall continue in full force
and effect in accordance with its terms.
SECTION II.1. Amendment to definition of Applicable Commitment Fee Margin.
The phrase "Fiscal Quarter ended September 30, 1997" contained in the definition
of Applicable Commitment Fee Margin in the Existing Credit Agreement is hereby
amended and replaced by the phrase "Fiscal Quarter ended December 31, 1997".
SECTION II.2. Amendment to definition of Applicable Margin. The phrase
"Fiscal Quarter ended September 30, 1997" contained in the definition of
Applicable Margin in the Existing Credit Agreement is hereby amended and
replaced by the phrase "Fiscal Quarter ended December 31, 1997".
SECTION II.3. Amendment to Section 7.2.2(d) ("Indebtedness"). Section
7.2.2(d) ("Indebtedness") of the Existing Credit Agreement is hereby amended by
deleting such section in its entirety and replacing such section with the
following:
(d) Indebtedness of Non-U.S. Subsidiaries in an amount not in excess
of $45,000,000 (which amount shall automatically be reduced to $25,000,000
immediately following the sale of Roltra Xxxxx), provided that no more
than $40,000,000 of such amount may constitute intercompany Indebtedness,
or if less than such amount at any time, the Permitted Amount.
Notwithstanding anything to the contrary in this Agreement, the secured
Indebtedness of Non-U.S. Subsidiaries permitted pursuant to Section
7.2.3(b)(ii) hereof may be refinanced by such Non-U.S. Subsidiaries;
provided that (i) such refinancing shall not result in an increase in the
principal amount of such secured Non-U.S. Subsidiary Indebtedness (or, in
the case of any revolving credit facility, the maximum lender commitment
pursuant thereto), (ii) such refinancing shall not result in any
additional collateral being pledged to secure such Non-U.S. Subsidiary
Indebtedness, and (iii) any secured Non-U.S. Subsidiary Indebtedness that
has been repaid and extinguished may not be reborrowed or reissued as
secured Non-U.S. Subsidiary Indebtedness. Notwithstanding clause (iii)
hereof, however, an aggregate amount not in excess of $2,500,000 of such
secured Non-U.S. Subsidiary Indebtedness which has been repaid and
extinguished by one or more Non-U.S. Subsidiaries may be reborrowed or
reissued as secured Non-U.S. Subsidiary Indebtedness by the same or any
other Non-U.S. Subsidiary from the same or any other lender; provided that
the market value of any collateral pledged in connection therewith shall
not exceed twice the amount of secured Non-U.S. Subsidiary Indebtedness
which has been reborrowed or reissued pursuant to this sentence.
SECTION II.4. Amendment to Section 7.2.3(b) ("Liens"). Section 7.2.3(b)
("Liens") of the Existing Credit Agreement is hereby amended by deleting such
subsection in its entirety and replacing such subsection with the following:
(b) Liens granted to secure payment of Indebtedness described in (i)
clause (c) of Section 7.2.2 to the extent such Liens are identified in
Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule and (ii)
clause (d) of Section 7.2.2 to the extent such Liens (x) are identified in
Item 7.2.3(b)(ii) ("Liens on Foreign Assets") of the Disclosure Schedule
or (y) secure secured Indebtedness of a Non-U.S. Subsidiary permitted
pursuant to Section 7.2.2(d);
SECTION II.5. Amendments to Section 10.1. ("Actions"). The phrase "act as
collateral Administrative Agent" contained in Section 10.1 ("Actions") of the
Existing Credit Agreement is hereby amended and replaced by the phrase "act as
collateral agent". The phrase "resulted solely from the gross negligence or
wilful misconduct of the Administrative Agent" also contained in Section 10.1 is
hereby amended and replaced by the phrase "resulted from the gross negligence or
wilful misconduct of the Administrative Agent".
SECTION II.6. Amendments to Section 11.1. ("Waivers, Amendments, etc.").
