<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 1, 1998
TOKHEIM CORPORATION
-------------------------------------
(Exact Name of Registrant as Specified in Charter)
Indiana 1-6018 35-0712500
------- ------ ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10501 Corporate Drive, Fort Wayne, IN 46845
- ------------------------------------- -----
(Address of Principal Executive Office) (Zip Code)
(219)-470-4600
--------------------------------------------------
Registrant's telephone number, including area code
N/A
--------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OF ASSETS
On September 30, 1998, pursuant to a Master Agreement for Purchase and
Sale of Shares, Assets and Liabilities, dated as of June 19, 1998, between
Tokheim Corporation ("Tokheim") and Schlumberger Limited ("Schlumberger"), as
amended by Amendment No. 1 thereto dated as of September 30, 1998 (the "Purchase
Agreement"), Tokheim completed, subject to certain foreign legal requirements,
the acquisition (the "Acquisition") of the fuel dispenser systems and service
business (the "RPS Division") of Schlumberger for a price equal to $330.0
million in cash, notes and warrants, subject to certain post-closing
adjustments. Unless otherwise indicated herein, the "Company" refers to Tokheim
and its subsidiaries following the Acquisition.
Pursuant to the Purchase Agreement, Schlumberger has agreed to retain
its manufacturing facility in Abbeville, France and all liabilities associated
with it, including any costs related to closing the facility. Schlumberger and
Tokheim also entered into a services agreement, as provided by the Purchase
Agreement, pursuant to which Schlumberger will pay Tokheim a minimum fee of
$850,000 a year (regardless of use) for a period of five years.
Of the $330.0 million purchase price, $100.0 million was paid in cash
borrowed under the terms of the New Credit Agreement (see description below).
The $210.0 million note portion of the purchase price consisted of $40.0 million
in 10-year, 12% junior subordinated payment-in-kind notes (the "Junior
Subordinated Notes") and $170.0 million in 12% senior subordinated notes due 120
days after the closing date (the "Senior Subordinated Notes" and, together with
the Junior Subordinated Notes, the "Subordinated Notes"). $20.0 million of the
purchase price was paid with warrants (the "Warrants") to purchase up to a
maximum of 19.9% of the outstanding shares of Tokheim common stock. The actual
number of shares issued upon exercise will be based upon the $20.0 million
purchase price divided by the weighted average closing price of Tokheim common
stock over the 30 day periods prior to and after the closing date. The Warrants
are exercisable for a nominal exercise price for five years beginning 120 days
after the closing date.
Tokheim has the option, subject to bank approval, to redeem (in whole
or in part) the Subordinated Notes and the Warrants. Under the terms of the
Senior Subordinated Notes, to the extent Tokheim has not refinanced the Senior
Subordinated Notes within 120 days of the closing date, such notes convert into
an equal principal amount of eight-year notes with an interest rate starting at
12% and
2
<PAGE>
increasing by 0.5% every three months, to a maximum of 14.5%. Interest exceeding
12% will be payable in kind.
Simultaneously with the consummation of the Acquisition, Tokheim
entered into a new credit agreement (the "New Credit Agreement") with certain
banks that replaced its prior credit agreement. Proceeds under the New Credit
Agreement were used as working capital, to provide the cash used in the
Acquisition and to refinance substantially all of Tokheim's debt outstanding
prior to the closing date, including approximately $55.0 million in principal
amount of Tokheim's 11 1/2% Senior Subordinated Notes plus interest and
premiums thereon.
The New Credit Agreement provides for aggregate maximum borrowings by
the Company of up to $240.0 million principal amount at variable interest rates.
On the closing date, the Company borrowed approximately $180.8 million under the
New Credit Agreement for the purposes set forth above and to pay fees associated
with the Acquisition and the financing of the Acquisition.
Also simultaneously with the consummation of the Acquisition, Tokheim
entered into a note purchase agreement with one or more purchasers (the "Note
Purchase Agreement"), pursuant to which Tokheim issued $22.5 million aggregate
principal amount of senior notes (the "Senior Notes") bearing an interest rate
starting at 12.5% and increasing by 0.5% on December 1, 1998, and every three
months thereafter to a maximum of 14.5%. Tokheim has the option, subject to bank
approval, to redeem (in whole or in part) the Senior Notes.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS FORM 8-K, INCLUDING, WITHOUT
LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS"
AND WORDS OF SIMILAR IMPORT, CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE
COMPANY, OR INDUSTRY RESULTS, TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: INCREASES IN
INTEREST RATES OR THE COMPANY'S COST OF BORROWING OR A DEFAULT UNDER ANY
MATERIAL DEBT
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AGREEMENT; INABILITY OF THE COMPANY TO SUCCESSFULLY MAKE AND INTEGRATE
ACQUISITIONS; INABILITY TO ACHIEVE ANTICIPATED COST SAVINGS OR REVENUE GROWTH;
DEPENDENCE ON THE RETAIL PETROLEUM INDUSTRY; INABILITY TO FORECAST OR ACHIEVE
FUTURE SALES LEVELS OR OTHER OPERATING RESULTS; FLUCTUATIONS IN EXCHANGE RATES
AMONG VARIOUS FOREIGN CURRENCIES, PRINCIPALLY AMONG DOLLARS, FRENCH FRANC
("FFR") AND THE BRITISH POUND; COSTS IN ADJUSTING TO A NEW COMMON EUROPEAN
CURRENCY; INABILITY TO PROTECT PROPRIETARY TECHNOLOGY OR TO INTEGRATE NEW
TECHNOLOGIES QUICKLY INTO NEW PRODUCTS; CHANGES IN BUSINESS STRATEGY OR
DEVELOPMENT PLANS; BUSINESS DISRUPTIONS; CHANGES IN GENERAL ECONOMIC CONDITIONS
OR WITH ECONOMIC CONDITIONS OF PARTICULAR MARKETS IN WHICH THE COMPANY COMPETES;
UNAVAILABILITY OF FUNDS FOR CAPITAL EXPENDITURES OR RESEARCH AND DEVELOPMENT;
CHANGES IN CUSTOMER SPENDING LEVELS AND DEMAND FOR NEW PRODUCTS; CHANGES IN
GOVERNMENTAL, ENVIRONMENTAL OR OTHER REGULATIONS, ESPECIALLY AS THEY MAY AFFECT
THE CAPITAL EXPENDITURES OF THE COMPANY'S CUSTOMERS; FAILURE OF THE COMPANY TO
COMPLY WITH GOVERNMENTAL REGULATIONS; LOSS OF KEY MEMBERS OF MANAGEMENT; ADVERSE
PUBLICITY; CONTINGENT LIABILITIES AND OTHER CLAIMS ASSERTED AGAINST THE COMPANY;
LOSS OF SIGNIFICANT CUSTOMERS OR SUPPLIERS; "YEAR 2000" PROBLEMS WITH COMPUTER
SYSTEMS OR SOFTWARE OF THE COMPANY OR ITS CUSTOMERS, SUPPLIERS OR RESELLERS; AND
OTHER FACTORS. GIVEN THESE UNCERTAINTIES, INDIVIDUALS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY
OBLIGATION TO UPDATE ANY SUCH FACTORS OR TO ANNOUNCE PUBLICLY THE RESULT OF ANY
REVISIONS TO ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT
FUTURE EVENTS OR DEVELOPMENTS.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of the Business Acquired.
Attached as exhibits to this Current Report on Form 8-K are audited
combined balance sheets of the RPS Division as of December 31, 1997 and
1996, and the related audited combined statements of income, cash flows and
equity (and the notes thereto) for each of the three years in the period
ended December 31, 1997. It is impracticable at this time to provide the
interim historical financial statements of the RPS Division required by
Regulation S-X. They will be filed as soon as practicable but no later than
60 days after this report is required to be filed.
4
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(b) Pro Forma Financial Information
Attached as exhibits to this Current Report on Form 8-K are the
unaudited pro forma consolidated condensed balance sheet and the related
consolidated condensed statement of earnings (and the notes thereto) for
the year ended November 30, 1997. Also attached as exhibits to this Current
Report on Form 8-K are the unaudited pro forma consolidated condensed
balance sheet of Tokheim and the related consolidated condensed statement
of earnings of Tokheim (and the notes thereto) for the year ended November
30, 1997. It is impracticable at this time to provide the interim pro forma
financial statements of the RPS Division required by Regulation S-X. They
will be filed as soon as practicable but no later than 60 days after this
report is required to be filed.
5
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(c) Other Exhibits
-(1) Master Agreement for Purchase and Sale of Shares, Assets,
and Liabilities, dated as of June 19, 1998, between
Tokheim and Schlumberger.
-(2) Amendment No. 1 to the Master Agreement for Purchase and
Sale of Shares, Assets and Liabilities, dated as of
September 30, 1998 between Tokheim and Schlumberger.
-(3) Securities Purchase Agreement, dated September 30, 1998, by
Tokheim and Schlumberger.
-(4) 12% Senior Subordinated Note Due January 28, 1999 in the
amount of $170,000,000.
-(5) Senior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee.
-(6) 12% Junior Subordinated Note Due 2008 in the amount of
$40,000,000.
6
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-(7) Junior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee.
-(8) Warrant to Purchase up to 19.9% of the Shares of Common
Stock of Tokheim.
-(9) Form of Roll-Over Note.
-(10) Registration Rights Agreement, dated September 30, 1998, by
Tokheim and Schlumberger.
-(11) Note Purchase Agreement, dated as of September 30, 1998,
among Tokheim, the Subsidiaries and the Purchasers.
-(12) Amended and Restated Credit Agreement, dated as of
September 30, 1998, among Tokheim, the Borrowing
Subsidiaries, the Lenders and NBD Bank, N.A. as
administrative agent and Credit Lyonnais as documentation
and collateral agent and Gleacher Natwest Inc. and Bankers
Trust Company as co-syndication agents.
-(13) Amendment No. 1 to Rights Agreement, dated as of September
30, 1998, between Tokheim and Harris Trust and Savings Bank
(incorporated herein by reference to the Company's
Registration Statement on Form 8-A/A dated October 14,
1998).
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TOKHEIM CORPORATION
Date: October 15, 1998 By: /s/ Douglas K. Pinner
----------------------------------
Douglas K. Pinner
Chairman of the Board,
President and Chief Executive Officer
and Director
Date: October 15, 1998 By: /s/ John A. Negovetich
----------------------------------
John A. Negovetich
Executive Vice President,
Finance and Administration
EXHIBITS
(a) Financial Statements of the Business Acquired.
-(1) RPS Division audited combined statements of income for the
years ended December 31, 1997, 1996 and 1995 (incorporated
herein by reference to the Company's Current Report on Form
8-K dated August 3, 1998).
-(2) RPS Division audited combined statements of cash flows for
the years ended December 31, 1997, 1996 and 1995
(incorporated herein by reference to the Company's Current
Report on Form 8-K dated August 3, 1998).
8
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-(3) RPS Division audited combined balance sheets as of December
31, 1997 and 1996 (incorporated herein by reference to the
Company's Current Report on Form 8-K dated August 3, 1998).
-(4) RPS Division audited combined statements of equity for the
years ended December 31, 1997, 1996 and 1995 (incorporated
herein by reference to the Company's Current Report on Form
8-K dated August 3, 1998).
-(5) RPS Division notes to the audited combined financial
statements for the years ended December 31, 1997, 1996 and
1995 (incorporated herein by reference to the Company's
Current Report on Form 8-K dated August 3, 1998).
(b) Pro Forma Financial Information
-(1) Unaudited pro forma consolidated condensed statement of
earnings for the year ended November 30, 1997.
-(2) Unaudited pro forma consolidated condensed balance sheet as
of November 30, 1997.
-(3) Notes to unaudited pro forma consolidated condensed
financial statements.
-(4) Unaudited pro forma Tokheim Corporation consolidated
condensed statement of earnings for the year ended November
30, 1997.
-(5) Unaudited pro forma Tokheim Corporation consolidated
condensed balance sheet as of November 30, 1997.
-(6) Notes to unaudited pro forma Tokheim Corporation
consolidated condensed financial statements.
9
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(c) Other Exhibits
-(1) Master Agreement for Purchase and Sale of Shares, Assets,
and Liabilities, dated as of June 19, 1998, between Tokheim
and Schlumberger.
-(2) Amendment No. 1 to the Master Agreement for Purchase and
Sale of Shares, Assets and Liabilities, dated as of
September 30, 1998 between Tokheim and Schlumberger.
-(3) Securities Purchase Agreement, dated September 30, 1998, by
Tokheim and Schlumberger.
-(4) 12% Senior Subordinated Note Due January 28, 1999 in the
amount of $170,000,000.
-(5) Senior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee.
-(6) 12% Junior Subordinated Note Due 2008 in the amount of
$40,000,000.
-(7) Junior Subordinated Note Indenture, dated as of September
30, 1998, among Tokheim, Management Solutions, Inc.,
Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt
Hose & Petroleum Equipment, Inc., Envirotronic Systems,
Inc., Gasboy International, Inc., Tokheim Automation
Corporation, Tokheim Investment Corp., as guarantors, and
Harris Trust and Savings Bank, as trustee.
10
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-(8) Warrant to Purchase up to 19.9% of the Shares of Common
Stock of Tokheim.
-(9) Form of Roll-Over Note.
-(10) Registration Rights Agreement, dated September 30, 1998, by
Tokheim and Schlumberger.
-(11) Note Purchase Agreement, dated as of September 30, 1998,
among Tokheim, the Subsidiaries and the Purchasers.
-(12) Amended and Restated Credit Agreement, dated as of
September 30, 1998, among Tokheim, the Borrowing
Subsidiaries, the Lenders and NBD Bank, N.A. as
administrative agent and Credit Lyonnais as documentation
and collateral agent and Gleacher Natwest Inc. and Bankers
Trust Company as co-syndication agents.
-(13) Amendment No. 1 to Rights Agreement, dated as of September
30, 1998, between Tokheim and Harris Trust and Savings
Bank.
11
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The following unaudited pro forma consolidated condensed financial
statements (the "Pro Forma Financial Statements") of the Company are derived
from the audited financial statements of Tokheim and the RPS Division and have
been adjusted to illustrate the effects of the Transactions. The Pro Forma
Consolidated Condensed Financial Statements and accompanying notes should be
read in conjunction with the consolidated financial statements of Tokheim and
the combined financial statements of the RPS Division, including the notes
thereto, appearing elsewhere or incorporated by reference in this Current
Report. The pro forma statements of earnings includes the RPS Division's
combined statement of income for the year ended December 31, 1997 and Tokheim's
consolidated statement of earnings for the year ended November 30, 1997. The pro
forma balance sheet includes the RPS Division's combined balance sheet as of
December 31, 1997 and Tokheim's consolidated balance sheet as of November 30,
1997. These pro forma statements give effect to the MSI acquisition, the Common
Stock Offering and the Transaction, and related purchase accounting adjustments,
as if these events had taken place on December 1, 1996 for the statement of
earnings and on November 30, 1997 for the balance sheet. The Pro Forma Financial
Statements are not necessarily indicative of either future results of operations
or the results that might have occurred if the foregoing MSI acquisition, the
Common Stock Offering and the Transactions had been consummated on the indicated
dates.
The Acquisition has been accounted for using the purchase method of
accounting, therefore the RPS Division's equity has been eliminated in the pro
forma consolidated condensed statements. The allocation of the aggregate
purchase price included in the Pro Forma Consolidated Condensed Financial
Statements is preliminary.
EXHIBIT (b)
Unaudited Pro Forma Consolidated Condensed Statement of Earnings
for the year ended November 30, 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
Tokheim
Pro Forma
for Equity
Tokheim Refinancing Offering,
(a) Pro Forma And MSI Acquisition,
RPS RPS for Equity Acquisition Refinancing &
RPS Division Division Offering and Pro Forma RPS Division
Division Adjustments Adjusted MSI Acquisition Adjustments Acquisition
-------- ----------- -------- --------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Net Sales........................$344,248 $ -- $344,248 $393,272 $ -- $737,520
Cost of sales, exclusive of
items listed below.............. 303,196 (9,125) 294,071 287,752 (850)(b) 580,973
Selling, general, and
administrative expenses......... 48,798 (11,480) 37,318 70,028 -- 107,346
Depreciation and
amortization.................... 3,902 3,973 7,875 10,490 6,163 (c) 24,528
Merger and acquisition cost
and other unusual items......... -- 2,338 2,338 3,493 -- 5,831
-------- --------- -------- -------- -------- --------
Operating Profit................. (11,648) 14,294 2,646 21,509 (5,313) 18,842
Interest expense, net............ 1,418 -- 1,418 10,570 36,573 (d) 48,561
Other expense (income), net...... 433 -- 433 (1,039) -- (606)
-------- --------- -------- -------- -------- --------
Earnings (loss) before income
taxes and extraordinary loss.... (13,499) 14,294 795 11,978 (41,886) (29,113)
Income taxes..................... (6,779) 7,190 411 1,895 -- 2,306
-------- --------- -------- -------- -------- --------
Earnings (loss) before
extraordinary loss..............$ (6,720) $ 7,104 $ 384 $ 10,083 $(41,886) $(31,419)
======== ========= ======== -------- ======== --------
Preferred Stock Dividends
($1.94 per share)............... $ (1,512) $ (1,512)
-------- --------
Earnings (loss) before
extraordinary loss applicable
to common stock................. $ 8,571 $(32,931)
======== ========
</TABLE>
<PAGE>
EXHIBIT (b)
Unaudited Pro Forma Consolidated Condensed Balance Sheet
as of November 30, 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
Tokheim
Pro Forma
for Equity
Tokheim Refinancing Offering,
(e) Pro Forma And MSI Acquisition,
RPS RPS for Equity Acquisition Refinancing &
RPS Division Division Offering and Pro Forma RPS Division
Division Adjustments Adjusted MSI Acquisition Adjustments Acquisition
-------- ----------- -------- --------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents......$ 7,321 $ (7,321) $ -- $ 7,458 $ (2,000)(l) $ 5,458
Accounts receivables, net...... 102,540 (3,620) 98,920 84,164 -- 183,084
Total Net Inventory............ 58,859 -- 58,859 64,508 -- 123,367
Other current assets........... 11,872 -- 11,872 6,711 -- 18,583
-------- -------- -------- -------- --------- --------
Total Current Assets......... 180,592 (10,941) 169,651 162,841 (2,000) 330,492
Property, plant & equipment,
net............................. 32,183 -- 32,183 42,221 -- 74,404
Other tangible assets............ 1,326 -- 1,326 9,191 -- 10,517
Goodwill......................... 51,757 (51,757) -- 62,695 246,515 (f) 309,210
Other noncurrent assets and
deferred charges................ 3,576 -- 3,576 19,561 4,566 (g) 27,703
-------- -------- -------- -------- --------- --------
Total Assets.................$269,434 $(62,698) $206,736 $296,509 $249,081 $752,326
======== ======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY:
Liabilities:
Current Liabilities:
Current portion long-term
debt.........................$ 46 $ -- $ 46 $ 2,391 $ -- $ 2,437
Notes payable, bank........... -- -- -- 98 -- 98
Cash Overdraft................ 12,614 (12,614) -- 10,575 -- 10,575
Accounts Payable and
accruals..................... 94,526 (6,781) 87,745 105,818 27,575 (h) 221,138
-------- -------- -------- -------- --------- --------
Total Current Liabilities.... 107,186 (19,395) 87,791 118,882 27,575 234,248
Long-Term Debt................. -- -- -- 4,397 4,397
Bank Credit Agreement.......... -- -- -- 8,158 163,047 (i) 171,205
Senior Subordinated Notes...... -- -- -- 55,000 137,500 (i) 192,500
Guaranteed ESOP Obligation..... -- -- -- 9,429 -- (i) 9,429
Junior Subordinated PIK
Notes......................... -- -- -- -- 40,000 (i) 40,000
Postretirement Benefits........ 4,188 -- 4,188 14,378 -- 18,566
Minimum Pension Liability...... -- -- -- 2,173 -- 2,173
Minority Interest.............. 133 -- 133 1,319 1,452
Other Lt. Liabilities.......... 3,657 -- 3,657 5,511 -- 9,168
-------- -------- -------- -------- --------- --------
Total Liabilities............ 115,164 (19,395) 95,769 219,247 368,122 683,138
Common Stock Warrants............ -- -- -- -- 20,000 (k) 20,000
Redeemable Convertible
Preferred Stock................. -- -- -- 24,000 -- 24,000
Guaranteed ESOP Obligation....... -- -- -- (9,429) -- (9,429)
Preferred Treasury Stock
at Cost......................... -- -- -- (4,718) -- (4,718)
-------- -------- -------- -------- --------- --------
Total Preferred Equity......... -- -- -- 9,853 9,853
Common Stock..................... 162,144 -- 162,144 88,882 (162,144)(j) 88,882
Minimum Pension Liability........ -- -- -- (2,173) -- (2,173)
Foreign Currency Translation
Adjustments..................... (1,566) -- (1,566) (18,048) 1,566 (j) (18,048)
Retained Earnings (accumulated
deficit)........................ (8,308) (43,303) (49,611) (1,112) 21,537 (m) (29,186)
Common Treasury Stock at Cost.... -- -- -- (140) -- (140)
-------- -------- -------- -------- --------- --------
Total Common Equity............ 154,270 (43,303) 110,967 67,409 (139,041) 39,335
-------- -------- -------- -------- --------- --------
Total Liabilities and
Stockholders' Equity........$269,434 $(62,698) $206,736 $296,509 $249,081 $752,326
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Note 1: Though not reflected in the Unaudited Pro Forma Consolidated Condensed
Statement of Earnings, Tokheim believes that through successful
integration and consolidation of the RPS Division estimated cost
savings of approximately $47.3 million can be achieved per annum after
three years.
