FIRST AMENDMENT TO
                        CREDIT AGREEMENT

          First Amendment (this "Amendment") dated as of
February 19, 1997 among Imo Industries Inc. (with its successors
and permitted assigns, the "Borrower") and the undersigned
Lenders (as defined below), to the Credit Agreement dated as of
April 29, 1996 (as such agreement may be amended, supplemented or
modified from time to time, the "Credit Agreement") among the
Borrower, Varo Inc., Warren Pumps Inc., the institutions from
time to time party thereto as lenders (the "Lenders"), the
institutions from time to time party thereto as issuing banks
(the "Issuing Banks"), and Citicorp USA, Inc., in its capacity as
agent and collateral agent for the Lenders and the Issuing Banks
(in such capacity, the "Agent").

                      W I T N E S S E T H:

          WHEREAS, the Borrower has requested the undersigned
Lenders, (i) to defer payment of installments on the A Term Loans
and the B Term Loans due during the period from the effective
date of this Amendment through December 31, 1997, (ii) to permit
certain proposed asset sales, (iii) to amend the financial
covenants contained in Sections 10.01 through 10.06 of the Credit
Agreement and (iv) to make certain other amendments to the Credit
Agreement, in each case substantially along the lines set forth
in that certain letter dated January 29, 1997 from the Borrower
to the Agent, a copy of which is attached hereto as Exhibit A;
and

          WHEREAS, the parties hereto desire to amend the Credit
Agreement as hereinafter set forth;

          NOW, THEREFORE, in consideration of the above premises,
the Borrower and the undersigned Lenders agree as follows:

          SECTION 1.  Defined Terms.  Capitalized terms used
herein without definition shall have the meanings ascribed to
such terms in the Credit Agreement.

          SECTION 2.  Amendment of Section 1.01.

          (a)  Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by inserting
the following definition after the definition of "Alternative
Currency" and before the definition of "Applicable Base Rate
Margin":

          "Annualized Basis" means with respect to the
     calculation of EBITDA for the fiscal period ending on the
     last day of each of the first three fiscal quarters of 1997,
     (i) with respect to such calculation for the first such
     fiscal quarter, four (4) times EBITDA for such quarter, (ii)
     with respect to such calculation for the second such fiscal
     quarter, two (2) times EBITDA for the six month period
     ending on the last day of such quarter and (iii) with
     respect to such calculation for the third such fiscal
     quarter, one and one-third (1 1/3) times EBITDA for the nine
     month period ending on the last day of such quarter.

          (b)  The definition of "Consolidated Net Worth"
contained in Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by deleting
the words "Discontinued Operations or" in clause (x) thereof.

          (c)  Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by deleting
the definition of "Discontinued Operations" in its entirety.

          (d)  The definition of "EBITDA" contained in Section
1.01 of the Credit Agreement is, effective as of the Amendment
Effective Date, hereby amended by deleting the words "the
Discontinued Operations and" in clauses (i)(E) and (ii)(A)
thereof.

          (e)  The definition of "Excess Cash Flow" contained in
Section 1.01 of the Credit Agreement is, effective as of the
Amendment Effective Date, hereby amended by replacing the words
"Discontinued Operations" contained in the parenthetical in
clause (x) thereof with the words "Proposed Dispositions".

          (f)  The definition of "Fixed Charge Coverage Ratio"
contained in Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by (i)
deleting all the parentheticals in such definition which contain
the words "Discontinued Operations" and (ii) deleting the phrase
", minus any net increase in Working Capital for such period,
plus any net decrease in Working Capital for such period" from
clause (i) thereof.

          (g)  The definition of "Interest Coverage Ratio"
contained in Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by deleting
all the parentheticals in such definition which contain the words
"Discontinued Operations".

          (h)  Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by inserting
the following definition after the definition of "Maximum
Subsidiary Investment Amount" and before the definition of
"Multiemployer Plan":

          "Morse Receivable" means the unpaid receivable
     resulting from the unpaid portion (approximately 4,500,000
     Deutschmarks) of a 1992 dividend declared by the Borrower's
     German Subsidiary, Teleflex GmbH (now merged with and into
     Imo Industries GmbH), to the Borrower's English Subsidiary,
     Morse Controls Ltd.

          (i)   Section 1.01 of the Credit Agreement is,
effective as of the Amendment Effective Date, hereby amended by
inserting the following sentence at the end of the definition of
"Net Cash Proceeds":

     For purposes of this definition, any cash proceeds received
     by the Borrower or Varo in connection with Varo's claim
     against the federal government under U.S. Government
     Contract No. F09603-86-C-2278 (which claim, on appeal from a
     decision of the Contracting Officer in respect of such
     contract, is, as of the date of the First Amendment to this
     Agreement, pending before the Armed Services Board of
     Contract Appeals (ASBCA Nos. 47945 and 47946)) shall
     constitute Net Cash Proceeds of the type described in clause
     (i) of this definition.

