Waiver, Consent & Amend. #1 To Credit Agreement

WAIVER, CONSENT AND AMENDMENT NO. 1


Dated as of February 13, 1997


WAIVER, CONSENT AND AMENDMENT NO. 1 (this "Amendment") among A I M Management Group Inc., a Delaware corporation (the "Borrower"), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the "Lenders"), Citibank, N.A., as administrative agent and lead managing agent (the "Lead Managing Agent") for the Lenders, and the co-agents listed on the signature pages of the Credit Agreement referred to below, as co-agents (the "Co-Agents" and, together with the Lead Managing Agent, the "Agents").


PRELIMINARY STATEMENTS:


(1) The Borrower, the Lenders and the Agents have entered into a Credit Agreement dated as of June 26, 1996 (the "Credit Agreement"). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.


(2) The Borrower has entered into an Agreement and Plan of Merger dated as of November 4, 1996 (as amended, supplemented or otherwise modified from time to time, the "Merger Agreement") with INVESCO PLC, a company organized under the laws of England ("INVESCO"), and INVESCO Group Services, Inc., pursuant to which the Borrower will be merged (the "Merger") with a newly-organized subsidiary ("Newco") of INVESCO. Newco will be the surviving corporation of the Merger. Immediately following the Merger, the assets and liabilities of the Borrower (including, without limitation, the rights and obligations of the Borrower under the Credit Agreement) will be contributed (the "Transfer") to a direct, newly-organized subsidiary of Newco to be known as AIM Management Group Acquisition Corp. (which after consummation of the Transfer will change its name to A I M Management Group Inc.)("New AIM"). The rights and obligations of the Borrower under the Credit Agreement will be transferred pursuant to a contribution and assumption agreement (the "Contribution Agreement"). The Merger and the Transfer are collectively referred to as the "Transaction". The Borrower hereby requests that the Required Lenders consent to the consummation of the Transaction and grant the waivers and amendments under the Loan Documents needed to facilitate the Transaction and as otherwise set forth below.


(3) The Required Lenders are, on the terms and conditions stated below, willing to grant the requests of the Borrower and the Borrower and the Required Lenders have agreed to amend the Credit Agreement as hereinafter set forth.


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NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:


SECTION 1. Waiver and Consent. Subject to the satisfaction of the conditions precedent set forth in Section 4(a), the Required Lenders hereby consent to the consummation of the Transaction and in furtherance thereof, agree to the following:


(a) Section 3.02(a) of the Credit Agreement, which provides for a
mandatory prepayment as a result of certain Asset Sales and a subsequent
permanent reduction of the Total Tranche A Commitment pursuant to Section
2.04(b)(i) in an amount equal to any such prepayment, is waived to the
extent the Transfer, as contemplated by the Transaction, constitutes an
Asset Sale.


(b) Section 7.04 of the Credit Agreement, pursuant to which the
Borrower covenanted not to merge with any Person, is waived to the extent
required to permit the Merger and to otherwise consummate the Transaction.


(c) Section 7.05(iv) of the Credit Agreement, pursuant to which the
Borrower covenanted not to repurchase, redeem, defease or retire or
otherwise acquire for value, prior to any scheduled repayment, sinking fund
payment or maturity, any Pari Passu Debt, is waived to the extent required
to permit the Borrower to tender for and redeem any Senior Notes tendered
pursuant to the change of control tender provisions of the Senior Notes in
connection with the Merger, without such payments being included in
Restricted Payments.


(d) Section 7.06 of the Credit Agreement, pursuant to which the
Borrower covenanted not to sell or otherwise dispose of all or
substantially all of its assets, is waived to the extent required to permit
the Transfer and to otherwise consummate the Transaction.


(e) Section 8.01(o) of the Credit Agreement, pursuant to which an
Event of Default occurs if (i) during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new directors whose election
to such Board or whose nomination for election by the shareholders of the
Borrower was approved by a vote of at least 66-2/3% of the directors then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of such Board of Directors
then in office, or (ii) any "person" or "group" other than any member of a
Key Shareholder Group shall at any time Beneficially Own a percentage of
the outstanding shares of Voting Stock of the Borrower equal to or greater
than 50% of the aggregate percentage of the outstanding shares of the
Voting Stock of the Borrower Beneficially 3


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Owned by all Key Shareholder Groups, is waived to the extent required to
permit the Merger and to otherwise consummate the Transaction.


(f) Section 8.01(p) of the Credit Agreement, pursuant to which an
Event of Default occurs if at any time the Key Shareholder Groups or any
one or more of the members thereof shall cease to Beneficially Own in the
aggregate at least 20% of the outstanding Voting Stock of the Borrower, is
waived to the extent required to permit the Merger and to otherwise
consummate the Transaction.