(a) The adjustments to the RPS Division's financial statements
reflect amounts that have been reclassified to conform to
Tokheim's presentation and to remove certain costs associated
with operations as a division of Schlumberger. The details of
these reclassifications and adjustments are as follows:
Cost of sales:
Reclassification of manufacturing depreciation and
amortization to depreciation and amortization........... $ (7,087)
Reclassification of personnel reductions
(restructuring) to merger and acquisitions and
other unusual items..................................... (350)
Reflects an adjustment to operations of
Schlumberger's Abbeville facility for fiscal 1997
which will not be purchased by Tokheim.................. (700)
Reclassification of nonrecurring warranty cost
associated with design flaws in new product
launches. These design flaws were corrected and
not expected to impact ongoing operations............... (988)
--------
Total adjustments and reclassification from cost
of sales........................................... (9,125)
--------
Selling, general, and administrative expenses:
Adjustments to management and technical fees
charged by Schlumberger to its subsidiaries net
of expenses Tokheim expects to incur.................... (9,692)
Reclassification of selling, general and
administrative depreciation and amortization to
depreciation and amortization........................... (788)
Reclassification of personnel reductions
(restructuring) to merger and acquisition costs and
other unusual items..................................... (800)
Reclassification of other miscellaneous items to
merger and acquisition costs and other unusual items.... (200)
--------
Total adjustments and reclassification from selling,
general and administrative expenses................ (11,480)
--------
Depreciation and amortization:
Reclassification of manufacturing and amortization........ 7,087
Reclassification of selling, general and
administrative depreciation and amortization............ 788
Elimination of preexisting goodwill amortization
that Tokheim is not purchasing.......................... (3,902)
--------
Total adjustments and reclassification to
depreciation and amortization...................... 3,973
--------
Merger and acquisition costs and other unusual items:
Reclassification of personnel reductions
(restructuring) from cost of sales...................... 350
Reclassification of personnel reductions
(restructuring) from selling, general and
administrative expenses................................. 800
Reclassification of nonrecurring warranty cost
associated with design flaws in new product
launches. These design flaws were corrected and not
expected to impact ongoing operations................... 988
Reclassification of other miscellaneous items from
selling, general and administrative costs............... 200
--------
Total adjustments and reclassification to merger and
acquisition cost and other unusual items........... 2,338
--------
Effect of all adjustments on pretax income..................... 14,294
Tax effect on adjustments using the RPS Division's reported
tax rate of 50.3%............................................ 7,190
--------
Effect of all adjustments on net earnings............ $ 7,104
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(b) Reflects a pro forma adjustment for technology and licensing
fees contractually payable by Schlumberger to Tokheim. These
fees relate to certain services and licenses provided to
Schlumberger by Tokheim. The contract is noncancelable and
requires minimum annual payments of $850 per annum to Tokheim
over the next 5 years.......................................... $ 850
========
(c) The pro forma adjustment represents the amortization of
purchased goodwill associated with the Acquisition as follows:
Anticipated Annual
Gross Amortization Amortization
Amount Period Amount
----------- ------------ ------------
Purchased goodwill (based on a
preliminary estimate of purchase
price allocation)............... $ 246,515 40 years $ 6,163
========== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(d) The pro forma interest expense, net, was calculated as follows:
Tokheim's pro forma interest expense for the MSI Acquisition and the Common Stock Offering........... $10,570
RPS Division's historical interest expense, net...................................................... 1,418
-------
Total............................................................................... 11,988
Plus: Interest expense on borrowings under:
New Bank Credit Agreement ($180,634 at interest rates ranging from 7.65% to 9.5%, spread between
three different Facilities)...................................................................... 17,803
12.0% Senior Subordinated Seller Notes............................................................. 20,400
12.5% Senior Notes................................................................................. 2,813
12.0% Junior Subordinated PIK Note................................................................. 4,800
-------
Total............................................................................... 45,816
Less: Interest expense on:
Tokheim debt being refinanced:
Existing Bank Credit Agreement................................................................... (1,717)
11 1/2% Senior Subordinated Notes due 2006....................................................... (6,325)
RPS Division....................................................................................... (1,418)
-------
Total............................................................................... (9,460)
-------
Sub-total.................................................................................... 48,344
Amortization of deferred financing costs:
Remove:
Existing Bank Credit Agreement................................................................... (1,380)
11 1/2% Senior Subordinated Notes................................................................ (307)
Add:
New Bank Credit Agreement........................................................................ 1,512
12.5% Senior Subordinated Notes due 2005........................................................... 393
-------
Pro forma interest expense, net...................................................................... $48,561
=======
</TABLE>
The Company has the option, subject to bank approval, to redeem (in whole or in
part) the Subordinated Notes and the Warrants.
Interest expense, net, includes that portion of interest with respect to the
Guaranteed ESOP Obligation which is not paid through dividends on, or
redemptions of, the ESOP Preferred Stock.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(e) The following table summarizes the adjustments made to the RPS Division's audited financial statements to
conform them to the terms and conditions as outlined in the Purchase Agreement.
Assets:
Cash not being purchased................................................................................ $ (7,321)
Reduction of accounts receivable for related party receivables not being purchased...................... (3,620)
Pre existing goodwill not being purchased............................................................... (51,757)
--------
Total adjustments to assets........................................................................ $(62,698)
========
Liabilities:
Cash overdraft not being assumed........................................................................ $(12,614)
Reduction of accounts payable and accruals for related party payables not being assumed................. (6,781)
--------
Total adjustments to liabilities................................................................... $(19,395)
Shareholders' Equity:
Net adjustment to retained earnings for the above adjustments of assets and liabilities................. (43,303)
--------
Total adjustments to liabilities and shareholders' equity.......................................... $(62,698)
========
(f) This amount represents the excess of cost over the fair value of the net assets (goodwill) of the
RPS Division acquired.
Total purchase price of the RPS Division.................................................................... $335,000
Purchase price adjustment for personnel reduction expenses to be reimbursed by Schlumberger............... (5,000)
--------
Adjusted purchase price................................................................................. 330,000
Book value of the RPS Division net assets, as adjusted, which is expected to approximate fair value....... 110,967
--------
Excess of cost over fair value of net assets acquired..................................................... 219,033
Direct costs associated with the Acquisition:
Legal and financial advisory fees....................................................................... 4,000
Direct acquisition costs (see note below)............................................................... 23,482
--------
Total Goodwill.......................................................................................... $246,515
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(g) This amount represents the pro forma adjustment necessary to reflect the Company's write-off of previous unamortized debt
issuance cost and the capitalization of the new debt issuance costs associated with the new financing plan. The existing
issuance costs will be written-off as a charge to extraordinary loss from debt extinguishment in the period incurred.
<S> <C>
Write-off of deferred issuance costs associated with the Existing Bank Credit Agreement..................... $ (4,693)
Write-off of deferred issuance costs associated with the 11 1/2% Senior Subordinated Notes.................. (2,925)
--------
Sub-total................................................................................................ (7,618)
Capitalization of deferred issuance costs associated with the New Bank Credit Agreement..................... 9,434
Capitalization of deferred issuance costs associated with the 12.5% Senior Subordinated Notes due 2005...... 2,750
--------
Net adjustment to reflect the fees associated with the financing of the Acquisition and refinancing
of existing debt........................................................................................ $ 4,566
========
The deferred debt issuance costs associated with the New Credit Agreement and the 12.5% Senior Subordinated Notes due 2005 will
be amortized over the life of the respective agreements on a straight line basis.
<S> <C>
(h) Pro forma adjustment to accounts payable and accruals:
Accrued interest on $55.000 of 11 1/2% Senior Subordinated Notes due 2006 to be redeemed.................... $ (2,107)
Accruable restructuring expenses............................................................................ 6,200
Accrued integration plan costs.............................................................................. 23,482
--------
$ 27,575
========
Included in accrued liabilities are certain costs Tokheim believes will be spent to close down redundant operations in
connection with the reorganization and rationalization of the RPS Division. The table below summarizes the deferred costs
included in goodwill and accrued liabilities as they relate to the integration plan for the RPS Division. The amounts do not
include costs associated with consolidation of previously existing Tokheim subsidiaries, which will be expensed as incurred,
nor do these costs benefit production in future periods.
<S> <C>
Personnel reductions........................................................................................ $ 18,602
Closure of redundant facilities............................................................................. 4,880
--------
Total.................................................................................................... $ 23,482
========
In addition to the above expenditures, the Company expects to spend approximately $500 for capital projects with future benefits.
The Company estimates future accruable restructuring charges related to the integration plan at approximately $6,200. In addition,
nonaccruable operating charges associated with the plan, which will be expensed as incurred, are estimated at $2,000. These amounts
have been aggregated and shown as a reduction of cash of $2,000, an increase in accrued expenses of $6,200 and an aggregate
reduction of retained earnings of $8,200. (see also Note below)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(i) This amount reflects the repayment of existing Tokheim debt and RPS
Division purchase price with the proceeds of the Senior Notes and
borrowings under the New Bank Credit Agreement.
Borrowings under the New Bank Credit Agreement............ $171,205
Borrowings under the New Bank Credit Agreement (refinance
preferred ESOP obligation).............................. 9,429
Issuance of 12.0% Senior Subordinated Note ............... 170,000
Issuance of 12.0% Junior Subordinated PIK Note due 2008... 40,000
Issuance of 12.5% Senior Note due 2005.................... 22,500
Repay:
Borrowings under the Existing Bank Credit Agreement....... (8,158)
Borrowings under the Existing Bank Credit Agreement
(refinance preferred ESOP obligation)................... (9,429)
11 1/2% Senior Subordinated Notes due 2006.............. (55,000)
--------
Net Adjustment to reflect Acquisition financing
and the application of proceeds to repay
existing debt...................................... $340,547
========
(j) Amounts represent the elimination of the RPS Division's
existing net book value (see also Note below).
(k) Per the terms of the letter agreement, the Company has financed
$20,000 of the purchase price by issuing Schlumberger a warrant
to purchase, for a nominal value, shares of Tokheim common stock.
The number of shares for which the warrant may be exercised equals
the number of shares whose value of the average closing price
thirty days prior to and thirty days after closing equals $20,000
but, not to exceed 19.9% of the total outstanding shares of the
Company at the closing date. The Company has the option, subject to bank
approval, to repurchase the warrants at Par Value.
(l) Adjustments to retained earnings (accumulated deficit) are
as follows:
Extraordinary loss from debt extinguishment:
Write-off deferred issuance costs associated with
the Existing Bank Credit Agreement...................... $ (4,693)
Write-off deferred issuance costs associated with the
11 1/2% Senior Subordinated Notes....................... (2,925)
Premiums paid to redeem 11 1/2% Senior Subordinated
Notes at the redemption percentage of 120.473% plus
Consent payment......................................... (12,256)
--------
Total extraordinary loss from debt extinguishment.... (19,874)
Other:
Accruable restructuring expenses.......................... (6,200)
Non accruable restructuring expenses...................... (2,000)
RPS Division accumulated deficit eliminated in
consolidation........................................... 49,611
--------
Total adjustment to accumulated deficit.............. $ 21,537
========
</TABLE>
Note: Dividends are payable on the Company's ESOP Preferred Stock, the proceeds
of which are used to service the Guaranteed ESOP Obligation
<PAGE>
Exhibit (b)
UNAUDITED PRO FORMA TOKHEIM CORPORATION FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS)
The following unaudited pro forma Tokheim Corporation financial statements
have been adjusted to reflect the effects of the MSI Acquisition and the
issuance of approximately 4.17 million Shares of Tokheim Common Stock pursuant
to its 1998 Common Stock Offering. The Unaudited Pro Forma Tokheim Corporation
Consolidated Condensed Statement of Earnings gives effect to the MSI Acquisition
and the Common Stock Offering as if they had occurred on December 1, 1996. The
Unaudited Pro Forma Tokheim Corporation Consolidated Condensed Balance Sheet
gives effect to the MSI Acquisition and the Common Stock Offering as if they had
occurred on November 30, 1997. The statements do not purport to represent what
Tokheim's results of operations or financial position actually would have been
if the MSI Acquisition and the Common Stock Offering had occurred as of such
dates and are not necessarily indicative of future operating results or
financial position. The Unaudited Pro Forma Tokheim Corporation Consolidated
Condensed Statement of Earnings for the year ended November 30, 1997 and Pro
Forma Tokheim Corporation Consolidated Condensed Balance Sheet as of November
30, 1997 were derived from the Tokheim's audited Consolidated Financial
Statements.
UNAUDITED PRO FORMA TOKHEIM CORPORATION CONSOLIDATED
CONDENSED STATEMENT OF EARNINGS
FOR THE YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
TOKHEIM PRO
FORMA FOR
COMMON THE COMMON
MSI TOKHEIM PRO STOCK STOCK
ACQUISITION FORMA FOR OFFERING OFFERING
PRO FORMA MSI PRO FORMA AND MSI
TOKHEIM MSI ADJUSTMENTS ACQUISITION ADJUSTMENTS ACQUISITION
-------- ------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $385,469 $7,803 $ -- $393,272 $ -- $393,272
Cost of sales, exclusive
of items listed below.. 283,932 3,820 -- 287,752 -- 287,752
Selling, general and
administrative
expenses............... 68,167 1,761 100 (a) 70,028 -- 70,028
Depreciation and
amortization........... 9,232 53 1,205 (b) 10,490 -- 10,490
Merger and acquisition
cost and other unusual
items.................. 3,493 1,347 (1,347)(c) 3,493 -- 3,493
-------- ------ ------ -------- ------ --------
Operating income........ 20,645 822 42 21,509 -- 21,509
Interest expense, net... 16,451 (28) 912 (d) 17,335 (6,765)(f) 10,570
Other income, net....... (1,003) (36) -- (1,039) -- (1,039)
-------- ------ ------ -------- ------ --------
Earnings (loss) before
income taxes and
extraordinary loss..... 5,197 886 (870) 5,213 6,765 11,978
Income taxes............ 1,217 -- 2 (e) 1,219 676 (g) 1,895
-------- ------ ------ -------- ------ --------
Earnings (loss) before
extraordinary loss..... $ 3,980 $ 886 $ (872) $ 3,994 $6,089 $ 10,083
======== ====== ====== ======== ====== ========
Preferred stock
dividends ($1.94 per
share)................. $ (1,512) $ (1,512) $ (1,512)
======== ======== ========
Earnings (loss) before
extraordinary loss
applicable to common
stock.................. $ 2,468 $ 2,482 $ 8,571
======== ======== ========
Earnings (loss) per
common share:
Primary
Before extraordinary
loss................ $ 0.31 $ 0.31 $ 0.70
======== ======== ========
Weighted average
number of shares
outstanding......... 8,083 8,083 4,170 12,253
======== ======== ======= ========
Fully diluted
Before extraordinary
loss................ $ 0.27 $ 0.27 $ 0.65
======== ======== ========
Weighted average
number of shares
outstanding......... 9,067 9,067 4,170 13,327
======== ======== ======= ========
</TABLE>
<PAGE>
Exhibit (b)
UNAUDITED PRO FORMA TOKHEIM CORPORATION CONSOLIDATED CONDENSED BALANCE SHEET
AS OF NOVEMBER 30, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
TOKHEIM PRO
FORMA
MSI TOKHEIM PRO COMMON FOR STOCK
ACQUISITION FORMA FOR OFFERING OFFERING
PRO FORMA MSI PRO FORMA AND MSI
TOKHEIM MSI ADJUSTMENTS ACQUISITION ADJUSTMENTS ACQUISITION
-------- ------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash and cash
equivalents........... $ 6,438 $1,020 $ -- (h) $ 7,458 $ -- $ 7,458
Accounts receivable,
net................... 83,011 2,002 (850)(i) 84,163 -- 84,163
Net inventory.......... 64,347 161 -- 64,508 -- 64,508
Other current assets... 6,705 7 -- 6,712 -- 6,712
-------- ------ ------- -------- -------- --------
Total current
assets............ 160,501 3,190 (850) 162,841 -- 162,841
Property, plant &
equipment, net......... 41,966 255 -- 42,221 -- 42,221
Other tangible assets... 9,184 7 -- 9,191 -- 9,191
Goodwill................ 62,695 -- -- 62,695 -- 62,695
Other noncurrent assets
and deferred charges... 16,273 42 4,821 (j) 21,136 (1,575)(m) 19,561
-------- ------ ------- -------- -------- --------
Total assets....... $290,619 $3,494 $ 3,971 $298,084 $ (1,575) $296,509
======== ====== ======= ======== ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Liabilities:
Current liabilities:
Current portion of
long-term debt...... $ 2,391 $ -- $ -- $ 2,391 $ -- $ 2,391
Notes payable, bank.. 98 -- -- 98 -- 98
Cash overdraft....... 10,575 -- -- 10,575 -- 10,575
Accounts payable and
accruals............ 105,787 1,373 -- 107,160 (1,342)(n) 105,818
-------- ------ ------- -------- -------- --------
Total current
liabilities....... 118,851 1,373 -- 120,224 (1,342) 118,882
Long-term debt......... 4,397 -- -- 4,397 -- 4,397
Existing credit
agreement............. 24,090 -- 12,000 (k) 36,090 (27,932)(o) 8,158
Senior subordinated
notes................. 90,000 -- -- 90,000 (35,000)(n) 55,000
Guaranteed ESOP
obligation............ 9,429 -- -- 9,429 -- 9,429
Postretirement
benefits.............. 14,378 -- -- 14,378 -- 14,378
Minimum pension
liability............. 2,173 -- -- 2,173 -- 2,173
Minority interest...... 1,319 -- -- 1,319 -- 1,319
Other long-term
liabilities........... 5,511 -- -- 5,511 -- 5,511
-------- ------ ------- -------- -------- --------
Total liabilities.. 270,148 1,373 12,000 283,521 (64,274) 219,247
Redeemable convertible
preferred stock........ 24,000 -- -- 24,000 -- 24,000
Guaranteed ESOP
obligation............. (9,429) -- -- (9,429) -- (9,429)
Preferred treasury stock
at cost................ (4,718) -- -- (4,718) -- (4,718)
-------- ------ ------- -------- -------- --------
Total preferred
equity............ 9,853 -- -- 9,853 -- 9,853
Common stock............ 21,158 300 (300)(l) 21,158 67,724 (p) 88,882
Minimum pension
liability.............. (2,173) -- -- (2,173) -- (2,173)
Foreign currency
translation
adjustments............ (18,048) -- -- (18,048) -- (18,048)
Retained earnings
(accumulated deficit).. 9,821 1,821 (7,729)(l) 3,913 (5,025)(n) (1,112)
Common treasury stock at
cost................... (140) -- -- (140) -- (140)
-------- ------ ------- -------- -------- --------
Total common
equity............ 10,618 2,121 (8,029) 4,710 62,699 67,409
-------- ------ ------- -------- -------- --------
Total liabilities
and shareholders'
equity............ $290,619 $3,494 $ 3,971 $298,084 $ (1,575) $296,509
======== ====== ======= ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
(a) Reflects additional compensation paid to the president of MSI
pursuant to an employment agreement entered into at the time
of the MSI Acquisition........................................ $ 100
(b) Reflects additional amortization expense related to $4,821 of
the purchase price that has been allocated to internally
developed software, which is being amortized over a four-year
period........................................................ $ 1,205
(c) Reflects the elimination of a nonrecurring charge of $980 that
relates to a bonus paid to the principal shareholder of MSI.