          (j)  Section 1.01 of the Credit Agreement is, effective
as of the Amendment Effective Date, hereby amended by inserting
the following definition after the definition of "Property" and
before the definition of "Pro Rata Share":

          "Proposed Dispositions" means the businesses and assets
     of the Borrower and the Restricted Subsidiaries identified
     on Schedule 1.01.14.

          SECTION 3.  Amendment of Section 2.01.

          (a)  Section 2.01(f)(i) of the Credit Agreement is,
effective as of the Amendment Effective Date (it being understood
and agreed that this amendment of Section 2.01(f)(i) shall be
effective as of the Amendment Effective Date only after the
receipt by the Agent of a copy of this Amendment, duly executed
by the Borrower and each of the Lenders), hereby amended in its
entirety as follows:

          (i)  A Term Loans.  The A Term Loans shall be repayable
     in seventeen (17) quarterly installments on the dates and in
     the amounts set forth below:

               Date                Installment Amount

          July 31, 1996            $1,250,000.00
          October 31, 1996         $1,250,000.00
          January 31, 1997         $1,250,000.00
          April 30, 1997           $0
          July 31, 1997            $0
          October 31, 1997         $0
          January 31, 1998         $1,517,857.14
          April 30, 1998           $1,517,857.14
          July 31, 1998            $1,517,857.14
          October 31, 1998         $1,517,857.14
          January 31, 1999         $1,517,857.14
          April 30, 1999           $1,517,857.14
          July 31, 1999            $1,517,857.14
          October 31, 1999         $1,517,857.14
          January 31, 2000         $1,517,857.14
          April 30, 2000           $1,517,857.14
          July 31, 2000            $1,517,857.14
          October 31, 2000         $1,517,857.14
          January 31, 2001         $1,517,857.14
          April 30, 2001           $1,517,857.18;

     provided, however, that, in any event, the seventeenth
     installment shall be in the amount of the then outstanding
     principal balance of the A Term Loans.

               (b)  Section 2.01(f)(ii) of the Credit Agreement
is, effective as of the Amendment Effective Date (it being
understood and agreed that this amendment of Section 2.01(f)(ii)
shall be effective as of the Amendment Effective Date only after
the receipt by the Agent of a copy of this Amendment, duly
executed by the Borrower and each of the Lenders), hereby amended
in its entirety as follows:

         (ii)  B Term Loans.  The B Term Loans shall be repayable
     in eleven (11) consecutive quarterly installments on the
     dates and in the amounts set forth below:

               Date                Installment Amount

          January 31, 1998         $2,585,227.27
          April 30, 1998           $2,585,227.27
          July 31, 1998            $2,585,227.27
          October 31, 1998         $2,585,227.27
          January 31, 1999         $2,585,227.27
          April 30, 1999           $2,585,227.27
          July 31, 1999            $2,585,227.27
          October 31, 1999         $2,585,227.27
          January 31, 2000         $2,585,227.27
          April 30, 2000           $2,585,227.27
          July 31, 2000            $2,269,369.63;

     provided, however, that, in any event, the eleventh
     installment shall be in the amount of the then outstanding
     principal balance of the B Term Loans.

          (c)  Section 2.01(f)(iii) of the Credit Agreement is,
effective as of the Amendment Effective Date, hereby amended in
its entirety as follows:

        (iii)  C Term Loans.  The C Term Loans shall be repayable
in twenty-eight (28) consecutive quarterly installments on the
dates and in the amounts set forth below:

               Date                Installment Amount

          July 31, 1996            $125,000
          October 31, 1996         $125,000
          January 31, 1997         $125,000
          April 30, 1997           $125,000
          July 31, 1997            $125,000
          October 31, 1997         $125,000
          January 31, 1998         $125,000
          April 30, 1998           $125,000
          July 31, 1998            $125,000
          October 31, 1998         $125,000
          January 31, 1999         $125,000
          April 30, 1999           $125,000
          July 31, 1999            $125,000
          October 31, 1999         $125,000
          January 31, 2000         $125,000
          April 30, 2000           $125,000
          July 31, 2000            $125,000
          October 31, 2000         $125,000
          January 31, 2001         $125,000
          April 30, 2001           $125,000
          July 31, 2001            $5,312,000
          October 31, 2001         $5,312,000
          January 31, 2002         $5,312,000
          April 30, 2002           $5,312,000
          July 31, 2002            $5,312,000
          October 31, 2002         $5,312,000
          January 31, 2003         $5,312,000
          April 30, 2003           $5,316,000;

     provided, however, that, in any event, the twenty-eighth
     installment shall be in the amount of the then outstanding
     principal balance of the C Term Loans.

          SECTION 4.  Amendment of Section 3.01.