The phrase "extend any Commitment Termination Date without" contained in clause
(c) of Section 11.1 ("Waivers, Amendments, etc.") of the Existing Credit
Agreement is hereby amended and replaced by the phrase "extend any Commitment
Termination Date shall be effective without". The phrase "any Letter of Credit"
contained in clause (d) of Section 11.1 is hereby amended and replaced by the
phrase "any Letter of Credit shall be effective". The phrase "in its capacity as
Issuer," contained in clause (e) of Section 11.1 is hereby amended and replaced
by the phrase "in its capacity as Issuer, shall be effective".
SECTION II.7. Amendment to Schedule I ("DISCLOSURE SCHEDULE"). Schedule I
("DISCLOSURE SCHEDULE") to the Existing Credit Agreement is hereby amended by
(i) adding at the end of the index page to such Schedule a reference to "ITEM
7.2.3(b)(ii) Liens on Foreign Assets", (ii) replacing ITEM 6.9 thereto with ITEM
6.9 attached hereto as Exhibit A, and (iii) adding ITEM 7.2.3(b)(ii), attached
hereto as Exhibit B, to Schedule I as ITEM 7.2.3(b)(ii) thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent to enter into
this First Amendment, the Borrower, the Parent and the Guarantors jointly and
severally represent and warrant unto the Administrative Agent, each Issuer and
each Lender as set forth in this Article III.
SECTION III.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).
SECTION III.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower, the Parent and the Guarantors of this
First Amendment 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).
SECTION III.3. Validity, etc. This First Amendment has been duly executed
and delivered by the Borrower, the Parent and the Guarantors and constitutes the
legal, valid and binding obligation of the Borrower, the Parent and the
Guarantors 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.
SECTION III.4. Compliance With Existing Credit Agreement. As of the
execution and delivery of this First Amendment and as of the date hereof, each
of the Borrower, the Parent, the Guarantors and each other Obligor, if any, is
in compliance with all the terms and conditions of the Existing Credit Agreement
and the other Loan Documents to be observed or performed by it, and no Default
has occurred and is continuing.
ARTICLE IV
MISCELLANEOUS PROVISIONS
SECTION IV.1. Ratification of and Limited Amendment to the Credit
Agreement. This First 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 First Amendment
preclude the Lenders from refusing to enter into any further or future
amendments. This First Amendment shall be deemed to be a "Loan Document" for all
purposes of the Credit Agreement.
SECTION IV.2. Consent and Acknowledgment of Guarantors. By their
signatures below, each of the Parent, VHC Inc. and Xxxxxx Pumps Inc., in their
capacity as a guarantor and as a grantor of collateral security under a Loan
Document, hereby acknowledges, consents and agrees to this First Amendment and
hereby ratifies and confirms its obligations as a guarantor under each Loan
Document executed and delivered by it in all respects.
SECTION IV.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 First Amendment.
SECTION IV.4. Expenses. The Borrower and the Parent jointly and severally
agree to pay all out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
First Amendment.
SECTION IV.5. Headings; Counterparts. The various headings of this First
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First Amendment or any provisions hereof. This First
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.
SECTION IV.6. Governing Law; Entire Agreement. THIS FIRST AMENDMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. This First 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. This First Amendment
and the provisions contained herein may be modified only by an instrument in
writing executed by the Borrower, the Administrative Agent and the Required
Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
IMO INDUSTRIES INC.
as Borrower
By: Xxxx X. Xxxxx
Title: Vice President
II ACQUISITION CORP.
as a Guarantor
By: Xxxx X. Xxxxx
Title: Vice President
VHC INC.
as a Guarantor
By: Xxxx X. Xxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
as Administrative Agent
By: Xxxxx X. Xxxxxxx
Title: Senior Relationship Manager
LENDERS:
THE BANK OF NOVA SCOTIA
By: Xxxxx X. Xxxxxxx
Title: Senior Relationship Manager
NATIONSBANK, NA
By: Xxxxxxxxxxxx X. Swamidasan
Title: Vice President