Also reflects the elimination of bonuses paid to employees of
MSI in anticipation of the sale to Tokheim, offset by expected
bonuses anticipated to be paid by Tokheim to senior management
of MSI........................................................ $(1,347)
(d) Additional interest expense related to the $12,000 of
additional borrowings under the Existing Credit Agreement to
fund the purchase of MSI at a 7.6% weighted average interest
rate.......................................................... $ 912
(e) MSI has been incorporated into Tokheim's consolidated federal
tax return. As such, Tokheim has available approximately
$24,669 of NOL carryforwards, which are offset by a
corresponding valuation allowance. Therefore, federal tax
provisions are only recorded for book purposes equal to the
expected Alternative Minimum Tax ("AMT") liability. The pro
forma provision for taxes is calculated as follows:
State and local tax provision for MSI's pre-tax earnings at
an 8.0% effective tax rate.................................. $ 71
Federal tax provision for MSI's pre-tax pro forma earnings
reduced by 90% for utilization of Tokheim's Net Operating
Loss ("NOL") carryforwards with the remaining amount taxed
at a 20% AMT rate........................................... 18
Reduction of state and local tax provision for pre-tax pro
forma earnings at an 8.0% effective tax rate................ (70)
Federal tax provision for MSI's pre-tax pro forma earnings
reduced by 90% for utilization of NOL carryforwards, with
the remaining amount taxed at a 20% AMT rate................ (17)
-------
$ 2
=======
Note: In addition to the above pro forma adjustments, the Company will incur
a one-time charge to operations for the writedown of in-process research and
development, of which technological feasibility has not yet been determined
and which has no alternative future use. This charge to earnings of
approximately $5,908 will be recorded in the first quarter of 1998.
(f) Pro forma adjustments to interest expense:
Decreased interest expense related to a portion of the
$12,000 of additional borrowings under the Existing Credit
Agreement to fund the purchase of MSI at a 7.6% interest
rate........................................................ $(1,382)
Decreased interest expense related to the $35,000 of 11 1/2%
Senior Subordinated Notes redeemed at 11.5%................. (4,025)
Decreased interest expense related to the $10,000 of 11 1/2%
Senior Subordinated Notes repurchased using proceeds from
the Existing Credit Agreement ($10,000 at 11.5% for 10.5
months, $10,000 at 7.6% for 1.5 months)..................... (1,101)
Decrease in amortization expense related to a pro rata share
of deferred issuance cost written off to extraordinary loss
on debt retirement.......................................... (257)
-------
(6,765)
=======
(g) Pro forma provision for taxes:
State and local tax provision at an 8.0% effective tax rate.. $ 541
Federal tax provision for pre-tax earnings reduced by 90% for
utilization of NOL carryforwards, with the remaining amount
taxed at a 20% AMT rate..................................... 135
-------
$ 676
=======
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(h)Pro forma adjustment to cash:
Reflects the repayment of a loan from a minority shareholder.... $ 850
Reflects an adjustment to record a distribution of cash
dividends to MSI shareholders prior to the acquisition......... $ (850)
--------
$ --
========
(i)Reflects the repayment of a loan from a minority shareholder..... $ (850)
(j)Reflects the purchase price allocation to capitalized software
costs to be amortized over a four-year life.................... $ 4,821
(k)To record additional borrowings under the Existing Credit
Agreement to fund the MSI Acquisition.......................... $ 12,000
(l)Pro forma adjustment to shareholders' equity:
Elimination of MSI's common stock............................... $ (300)
========
To record the one-time write down of in-process research and
development.................................................... (5,908)
Reflects an adjustment to record a distribution of cash
dividends to MSI shareholders prior to the MSI Acquisition..... (850)
Elimination of MSI's retained earnings.......................... (971)
--------
Total adjustment to retained earnings......................... $ (7,729)
--------
Total adjustment to shareholders' equity...................... $ (8,029)
========
(m)Decrease in deferred issuance cost related to a 35% write down of
the unamortized balance........................................ $ (1,575)
(n)Redemption of 11 1/2% Senior Subordinated Notes
Redemption of 11 1/2% Senior Subordinated Notes with Common
Stock Offering proceeds........................................ $(35,000)
Elimination of four months of accrued interest on the $35,000 of
redeemed 11 1/2% Senior Subordinated Notes..................... (1,342)
Redemption premiums, charged to equity.......................... (3,450)
Pro rata write-off of deferred debt issuance costs, charged to
equity......................................................... (1,575)
--------
$(41,367)
========
(o)Pro forma adjustments to Existing Bank Credit Agreement:
Repayment of funds borrowed to repurchase $10,000 of 11 1/2%
Senior Subordinated Notes...................................... $(10,000)
Repayment of funds borrowed to purchase MSI..................... (12,000)
Repayment of borrowed to provide Working Capital................ (5,932)
--------
$(27,932)
========
(p)Increase in Common Stock reflecting net proceeds of the Common
Stock Offering................................................. $ 67,724
Note: In addition to the pro forma adjustments, the Company will
incur a one-time extraordinary loss of $4,964 which reflects the
premiums paid to redeem the 11 1/2% Senior Subordinated Notes and
to write off a pro rata share of the original deferred issuance
cost.
</TABLE>
<PAGE>
EXHIBIT (c)(1)
MASTER AGREEMENT FOR PURCHASE AND SALE
OF SHARES, ASSETS AND LIABILITIES
This Master Agreement (the "Agreement"), is made as of June 19, 1998, by and
among
- - SCHLUMBERGER LIMITED, a Netherlands Antilles Corporation, acting for itself
and on behalf of the companies listed in Schedule A (the "Selling
Subsidiaries"),
(hereinafter referred to as "SCHLUMBERGER")
and,
- - TOKHEIM CORPORATION an Indiana corporation, acting for itself and on behalf
of all its subsidiaries (the "Acquiring Subsidiaries"),
(hereinafter referred to as "BUYER"),
SCHLUMBERGER and BUYER are sometimes referred to herein as the "Parties".
RECITALS
Whereas the Selling Subsidiaries are, among other things, directly or
indirectly, engaged in the business of design, development, manufacture,
marketing, distribution, and sale of fuel pump dispensers (the "RPS Dispenser
Business"), and electronic hardware and system software related to retail
automation systems and forecourt payment terminals (the "RPS Systems Business"),
and design, construction, maintenance of, and other services for service-
stations (the "RPS Service Business");
Whereas Selling Subsidiaries conduct the RPS Dispenser Business, the RPS Systems
Business and the RPS Service Business (collectively, the "RPS Business") to
varying degrees through the entities and divisions of companies listed in
Schedule C;
<PAGE>
Whereas upon the terms and subject to the conditions hereinafter set forth, and
subject to certain agreed upon corporate restructurings, BUYER agrees to
purchase and assume, and SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to sell, and assign, all of the issued and outstanding capital
shares (the "Acquired Shares") of the entities devoted to the RPS Business (the
"Acquired Companies") and the RPS Business of the Selling Subsidiaries (the
"Acquired RPS Activities") listed in Schedule D and comprised of the assets (the
"Acquired Assets") and liabilities (the "Assumed Liabilities") as defined in
Schedule E;
Whereas the Parties also desire to make certain representations, warranties and
other agreements in connection with the transactions contemplated herein and to
provide for certain conditions precedent with respect thereto.
NOW THEREFORE, the Parties hereto agree as follows:
ARTICLE I
----------
PURCHASE AND SALE
-----------------
1.1 The Acquisition
Subject to the terms and conditions of this Agreement on the Closing Date
(as defined in Section 4.1 hereinafter), SCHLUMBERGER shall cause the
Selling Subsidiaries to sell, transfer, convey and deliver to BUYER and the
Acquiring Subsidiaries, the Acquired Shares and the Acquired Assets subject
to assumption by BUYER and the Acquiring Subsidiaries, of the Assumed
Liabilities.
1.2 Separate Acquisition Agreements
Each of the acquisitions of Acquired Shares, Acquired Assets and the
assumption of the Assumed Liabilities shall be carried out by separate
acquisition agreements between the respective Selling Subsidiaries and
Acquiring Subsidiaries, which form an integral and indivisible part of this
Agreement and which, subject only to mandatory changes imposed by local
applicable laws, shall be in accordance with the form of acquisition
agreement attached hereto as Schedule 1.2 (the "Specific Acquisition
Agreements").
2
<PAGE>
In no event shall any representation or warranty, covenant or any other
specific provision possibly imposed by local laws supersede the terms and
conditions specified herein. The Parties hereby acknowledge that their
relationship shall be solely governed by the terms contained herein.
SCHLUMBERGER and BUYER shall respectively cause the Selling Subsidiaries
and the Acquiring Subsidiaries to duly execute the Specific Acquisition
Agreements forthwith on the Closing Date.
1.3 Total Purchase Price
The aggregate purchase price for the Acquired Shares and the Acquired
Assets shall be US dollars 335,000,000 (three hundred and thirty five
million dollars) (the "Total Purchase Price"), subject to the assumption by
BUYER and the Acquiring Subsidiaries of the Assumed Liabilities. The Total
Purchase Price shall be allocated to each of the Acquired Companies and to
each of the, or group of, Acquired Assets relating to each of the Acquired
RPS Activities, as indicated in Schedule 1.3.
1.4 Payment of the Total Purchase Price
Payment of the Total Purchase Price for the Acquired Shares and the
Acquired Assets shall be made by BUYER on the Closing Date by depositing,
by bank wire transfer in US Dollars, the amount of the Total Purchase Price
in immediately available funds, into an account designated by SCHLUMBERGER
for such purpose, which designation shall be made no later than three (3)
business days before the Closing Date by SCHLUMBERGER, acting as agent for
the Selling Subsidiaries.
1.5 Base Balance Sheet and Statements of Income
Within 15 calendar days of the date of this Agreement, SCHLUMBERGER shall
prepare, in accordance with United States generally accepted account ing
principles ("US GAAP"), except that no reserve shall be included for
outstanding litigation of the RPS Business in France, the United States of
America, Russia, the Czech Republic, the United Kingdom and Italy (but
solely relating to the RPS Business of the Italian Selling Subsidiary), and
in accordance with the accounting rules and practices described in Schedule
1.5 (a) (the "Accounting Principles"), which accounting rules the Parties
acknowledge to be consistent with US GAAP, and deliver to BUYER (i) an
3
<PAGE>
audited combined balance sheet of the RPS Business as at December 31, 1997,
including the related schedules and notes, and (ii) the audited combined
statements of income and cash flows of the RPS Business for the year ended
on December 31, 1997. The December 31, 1997 balance sheet and the 1997
statements of income and cash flows shall be prepared for the RPS Business
on a "stand alone" basis. The pro forma adjustments, which are to be made
in the preparation of the combined balance sheet and income statement for
1997, are set out in Schedule 1.5(b). The December 31, 1997 balance sheet,
as adjusted in accordance with Schedule 1.5 (b), shall be referred to as
the "Base Balance Sheet". The December 31, 1997 statements of income and
cash flows, as adjusted in accordance with Schedule 1.5 (b), shall be
referred to as the "Base Income Statement".
1.6 Adjustment to the Total Purchase Price
(a) Within thirty (30) calendar days from the Closing, SCHLUMBERGER shall
deliver to BUYER a combined balance sheet of the RPS Business as of
the month-end which shall corre spond to the Closing Date, as defined
in Section 4.1 hereto (the "Closing Balance Sheet"). The Closing
Balance Sheet shall be prepared in accordance with US GAAP and the
Accounting Principles. To the extent that the Net Equity, shown on
the Base Balance Sheet is higher than the Net Equity shown on the
Closing Balance Sheet, SCHLUMBERGER shall make a payment to BUYER
equivalent to the amount of the difference. To the extent that the Net
Equity shown on the Base Balance Sheet is less than the Net Equity
shown on the Closing Balance Sheet, BUYER shall make a payment to
SCHLUMBERGER equivalent to the amount of the surplus. Any payment
resulting from this Section 1.6 (a) shall be referred to as the "Post
Closing Adjustment". "Net Equity" ("situation reelle") shall mean an
amount equal to (i) the aggregate book value of the assets of the RPS
Business reflected on a balance sheet prepared at a given date, in
accordance with US GAAP and the Accounting Principles, minus (ii) the
aggregate book value of the liabilities of the RPS Business reflected
on that same balance sheet.
(b) BUYER and its auditors will review the Closing Balance Sheet within 20
days from the submission by SCHLUMBERGER of the foregoing. BUYER shall
then deliver to SCHLUMBERGER, within 10 days after completion of this
review, a detailed statement setting forth its objections to the
Closing Balance Sheet, if any.
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Based on such statement, SCHLUMBERGER shall deliver to BUYER, within
10 days after SCHLUMBERGER's receipt of BUYER's objections, a detailed
statement setting forth its position with respect to such objections.
In the event that the determination by each of the Parties of the Net
Equity is different but within US dollars (1,000,000 one million
dollars) of each other, then the Net Equity shall be the average of
such determination by each such Party.
SCHLUMBERGER and BUYER shall use all reasonable efforts to resolve any
further dispute, but if a final resolution is not obtained within 5
business days after BUYER receives SCHLUMBERGER's statement of
position, any remaining disputes shall be resolved by Ernst & Young
Paris office (the "Arbitrator").
Should Ernst & Young refuse the appointment or be unable to carry out
its mission as provided by this paragraph 1.6 (b), each party may
request, pursuant to "refere" proceedings, the President of the Paris
Commercial Court to appoint the Paris office of another
internationally recognized accounting firm to act as the Arbitrator,
(c) The Arbitrator will audit the Closing Balance Sheet, will review
and try to resolve the Parties' disagreements and will determine
the final value of the Net Equity as of the Closing Date and thus
of its increase, or decrease, as the case may be, as compared to
the Net Equity as of December 31, 1997. Within 10 days from first
being informed of the dispute by a Party, the Arbitrator will
organize a joint session to enable each party to submit
additional arguments and reasoning. Within 20 days from said
joint session, the Arbitrator shall deliver to SCHLUMBERGER and
BUYER a written report restating the Parties' disputes as well as
his determination of the Net Equity as of the Closing Date. These
determinations will be conclusive and binding upon the Parties
hereto.
Each party shall bear the fees and expenses of its auditors in
connection with the matters referred to in this Section. SCHLUMBERGER
and BUYER shall each pay 50% of the fees charged by the Arbitrator.
(d) If any additional payment were to be due by SCHLUMBERGER or owed
to SCHLUMBERGER subsequent to the Post Closing Adjustment, such
payment will take place within the later of (i) 10 days from the
date of issuance of the final determination by the Arbitrator or
(ii) 30 days from SCHLUMBERGER's submission of
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the Closing Balance Sheet, should these documents be agreed upon
by BUYER.
(e) "Interest Rate" shall mean the rate per annum equal to the London
Inter bank Borrowing Rate (LIBOR) for deposits of three months
duration.
(f) Notwithstanding anything else contained in this Agreement, in no
event shall the Post-Closing Adjustment result in an overall
adjustment higher than 10% of the Base Balance Sheet Net Equity.
1.7 Assumption of Liabilities
With respect to the purchase and sale of the Acquired Assets, in addition
to the payment of the Total Purchase Price, and pursuant to the Specific
Acquisition Agreements, BUYER and the Acquiring Subsidiaries will assume,
as of the Closing Date, and subsequently, in due course, pay or otherwise
discharge all Assumed Liabilities.