          (a)  Section 3.01(b)(i) of the Credit Agreement is,
effective as of the Amendment Effective Date, hereby amended by
(i) deleting the first parenthetical in such Section and (ii)
replacing the proviso in the second sentence thereof in its
entirety as follows:

     provided, that after the aggregate principal amount of the
     Term Loans outstanding on the Amendment Effective Date (as
     defined in the First Amendment to Credit Agreement dated as
     of February 19, 1997) has been reduced by at least
     $50,000,000, at Borrower's option, exercised at any time by
     written notice to the Agent, Net Cash Proceeds shall not be
     applied to the remaining Term Loans but instead applied to
     any outstanding non-contingent Revolving Credit Obligations
     (without any permanent reduction in the Revolving Credit
     Commitments).

          (b)  Section 3.01(b)(iii) of the Credit Agreement is,
effective as of the Amendment Effective Date, hereby amended by
replacing the proviso in clause (B) of the first sentence thereof
in its entirety as follows:

     provided, however, that the mandatory prepayment referred to
     in this clause (B) shall be reduced to fifty percent (50%)
     of such Excess Cash Flow after the Borrower and its
     Restricted Subsidiaries have sold Roltra-Morse S.p.A. and
     have received Net Cash Proceeds of at least $50,000,000 from
     such sale and the sale of other Proposed Dispositions.

          SECTION 5.  Amendment of Section 6.01.  Section 6.01(c)
of the Credit Agreement is, effective as of the Amendment
Effective Date, hereby amended by deleting the parenthetical
"(other than the Discontinued Operations)" in the penultimate
sentence of such Section.

          SECTION 6.  Amendment of Section 9.01.  Section 9.01 of
the Credit Agreement is, effective as of the Amendment Effective
Date, hereby amended (x) by deleting the word "and" immediately
following clause (xiii) thereof, (y) replacing the period at the
end of clause (xiv) of such Section with a "; and", and (z)
inserting the following clause (xv) at the end of such section:

         (xv)  Indebtedness not in excess of a principal amount
     of $3,000,000 of the Borrower owing to Morse Controls Ltd.
     from the Morse Receivable and the assignment thereof to the
     Borrower.

          SECTION 7.  Amendment of Section 9.02.  Clause (viii)
of Section 9.02 of the Credit Agreement is, effective as of the
Amendment Effective Date, hereby amended to read in full as
follows:

       (viii)  the sale by the Borrower and/or its Subsidiaries,
     as applicable, in a single transaction or in a series of
     transactions, pursuant to documentation which shall be
     delivered to the Agent promptly upon its becoming available,
     of all or any part of the Proposed Dispositions; provided
     that (i) if Varo's electronic systems division is so sold,
     the Borrower shall have received Net Cash Proceeds of at
     least $9,000,000 in respect thereof, (ii) if Roltra-Morse
     S.p.A. is so sold, (x) the Borrower shall have received Net
     Cash Proceeds of at least $30,000,000 in respect thereof and
     (y) if such sale is consummated at any time on or prior to
     September 30, 1998, the Requisite Lenders and the Borrower
     shall have amended the Financial Covenants contained in
     Sections 10.02, 10.03, 10.05 and 10.06 for the fiscal
     periods ending on or after the date of consummation of such
     sale through September 30, 1998 in accordance with the terms
     of Section 14.07, solely for the purpose of taking into
     account such sale, and (iii) no such sale of Proposed
     Dispositions (other than Varo's electronic systems division
     and Roltra-Morse S.p.A.) shall be made for less than Fair
     Market Value; and

          SECTION 8.  Amendment of Section 9.04.  Clause (viii)
of Section 9.04 of the Credit Agreement is, effective as of the
Amendment Effective Date, hereby amended to read in full as
follows:

       (viii)  Investments by the Borrower and/or any of the
     Restricted Subsidiaries in one or more Unrestricted
     Subsidiaries or Permitted Joint Ventures which are not
     organized and existing under the laws of the United States
     of America, any State thereof, the District of Columbia or
     the United States Virgin Islands; provided that the
     aggregate book value of such Investments made after the
     Closing Date, determined with respect to each such
     Investment at the time such Investment is made, shall not
     exceed $5,000,000 (it being understood and agreed that such
     amount shall not include any Investments in Roltra-Morse
     S.p.A), or, after the aggregate outstanding principal amount
     of the Term Loans and Revolving Loans has been reduced to an
     amount equal to or less than $75,000,000, $10,000,000;
     provided further, that notwithstanding the foregoing
     proviso, (i) the Borrower and the Restricted Subsidiaries
     are permitted to make cash Investments in Roltra-Morse
     S.p.A. of up to $10,000,000 and (ii) the Borrower shall be
     permitted to hold an Investment of Indebtedness or equity in
     Imo Industries GmbH resulting from the assignment to the
     Borrower from Morse Controls Ltd. of the Morse Receivable,
     and the conversion of the Morse Receivable to equity;

