SECOND SUPPLEMENTAL INDENTURE

            SECOND  SUPPLEMENTAL  INDENTURE  dated as of August 26, 1997 between
IMO INDUSTRIES INC., a Delaware  corporation  (the "Company"),  and IBJ SCHRODER
BANK & TRUST COMPANY, as trustee (the "Trustee").

                          W I T N E S S E T H :

            WHEREAS, the Company and the Trustee have heretofore entered into an
Indenture  dated  as  of  April  15,  1996  (as  previously  supplemented,   the
"Indenture"); and

            WHEREAS,  the Company  desires and has requested the Trustee to join
with it in the execution and delivery of this Supplemental Indenture; and

            WHEREAS,  Section 9.1(1) of the Indenture  provides that the Company
and the Trustee may enter into indentures  supplemental to the Indenture for the
purpose of curing any ambiguity, omission, defect or inconsistency,  without the
consent of any Holder; and

            WHEREAS,  the  Company  has  represented  to the  Trustee  that  all
conditions  precedent  to  the  execution  and  delivery  of  this  Supplemental
Indenture have been satisfied;

            NOW, THEREFORE, the parties hereto agree as follows:

            SECTION 1. Unless otherwise  specifically  defined herein, each term
used herein which is defined in the Indenture shall have the meaning assigned to
such term in the Indenture.

            SECTION 2. Effective as of the date hereof,  the following  sentence
is hereby added at the end of the definition of Permitted  Liens in Section 1.01
of the Indenture:


      "For  the  avoidance  of  uncertainty,  Permitted  Liens  may  secure  all
      obligations  in  respect  of the  Indebtedness  permitted  to be  secured,
      including  without  limitation  accrued  and  unpaid  interest  (including
      Post-Petition  Interest) and any costs,  expenses,  fees,  reimbursements,
      indemnities  and other  obligations  of the Company or any  Subsidiary  in
      respect of or in connection with such Indebtedness."

            SECTION  3. The  Trustee  accepts  the  amendment  of the  Indenture
affected by this Supplemental  Indenture and agrees to execute the trust created
by the Indenture,  as hereby amended, but only upon the terms and conditions set
forth in the Indenture,  as hereby  amended,  including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, which
terms and  provisions  shall in like manner define and limit its  liabilities in
the performance of the trust created by the Indenture,  as hereby  amended,  and
the Trustee makes no  representations  as to the validity or sufficiency of this
Supplemental Indenture and shall incur no liability or responsibility in respect
of the validity thereof.

            SECTION 4. The Company  agrees to indemnify the Trustee and hold the
Trustee  harmless  from and against any and all  liabilities,  losses,  damages,
claims or actions to which the Trustee  may become  subject as a result of or in
connection with the execution of this  Supplemental  Indenture and the amendment
of the Indenture  pursuant hereto,  and will reimburse the Trustee for any legal
or  other  expenses  reasonably  incurred  by the  Trustee  in  connection  with
investigating or defending any such liability, loss, damage, claim or action.

            SECTION 5. Except as expressly  amended hereby,  the Indenture is in
all  respects  ratified  and  confirmed,  and  all  the  terms,  conditions  and
provisions thereof shall remain in full force and effect.

            SECTION  6. This  Supplemental  Indenture  shall  form a part of the
Indenture  for all  purposes,  and every  holder  of  Securities  heretofore  or
hereafter authenticated and delivered shall be bound hereby.

            SECTION 7. This  Supplemental  Indenture  shall be  governed  by and
construed in accordance with the law of the State of New York.

            IN WITNESS  WHEREOF,  the  parties  hereto  have  caused this SECOND
SUPPLEMENTAL INDENTURE to be duly executed as of the date hereof.

                                    IMO INDUSTRIES INC.


                                       By:/s/ T.J. Bird
                                       Name:  T.J. Bird
                                       Title:  Executive Vice President


                                    IBJ SCHRODER BANK & TRUST
                                    COMPANY, as Trustee


                                       By:/s/ Barbara McCluskey
                                       Name:  Barbara McCluskey
                                       Title:  Vice President





                           IMO INDUSTRIES INC.


               11 3/4% Senior Subordinated Notes Due 2006



                         SUPPLEMENTAL INDENTURE

                       Dated as of August 26, 1997

                                   to

                                INDENTURE

                       Dated as of April 15, 1996


                   IBJ SCHRODER BANK & TRUST C0MPANY,
                               as Trustee