ARTICLE II
-----------
PRE-CLOSING COMMITMENTS
-----------------------
2.1 Conduct of Business pending Closing
Except as otherwise provided in Schedule 2.1, and as otherwise provided in
this Agreement, including without limitation, the restructuring agreed upon
by the Parties, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries, and BUYER agree that, from the date hereof to the Closing
Date, unless BUYER shall otherwise consent in writing (which consent BUYER
shall not unreasonably withhold) or as expressly contemplated by this
Agreement the following provisions shall apply:
(a) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the
Acquired Companies to, use their best efforts to preserve in all
material respects the business organization of the RPS Business
intact. SCHLUMBERGER shall cause the RPS Business to be conducted only
in the ordinary course of business, consistent with past practice.
Such commitment shall include, without limitation, the fact that:
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(i) SCHLUMBERGER, shall, and shall cause the Selling Subsidiaries
and the Acquired Companies to, adequately insure all property,
real, personal and mixed, owned or leased by the RPS Business,
against all ordinary and insurable risks; and all such property
shall be used, operated, maintained and repaired in a careful
and reasonably efficient manner;
(ii) SCHLUMBERGER shall not, and shall not permit any Selling
Subsidiary or any Acquired Company to, do any act or omit to do
any act, or permit any act or omission to act, which will cause
a breach of any material contract or material commitment of the
RPS Business or which would cause the breach of any
representation or warranty made hereunder; and
(iii) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and
the Acquired Companies to, continue to comply in a manner
consistent with past practice with all laws applicable to the
RPS Business and its properties, operations, business and
employees.
(b) SCHLUMBERGER shall not, and shall not permit any Selling Subsidiary or
any Acquired Company to, pledge, sell or encumber any of the Acquired
Assets or assets of the Acquired Companies other than in the ordinary
course of business and consistent with past practice;
(c) SCHLUMBERGER shall not permit the Selling Subsidiaries ,to the extent
related to, or affecting, the RPS Business, and the Acquired
Companies, to do any of the following:
(i) authorize for issuance, issue, sell, pledge, deliver, or agree
or commit to issue, sell, pledge, deliver (whether through the
issuance or grant of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any capital
stock of the Acquired Companies or securities or rights
convertible into, or exchangeable for, shares of capital stock
or securities convertible into, or exchangeable for, such
shares;
(ii) amend or propose to amend their by-laws or articles of
incorporation or those of the Acquired Companies;
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(iii) split, combine or reclassify any shares of the capital stock of
the Acquired Companies;
(iv) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any share of the capital stock of
the Acquired Companies; or
(v) authorize any agreement, commitment or arrangement to do any of
the foregoing;
(vi) make changes in the accounting methods or practices followed by
the Selling Subsidiaries and Acquired Companies as regards the
RPS Business or make any changes in depreciation or amortization
policies or rates;
(vii) terminate the employment of, or increase, out of the ordinary
course of business, the compensation of, any officer;
(d) SCHLUMBERGER shall cause the Selling Subsidiaries and the Acquired
Companies, solely as it relates to the RPS Business, with respect to
clauses (ii), (iii) and (vi) below, not to:
(i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business
organization or division thereof or make any investment either
by purchase of stock or securities of any other individual or
entity;
(ii) acquire any assets for a value in excess of US dollars 100,000
(one hundred thousand dollars) other than pursuant to pending
or approved capital acquisition requests of the RPS Business as
disclosed to BUYER, and other than purchases in the ordinary
course of business;
(iii) dispose of any RPS Assets with a value in excess of US dollars
100,000 (one hundred thousand dollars);
(iv) incur any indebtedness for borrowed money or issue any debt
securities or assume or guarantee the obligations of any other
person, make any loans or advances or enter into any other
transaction, except the occurrence of intercompany loans or the
making of intercompany advances in the ordinary course of
business consistent with past practices and except for
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advances to employees for expenses in the ordinary course of
business and consistent with past practices;
(v) authorize, recommend or propose any change in its
capitalization, unless such capitalization is necessary to
comply with applicable laws; or
(vi) make changes in the accounting methods or practices followed by
the Selling Subsidiaries, Acquired Companies or RPS Business,
or make any changes in depreciation or amortization policies or
rates relating to the RPS Business;
(vii) make their best efforts not to terminate the employment of, or
increase the compensation of, employees identified in Schedule
5.20(a)(ii) (including any increase pursuant to any bonus,
pension, profit sharing or other plan or commitment) other than
as set forth in Schedule 2.1 in the ordinary course of business
consistent with past practice;
(viii) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities or
obligations reflected or reserved against in the Base Balance
Sheet or incurred in the ordinary course of business and
consistent with past practice since the date of the Base
Balance Sheet;
(ix) write down the value of any inventory or write off as
uncollectable any notes or accounts receivable, except for
write-downs and write-offs in the ordinary course of business
and consistent with past practice;
(x) cancel any debts or waive any claims or rights of substantial
value, except in the ordinary course of business and consis
tent with past practice or with respect to (i) SCHLUMBERGER
cash pool agreements, (ii) loan agreements by SCHLUMBERGER
affiliates not involved in the RPS Business, and (iii) bank
loans or overdrafts facilities;
(xi) change any of the banking or safe deposit arrangements
described in Schedule 5.22 hereof;
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(xii) enter into any contract or commitment for, or purchase, any raw
material or supplies, except (a) normal contracts or
commitments for the purchase of, and normal purchases of, raw
materials or supplies, made in the ordinary course of business
and consistent with past practice, (b) normal contracts or
commitments for the purchase of and normal purchases of,
inventory in the ordinary course of business and consistent
with past practice, and (c) other contracts, commitments, or
purchases in the ordinary course of business and consistent
with past practice; or
(xiii) authorize or propose any of the foregoing or enter into or
modify any contract, agreement, or commitment or arrangement
with respect to any of the foregoing;
(e) None of the Acquired Companies, the Selling Subsidiaries or
SCHLUMBERGER shall waive, release, grant, license or transfer any
Intellectual Property (as defined in Section 5.9) or modify or change,
in any material respect, any existing material license, distribution
agreement, lease, or other document used in the RPS Business, in each
case, other than in the ordinary course of business.
2.2 Access/Filing and Authorizations/Reasonable Efforts
(a) Between the date hereof and the Closing Date, BUYER shall use its best
efforts to enable the conditions precedent listed in the following
Article to be satisfied as promptly as practicable. SCHLUMBERGER
shall, in all respects, cooperate with BUYER and shall give good faith
responses to all requests for information by any governmental agency
or under any applicable laws and each party shall notify the other
prior to undertaking any action relating to the RPS Business. BUYER
shall notify SCHLUMBERGER, prior to the Closing Date, as to whether
such conditions are satisfied and, where appropriate, the grounds on
which it maintains that any condition is not satisfied.
(b) Between the date hereof and the Closing Date, SCHLUMBERGER is
prepared, in order to ensure the transition of the operations after
the Closing Date, to give BUYER, its counsel, accountants, financing
representatives and other representatives, upon BUYER's reasonable
request, access to the senior management, the key personnel, the
plants and premises, and the books and records of the RPS Business,
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under conditions to be mutually defined so that such access shall not
interfere with the day-to-day operations of the RPS Business and the
duties of management, provided that one of the SCHLUMBERGER legal
representatives, listed in Schedule 2.2 (b) is present during such
contact, communication or visit. Access by BUYER's personnel to RPS
Business information shall be subject to guidelines which have been
mutually agreed upon by SCHLUMBERGER and BUYER. No access to such
personnel, information, plants or premises shall be unreasonably
denied by SCHLUMBERGER, the intent of the Parties, as reflected in
this Section 2.2(b), being only to carefully plan together the
transitional period to the benefit of the RPS Business as an ongoing
concern.
(c) From the date hereof, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to, their best efforts with BUYER in order to procure the
assignment to BUYER and the Acquiring Companies of all of the
contracts relating to the Acquired RPS Activities, including, but not
limited to, their direct and indirect distribution agreements (such as
dealer agreements, distributor agreements and supply agreements to
third Parties including affiliates of SCHLUMBERGER), orders of
customers as well as purchase agreements, service agreements with
customers and lease agreements.
(d) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, use
their best efforts to obtain the resignation of the statutory auditors
of the Acquired Companies, effective as of the Closing Date or any
other meaningful date agreed to by the Parties hereto.
(e) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to,
within thirty (30) calendar days from the end of each month from the
date hereof to the Closing, furnish BUYER with an unaudited proforma
consolidated balance sheet of the RPS Business as at the end of each
month, and unaudited proforma consolidating statements of income,
changes in stockholder's equity and changes in financial position for
the monthly period then ended, all attested by the relevant financial
officer of the RPS Business.
(f) From time to time after signature of this Agreement and prior to the
Closing, SCHLUMBERGER will promptly supplement or amend the Schedules
set forth in Article V hereof (the "Disclosure Schedules") with
respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to
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be set forth or described in the Disclosure Schedules. No supplement
or amendment of the Disclosure Schedules made pursuant to this Section
shall be deemed to cure any breach of any representation or warranty
made in this Agreement unless BUYER specifically agrees thereto in
writing.
(g) As soon as practicable, SCHLUMBERGER and BUYER shall make any and all
filings, which are required under, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act") and other applicable
antitrust or competition laws. Each Party will furnish to the other
Party such necessary information and reasonable assistance as the
latter may request in connection with its preparation of necessary
filings or submissions to any governmental agency, including, without
limitation, any filings necessary under the provisions of the HSR Act.
Each Party will supply the other Party with copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof) between it or its representatives, on the one
hand, and the Federal Trade Commission, the Antitrust Division of the
U.S. Department of Justice or any other governmental agency or
authority or members of their respective staffs, on the other hand,
with respect to this Agreement or the transactions contemplated
hereby.
(h) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the
Acquired Companies to, and BUYER shall, and shall cause the Acquiring
Subsidiaries to, use its and their best efforts to insure that the
conditions set forth in Section 2 hereof are satisfied, insofar as
such matters are within the control of any of them.
2.3 Exclusivity
Except as specifically disclosed in Schedule 2.3 from the date of this
Agreement through the Closing Date, or earlier, if BUYER is in material
breach of its obligations and commitments hereunder, SCHLUMBERGER agrees
that BUYER will have exclusive rights to consummate the transactions
contemplated hereby. SCHLUMBERGER, shall not, and shall not permit the
Selling Subsidiaries and the Acquired Companies, and their representatives
and agents, to, entertain, accept, or discuss a possible sale or other
disposition of any component of the RPS Business, any capital stock of the
Acquired Companies or any of the RPS Assets, or any interest therein, with
any other party, or provide information to any other party in connection
therewith.
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BUYER hereby agrees that from the date of signature hereof and through the
Closing Date, BUYER, the Acquiring Subsidiaries, and their representatives
and agents shall not entertain, accept, or discuss a possible purchase or
other acquisition of any major competitor of the RPS Business with any
other party.
2.4 Specific Tax Indemnification for Restructuring
BUYER shall indemnify SCHLUMBERGER against any and all tax liability and
associated costs that would derive from any restructuring of the RPS
Business requested by BUYER from SCHLUMBERGER prior to Closing.
ARTICLE III
------------
CONDITIONS PRECEDENT AND OTHER AUTHORIZATIONS
---------------------------------------------
3.1 Conditions Precedent to SCHLUMBERGER's Obligations
The obligations of SCHLUMBERGER to consummate the sale of the RPS Business
as contemplated in Article I above are subject to the satisfaction of the
following conditions (all or any of which may be waived, in whole or in
part, by SCHLUMBERGER):
(a) All governmental anti-trust consents and approvals required by law
prior to Closing to permit the consummation of the transactions
contemplated by this Agreement shall have been obtained and any pre-
Closing waiting periods (and any extension thereof) applicable to the
consummation of the Agreement shall have expired or been terminated,
provided, however, that the obligations to consummate the sale shall
remain unchanged, and Article I shall apply, if and where anti-trust
consents are subject to divestitures which, in the aggregate, do not
substantially alter the ability of BUYER to run the RPS Business as
presently conducted.
(b) There shall be no material suit, action or other enforcement
proceeding instituted or pending by or before any court or
governmental or other regulatory or administrative agency or
commission requesting an order, judgment or decree challenging all or
a substantial portion of the transactions contemplated by this
Agreement.
(c) There shall be no event, circumstances or current financial
disclosures by BUYER or its representatives which would indicate
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BUYER's inability to finance the cash payment of the Total Purchase
Price, as of the Closing Date.
(d) BUYER shall have delivered to SCHLUMBERGER a certificate, dated as of
the Closing Date, signed by a duly authorized officer of BUYER, to the
effect that all representations and warranties of BUYER in this
Agreement are true and correct in all material respects as of the
Closing Date with the same force and effect as though made at such
time, except for changes specifically disclosed or expressly permitted
or contemplated by the Agreement.
(e) BUYER shall have performed and complied with all agreements,
obligations and conditions required by this Agreement to be performed
or complied with by it on or prior to the Closing.
(f) Opinions of BUYER's counsel, in a form and substance reasonably
acceptable to Schlumberger.
3.2 Conditions Precedent to BUYER's Obligations
The obligation of BUYER to consummate the acquisition of the RPS Business
as contemplated in this Agreement, is subject to the satisfaction of the
following conditions (all or any of which may be waived in whole or in part
by BUYER):
(a) All governmental anti-trust consents and approvals required by law
prior to Closing to permit the consummation of the transactions
contemplated by this Agreement shall have been obtained and any pre-
Closing waiting periods (and any extension thereof) applicable to the
consummation of the Agreement shall have expired or been terminated,
provided, however, that the obligations to consummate the sale shall
remain unchanged, and Article I shall apply, if and where anti-trust
consents are subject to divestitures which, in the aggregate, do not
substantially alter the ability of BUYER to run the RPS Business as
presently conducted.
(b) Any and all information of, consultation with or approval by, work
councils of the Selling Subsidiaries, and Acquired Companies shall
have been given, made or obtained, where required by applicable law.
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(c) The representations and warranties contained in Article V hereof, the
Disclosure Schedules and in all certificates and other documents
delivered and to be delivered by SCHLUMBERGER to BUYER or pursuant
hereto or in connection with this Agreement shall be true, complete
and accurate in all material respects as of the date when made and at
and as of the Closing Date as though such representations and
warranties were made at and as of such date, except for:
(i) changes expressly permitted or contemplated by the terms of this
Agreement;
(ii) changes resulting from the normal course of the RPS Business;
(iii) changes that do not have, alone or in the aggregate, a
substantial impact on the RPS Business as a whole; and
(iv) changes that SCHLUMBERGER otherwise commits to reflect in a
reasonable and adequate manner in the Closing Date Balance
Sheet, or in the Post Closing Adjustment, after consultation
with BUYER.
and SCHLUMBERGER shall have provided BUYER with a certificate of a duly
authorized officer to this effect.
(d) SCHLUMBERGER shall have materially performed and complied with all
agreements, obligations and conditions required by this Agreement to
be performed or complied with by it on or prior to the Closing.
(e) There shall not be instituted or pending any material suit, action, or
other enforcement proceeding by or before any court or governmental or
other regulatory or administrative agency or commission requesting an
order, judgment or decree which substantially impairs BUYER's ability
to exercise control over or manage the RPS Business after the Closing.
(f) From the date of the Base Balance Sheet to the Closing Date, the RPS
Business as a whole shall not have suffered an event specific to the
RPS Business having a material adverse impact upon the RPS Business as
a whole (whether or not such change is referred to or described in any
supplement to the Disclosure Schedules). An event
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shall be deemed specific to the RPS Business if it does not concern
the industry as a whole or if it is not related to the identity of
BUYER.
(g) SCHLUMBERGER shall have delivered to BUYER opinions of counsel to
SCHLUMBERGER, dated as of the Closing Date, in substantially the form
and substance reasonably acceptable to Buyer regarding SCHLUMBERGER,
Schlumberger Technologies Inc. and certain US law aspects of the
transactions contemplated by this Agreement.
3.3 Other Authorizations
In case one or more permits, consents or authorizations other than
mentioned in Sections 3.1 and 3.2, which is necessary for the completion of
the transactions contemplated herein in a respective country, were not
delivered prior to the Closing Date (the "Affected Jurisdictions"), the
Closing shall notwithstanding take place with respect to the Acquired
Companies and Acquired Assets in all jurisdictions where the permits,
consents or authorizations have been granted or are not legally required
(the "Non-Affected Jurisdictions").
The Total Purchase Price payable on the Closing Date shall relate to the
Non-Affected Jurisdictions and be adjusted on the basis of the allocation
of the Total Purchase Price set forth in Schedule 1.3.
For each of the Affected Jurisdiction, the Closing, as well as the payment
of the portion of the Total Purchase Price allocable to said Affected
Jurisdiction, shall take place within fifteen (15) days of the date when
the requested permit, consent or authorization are obtained and shall be
deemed retroactive as of the Closing Date.
ARTICLE IV
CLOSING
4.1 The Closing
The Closing for the acquisition of the RPS Business shall take places at
the offices of Schlumberger Limited, 42, rue St Dominique, 75007 Paris,
France on July 31, 1998, or at such other place and date as SCHLUMBERGER
and BUYER mutually shall agree (the "Closing Date"), subject to the Closing
Date corresponding to the last day of the month in which the last of the
conditions precedent, listed in Section 3.1 and 3.2 hereto, is met.
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If the conditions precedent set forth in Article III, Sections 3.1 and 3.2
have not been satisfied or waived on or before such date, then the Closing
Date shall be postponed to a date (not later than December 31, 1998) which
is within five business days following the satisfaction or waiver of the
last of the conditions precedent.
4.2 Documents to be delivered by SCHLUMBERGER
At the Closing Date, SCHLUMBERGER shall perform and deliver, and shall
cause each of the Selling Subsidiaries to deliver, to BUYER and to each of
the Acquiring Subsidiaries, such documents and instruments to be delivered
by them to convey title to all of the Acquired Shares, Acquired Assets and
assign all Assumed liabilities, including:
(a) Specific Acquisition Agreements allowing for the transfer of the
Acquired Shares, the Acquired Assets and the assumption of the Assumed
Liabilities, with the exception of the Acquired Shares, Acquired
Assets and Assumed Liabilities related to the Affected Jurisdictions,
if any;
(b) Duly endorsed share certificates, share transfer forms or other
instruments required by applicable laws to validly transfer the
Acquired Shares other than those relating to the Affected
Jurisdictions, if any;
(c) Agreements, other than the Specific Acquisition Agreements, required
by applicable laws to validly transfer the Acquired Assets, if any;
(d) Certified copies of resolutions, duly adopted by the Selling
Subsidiaries' Board of Directors, approving the transaction
contemplated and authorizing the performance by the Selling
Subsidiaries of this Agreement and the execution of the Specific
Acquisition Agreements, together with all other agreements necessary
to consummate the transactions contemplated by this Agreement, and the
stock transfer register ("registre des mouvements de titres") and the
stockholders' register ("registre des comptes d'actionnaires") of the
Acquired Companies;
(e) Letters of resignation signed by each of the directors of the Acquired
Companies, as may be requested in writing by BUYER at least seven days
prior to the Closing Date;
(f) Transfer to the Acquired Companies or the Selling Subsidiaries of the
employees set forth in Schedule 4.2(f) who are fully dedicated to the
RPS Business and are seconded from other SCHLUMBERGER entities;
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(g) To the extent possible, a letter of resignation signed by the
statutory auditors of the Selling Subsidiaries and the Acquired
Companies effective upon the Closing;
(h) The minutes of a duly called meeting of the board of directors and the
shareholders, where required by applicable law, of the Selling
Subsidiaries (other than SCHLUMBERGER) and the Acquired Companies,
including provisions with respect to, inter alia, approving the new
shareholders and appointing new directors designated in writing by
BUYER at least seven days prior to the Closing;
(i) Duly endorsed share certificates, share transfer forms or other
instruments required by applicable laws to validly transfer all
shares of the Acquired Companies held by officers and directors
thereof.