          SECTION 9.  Amendment of Section 9.05.  Section
9.05(vi) of the Credit Agreement is, effective as of the
Amendment Effective Date, hereby amended to read in full as
follows:

         (vi)  Extensions, renewals or replacements of Permitted
     Existing Accommodation Obligations of the Borrower in
     respect of the obligations of any Unrestricted Subsidiary
     (provided the amount of such Accommodation Obligations is
     not increased as a result of any extension, renewal or
     replacement thereof) and other Accommodation Obligations of
     the Borrower in respect of obligations of any Unrestricted
     Subsidiary; provided that (x) the aggregate amount of such
     Accommodation Obligations (other than such extensions,
     renewals or replacements of Permitted Existing Accommodation
     Obligations) shall not exceed $11,000,000 at any time
     outstanding prior to the sale of Roltra-Morse S.p.A. (it
     being understood and agreed that $5,000,000 of such amount
     shall apply only in respect of obligations of Roltra-Morse
     S.p.A.) and (y) the aggregate amount of such Accommodation
     Obligations (including Permitted Existing Accommodation
     Obligations of the Borrower in respect of the obligations of
     any Unrestricted Subsidiary and any extensions, renewals or
     replacements of such Permitted Existing Accommodation
     Obligations) shall not exceed $10,000,000 at any time
     outstanding after such sale;

          SECTION 10.  Amendment of Article 10.

          (a)  Section 10.01 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.01.  Minimum Consolidated Net Worth.  The Consolidated
     Net Worth of the Borrower and its Subsidiaries at all times during
     any period set forth below shall not be less than the minimum amount
     set forth opposite such period:

          Period                                  Minimum Amount

     From December 31, 1996 to but
          excluding March 31, 1997                -$68,100,000
     From March 31, 1997 to but
          excluding June 30, 1997                 -$68,100,000
     From June 30, 1997 to but
          excluding September 30, 1997            -$68,100,000
     From September 30, 1997 to but
          excluding December 31, 1997             -$68,100,000
     From December 31, 1997 to but
          excluding March 31, 1998                -$68,100,000
     From March 31, 1998 to but
          excluding June 30, 1998                 -$68,100,000
     From June 30, 1998 to but
          excluding September 30, 1998            -$68,100,000
     From September 30, 1998 to but
          excluding December 31, 1998             -$68,100,000
     From December 31, 1998 to but
          excluding March 31, 1999                -$63,100,000
     From March 31, 1999 to but
          excluding June 30, 1999                 -$61,900,000
     From June 30, 1999 to but
          excluding September 30, 1999            -$60,600,000
     From September 30, 1999 to but
          excluding December 31, 1999             -$59,400,000
     From December 31, 1999 to but
          excluding March 31, 2000                -$58,100,000
     From March 31, 2000 to but
          excluding June 30, 2000                 -$55,600,000
     From June 30, 2000 to but
          excluding September 30, 2000            -$53,100,000
     From September 30, 2000 to but
          excluding December 31, 2000             -$50,600,000
     From December 31, 2000 to but
          excluding March 31, 2001                -$48,100,000
     From March 31, 2001 to but
          excluding June 30, 2001                 -$45,600,000
     From June 30, 2001 to but
          excluding September 30, 2001            -$43,100,000
     From September 30, 2001 to but
          excluding December 31, 2001             -$40,600,000
     From December 31, 2001 to but
          excluding March 31, 2002                -$38,100,000
     From March 31, 2002 to but
          excluding June 30, 2002                 -$33,100,000
     From June 30, 2002 to but
          excluding September 30, 2002            -$28,100,000
     From September 30, 2002 to but
          excluding December 31, 2002             -$23,100,000
     From December 31, 2002 to but
          excluding March 31, 2003                -$18,100,000
     From March 31, 2003 to but
          excluding June 30, 2003                 -$18,100,000

          (b)  Section 10.02 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.02.  Minimum Fixed Charge Coverage Ratio.  The
     Fixed Charge Coverage Ratio, as determined as of the last
     day of each fiscal quarter of the Borrower set forth below
     for the twelve month period ending on such date (or if the
     period from  January 1, 1997 to such date is less than
     twelve months, such shorter period), shall not be less than
     the minimum ratio set forth opposite such fiscal quarter:

          Fiscal Quarter                     Minimum Ratio

     Second fiscal quarter of 1997           0.25 to 1
     Third fiscal quarter of 1997            0.35 to 1
     Fourth fiscal quarter of 1997           0.50 to 1
     First fiscal quarter of 1998            0.70 to 1
     Second fiscal quarter of 1998           0.71 to 1
     Third fiscal quarter of 1998            0.73 to 1
     Fourth fiscal quarter of 1998           0.75 to 1
     First fiscal quarter of 1999            0.78 to 1
     Second fiscal quarter of 1999           0.80 to 1
     Third fiscal quarter of 1999            0.83 to 1
     Fourth fiscal quarter of 1999           0.85 to 1
     First fiscal quarter of 2000            0.91 to 1
     Second fiscal quarter of 2000           0.98 to 1
     Third fiscal quarter of 2000            1.04 to 1
     Fourth fiscal quarter of 2000           1.10 to 1
     First fiscal quarter of 2001            1.15 to 1
     Second fiscal quarter of 2001           1.20 to 1
     Third fiscal quarter of 2001            1.25 to 1
     Fourth fiscal quarter of 2001           1.30 to 1
     First fiscal quarter of 2002            1.35 to 1
     Second fiscal quarter of 2002           1.40 to 1
     Third fiscal quarter of 2002            1.45 to 1
     Fourth fiscal quarter of 2002           1.50 to 1
     First fiscal quarter of 2003            1.50 to 1
     Second fiscal quarter of 2003           1.50 to 1

          (c)  Section 10.03 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.03.  Minimum Interest Coverage Ratio.  The Interest
     Coverage Ratio as determined as of the last day of each
     fiscal quarter of the Borrower set forth below for the
     twelve month period ending on such date (or if the period
     from January 1, 1997 to such date is less than twelve
     months, such shorter period), shall not be less than the
     minimum ratio set forth opposite such fiscal quarter:

          Fiscal Quarter                     Minimum Ratio

     First fiscal quarter of 1997            1.00 to 1
     Second fiscal quarter of 1997           1.30 to 1
     Third fiscal quarter of 1997            1.40 to 1
     Fourth fiscal quarter of 1997           1.50 to 1
     First fiscal quarter of 1998            1.60 to 1
     Second fiscal quarter of 1998           1.60 to 1
     Third fiscal quarter of 1998            1.65 to 1
     Fourth fiscal quarter of 1998           1.75 to 1
     First fiscal quarter of 1999            1.76 to 1
     Second fiscal quarter of 1999           1.78 to 1
     Third fiscal quarter of 1999            1.79 to 1
     Fourth fiscal quarter of 1999           1.80 to 1
     First fiscal quarter of 2000            1.85 to 1
     Second fiscal quarter of 2000           1.90 to 1
     Third fiscal quarter of 2000            1.95 to 1
     Fourth fiscal quarter of 2000           2.00 to 1
     First fiscal quarter of 2001            2.03 to 1
     Second fiscal quarter of 2001           2.07 to 1
     Third fiscal quarter of 2001            2.10 to 1
     Fourth fiscal quarter of 2001           2.25 to 1
     First fiscal quarter of 2002            2.31 to 1
     Second fiscal quarter of 2002           2.38 to 1
     Third fiscal quarter of 2002            2.44 to 1
     Fourth fiscal quarter of 2002           2.50 to 1
     First fiscal quarter of 2003            2.50 to 1
     Second fiscal quarter of 2003           2.50 to 1

          (d)  Section 10.04 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.04.  Maximum Capital Expenditures.  Capital Expenditures
     made or incurred by the Borrower and the Borrower's Subsidiaries on a
     consolidated basis during each Fiscal Year set forth below shall not
     exceed in the aggregate the amount set forth opposite such Fiscal Year:

          Fiscal Year                        Maximum Amount

     Fiscal Year 1997                        $27,000,000
     Fiscal Year 1998                        $27,000,000
     Fiscal Year 1999                        $27,000,000
     Fiscal Year 2000                        $27,000,000
     Fiscal Year 2001                        $27,000,000
     Fiscal Year 2002                        $27,000,000
     Fiscal Year 2003                        $27,000,000

          (e)  Section 10.05 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.05.  Maximum Permitted Senior Debt Ratio.  The ratio of
     (i) Permitted Senior Debt of the Borrower and its Subsidiaries on a
     consolidated basis on the last day of such period to (ii) EBITDA of
     the Borrower and its Subsidiaries on a consolidated basis for such
     period (or if the period from January 1, 1997 to such date is less
     than twelve months, such amount shall be calculated on an Annualized
     Basis), as determined as of the last day of each fiscal quarter of the
     Borrower set forth below for the twelve month period ending on
     such date, shall not be greater than the maximum ratio set forth
     opposite such fiscal quarter:

          Fiscal Quarter                     Maximum Ratio

     First fiscal quarter of 1997            5.00 to 1
     Second fiscal quarter of 1997           3.60 to 1
     Third fiscal quarter of 1997            3.60 to 1
     Fourth fiscal quarter of 1997           2.90 to 1
     First fiscal quarter of 1998            2.80 to 1
     Second fiscal quarter of 1998           2.70 to 1
     Third fiscal quarter of 1998            2.60 to 1
     Fourth fiscal quarter of 1998           2.00 to 1
     First fiscal quarter of 1999            1.94 to 1
     Second fiscal quarter of 1999           1.88 to 1
     Third fiscal quarter of 1999            1.81 to 1
     Fourth fiscal quarter of 1999           1.75 to 1
     First fiscal quarter of 2000            1.69 to 1
     Second fiscal quarter of 2000           1.63 to 1
     Third fiscal quarter of 2000            1.56 to 1
     Fourth fiscal quarter of 2000           1.50 to 1
     First fiscal quarter of 2001            1.50 to 1
     Second fiscal quarter of 2001           1.50 to 1
     Third fiscal quarter of 2001            1.50 to 1
     Fourth fiscal quarter of 2001           1.50 to 1
     First fiscal quarter of 2002            1.50 to 1
     Second fiscal quarter of 2002           1.50 to 1
     Third fiscal quarter of 2002            1.50 to 1
     Fourth fiscal quarter of 2002           1.50 to 1
     First fiscal quarter of 2003            1.50 to 1
     Second fiscal quarter of 2003           1.50 to 1

          (f)  Section 10.06 of the Credit Agreement is,
     effective as of the Amendment Effective Date, hereby amended to
     read in full as follows:

               10.06.  Maximum Permitted Total Debt Ratio.  The ratio of
     (i) Permitted Total Debt of the Borrower and its Subsidiaries on a
     consolidated basis for such period to (ii) EBITDA of the Borrower and
     its Subsidiaries on a consolidated basis for such period (or if the
     period from January 1, 1997 to such date is less than twelve months,
     such amount shall be calculated on an Annualized Basis), as determined
     as of the last day of each fiscal quarter of the Borrower set forth
     below for the twelve month period ending on such date, shall not
     be greater than the maximum ratio set forth opposite such fiscal
     quarter:

          Fiscal Quarter                     Maximum Ratio

     First fiscal quarter of 1997            9.00 to 1
     Second fiscal quarter of 1997           7.20 to 1
     Third fiscal quarter of 1997            7.10 to 1
     Fourth fiscal quarter of 1997           6.20 to 1
     First fiscal quarter of 1998            5.70 to 1
     Second fiscal quarter of 1998           5.50 to 1
     Third fiscal quarter of 1998            5.50 to 1
     Fourth fiscal quarter of 1998           5.00 to 1
     First fiscal quarter of 1999            5.00 to 1
     Second fiscal quarter of 1999           5.00 to 1
     Third fiscal quarter of 1999            5.00 to 1
     Fourth fiscal quarter of 1999           5.00 to 1
     First fiscal quarter of 2000            4.88 to 1
     Second fiscal quarter of 2000           4.75 to 1
     Third fiscal quarter of 2000            4.63 to 1
     Fourth fiscal quarter of 2000           4.50 to 1
     First fiscal quarter of 2001            4.38 to 1
     Second fiscal quarter of 2001           4.25 to 1
     Third fiscal quarter of 2001            4.13 to 1
     Fourth fiscal quarter of 2001           4.00 to 1
     First fiscal quarter of 2002            3.88 to 1
     Second fiscal quarter of 2002           3.75 to 1
     Third fiscal quarter of 2002            3.63 to 1
     Fourth fiscal quarter of 2002           3.50 to 1
     First fiscal quarter of 2003            3.50 to 1
     Second fiscal quarter of 2003           3.50 to 1

          SECTION 11.  Waiver.  To the extent that any Event of
Default may have arisen solely from the Borrower's failure to
comply with the covenants contained in Sections 10.01 through
10.06 of the Credit Agreement for the period beginning as of
September 30, 1996 through the Amendment Effective Date, such
Event of Default is, effective as of the Amendment Effective
Date, hereby waived by the undersigned Lenders.

          SECTION 12.  Conditions Precedent to the Effectiveness
of this Amendment.  This Amendment shall become effective as of
the date hereof on the date (the "Amendment Effective Date") when
the following conditions precedent have been satisfied (unless
waived by the undersigned Lenders):

          12.01  The Agent shall have received on or before the
Amendment Effective Date (i) a copy of this Amendment duly
executed by the Borrower and each of the Requisite Lenders except
as provided in Section 3 hereof, (ii) a favorable opinion of
Weil, Gotshal & Manges LLP, counsel to the Borrower and the
Guarantors, dated the Amendment Effective Date and addressed to
the Agent, the Lenders and the Issuing Banks, with respect to
such matters relating to this Amendment as the Agent may
reasonably request, and (iii) a favorable opinion of Thomas J.
Bird, general counsel of the Borrower and the Guarantors, dated
the Amendment Effective Date and addressed to the Agent, the
Lenders and the Issuing Banks, with respect to such matters
relating to this Amendment as the Agent may reasonably request;
without limiting the foregoing, the Borrower and the Guarantors
hereby direct their counsel, Weil, Gotshal & Manges LLP, and
their general counsel to deliver to the Agent, the Lenders, the
Issuing Banks and Sidley & Austin, such opinions.