(g) Section 8.01(q) of the Credit Agreement, pursuant to which an
Event of Default occurs if any change in Beneficial Ownership of the
outstanding shares of Voting Stock of the Borrower shall occur
necessitating any consent of the shareholders or directors of any
Investment Company and such consent is not obtained in a timely manner, or
with respect to the Management Contracts, the consents relating to 90%
thereof are not obtained with the statutory period necessary to prevent the
termination thereof, is waived to the extent required to permit the Merger
and to otherwise consummate the Transaction.


SECTION 2. Amendments to Credit Agreement. The Credit Agreement is, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 4(a), hereby amended as follows:


(a) Section 1.01 and the definition of "Net Income" is amended by
deleting the paragraph in its entirety and adding the following:


"Net Income" means, with respect to any period, the net income of
the Borrower and its Subsidiaries for such period, all determined
in accordance with GAAP on a Consolidated basis, provided, that
there shall be excluded (a) all extraordinary gains or losses
(less all fees and expenses relating thereto), (b) any gain or
loss, net of taxes, realized upon the termination of any employee
pension benefit plan, (c) the income of any Person accrued prior
to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower and its Subsidiaries, (d) the
income of any Person (other than a Subsidiary) in which the
Borrower and its Subsidiaries has an ownership interest, except to
the extent that any such income has been actually received by the
Borrower and its Subsidiaries in the form of dividends or similar
distributions, (e) gains or losses (less all fees and expenses
relating thereto) in respect of dispositions of assets other than
in the ordinary course of business and (f) the net income of any
Subsidiary to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the
terms of its charter 4
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or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulations applicable to that Subsidiary or
its shareholders.


(b) Section 1.01 and the definition of "Permitted Investments" is
amended by deleting the phrase that begins with", provided" in subsection
(i) and ends with "at any time".


(c) Section 7.05(a)(2)(A) is amended by deleting subsection (A), by
changing December 31, 1995 to November 3, 1993 in subsection (B) and by
changing each reference in subsections (C), (D), (E) and (F) from "the
Third Restatement Date" to "November 3, 1993".


(e) Section 7.20 is amended by deleting "(i)" in the first line, by
substituting "Section 7.20. " for " clause 7.20(i); "and by deleting
clause (ii) in its entirety.


(f) Section 8.01(f) is amended by substituting "$5,000,000" for
$1,000,000".


(g) Section 8.01(h) is amended by substituting "$5,000,000" for
$1,000,000".


SECTION 3. Further Amendments Upon Consummation of Transaction. When, and only when, on or before March 3, 1997 the Transaction is consummated, and subject to the satisfaction of the conditions precedent set forth in Section 4(b), the Credit Agreement is hereby further amended as follows:


(a) The recital of the parties is amended by substituting "A I M
Management Acquisition Corp." for "A I M Management Group Inc.".


(b) Section 7.03 is amended by deleting "and" at the end of
subsection (j), deleting the period at the end of subsection (k) and
substituting therefor "; and" and by adding to the end of Section 7.03 a
new subsection (l), to read as follows:


(1) the Borrower and AIM Advisors may become and remain liable
with respect to guaranties of the indebtedness of INVESCO PLC
under that certain Credit Agreement dated as of February 13, 1997
(the "INVESCO Credit Agreement") among INVESCO PLC, as borrower,
Citibank and NationsBank, N.A. ("NationsBank") as agents, the
lenders and co-agents parties thereto and NationsBank, as funding
agent; provided, however, that 5
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any such guaranties by AIM Advisors shall contain no terms more
favorable to the beneficiaries thereof than those set forth in the
AIM Guaranties.


(c) Section 8.01(o) is amended by deleting the paragraph and by
adding a new subsection (o) to read as follows:


(o) (i) Any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of
Voting Stock of INVESCO PLC or the Borrower, as the case may
be, (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all
Voting Stock of INVESCO PLC or the Borrower, as the case may
be; or (ii) during any period of up to 24 consecutive months,
commencing after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of
INVESCO PLC or the Borrower, as the case may be, shall cease
for any reason to constitute a majority of the board of
directors of INVESCO PLC or the Borrower, as the case may be
(except, in the cases of clauses (i) and (ii), in connection
with the Merger or pursuant to the Merger Agreement and the
Voting Agreement dated as of November 4, 1996 among INVESCO
PLC and the other parties named therein);

(d) Section 8.01(p) is amended by deleting the paragraph in
its entirety.


(e) Section 8.01(q) is amended by deleting the paragraph in
its entirety.


(f) Section 8.01(r) is amended by substituting "(p)" for
"(r)", deleting the paragraph in its entirety and adding the following:


Any ERISA Event shall have occurred with respect to a
Plan, or any Loan Party or any ERISA Affiliate shall h ...