4.3 Documents to be delivered by BUYER
At the Closing Date, BUYER shall deliver to SCHLUMBERGER the Total Purchase
Price and perform and deliver, and shall cause each of the Acquiring
Subsidiaries to deliver, to SCHLUMBERGER and each of the Selling
Subsidiaries, such documents and instruments to be delivered by them to
convey title to all of the Acquired Shares and RPS Activities, including:
(a) Specific Acquisition Agreements allowing for the transfer of the
Acquired Shares, the Acquired Assets and the assumption of the Assumed
Liabilities, with the exception of the Acquired Shares, Acquired
Assets and Assumed Liabilities related to the Affected Jurisdictions,
if any;
(b) Share transfer forms or other instruments required by applicable laws
to validly transfer the Acquired Shares other than those relating to
the Affected Jurisdictions, if any;
(c) Agreements, other than the Specific Acquisition Agreements, required
by applicable laws to validly transfer the Acquired Assets, if any;
(d) Agreements or other instruments required by applicable law to
acknowledge BUYER's assumption of the Assumed Liabilities, if any;
(e) Certified copies of resolutions, duly adopted by BUYER's and the
Acquiring Subsidiaries' Board of Directors approving the transaction
contemplated and authorizing their execution and performance of this
Agreement;
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SCHLUMBERGER
SCHLUMBERGER, in its own name and on behalf of the Selling Subsidiaries, but in
respect of the RPS Business only, represents and warrants to BUYER that:
5.1 Organization
(a) Each of the Acquired Companies is, and shall be at the Closing Date, a
corporation duly organized, validly existing and in good standing
under the laws of the state or country in which it was incorporated.
(b) The copies of the by-laws and/or articles of association of the
Acquired Companies previously requested by and delivered to BUYER are
true and complete copies, as presently in effect and the Acquired
Companies have materially complied with all the provisions of these
documents.
(c) The statutory books and registers of the Acquired Companies and all
current books of account have been properly maintained in compliance
with applicable laws and accounting principles, and are up to date.
5.2 Title to the Acquired Shares and Acquired Assets
(a) Except as listed in Schedule D, all of the issued and outstanding
shares of the Acquired Companies are owned by a Selling Subsidiary or
directors of the Acquired Companies. The Acquired Shares are validly
issued and outstanding, fully paid and transferable. There are no
outstanding subscriptions, options, warrants, puts, calls, rights,
contracts, commitments, agreements, understandings, or arrangements
relating to any Acquired Company, including any right of conversion or
exchange under any outstanding instrument, and none of such securities
are reserved for issuance for any purpose. Except as disclosed in
Schedule 5.2 (a), SCHLUMBERGER does not own, directly or indirectly,
any capital stock or other equity securities of any corporation or has
any direct or indirect equity or ownership interest in any other
entity engaged in the RPS Business.
(b) On the date hereof, SCHLUMBERGER, the Selling Subsidiaries and the
directors of the Acquired Companies are the sole owners of, and have
full power and authority to vote with, all of the Acquired Shares,
with the full power and authority to deliver to BUYER and the
Acquiring Subsidiaries all of the Acquired Shares, respectively,
pursuant to Article I of this Agreement
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and the relevant Specific Acquisition Agreements, free and clear of
all options, pledges, mortgages, escrow, rights of first refusal,
security interests, liens, claims, charges, encumbrances or
restrictions on transfer either written or oral whatsoever.
SCHLUMBERGER commits to obtain, on the Closing Date, the transfer by
the directors of the Acquired Companies to the Acquiring Subsidiaries
of all shares held by them in the Acquired Companies.
(c) Except as specified otherwise in Schedule 5.2 (c) of this Agreement
and, as the case may be, as per the by-laws of the Acquired Companies,
there are, and there shall be, at the Closing Date, no contracts,
commitments, agreements, understandings, arrangements, or restrictions
relating to ownership or voting of any of the Acquired Shares.
(d) Except as specified otherwise in Schedule 5.10 of this Agreement or in
any other document delivered by SCHLUMBERGER or any of the Selling
Subsidiaries prior to the date of this Agreement, SCHLUMBERGER and the
Selling Subsidiaries are the owners of the Acquired Assets with full
power and authority to convey them to BUYER and the Acquiring
Subsidiaries, pursuant to this Agreement and to the Specific
Acquisition Agreements, free and clear of all liens and encumbrances,
restrictions, mortgages or charges that could materially affect their
value.
5.3 Authority of SCHLUMBERGER
(a) SCHLUMBERGER is a Netherlands Antilles Corporation duly organized and
validly existing under the laws of the Netherlands Antilles and has
all material requisite corporate power to own its properties and carry
on its business as now being conducted. SCHLUMBERGER has full power
and authority, and has taken all necessary and proper action, to
execute and deliver this Agreement and the other agreements and
instruments executed in connection with this Agreement to which it is
a party, and to consummate the transactions contemplated herein, and
to transfer, assign and deliver the Acquired Shares as provided in
this Agreement and such delivery will convey to BUYER good and
marketable title to the Acquired Shares and to all rights afforded
thereby, free and clear of all liens. SCHLUMBERGER has taken, and has
caused the Selling Subsidiaries to take, all necessary and proper
actions to execute and deliver the agreements and instruments to be
executed in connection with this Agreement and the agreements
contemplated herein, including the Specific Acquisition Agreements,
and to consummate the transactions contemplated hereby or thereby.
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(b) This Agreement, the Specific Acquisition Agreements and any other
agreement contemplated herein to which SCHLUMBERGER or any of the
Selling Subsidiaries is a party, constitute valid and binding
obligations of SCHLUMBERGER and the Selling Subsidiaries, enforceable
against them in accordance with their terms.
(c) The Acquired Companies have all power and authority to own the
properties and assets they now own or will own at the Closing, to
conduct the RPS Business as presently conducted, and are duly
qualified or licensed to do business as foreign corporations in good
standing in every jurisdiction listed opposite the name of the
Acquired Companies in Schedule 5.3 (c) which are the only
jurisdictions in which ownership of property or the conduct of its
business requires such qualification.
5.4 Subsidiaries
Except as disclosed in Schedule 5.4, none of the Acquired Companies holds
any direct or indirect ownership interest in any company, business or other
legal entities as of the Closing Date.
5.5 Articles of Incorporation: No Violation
Except as set forth in Schedule 5.5, neither the execution nor the delivery
of this Agreement or any of the Specific Acquisition Agreements and other
documents executed in connection with this Agreement, to which SCHLUMBERGER
or the Selling Subsidiaries is a party, nor the consummation of the
transactions contemplated hereby or thereby violates or conflicts with
any provision of, or constitute a default under, the articles of
incorporation or by-laws, as amended, of SCHLUMBERGER or of any Selling
Subsidiary or any Acquired Company, or violates, or is in conflict with, or
constitutes a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or results in the termination of,
or accelerates the performance required by, or causes the acceleration of
the maturity of any debt or obligation pursuant to, or results in the
creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of the RPS Business under, any agreement or
commitment to which any Selling Subsidiary or other subsidiary of
SCHLUMBERGER engaged in the RPS Business is a party or by which any Selling
Subsidiary or other subsidiary of SCHLUMBERGER engaged in the RPS Business
is bound, or to which the property of any Selling Subsidiary or other
subsidiary of SCHLUMBERGER engaged in the RPS Business is subject, or
violates any statute or law or any judgment, decree, order, regulation or
rule of any court or governmental authority.
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5.6 Financial Statements/Accounts Receivable/Customers
(a) SCHLUMBERGER has heretofore delivered, or will deliver, to the BUYER
the Base Balance Sheet of the RPS Business, and the balance sheet,
combined statements of income and cash flows of the RPS Business for
the years ended on December 31, 1995, 1996 and 1997, all certified and
audited by Price Waterhouse, independent certified public accountants,
whose reports thereon are included therein. Such pro forma combined
balance sheets and the notes thereto are true, complete and accurate
and fairly present the pro forma consolidated assets, liabilities and
financial condition of the RPS Business as at the respective dates
thereof, and such combined statements of income and cash flows and the
notes thereto are true, complete and accurate and fairly present the
results of operations for the periods therein referred to, all in
accordance with US GAAP and the Accounting Principles, except for
reserves relating to outstanding litigation of the RPS Business in
France, the United States of America, Russia, the Czech Republic, the
United Kingdom and Italy (but solely relating to the RPS Business of
the Italian Selling Subsidiary).
(b) The accounts receivable shown on the Base Balance Sheet and all
accounts receivable acquired or generated by each Acquired Company and
each Acquired RPS Activity since December 31, 1997 (the
"Receivables"), are bona fide receivables and represent amounts due
with respect to actual transactions entered into in the ordinary
course of business and are collectible at their recorded amounts
within 250 days from the date of the Closing and are legal, valid and
binding obligations of their account obligors; provided, however, that
SCHLUMBERGER makes no representation as to the collectability of any
Receivable should the account obligor be declared, voluntarily or
involuntarily, bankrupt or be involved in a bankruptcy or similar type
proceeding or be subject to any judicially imposed stay of payments
after the Closing. Those Receivables reflected on the Acquisition
Balance Sheet have been so reflected in accordance with the Accounting
Principles. No account has been assigned or pledged to any other
person and except as set forth in Schedule 5.6 no defense or setoff to
any such account has been asserted in writing by an account obligor.
The representations and warranties contained in this Section 5.6(b)
are not given in respect of RPS intra-company agreements, to which
management principles apply.
(c) Except ongoing purchases or sales, all inter-company accounts
receivable from other SCHLUMBERGER affiliates not involved in the RPS
Business and accounts payable to other SCHLUMBERGER affiliates not
involved in the RPS Business, as of the date of signature of this
Agreement, have been
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paid or will be paid on or before the Closing Date to, or by, the
respective Acquired Companies or to and by the Selling Subsidiaries.
5.7 Customers and Suppliers
(a) Schedule 5.7 (a) sets forth: (a) a list of (i) the ten largest
customers of the RPS Business in terms of sales during the fiscal year
ended December 31, 1997, showing the approximate total sales by the
RPS Business to each such customer during each of such fiscal year;
(b) a list of the ten largest suppliers of the RPS Business in terms
of purchases during the fiscal year ended December 31, 1997, showing
the approximate total purchases by the RPS Business from each such
supplier during each of such fiscal year. There has not been any
material adverse change in the business relationship of the RPS
Business with any customer or supplier named in Schedule 5.7 (a).
Except for the customers and suppliers named in Schedule 5.7 (a), the
RPS Business has not had any customer who accounted for more than 5%
of the sales of the RPS Business during the fiscal year ended December
31, 1997, or any supplier from whom it purchased more than 5% of the
goods or services which it purchased during the fiscal year ended
December 31, 1997.
(b) As of the date of this Agreement, there are no claims against the RPS
Business to return in excess of an aggregate of US$100,000 of
merchandise by reason of alleged overshipments, defective merchandise
or otherwise, or of merchandise in the hands of customers under an
understanding that such merchandise would be returnable.
(c) Nothing in this Agreement shall constitute a representation or
warranty by Schlumberger that any of the contracts listed in Schedule
5.7 (c) shall be renewed, continued, or unaffected by a change in
control of the RPS Business.
5.8 Taxes
As related to the RPS Business and except as set forth in Schedule 5.8:
The Selling Subsidiaries and the Acquired Companies have duly and properly
filed with the appropriate governmental authorities all national, state,
local and other tax returns, as well as social security returns and reports
required to be filed by them, and have paid in full or made adequate
provisions for the payment of all taxes and social security contributions
owed. There are no tax liens upon any property or assets of the Acquired
Companies or the Selling Subsidiaries. All amounts to be
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collected or withheld by the Selling Companies and the Acquired Companies
have been duly collected or withheld and all such amounts that are required
to be remitted to any taxing authority have been duly remitted to the
appropriate authority.
There are no contingent tax liabilities not reflected on the Base Balance
Sheet, except those which may have arisen since the date of such Base
Balance Sheet in the ordinary course of business and consistent with past
practice. All deferred tax assets are recoverable either directly as
refunds or as future offsets to tax liabilities.
None of the Acquired Companies has entered into special arrangements with
any tax authority other than the ones listed in Schedule 5.8.
None of the Acquired Companies is party to any agreement providing for the
allocation or sharing of Taxes, and none of the Acquired Companies shall
have any continuing obligations or liabilities under any such agreement
after the Closing Date.
None of the Acquired Companies or Selling Subsidiaries is a party to any
pending or to the best of their knowledge, threatened material action or
proceeding by any governmental or other authority for the assessment or
collection of income or other taxes or fiscal or social charges, except for
those listed in Schedule 5.8. The tax or social security authorities have
no liens, charges or other encumbrances on the assets of the Acquired
Companies or the Acquired Assets other than liens, charges or encumbrances
for taxes or payments not yet due and payable.
5.9 Intellectual and Industrial Property
(a) Schedule 5.9(a) hereto exhaustively lists: (i) each patent, patent
application, registered copyright and application therefor, registered
trademark and application therefor (including those trademarks that
have been in continuous use since 1990), registered design and
application therefor (including priority dates and registration
numbers) registered in the name of SCHLUMBERGER, the Selling
Subsidiaries or any of the Acquired Companies related to the RPS
Business; (ii) each material license or other agreement relating to
any of the items listed in (i) above; and (iii) each material license
or other similar agreement relating to any registered intellectual
property owned by third parties to which SCHLUMBERGER, the Selling
Subsidiaries or any of the Acquired Companies are a party and that are
material to the current RPS Business.
(b) The foregoing, together with all unregistered copyrights and
trademarks, know-how, trade secrets and proprietary technology
material to SCHLUMBERGER, the Selling Subsidiaries (or any of the
Acquired
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Companies) in the conduct of the RPS Business or being developed by
any third party for SCHLUMBERGER, the Selling Subsidiaries or any of
the Acquired Companies, are herein referred to as the "Intellectual
Property". On the Closing Date the Selling Subsidiaries shall transfer
the Intellectual Property not already held by the Acquired Companies
to BUYER and the Acquiring Subsidiaries, as the case may be.
(c) Except as indicated in Schedule 5.9(a), SCHLUMBERGER, the Selling
Subsidiaries and the Acquired Companies are the sole and exclusive
owners of the Intellectual Property disclosed in Section 5.9(a)(i)
above, and have a valid contractual right to use the Intellectual
Property disclosed in Section 5.9(a)(iii) above. All of the owned
Intellectual Property disclosed in Section 5.9(a) above is held free
and clear of any material encumbrances, and the right of SCHLUMBERGER,
the Selling Subsidiaries and the Acquired Companies to use the
licensed Intellectual Property disclosed in Section 5.9(a)(iii) is
subject only to the terms of such licenses.
(d) Except for intellectual property rights held or controlled by
suppliers or sub-contractors of the RPS Business, the Intellectual
Property constitutes all of the intellectual property currently used
for, and necessary to, the conduct of the RPS Business, as it is
presently conducted. No registration or application relating to any
Intellectual Property, which is currently used in or is necessary for
the conduct of the RPS Business has lapsed, expired or been abandoned
or cancelled.
(e) Except as set forth on Schedule 5.9 (e), no Intellectual Property is
the subject of any pending or threatened opposition, cancellation,
interference or similar proceeding before any Governmental Entity, and
to the best of SCHLUMBERGER's knowledge there are no claims pending or
threatened (nor does SCHLUMBERGER know of any valid basis for any
claim), before any court or registration office challenging (i) the
registrability, validity, renewal or enforceability of any
Intellectual Property, (ii) the ownership rights of SCHLUMBERGER, the
Selling Subsidiaries or the Acquired Companies with respect to owned
Intellectual Property, or (iii) SCHLUMBERGER's, the Selling
Subsidiaries' or the Acquired Companies' right, to use the
Intellectual Property on the grounds of infringement upon the
proprietary rights of a third party.
(f) Subject to the relevant third party rights, consummation of this
Agreement by SCHLUMBERGER will not result in the loss, termination or
impairment of any of the Intellectual Property nor will it affect the
right of the BUYER to use the Intellectual Property after the Closing.
Except for confidentiality agreements signed in connection with the
divestiture of the RPS Business,
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neither SCHLUMBERGER nor the Selling Subsidiaries nor the Acquired
Companies has entered into any agreement outside of the ordinary
course of business with respect to the maintenance of the secrecy or
confidentiality of any Intellectual Property.
5.10 Title to Properties; Encumbrances
Except as set forth in Schedule 5.10, each of the Selling Subsidiaries and
the other subsidiaries of SCHLUMBERGER engaged in the RPS Business has good,
valid and marketable title to all the properties and assets which it purports to
own (real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Base Balance Sheet
(except for inventory and personal property having an aggregate book value not
in excess of US$100,000 sold since the date of the Base Balance Sheet in the
ordinary course of business and consistent with past practice), and all the
properties and assets (other than inventory) purchased by the Selling
Subsidiaries or Acquired Companies since the date of the Base Balance Sheet are
listed in Schedule 5.10. All properties and assets are free and clear of all
title defects or objections, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever including, without limitation, leases,
chattel mortgages, conditional sales contracts, collateral security arrangements
and other title or interest retention arrangements, and are not, in the case of
real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature whatsoever
except, with respect to all such properties and assets, (a) liens shown on the
Base Balance Sheet as securing specified liabilities or obligations with respect
to which no default exists; (b) minor imperfections of title, if any, none of
which are substantial in amount, materially detract from the value, or impair
the use of the property subject thereto, or impair the operations of any Selling
Subsidiary or Acquired Company, and which have arisen only in the ordinary
course of business and consistent with past practice since the date of the Base
Balance Sheet; and (c) liens for current taxes not yet due. The rights,
properties and other assets presently owned, leased or licensed by the
Subsidiaries (and the Acquired Companies) and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
the Selling Subsidiaries or Acquired Companies to conduct RPS Business in all
material respects in the same manner as their businesses have been conducted
prior to the date hereof.