          12.02  Each of the representations and warranties of
the Borrower and the Guarantors contained in the Credit Agreement
and in the other Loan Documents (after giving effect to this
Amendment) shall be true and correct on and as of the Amendment
Effective Date, except to the extent that any such representation
or warranty expressly relates to a prior date, in which case,
such representation and warranty shall be true and correct as of
such earlier date.

          12.03  All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with
the transactions contemplated by this Amendment, shall be
satisfactory in all respects in form and substance to the Agent.

          12.04  No Default or Event of Default (other than any
Default or Event of Default relating to any matter waived
pursuant to Section 11 of this Amendment) shall have occurred and
be continuing on the Amendment Effective Date.

Notwithstanding the foregoing, (i) if all the Lenders have not
executed this Amendment by February 28, 1997 (or such later date
as shall be agreed to by the Agent and the Borrower) (the
"Amendment Cut-off Date"), the amendments contained in Section 3
of this Amendment shall be deleted in their entirety and be of no
further force and effect and (ii) if the Amendment Effective Date
has not occurred by the Amendment Cut-off Date or the Borrower
has not paid to the Lenders and the Agent the fees payable to the
Lenders pursuant to Section 15.02 hereof or any other fees
payable to the Agent in connection with this Amendment when such
fees become due and payable, then this Amendment shall cease to
be of any further force and effect.

          SECTION 13.  Representations and Warranties.  The
Borrower hereby represents and warrants to the Lenders, the
Issuing Banks and the Agent that (a) as of the date hereof (and
except as waived pursuant to Section 11 of this Amendment) no
Default or Event of Default under the Credit Agreement shall have
occurred and be continuing, (b) all of the representations and
warranties of the Borrower and the Guarantors contained in the
Credit Agreement (other than any representations and warranties
relating to the matters referred to in Section 11 hereof) and in
any other Loan Document continue to be true and correct as of the
date hereof, as though made on and as of such date, except to the
extent that such representations or warranties expressly relate
to prior dates, in which case, such representations and
warranties shall be true and correct as of such earlier dates.

          SECTION 14.  Reference to and Effect on the Loan
Documents.

          14.01  Upon the effectiveness of this Amendment, on and
after the date hereof, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of like import,
and each reference in the other Loan Documents to the Credit
Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.

          14.02  Except as specifically amended above, all of the
terms of the Credit Agreement and all other Loan Documents shall
remain unchanged and in full force and effect

          14.03  The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender,
any Issuing Bank or the Agent, nor constitute a waiver of any
provision of the Credit Agreement or any of the Loan Documents.

          14.04  Notwithstanding anything to the contrary in this
Section 14, upon the effectiveness of this Amendment, the
provision in the Consent and Waiver of the Requisite Lenders
dated December 18, 1996 permitting the Borrower and the
Restricted Subsidiaries to make the Additional Roltra Investment
(as defined in such Consent and Waiver) shall have no further
force or effect, it being understood and agreed that such
Investment shall constitute a portion of the $10,000,000 of
Investments permitted to be made in Roltra-Morse S.p.A. pursuant
to Section 9.04(viii) of the Credit Agreement.

          SECTION 15.  Fees, Costs and Expenses.

          15.01     The Borrower agrees to pay on demand in
accordance with the terms of Section 14.02 of the Credit
Agreement all costs and expenses in connection with the
preparation, reproduction, execution and delivery of this
Amendment, including the reasonable fees and out-of-pocket
expenses of Sidley & Austin, counsel for the Agent.

          15.02     The Borrower shall pay to the Agent for the
account of each Lender, in accordance with such Lender's Pro Rata
Share, an amendment fee in an amount equal to 0.25% of the sum of
such Lender's Revolving Credit Commitment, if any, and
outstanding Term Loans, which fee shall be payable on the earlier
to occur of (i) the Amendment Effective Date (if all the Lenders
have executed this Amendment on such date) and (ii) the Amendment
Cut-off Date; provided, however, in the event Section 3 of this
Amendment has not become effective by the Amendment Cut-off Date,
the Borrower shall be required to pay to the Agent solely for the
account of each Lender that has executed this Amendment an
amendment fee in an amount equal to 0.125% of the sum of such
Lender's Revolving Credit Commitment, if any, and outstanding
Term Loans.

          SECTION 16.  Execution in Counterparts.  This Amendment
may be executed and delivered in any number of counterparts and
by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original
and all of which taken together shall constitute one and the same
original agreement.