5.11 Leases
Schedule 5.11 contains an accurate and complete description of the terms of
all leases pursuant to which the Selling Subsidiaries and the Acquired
Companies lease (i) real property, or (ii) personal property with annual
rents above US dollars 100,000 (one hundred thousand dollars) per year.
Except as set forth in Schedule 5.11, all
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such leases are valid, binding and enforceable in accordance with their
terms, and are in full force and effect; there are no existing defaults by
any Selling Subsidiary or any Acquired Companies thereunder; no event of
default has occurred which (whether with or without notice, lapse of time
or the happening or occurrence of any other event) would constitute a
default thereunder. SCHLUMBERGER shall use its best efforts, and shall
cause the Selling Subsidiaries to use their best efforts, to obtain the
consent of all lessors whose consent is required in connection with this
transaction.
In the event that, despite the Selling Subsidiaries' best efforts, not all
consents can be obtained from lessors, then, for these premises where such
consents cannot be obtained, SCHLUMBERGER shall cause the relevant Selling
Subsidiary to seek any alternative, including, without limitation,
subletting, if permitted, to BUYER the relevant premises, in order to allow
BUYER the use of said premises until a suitable arrangement can be found,
and up to a maximum of twelve months.
5.12 Transactions with Affiliates
Except as reflected on the Base Balance Sheet or Schedule 5.12, none of the
Selling Subsidiaries nor any of the Acquired Companies has any outstanding
liabilities or obligations for amounts owing to or from, or leases,
contracts or other commitments or arrangements or understandings of a
legally binding nature of any kind with SCHLUMBERGER or any affiliate
thereof (excluding from such affiliates, the Selling Subsidiaries).
5.13 Machinery/Inventory
(a) All machinery owned, leased or used by the Acquired Companies or
included in the Acquired Assets have been maintained in the ordinary
course of business .
(b) All inventory used in or relating to the conduct of the RPS Business
is usable or able to be sold (but with no guarantee as to such sale)
in the ordinary course of business consistent with past practices or
has been depreciated in line with applicable procedures applied in a
consistent manner to the RPS Business. All such inventory is owned by
the Acquired Companies or the Selling Subsidiaries, free and clear of
all liens or encumbrances.
5.14 Plant and Equipment
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The plants, structures and manufacturing equipment of the RPS Business
owned by the Selling Subsidiaries are structurally sound with no known
defects and are in good operating condition and repair and are adequate for
the uses to which they are being put; and none of such plants, structures
or equipment are in need of major maintenance or repairs except for
ordinary, routine maintenance and repairs which are not material in nature
or cost. Neither SCHLUMBERGER nor any Selling Subsidiary nor any of the
Acquired Companies has received notification that it is in violation of any
applicable building, or zoning, regulations in respect of its plants or
structures or their operations and no such violation exists.
5.15 Product Liability
Except as set forth in Schedule 5.15, there is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or threatened
against or involving any Selling Subsidiary or Acquired Company relating to
any product alleged to have been manufactured or sold by the RPS Business
and alleged to have been defective, or improperly designed or manufactured,
nor is there any valid basis for any such action, proceeding or
investigation.
5.16 Year 2000 Compliance
Schedule 5.16 sets forth the measures taken by the Selling Subsidiaries and
the Acquired Companies to address the risks associated with the Year 2000
event.
5.17 Common European Currency
Schedule 5.17 sets forth the measures taken by the Selling Subsidiaries and
the Acquired Companies to address the risks associated with the Common
European Currency.
5.18 Insurance
The Selling Subsidiaries and the Acquired Companies have consistently
maintained in full force and effect all insurance policies that are
customary in their field of business and all premiums have been paid in due
course. Such policies are sufficient for compliance with all requirements
of law and of all agreements to which the Selling Subsidiaries or Acquired
Companies are a party and provide insurance coverage for the assets and
operations of the Selling Subsidiaries or Acquired
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Companies in accordance with SCHLUMBERGER's practice throughout its group.
None of the Acquired Companies and of the Selling Subsidiaries has been
denied any insurance with respect to their assets or operations, nor has
their coverage been limited, since January 1, 1994, by reason of losses
incurred by the RPS Business, in particular as a result of product
liability.
It is expressly provided that all group insurance policies maintained by
SCHLUMBERGER and the Selling Subsidiaries and benefiting the Acquired
Companies and the Acquired RPS Activities shall cease with effect from the
Closing Date. Until the Closing Date, SCHLUMBERGER and the Selling
Subsidiaries shall have maintained in full force and effect such insurance
policies and SCHLUMBERGER or the Selling Subsidiaries shall have filed in
due course all relevant claims if any, thereunder.
5.19 Contracts and Commitments
(a) To the best knowledge of SCHLUMBERGER, except as provided in Schedule
5.19 (a), none of the Acquired Companies or the Selling Subsidiaries
has any power of attorney outstanding or any obligations or
liabilities (whether absolute, accrued, contingent or otherwise) as
guarantor, surety, co-signer, endorser, co-maker, indemnitor or
otherwise in respect of obligations of any third party. Neither are
there any forward foreign exchange contracts or similar foreign
exchange instruments.
(b) Schedule 5.19 (b) lists all contracts which are material to the
operation of the RPS Business (the "Material Contracts"). For purposes
of this Agreement, Material Contracts shall mean (i) supply contracts:
those for more than one year not cancelable without penalty, and those
for the five highest dollar volumes of purchases for each of the
Acquired Companies or Selling Subsidiaries; (ii) contracts for
products and services with a sole source supplier which, during the
1997 calendar year, accounted for more than US dollars 1,000,000 (one
million dollars); (iii) patent licensing agreements the object of
which is specific to an RPS Business application, whether or not
payments are required; (iv) sales agreements which, in 1997, accounted
for more than US dollars 1,000,000 (one million dollars) worth of
sales.
(c) Neither the Acquired Companies nor any of the Selling Subsidiaries is
in material default under any of the Material Contracts. To the best
knowledge of SCHLUMBERGER and of the Selling Subsidiaries, there has
not been any material default under any of the Material Contracts by
any other party thereto nor to the best of their knowledge have they
been informed, as of the
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date of this Agreement by any such other party of its intent to
terminate a Material Contract.
(d) None of SCHLUMBERGER, the Acquired Companies or the Selling
Subsidiaries has received any written notice or has any knowledge or
reason to believe that any current material supplier to any Acquired
Company or Acquired RPS Activity will not continue to supply any
Acquired Company or Acquired RPS Activity on substantially the same
basis as it currently supplies any such Acquired Company or Acquired
RPS Activity, except for price increases in accordance with any such
supplier's ordinary course of business.
(e) SCHLUMBERGER shall, and shall cause each Selling Subsidiary and the
Acquired Companies to, not do any act or omit to do any act, or permit
any act or omission which would, upon such act or omission or with the
passage of time, cause a breach or default under any of the Material
Contracts, or materially adversely affect BUYER's use of the
properties or the assets of the RPS Business. Beginning on the date
hereof, SCHLUMBERGER shall, and shall cause each Selling Subsidiary
and the Acquired Companies to, use their respective best efforts to
obtain any consents and waivers necessary to maintain such Contracts.
(f) The assignment of Material Contracts entered into by the Selling
Subsidiaries with respect to the Acquired RPS Activities may require
the prior written consent of the other party. However, to
SCHLUMBERGER's knowledge, and except as listed in Schedule 5.19 (f),
all Material Contracts are assignable to BUYER without undue
difficulties, and SCHLUMBERGER shall use its best efforts to
facilitate such assignment.
(g) The RPS Business is not restricted by agreement from carrying on its
business anywhere in the world.
(h) The RPS Business does not have any material outstanding loan to any
person.
(i) Except for employment agreements and those agreements that are listed
in Schedule 5.19(i), neither the Selling Subsidiaries nor the Acquired
Companies have entered into agreements with their officers and
directors that relate to the RPS Business and are being transferred to
BUYER either through the Acquired Companies or the Acquired RPS
Activities.
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5.20 Labor Matters
(a) Schedule 5.20(a)(i) lists, as of the date hereof, the name of each
employee transferable with the RPS Business, including employees of
both the Acquired Companies and the Selling Subsidiaries attached to
the RPS Business, and Schedule 5.20(a)(ii) lists the key employees of
both the Acquired Companies and the Selling Subsidiaries attached to
the RPS Business.
(b) Except as disclosed by SCHLUMBERGER or any of the Selling Subsidiaries
prior to the date hereof or except as disclosed in Schedule 5.20(b),
none of SCHLUMBERGER or the Selling Subsidiaries (as it relates to the
RPS Business) has, as of the date hereof, established any labor policy
such as offered pension, disability, profit sharing, hospitalization
insurance or retirement, other than as required by law or any
applicable collective bargaining agreement. All such pension plans are
fully funded. There are no benefits to employees, officers or
directors that shall become due on account of the change in control in
the capital of any Acquired Companies or Acquired RPS Activities.
(c) SCHLUMBERGER, the Selling Subsidiaries and the Acquired Companies have
paid and shall pay until the Closing Date, in full, all wages,
salaries, bonuses and other direct or indirect compensation in cash or
in kind earned by, and due and payable to, all transferred employees.
(d) To the best knowledge of SCHLUMBERGER, each of the Acquired Companies
and Selling Subsidiaries as it relates to the RPS Business is, and
shall be at the Closing Date, in compliance with local laws and
regulations concerning employment, it being understood that
SCHLUMBERGER and its affiliates may be held liable only for failure to
comply with these laws and regulations up to the Closing Date.
(e) The Acquired Companies and the Selling Subsidiaries have in relation
to each of their employees, and in accordance with relevant applicable
laws and usages:
(i) maintained records of the service of the employees:
(ii) paid all income tax under applicable laws and payments due in
respect of national insurance contributions (including the
employer's contributions) after making the applicable, required
deductions from
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salaries, wages and bonuses paid by the Acquired Companies and
the Selling Subsidiaries:
(iii) maintained proper records of the payments and deductions
mentioned above.
(f) There is no labor strike, slow down or stoppage pending, or to
SCHLUMBERGER's knowledge, threatened against or directly affecting the
RPS Business. Neither the Selling Subsidiaries (in relation to the RPS
Business) nor the Acquiring Companies have received notice of a labor
dispute or claim brought by a terminated employee. There are no
pending law suits in relation to employee termination. SCHLUMBERGER
has no knowledge of any threatened labor disputes or claims.
(g) Except as set forth in Schedule 5.20(g), neither the Selling
Subsidiaries nor the Acquired Companies have entered into employment
agreements that contain any severance or termination pay liabilities
or obligations in excess of what is provided by applicable law or
applicable collective bargaining agreements.
(h) Except as set forth in Schedule 5.20(h), the Selling Subsidiaries and
Acquired Companies have entered into, or apply, no collective
bargaining agreements, union contracts or agreements.
5.21 Fringe Benefit Plans
Except as set forth in Schedule 5.21, neither the Selling Subsidiaries nor
any of the Acquired Companies has any bonus, deferred compensation,
pension, profit-sharing, retirement, stock purchase, stock option or any
other fringe benefit plan, arrangement or practice, whether formal or
informal that would be transferred by BUYER. The Base Balance Sheet
reflects in the aggregate an accrual of all amounts accrued but unpaid
under the aforesaid plans and arrangements as of December 31, 1997. Neither
the Selling Subsidiaries or Acquired Companies has any commitment, whether
formal or informal and whether legally binding or not, to create any
additional such plan or arrangement.
5.22 Banking Relationships
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Schedule 5.22 lists the name of each bank, trust company, savings and loan
association and other financial institution in which the Acquired Companies
have any account or related to the Acquired RPS Activities (giving the
account numbers and the names of the person(s) authorized to draw thereon
or to have access thereto).
5.23 Litigation
Schedule 5.23 lists all known litigation except for (i) matters involving
each a claim of less than US dollars 50,000 (fifty thousand dollars) or
(ii) matters covered by insurance for which the insurance carrier has
accepted the potential liability and defense thereof,
Except for (i) matters involving each a claim of less than US dollars
50,000 (fifty thousand dollars) or (ii) matters covered by insurance for
which the insurance carrier has accepted the potential liability and
defense thereof, there is, to the knowledge of SCHLUMBERGER, no claim,
action, suit, proceeding, outside of France, the United States of America,
Russia, the Czech Republic, the United Kingdom and Italy (but solely
relating to the RPS Business of the Italian Selling Subsidiary) or
investigation pending which has not been adequately, or will not have been
adequately, reserved for, in the Base Balance Sheet and, in particular,
concerning product liability, there are to the knowledge of SCHLUMBERGER no
claims pending or threatening as of the date hereof.
(a) The Acquired Companies and the Selling Subsidiaries have not received
any process, notice or communication, formal or informal, by or on
behalf of the Office of Fair trading, the Monopolies and Mergers
Commission or any other authority of any country having jurisdiction
in anti-trust matters, in relation to any aspect of the RPS Business
or any agreement or arrangement to which the Company is or was, or is
alleged to be or have been, a party.
5.24 No Material Change
Except as set forth in Schedule 5.24, since the date of the Base Balance
Sheet, the RPS Business has been conducted in the ordinary course and there
have been no events having a material adverse effect on the value of the
RPS Business.
5.25 Compliance with Applicable Laws/Permits
(a) The Selling Subsidiaries and the Acquired Companies have generally
conducted their business in accordance with all applicable laws,
regulations and other requirements of all national governmental
authorities, and of all states, municipalities and other political
subdivisions and agencies thereof,
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having jurisdiction over the RPS Business. None of the Selling
Subsidiaries nor the Acquired Companies has received any notification
of any asserted present or past material failure by the Selling
Subsidiaries or the Acquired Companies to comply with such laws, rules
or regulations except as described in Section 5.26.
(b) Except when presently in the process of renewal, in accordance with
local regulation and past local practices: (i) the Selling
Subsidiaries and the Acquired Companies hold, or will hold at the end
of the regular periodic renewal process, all applicable weight and
control certificates currently required by any country in which they
do business or required with respect to the sale of any RPS product,
and all other permits of any kind currently required for the operation
of the RPS Business as currently conducted and such certificates and
permits are in full force and effect; (ii) at the Closing, each
Selling Subsidiary and Acquired Company will hold, or will be in the
process of obtaining the renewal of, all material governmental or
regulatory permits and authorizations which are required for the
conduct of the RPS Business as currently being conducted.
No notices have been received by SCHLUMBERGER, any Selling Subsidiary, or
any of the Acquired Companies, relating to termination or cancellation of,
and neither SCHLUMBERGER nor any Selling Subsidiary or any of Acquired
Company is in violation of the material terms and conditions of, any such
permits or authorizations.
5.26 Environmental Matters
(a) For purposes of this Agreement:
(i) "Environmental Law" means any applicable treaties, laws,
regulations, directives, circulars, orders, decrees, judgments,
injunctions, permits, approvals, authorizations, or permissions
relating to pollution or protection of the environment,
including, without limitation, laws relating to releases or
threatened releases of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, ambient
air, surface water, groundwater, land, surface and subsurface
strata) or pertaining to the protection of natural resources,
the environment and public and employee health and safety, or
governing or regulating the use, storage, handling,
transportation, treatment, processing, disposal or generation
of any Hazardous Materials, and the regulations promulgated
pursuant thereto as such laws and regulations may be amended or
supplemented through the Closing Date;
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(ii) "Hazardous Materials" means any substance, material or waste
which is regulated pursuant to any Environmental Law by any
public or governmental authority in the jurisdictions in which
the SCHLUMBERGER conducts business, including any material or
substance which is defined as a "hazardous waste", "hazardous
substance", "contaminant", "pollutant", "explosive",
"flammable", "radioactive" or "toxic" under any provision of
Environmental Law, but not limited to, petroleum, asbestos, or
PCB's (as defined in Section 5.26(c));
(iii) "Release" means any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, or migration
into the environment, or into or out of any property subject to
this Agreement;
(iv) "Remedial Action" means all actions, including any capital
expenditures, required by a governmental entity or required
under any applicable Environmental Law to (i) investigate,
clean-up, remove, treat, or in any other way address any
Hazardous Materials in the environment, (ii) prevent the
Release of any Hazardous Material so it does not endanger
public health or the environment, or (iii) perform pre-remedial
studies, and investigations or post-remedial monitoring and
care pertaining or relating to a Release, or (iv) bring the
applicable party into compliance with any Environmental Law;
and
(v) Contemporaneously with the execution of this Agreement, to the
best of its knowledge, SCHLUMBERGER has delivered to BUYER, true
and complete copies of all environmental studies made in the
last five years relating to the RPS Business, any Selling
Subsidiary or Acquired Company; a list of material Hazardous
Materials used or generated by any Selling Subsidiary or
Acquired Company; and a general description of the waste
disposal practices of the Selling Subsidiaries or Acquired
Companies.
(b) Except as set forth in Schedule 5.26(b), to the best of Schlumberger's
knowledge, all of the Real Property (as defined below) which is part
of the RPS Business and the operations of the RPS Business is, or, as
of the Closing Date, will be in material compliance with all
Environmental Laws, including, without limitation, all restrictions,
conditions, standards, limitations, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental
Laws or contained in any code, plan or demand letter issued, entered,
promulgated or approved thereunder. For the
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purposes of this Agreement, Real Property shall mean all real property
(including plants, buildings, structures and fixtures) used in the
operation of the RPS Business and which is owned, leased or used by
either SCHLUMBERGER, any of the Selling Subsidiaries or Acquired
Companies.
(c) Except as set forth in Schedule 5.26(c), to the best of Schlumberger's
knowledge, there have been no releases, spills or discharges of
Hazardous Materials on or underneath any of the Real Property which is
part of the RPS Business or waste disposal by any Acquired Company or
Selling Subsidiary at an offsite location that is currently in
violation of any Environmental Law; also except as noted in such
Schedule, the Real Property in the United States which is part of the
RPS Business does not contain any underground storage tanks, asbestos,
manufacturing equipment using polychlorinated biphenyls ("PCBs"),
underground injection wells, or septic tanks in which process
wastewater or any Hazardous Materials have been disposed.
(d) Except as set forth in Schedule 5.26(d), to the best of Schlumberger's
knowledge, the Selling Subsidiaries and the Acquired Companies have
obtained and will, as of the Closing Date, maintain all material
permits required under applicable Environmental Laws for the continued
operations of the RPS Business as currently conducted (the
"Environmental Permits").
(e) Except as set forth in Schedule 5.26(e), to the best of Schlumberger's
knowledge, there is no claim, notice or proceeding pending to
terminate any Environmental Permit; and SCHLUMBERGER, the Selling
Subsidiaries or Acquired Companies have received no communication that
alleges that any Selling Subsidiary or Acquired Company is in non-
compliance.
(f) Except as set forth in Schedule 5.26(f), to the best of Schlumberger's
knowledge, the operations of the Selling Subsidiaries or Acquired
Companies are not subject to any outstanding written orders,
investigations or material contracts with any governmental entity
respecting (i) Environmental Laws, (ii) Remedial Actions or (iii)
Release of a Hazardous Material.