          SECTION 17.  Governing Law.  THIS AMENDMENT SHALL BE
INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF
NEW YORK.


IN WITNESS WHEREOF, this Amendment has been duly executed on the
date set forth above.


                              IMO INDUSTRIES INC.


                              By: /s/R.A. Derr II
                                 Name:R.A. Derr II
                                 Title:Vice President & Treasurer

                              CITICORP USA, INC., as Agent and Lender


                              By: /s/Timothy L. Freeman
                                 Name:Timothy L. Freeman
                                 Title:Attorney-in-Fact

                              SANWA BUSINESS CREDIT CORPORATION


                              By: /s/Peter L. Skavla
                                 Name:Peter L. Skavla
                                 Title:Vice President

                              BHF-BANK AKTIENGESELLSCHAFT


                              By:
                                 Name:
                                 Title:

                              By:
                                 Name:
                                 Title:

                              LEHMAN COMMERCIAL PAPER INC.


                              By:
                                 Name:
                                 Title:

                              THE NIPPON CREDIT BANK LTD.,
                                   NEW YORK BRANCH


                              By: /s/Clifford Abramsky
                                 Name:Clifford Abramsky
                                 Title:Senior Manager

                              COMPAGNIE FINANCIERE DE CIC ET DE
                                   L'UNION EUROPEENNE


                              By: /s/Sean Mounier
                                 Name:Sean Monier
                                 Title:First Vice President

                              By: /s/Marcus Edward
                                 Name:Marcus Edward
                                 Title:Vice President

                              FIRST SOURCE FINANCIAL LLP


                                   By:  FIRST SOURCE FINANCIAL,
                                        INC. as its Agent/Manager

                                   By: /s/Gary L. Francis
                                      Name:Gary L. Francis
                                      Title:Senior Vice President

                                   By:
                                      Name:
                                      Title:

                              THE FIRST NATIONAL BANK OF BOSTON


                              By:
                                 Name:
                                 Title:

                              TRANSAMERICA BUSINESS CREDIT
                                   CORPORATION


                              By: /s/Perry Vavoules
                                 Name:Perry Vavoules
                                 Title:Senior Vice President

                              MERRILL LYNCH SENIOR FLOATING RATE
                                   FUND


                              By: /s/Anthony R. Clemente
                                 Name:Anthony R. Clemente
                                 Title:Authorized Signatory

                              THE CHASE MANHATTAN BANK, N.A.


                              By: /s/Peter M. Fitzimmons
                                 Name:Peter M. Fitzimmons
                                 Title:Vice President

                              ING CAPITAL ADVISORS, INC., as
                                   Agent for Bank Syndication
                                   Account


                              By: /s/Kathleen A. Lenarcic
                                 Name:Kathleen A. Lenarcic
                                 Title:Vice President & Portfolio Mgr.

                              PPM AMERICA, INC.


                              By:  PPM AMERICA, INC.,
                                   as attorney-in-fact, on behalf of
                                   Jackson National Life
                                   Insurance Company


                                   By: /s/Michael DiRe
                                   Name:Michael DiRe
                                   Title:Vice President/Head
                                         High Yield Bank Loans


                              SENIOR DEBT PORTFOLIO


                              By:  BOSTON MANAGEMENT AND
                                   RESEARCH, AS INVESTMENT
                                   ADVISOR

                                       By: /s/Payson F. Swaffield
                                          Name: Payson F. Swaffield
                                          Title:Vice President


                               MEDICAL LIABILITY MUTUAL INSURANCE CO.


                               By: Chancellor LGT Senior Secured
                                   Management, Inc. as Investment
                                   Manager

                               By: /s/Stephen M. Alfieri
                                  Name:Stephen M. Alfieri
                                  Title:Managing Director


                               KEYPORT LIFE INSURANCE CAPITAL COMPANY


                               By: Chancellor LGT Senior Secured
                                   Management, Inc. as Investment
                                   Manager

                               By: /s/Stephen M. Alfieri
                                  Name:Stephen M. Alfieri
                                  Title:Managing Directo


                               SOUTHERN PACIFIC THRIFT & LOAN
                                    ASSOCIATION

                               By:
                                  Name:
                                  Title:


                               ML CBO IV (CAYMAN) LTD.


                                    By:  PROTECTIVE ASSET
                                         MANAGEMENT, L.L.C, as
                                         Collateral Manager

                                    By: /s/ James Dondero 
                                       Name:James Dondero CPA,CFA
                                       Title:President


Acknowledged and agreed
to:

VARO INC.


By: /s/R.A. Derr II
   Name:R.A. Derr II
   Title:Vice President & Treasurer

WARREN PUMPS INC.


By: /s/R.A.Derr II
   Name:R.A. Derr II
   Title:Vice President, Treasurer
          & Chief Financial Officer