(g) Except as set forth in Schedule 5.26(g), to the best of Schlumberger's
knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired
Companies have received any written communication alleging the
violation of or a liability under any Environmental Law or liability
attributable to the Release of any Hazardous Materials.
(h) Except as set forth in Schedule 5.26(h), to the best of Schlumberger's
knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired
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Companies have any contingent liabilities in connection with the
Release of any Hazardous Materials in the environment (whether on-site
or off-site).
(i) (i) As identified in Schedule 5.26 (i)(i) and Section 9.14 below, or
as might be identified after the Closing Date in accordance with
this Agreement, SCHLUMBERGER shall perform any Remedial Action
(a) as may be deemed necessary or appropriate by SCHLUMBERGER
after prior consultation and BUYER's agreement in principle to
the applicable remediation plan as presented by SCHLUMBERGER or
(b) as may be ordered or approved by a governmental authority
and an applicable Environmental Law. ;
(ii) With respect to the Remedial Action, SCHLUMBERGER, shall conduct
all tests, undertake all monitoring, and perform any and all
actions, of whatever scope, kind and nature as (a) may be deemed
necessary or appropriate by SCHLUMBERGER after prior
consultation and BUYER's agreement in principle to the
applicable remediation plan as presented by SCHLUMBERGER or (b)
may be ordered or approved by a governmental authority and an
applicable Environmental Law. SCHLUMBERGER shall use reasonable
efforts to undertake any Remedial Action in such a manner as to
minimize interference with normal business operations. With
regard to Remedial Actions that may be performed by
SCHLUMBERGER, BUYER shall provide SCHLUMBERGER such access to
portions of the property as are not otherwise accessible to
SCHLUMBERGER, as SCHLUMBERGER deems reasonable and necessary to
effect such Remedial Action, provided that such access shall
minimize interference with BUYER's normal operations.
(iii) BUYER agrees for itself, its directors, officers, employees,
agents, invitees, contractors, lessees, successors and assigns,
not to (i) interfere unreasonably with the operation of
SCHLUMBERGER's Remedial Action, or (ii) contribute to the
exacerbation of any environmental situation for which
SCHLUMBERGER has a Remedial Action obligation. SCHLUMBERGER
shall consult fully with BUYER prior to engaging in any Remedial
Action in order to explain what it will do and to establish
cooperative means so that the Remedial Action can be conducted
properly and efficiently. BUYER shall consult with SCHLUMBERGER
prior to engaging in any activity that could reasonably be
expected to adversely affect the Remedial Action or exacerbate
any related environmental condition, and will comply as
appropriate and reasonable with such reasonable safeguards and
procedures as SCHLUMBERGER may request.
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(iv) For purposes of this paragraph 5.26(i)(iv), all actions to be
taken by SCHLUMBERGER will be taken by SCHLUMBERGER or any
affiliate of its choice designated for purposes of carrying out
the Remedial Action. BUYER's obligations towards SCHLUMBERGER
will apply towards SCHLUMBERGER's designated affiliate.
(v) In the event that SCHLUMBERGER does not perform any work in
connection with a Remedial Action called for by an
administrative or court order, within 20 days of notice by BUYER
of said order, accompanied by all applicable information, BUYER
shall be entitled to initiate and perform such work or action on
its own, without prejudice to the allocation of related expenses
set forth in Section 9.3 herein, until such time as SCHLUMBERGER
shall undertake such work or action as called for in such
administrative or court order.
5.27 No undisclosed liability
The RPS Business does not have any liabilities or obligations of any nature
which, under US GAAP, or the Accounting Principles, should be fully
reflected or reserved against in the Base Balance Sheet and are not so
reflected or reserved against, except for liabilities and obligations
incurred in the ordinary course of business and consistent with past
practice since the date hereof.
5.28 No implied representation
Notwithstanding anything contained in this Article V or any other provision
of this Agreement, it is the explicit intent of each Party thereto that
SCHLUMBERGER is not making any representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement,
including but not limited to any implied warranty or representation as to
condition, merchantability or suitability as to any of the properties or
assets of the RPS Business.
ARTICLE VI
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REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
BUYER represents and warrants that:
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6.1 Organization of BUYER and the Acquiring Subsidiaries
Each of BUYER and as per the Closing Date the Acquiring Subsidiaries is a
corporation which is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power and authority to own, lease and operate its properties and to carry
on its business as now being conducted.
6.2 Authority of BUYER and the Acquiring Subsidiaries
(a) Each of BUYER and as per the Closing Date the Acquiring Subsidiaries
has full power and authority to enter into this Agreement and/or the
other agreements and instruments executed in connection with this
Agreement, and to carry out its respective obligations hereunder. The
execution and delivery of this Agreement and the other agreements and
instruments executed in connection with this Agreement, to which any
of them is a party, have been duly authorized by its Board of
Directors and, as necessary, its shareholders. No other corporate or
other proceedings on the part of any of them are necessary to
authorize this Agreement, the agreements contemplated in this
Agreement and the transactions contemplated hereby or thereby, except
the declaration or notification required under any stock exchange
regulations whatsoever, which BUYER undertakes to make in due course
as required:
(b) This Agreement and the other agreements and instruments executed in
connection with this Agreement to which BUYER or as per the Closing
Date the Acquiring Subsidiaries is a party constitute valid and
binding obligations of BUYER and said Acquiring Subsidiaries,
enforceable against each of them, in accordance with their respective
terms.
6.3 Consents and Approvals; No Violation
Neither the execution or delivery of this Agreement or any of the other
agreements and instruments executed in connection with this Agreement, to
which BUYER or as per the Closing Date the Acquiring Subsidiaries is a
party, nor the consummation of the transactions contemplated hereby or
thereby (i) requires any filing or registration with, or material permit,
authorization, consent or approval of, any governmental or regulatory
authority other than as shall have been made and obtained on or prior to
the Closing Date; (ii) violates any law, rule, regulation, ordinance,
order, writ, injunction, judgment, decree or award of any court of
governmental or regulatory authority; (iii) violates or conflicts with any
provision of, or constitutes a default (or an event which, with notice or
lapse of time or both,
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would constitute a default) under the Articles of Incorporation or by-laws,
as amended, of BUYER and of the Acquiring Subsidiaries; and (iv) violates
or breaches any material provision of any agreement, commitment or
obligation of any kind to which BUYER or one of the Acquiring Subsidiaries
is a party.
6.4 Financing
BUYER has received from The First National Bank of Chicago, First Chicago
Capital Markets, Inc. and Bankers Trust Company, a valid and binding
commitment to finance the transactions contemplated hereby, which
commitment is entirely described in the letter attached hereto as Schedule
6.4 (the "Financing Letter").
ARTICLE VII
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ADDITIONAL COVENANTS
--------------------
7.1 Reasonable Efforts
If at any time after the Closing Date any further action is necessary,
proper or advisable to implement this Agreement and the other agreements
contemplated hereby, as soon as reasonably practicable, each Party to this
Agreement shall, or cause the proper employees. officers or directors of
such Party or its Subsidiaries to, take all such necessary action.
7.2 Non-Competition Agreements
SCHLUMBERGER, for itself and on behalf of each of its affiliates, unless
acting with the prior written consent of BUYER, shall not, and shall cause
each of its affiliates not to, directly and indirectly, for a period of
four (4) years after the Closing Date engage in any business which is in
competition with the RPS Dispenser Business and the RPS Service Business
(as conducted as of the date hereof), provided, however, that SCHLUMBERGER
or its affiliates may participate in a joint venture, similar arrangement
or commercial alliance with a third party which engages in a business
competitive with the RPS Dispenser Business or RPS Service Business if the
purpose and activities of such joint venture, similar arrangement or
commercial alliance is not dispensers nor services.
It is understood and agreed by the Parties that SCHLUMBERGER or its
affiliates are free to engage directly or indirectly in any activity in the
area of electronic payment networks, transactions and/or systems in
relation to RPS Business applications including but not limited to smart
cards, fidelity or payment cards, card
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validators and payment terminals, with the exception, however, of any
electronic systems or programs controlling gasoline dispensers or gasoline
pumps which SCHLUMBERGER and each of its affiliates shall not, directly or
indirectly, engage in for a period of four (4) years after the Closing
Date.
In the event that the provisions of this Section 7.2 should ever be deemed
to exceed the time or geographic limitations or any other limitations
permitted by applicable law in any jurisdiction, then such provisions shall
be deemed reformed in such jurisdiction to the maximum permitted by
applicable law.
7.3 Public Announcements/Disclosures
Upon execution of this Agreement each Party shall be entitled to issue
press-releases or public announcements regarding the transactions
contemplated hereby, which press releases or announcements shall be
submitted for prior approval to the other party which shall not
unreasonably withhold the approval.
Neither SCHLUMBERGER nor BUYER will disclose any other information
regarding this Agreement except:
- with the prior written consent of the other party;
- as required under securities and stock exchange laws and regulations
or other applicable laws and governmental regulations, including the
Treaty of Rome;
- to their employees, agents and consultants (including, without
limitation, any entity providing credit to BUYER) and only to the
extent such persons have a need to know such information and are bound
by the Confidentiality Agreement executed on April 21, 1998, or unless
such disclosure is required by applicable law.
7.4 SCHLUMBERGER Guarantees
As of the Closing Date, BUYER shall assume the obligations of the Acquired
Companies or related to the Acquired RPS Activities under any guarantees
and similar obligations including any comfort letters related to the RPS
Business so that SCHLUMBERGER is relieved of all liabilities with respect
to such guarantees as of the Closing Date and hold harmless of any claims
and expenses related thereto.
7.5 Product Liability
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SCHLUMBERGER agrees to be responsible for all claims in respect of all
legal and contractual product liability and all other warranty obligations
in respect of the products manufactured and sold, as well as the services
provided in connection therewith, in the course of the RPS Business prior
to the Closing Date.
BUYER agrees to be responsible for all claims in respect of all legal and
contractual product liability and all other warranty obligations in respect
of the products sold, as well as of the services provided in connection
therewith, in the course of the RPS Business after the Closing Date.
7.6 SCHLUMBERGER Names and Trademarks
Within six (6) months from the Closing Date, BUYER and the Acquiring
Subsidiaries shall promptly discontinue the direct use of the name,
trademark and corporate denomination "SCHLUMBERGER" and of SCHLUMBERGER's
corporate logo, or of any variation thereof.
BUYER, the Acquiring Subsidiaries and the Acquired Companies shall be
authorized to use the stock of technical and commercial documentation held
by the Acquired Companies or related to the Acquired RPS Activities as
existing at the Closing Date during six months only as from this Date. At
the end of this period, they shall immediately return to SCHLUMBERGER or
destroy the remaining documentation in compliance with its instructions.
BUYER and the Acquiring Subsidiaries shall be authorized for a period not
exceeding six (6) months from the Closing Date, to continue to
commercialize directly or through the Acquired Companies or its
distributors the RPS Business products which will be in stock at said date,
marked with the "SCHLUMBERGER" names, trademarks or logos. At the end of
this period, BUYER and the Acquiring Subsidiaries shall be prohibited to
manufacture and sell new RPS Business products or RPS Business products in
stock labeled with these names, trademarks or logos, and any mention
thereof shall be removed from any and all of the products remaining in
stock and SCHLUMBERGER shall be given access to all premises so that it may
proceed with all reasonable investigations with respect to this
undertaking.
7.7 Release of liens or encumbrances
Should liens or encumbrances exist which happened not to have been
disclosed by SCHLUMBERGER or the Selling Subsidiaries, SCHLUMBERGER
covenants to cause such liens or encumbrances to be released, at its cost,
upon request from
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BUYER or any of the Acquiring Subsidiaries, unless such encumbrances or
liens are granted in relation to lease agreements for equipment, financial
leasing agreements for equipment and the like, which agreements are
transferred to, and assumed by, BUYER pursuant to the terms of this
Agreement, which liens shall not be in excess of an aggregate amount of US
dollars 100,000 (one hundred thousand dollars).
7.8 Other SCHLUMBERGER employees
(a) Schedule 7.8(a) sets out a list of sales personnel located in South
America and Asia, that, although not on payrolls of the RPS Business,
exclusively sell RPS products. These employees will remain employed by
SCHLUMBERGER affiliates for a maximum of twelve months after the
Closing Date but will continue to sell RPS products, in the name and
on behalf of BUYER. Their cost (salary, benefits and expenses) will be
billed to BUYER by their employer, with no margin, during that period.
At the end of the twelve-month period, the Parties shall decide
jointly on the future of these employees.
(b) Schedule 7.8(b) sets out a list of employees of SCHLUMBERGER or
affiliates thereof that SCHLUMBERGER will second, or will cause to be
seconded, to BUYER or Acquiring Subsidiaries for a period of at least
one year and at most two years. This exact period will be decided by
BUYER. SCHLUMBERGER or its affiliates shall bill BUYER or the
Acquiring Subsidiaries for the cost of these employees (salary,
benefits and expenses), with no margin, during the period of the
secondment.
7.9 Customer Information
All customers and prospects, the customers data base including all
information on history of customers as from installation date, files,
commercial and technical documentation of the Selling Subsidiaries and all
other subsidiaries of SCHLUMBERGER engaged in the RPS Business shall be
transferred to BUYER and the Acquiring Companies at the Closing.
7.10 Contracts awaiting consent to transfer
Should the consent of a party to a contract that is part of the Acquired
Assets fail to be obtained in relation to the transfer of such contract to
the Acquiring Subsidiary, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to, cooperate with
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BUYER in any arrangement reasonably requested by BUYER to provide BUYER or
the Acquiring Subsidiaries the benefits under such contract, including the
enforcement at the cost of and for the benefit of BUYER or the Acquiring
Subsidiaries of any and all rights thereunder of SCHLUMBERGER or the
Selling Subsidiaries against the other party thereto that are attributable
to the RPS Business.
7.11 Shared Premises
As soon as practicable after the Closing Date but at the latest within nine
(9) months of such date, BUYER shall have relocated all the RPS Business
presently operated out of the SCHLUMBERGER Montrouge site. The Parties
will review, and agree upon, on a case by case basis, other lease or
sublease arrangements relating to shared premises to ensure a practical
transitional period.
7.12 Access
After the Closing Date, SCHLUMBERGER and the Selling Subsidiaries shall
continue to give access to BUYER and the Acquiring Subsidiaries to any
information and archives relating to the RPS Business not transferred to
BUYER or the Acquiring Subsidiaries pursuant to this Agreement and to
provide reasonable assistance with all tax, customs and social security
inquiries and claims in relation to the RPS Business.
7.13 Waiver of Subrogation
To the extent of liabilities assumed by BUYER or Acquiring Subsidiaries
pursuant to this Agreement, BUYER shall ensure that its insurers, and the
Acquiring Subsidiaries' insurers, agree to waive all rights of subrogation
against SCHLUMBERGER or the Selling Subsidiaries and their insurers.
7.14 Pension Plans
(a) In the USA, SCHLUMBERGER shall continue to maintain the existing
defined benefit pension plan and defined contribution savings plan.
Said plans shall continue to remain under the sponsorship and
direction of the Selling Subsidiary in the USA, and no direct transfer
of the assets or liabilities shall occur with respect to said plans.
The treatment of benefits under said plans is detailed in Schedule
7.14 (a).
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(b) In the UK, SCHLUMBERGER and BUYER undertake to cooperate to procure
that
(i) BUYER (or any Acquiring Subsidiary that employs the UK Employees,
as defined in Schedule 7.14 (b) after Closing) is appointed as
the principal company of the Dunclare Scheme, as defined in
Schedule 7.14 (b) with effect from Closing;
(ii) subject to the requirements of sections 16-21 of the Pension Act
1995, new trustees nominated by BUYER are appointed as trustees
of the Dunclare Scheme with effect from Closing in the place of
the existing trustees.
The treatment of the replacement benefits and the participation
period in the Schlumberger Scheme are defined and treated in Schedule
7.14 (b).
7.15 Continuing relationships
In the event relationships with SCHLUMBERGER affiliates not involved in the
RPS Business survive the Closing, the Parties shall continue such
relationships at standard arm's length conditions.
7.16 Cashflow forecasts
SCHLUMBERGER commits to provide BUYER with historical cashflow requirement
data, for 1997 and for each of the significant Acquired Companies and
Acquired RPS Assets, within one month from the date of signature of this
Agreement.
7.17 Chinese Joint Venture
Within 90 days from the date of signature of this Agreement, BUYER commits
to notify SCHLUMBERGER of its decision whether to acquire SCHLUMBERGER's
indirect interest in a Chinese joint venture (58% shareholding in
Schlumberger-Xin Yang Retail Petroleum Systems Corporation Ltd) (the
"Chinese Joint Venture"), at conditions to be discussed. Failing such
notification, BUYER shall be deemed not to acquire this interest and
SCHLUMBERGER shall be free to keep it, transfer it or otherwise dispose of
it, notwithstanding any other provision of this Agreement. Should BUYER not
acquire the Chinese Joint Venture, it commits to continue all existing
agreements between the RPS Business and the Chinese Joint Venture until
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their respective term, all renewals excluded. The major agreements are
attached in Schedule 7.17 hereto. If SCHLUMBERGER is obliged to stay as a
shareholder of the Chinese Joint Venture, SCHLUMBERGER shall not be
considered in violation of any non-competition obligation or warranty as it
relates to such Chinese Joint Venture, provided that SCHLUMBERGER shall
exit the share capital of the Chinese Joint Venture by December 31, 2014.
7.18 BUYER's commitments with regards to employees
(a) BUYER shall maintain the employment conditions of all employees of the
Acquired Companies and all employees transferred by the Selling
Subsidiaries to the Acquiring Subsidiaries, including, without
limitation: (i) the seniority acquired during their employment with
the Acquired Companies, the Selling Subsidiaries and any SCHLUMBERGER
affiliates; (ii) severance pay, such severance payment, for all US
employees of the RPS Business, being equal to the sum of one week's
pay per year of employment up to a maximum of 26 weeks pay, with a
minimum severance payment equal to two week's pay; and (iii) retiree
medical benefits, to the extent such benefits are currently offered by
BUYER.
(b) BUYER shall continue the incentive compensation programs in place with
the Acquired Companies and the Selling Subsidiaries for the year 1998
with measurements and awards consistent with such programs and past
practices, but subject to appropriately redefined business objectives.
(c) BUYER shall ensure that the employees of the Acquired Companies and
the Selling Subsidiaries be entitled to take any remaining accrued and
unused vacation or receive pay in lieu thereof, for the year 1998.
7.19 Cooperation in Connection with Outstanding Litigation
SCHLUMBERGER and BUYER shall fully cooperate in connection with all
litigation outstanding at the Closing Date and continuing beyond the
Closing Date. Without limitation, in France, the United States of America,
Russia, the Czech Republic, the United Kingdom and Italy (but solely
relating to the RPS Business of the Italian Selling Subsidiary), BUYER
shall provide reasonable access to all records, documents, employees and
information of the RPS Business as may be required from time to time to
properly defend in such litigation. Failure to cooperate as provided in
this Section 7.19, if it prevents one Party to adequately defend its
interest, shall render the other party liable for all amounts that may
become due as a result.
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For any litigation outstanding at the Closing Date relating to the RPS
Business, no settlement shall be entered into by either BUYER or
SCHLUMBERGER with respect to such litigation unless (i) the amounts to be
paid are entirely covered by insurance; or (ii) the Parties agree to such
settlement, to which their consent shall not be unreasonably withheld.
ARTICLE VIII
-------------
TERMINATION
-----------
8.1 Failure of Conditions Precedent
If the conditions precedent set out in Article III, Sections 3.1 and 3.2
above shall not have been fulfilled on or before December 31, 1998, this
Agreement may be terminated by either party, in which case no party shall
have any claim of any nature whatsoever hereunder against any other party.
8.2 Mutual Consent
This Agreement may be terminated at any time by mutual consent.
8.3 Procedure Upon Termination
In the event of termination of this Agreement as provided herein, written
notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated and
abandoned, without further action by SCHLUMBERGER or BUYER. If the
transactions contemplated by this Agreement are terminated and abandoned as
provided herein:
(a) Each Party will redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to
the Party furnishing the same;
(b) All confidential information received by any Party hereto with respect
to the business of any other Party or its subsidiaries shall be
treated in accordance with Section 8.4 hereof; and
(c) No party hereto shall have any liability or further obligation to any
other party to this Agreement except as stated in subparagraphs (a)
and (b) of this Section 8.3.
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8.4 Confidentiality
Subject to the terms of any non-disclosure agreement in effect between the
Parties, if, for any reason, this Agreement is terminated or if the
transactions contemplated herein were not completed, BUYER and the
Acquiring Subsidiaries shall not use or disclose any information concerning
the RPS Business, SCHLUMBERGER, the Selling Subsidiaries and any of the
persons with whom the foregoing entertain business relations which they
shall have obtained in the course of the negotiation leading to the
signature of this Agreement and to the Closing, unless such information
becomes publicly available other than as a result of a disclosure by
SCHLUMBERGER or becomes available on a non-confidential basis from a
source other than SCHLUMBERGER which is not prohibited from disclosing such
information.
ARTICLE IX
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GENERAL AGREEMENTS
------------------
9.1 Expenses
(a) Whether or not the acquisition of the RPS Business is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses.
(b) Notwithstanding anything to the contrary, stock transfer tax, stamp
duties, and similar taxes (but not income, capital gains, and similar
taxes) imposed by any jurisdiction on the sale of the Acquired Shares
or the Acquired Assets contemplated by this Agreement shall be borne
by BUYER or any of the Acquiring Subsidiaries.
9.2 Brokers
SCHLUMBERGER represents and warrants that no broker or finder is entitled
to any brokerage or finders fee or other commission from BUYER or any
Acquiring Subsidiary based on agreements, arrangements or undertakings made
by SCHLUMBERGER or any Selling Subsidiary in connection with the
transactions contemplated hereby.
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BUYER represents and warrants that no broker or finder is entitled to any
brokerage or finders fee or other commission from SCHLUMBERGER or any
Selling Subsidiary based on agreements, arrangements or undertakings made
by BUYER or any Acquiring Subsidiary or affiliates in connection with the
transactions contemplated hereby.
9.3 Survival of Representations and Warranties
(a) The representations and warranties made by SCHLUMBERGER and BUYER in
this Agreement or in any of the Specific Acquisition Agreement
delivered pursuant to said Agreement shall terminate at the expiration
of the periods set out below and starting from the Closing Date,
except as to any matters occurred before the expiration of said
periods as to which a specific claim for indemnification will have
been notified in writing and in detail to the Indemnifying Party (as
defined in subparagraph d below) prior to the expiration of said
periods:
(i) with respect to the tax and social security liability,
representations: the periods shall be that of the applicable
statute of limitation, excluding any available extensions
thereof;
(ii) with respect to Environmental matters, December 31, 2004 for
issues arising in the United States of America, and outside the
United States of America, December 31, 2001, providing however,
that, beyond December 31, 1999, all Damages, costs and expenses
relating to environmental matters shall be shared equally by the
Parties;
(iii) with respect to all other representations and warranties:
December 31, 1999.
(b) Subject to the provisions of this Section 9.3, SCHLUMBERGER shall, or
shall cause a Selling Subsidiary, provided such subsidiary satisfies
such obligation, to indemnify and hold harmless BUYER and the
Acquiring Subsidiaries from any liability, damage, loss, judgment,
assessments, cost or expense, including all reasonable attorney's
fees, with the exception of those attorney's fees expressly dealt with
in Section 9.3(d) (the "Damages") arising from and attributable to:
(i) the material breach of any representation or warranty made by
SCHLUMBERGER in this Agreement;
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(ii) any failure of SCHLUMBERGER or the Selling Subsidiaries duly to
materially perform or observe any covenant or agreement to be
performed or observed by SCHLUMBERGER or the Selling
Subsidiaries pursuant to this Agreement; and
(iii) all other liabilities of the RPS Business which are not (i)
liabilities of an Acquired Company on the date hereof, (ii)
incurred by an Acquired Company after the date hereof in the
ordinary course of business and consistent with past practice,
(iii) liabilities listed in Exhibit E, or (iv) reflected on the
Closing Balance Sheet.
(c) Subject to the provisions of this Section 9.3, BUYER shall indemnify
and hold harmless SCHLUMBERGER and the Selling Subsidiaries from any
Damages arising from and attributable to:
(i) the material breach of any representation or warranty made by
BUYER in this Agreement;
(ii) any failure of Buyer or the Acquiring Subsidiaries duly to
materially perform or observe any covenant or agreement to be
performed or observed by BUYER or the Acquiring Subsidiaries
pursuant to this Agreement; and
(iii) the Assumed Liabilities.
(d) Any claim for indemnity shall be made by the party seeking
indemnification (the "Aggrieved Party") to the other party (the
"Indemnifying Party"), by written notice specifying in reasonable
detail the basis of the claim. Such notice, as well as the compliance
with the procedure set forth in the subsequent paragraph, shall be a
condition precedent to any liability hereunder. In regard to claims
brought by BUYER or Acquiring Subsidiaries, SCHLUMBERGER shall
determine which Selling Subsidiary or Subsidiaries, if any, shall be
responsible as the Indemnifying Party or Parties, and shall cause such
Selling Subsidiary to satisfy such obligation.
In the event of a direct claim, the Indemnifying Party shall have thirty
(30) days following its receipt of the relevant claim notice (the "Review
Period") to make such investigation of the underlying claim as it considers
necessary or desirable and the Aggrieved Party shall cooperate therewith.
If, on or prior to the expiration of the Review Period, the Parties agree
upon the validity and amount of such
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claim, the Indemnifying Party shall pay to the Aggrieved Party, within
three (3) business days following the date of such agreement, the full
agreed amount of the indemnification due on account of such claim. If the
Parties are unable to reach agreement prior to the expiration of the Review
Period, the parties may then refer the matter to arbitration as provided
pursuant to Section 9.13 of the Agreement.
In the event indemnification is likely to be sought with respect to a
claim, action or proceeding brought by a third party against the Aggrieved
Party, the Aggrieved Party shall permit the Indemnifying Party to assume
the defense of such third party claim, action or proceeding and shall
cooperate fully with the Indemnifying Party in the conduct of such defense.
Failure by the Indemnifying Party to notify the Aggrieved Party of its
election to defend any such claim or litigation within fifteen (15) days
from receipt of the notice thereof, shall be deemed a waiver by the
Indemnifying Party of its right to defend such claim or litigation. If the
Indemnifying Party assumes the defense of any such claim or litigation, the
obligations of the Indemnifying Party as to such claim shall be limited to
taking all steps necessary in the defense or settlement of the claim or
litigation and to holding the Aggrieved Party harmless from and against any
and all Damages caused by or arising out of any settlement or judgment in
connection with such claim or litigation, subject to the limitations of
Section 9.3 (e) hereunder. The Aggrieved Party may participate, at its
expense, in the defense of such claim or litigation, provided that the
Indemnifying Party shall direct and control the defense of such claim or
litigation. The Indemnifying Party shall not, in the defense of such claim
or litigation, consent to entry of any judgment or settlement, except
with the written consent of the Aggrieved Party. In case of failure by the
Indemnifying Party to duly elect to defend a claim or litigation, it may
participate, at its expense, in the defense of such claim or litigation,
provided that the Aggrieved Party shall direct and control the defense of
such claim or litigation.
Subject to final authority regarding direction and control as set forth
above, SCHLUMBERGER and BUYER will coordinate the conduct of the matter and
in particular the statements to be made, as well as the advisability of
settling or contesting the proceedings, will confer regarding their
respective choice of counsel and will each make available to the other the
documents related to the RPS Business under its control available to the
other for purposes of the defense.
(i) An Aggrieved Party shall not be entitled to an indemnity from an
Indemnifying Party for claims which individually do not exceed US
dollars 75,000 (seventy five thousand dollars) and in the
aggregate do not exceed US dollars 1,000,000 (one million
dollars).
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The total liability of an Indemnifying Party (including all affiliates
involved in the transactions contemplated by this agreement) shall not
exceed a total equal to US dollars 35,000,000 (thirty five million
dollars). This amount shall be reduced by the same percentage as the Total
Purchase Price, should the Total Purchase Price be reduced pursuant to
Section 1.6 above.
It is expressly understood that subject to the limitations above, an
Aggrieved Party shall be liable only for the net loss in excess of the US
dollars 1,000,000 (one million dollars) deductible amount referred to in
the first sentence of this paragraph 9.3 (e).
(e) Any net loss to be indemnified pursuant to this Section shall mean the
amount of the aggregate Damages actually suffered by affiliated
Aggrieved Parties less any provision on the Closing Balance Sheet no
longer justified, less any reduction, saving or repayment of taxes or
duties, or associated payments due or paid under any insurance policy
or other third party indemnity arrangement as well as any other
receipt or benefit which it might receive, whether or not these
amounts are related in any way to the claim giving rise to the
indemnification. It is expressly agreed that an Aggrieved Party shall
endeavor to mitigate any and all the damages for which an Indemnifying
Party may be exposed and held responsible under this Agreement.
9.4 Currencies
All financial documents and information contained in this Agreement,
provided or to be provided pursuant to this Agreement, shall be in US
dollars. The applicable exchange rate shall be that used by SCHLUMBERGER
at the relevant date. For purposes of the Base Balance Sheet; the
applicable exchange rate is that defined in Schedule 9.4.
9.5 Interpretation
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
9.6 Notices
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given: when delivered, if delivered by
messenger
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during normal business hours of the recipient: when sent, if transmitted by
facsimile transmission (receipt confirmed) during normal business hours of
the recipient, or, if mailed by registered mail, postage prepaid, on the
third business day following mailing, in each case addressed as follows:
(a) if to SCHLUMBERGER or any of the Selling Subsidiaries to:
Schlumberger Limited
Legal Department
Attention Acquisitions Counsel
42 rue St Dominique - 75007 Paris
With a copy to:
Gibson Dunn & Crutcher LLP
104 avenue Raymond Poincare
75116 Paris, France
Attention: Bernard Grinspan
(b) if to BUYER or any of the Acquiring Subsidiaries, to:
Tokheim Coporation
10501 Corporate Drive
Ft. Wayne, Indiana 46845 USA
Attention: Chief Financial Officer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
68, rue du Faubourg Saint-Honore
75008 Paris, France
Attention: Thomas R. Bateman
9.7 Entire Agreement
This Agreement (including the documents and instruments referred to herein
or therein) (i) constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral, between the
Parties with respect to the subject matter hereof, except the
confidentiality Agreement executed on April 21, 1998; and (ii) is not
intended to confer upon any other person any rights or remedies hereunder,
except as explicitly mentioned herein.
9.8 Amendment
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This Agreement may be amended or modified in whole or in part at any time
by an agreement in writing executed in the same manner as this Agreement.
9.9 Waiver of Compliance
Any failure of SCHLUMBERGER, on the one hand, or BUYER, on the other, to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by SCHLUMBERGER or the BUYER, respectively, but
such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
9.10 Governing Law
This Agreement as well as the Specific Acquisition Agreements shall be
governed by and construed in accordance with the laws of France.
9.11 Assignability; Successors and Assigns
The rights and obligations under this Agreement may not be assigned or
delegated by any party hereto, in whole or in part, to any third party
without the prior written consent of the other party hereto; provided,
however, that without such prior consent, BUYER shall have the right to
assign all or any part of its rights and obligations hereunder to (i) any
of BUYER's directly or indirectly wholly-owned affiliates, or (ii) by way
of security, guaranty or pledge, to any person providing credit to BUYER;
provided further that BUYER irrevocably and unconditionally guarantees the
prompt and complete performance by such transferee of BUYER's obligations
thereunder, and notifies SCHLUMBERGER of such assignment at least ten (10)
business days before the Closing.
9.12 Severability
Any provision of this Agreement which is held invalid or unenforceable in
any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
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9.13 Arbitration
All disputes, controversy or claim arising out of or in connection with the
Agreement shall be finally settled by arbitration under the rules of the
International Chamber of Commerce then in effect by three arbitrators
appointed in accordance with the said Rules.
The seat of arbitration shall be Paris (France).
The arbitration language shall be conducted and the award shall be rendered
in English.
It is further expressly stated that the arbitrators appointed as provided
above shall have sole and final jurisdiction for all disputes which may
arise in connection with this Agreement and its schedules but also for all
specific Acquisition Agreements, as well as their schedules and exhibits
executed pursuant to Article I above.
The award shall be final and binding upon the Parties as from the date
rendered and shall be the sole and exclusive remedy between the Parties
regarding any claims, counterclaims or issues presented to the arbitral
tribunal.
Any monetary award shall be made and promptly payable in US Dollars free of
any tax. Any costs, fees or taxes incident to enforcing the award shall,
to the maximum extent permitted by law, be charged against the Party
resisting such enforcement.
BUYER guarantees that all Acquiring Subsidiaries shall strictly observe
this arbitration provision and shall not sue SCHLUMBERGER or any of the
Selling Subsidiaries in any Court of justice. SCHLUMBERGER guarantees that
all Selling Subsidiaries shall strictly observe this arbitration provision
and shall not sue BUYER or any of the Acquiring Subsidiaries in any Court
of justice.
These guarantees shall be supported in writing by the Acquiring
subsidiaries and the Selling Subsidiaries but the failure to give such
support or the possible invalidity of said guarantees shall not invalidate
commitments of BUYER and SCHLUMBERGER under this provision.
9.14 Bladel Remediation
In accordance with Section 5.26(i), SCHLUMBERGER shall arrange and bear the
cost at the Bladel, Netherlands site for monitoring and remediation of the
soil
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and groundwater contamination currently known by SCHLUMBERGER, as discussed
in part in the Bladel Environmental Reports listed in Schedule 9.14. The
Remedial Action required to address this contamination will be conducted in
accordance with applicable Environmental Laws and under the oversight and
with the approval of the appropriate governmental authorities.
SCHLUMBERGER's obligation to arrange and bear the costs for the Bladel
Remedial Action as required under this Section 9.14, expires eight years
from the date of this Agreement, provided, however, that during this
period SCHLUMBERGER shall make its best efforts to proceed with such
Remedial Action.
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IN WITNESS WHEREOF, this Master Agreement has been signed on behalf of
SCHLUMBERGER Limited and TOKHEIM CORPORATION by a duly authorized officer of
each corporation, all as of the date first abovewritten.
__________________________ __________________________
SCHLUMBERGER LIMITED TOKHEIM CORPORATION
By: ______________________ By: ______________________
Title:____________________ Title:____________________
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EXHIBIT (c)(2)
AMENDMENT NO. 1
This Amendment No. 1 (this "Amendment") to the Purchase Agreement (as
defined below) is entered into between Tokheim Corporation ("Tokheim") and
Schlumberger Limited ("Schlumberger") as of September 30, 1998.
RECITALS
A. Tokheim and Schlumberger entered into a Master Agreement for Purchase
and Sale of Shares, Assets and Liabilities, dated as of June 19, 1998 (the
"Purchase Agreement"), pursuant to which Tokheim agreed to purchase the fuel
dispenser manufacturing, sales and service business units (the "RPS Division")
of Schlumberger for a price equal to $335 million, subject to certain
adjustments (the "Acquisition"). Pursuant to letter agreements dated as of July
21, 1998, July 31, 1998 and August 28, 1998, Schlumberger agreed to certain
concessions which are superseded by this Amendment No. 1. Tokheim and
Schlumberger now agree, as defined in those letter agreements, to retain the
Abbeville facility. Defined terms used in this Amendment No.1 that are not
defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
B. The Purchase Agreement requires the parties to close the Acquisition on
the last day of the month in which the last of the conditions precedent to the
closing is met. On September 23, 1998, Schlumberger notified Tokheim that such
conditions precedent to closing had been met and scheduled the closing for
September 30, 1998.
C. Tokheim has proposed to pay only $100 million of the purchase price in
cash and has requested Schlumberger to agree to (i) amend the Purchase Agreement
to provide that the balance of the purchase price will be paid as provided
herein and (ii) accept the debt securities and warrants of Tokheim referred to
herein in payment of the balance of the purchase price.
D. Schlumberger is willing to amend the Purchase Agreement as provided
herein and to finance the balance of the purchase price on the terms and
conditions set forth below and in the summary term sheet (the "Term Sheet")
attached as Exhibit A.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Tokheim and Schlumberger agree as
follows:
Section 1. Corporate Restructurings. At Tokheim's request, Schlumberger
has agreed to proceed with certain corporate restructurings, on or before
Closing, that had not initially been contemplated. These restructurings include
(i) the transfer to a French Schlumberger entity, ETPM SA, of the Acquired RPS
Activities in France (listed in Schedule C to the Purchase Agreement), with the
exception of the Abbeville facility, which facility Schlumberger has agreed to
keep, together with all liabilities associated thereto and (ii) the transfer of
the Acquired RPS Activities in Italy (RPS activities operated by Schlumberger
Industries Spa and listed in Schedule C to the Purchase Agreement) to the
Acquired Company in Italy (CME-RIMIC Spa). An amended version of Schedules D
and E and E-1(b) and E-1(a)(vi) are attached hereto as Exhibit B. Schedules
E-1(a)(i), E-1(a)(iii) and E-1(m) to the Purchase Agreement are deleted.
Schlumberger has also, with
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Tokheim's approval, restructured the share capital of the RPS entity in
Switzerland, Denmark and Slovakia in order for said entities to be in
compliance with local law. An amended version of Schedule C is attached hereto
as Exhibit C.
Section 2. Intercompany Loan Agreements. In order to reduce the Acquired
Companies' bank exposure in view of the Closing, and with Tokheim's approval,
Schlumberger set up a number of inter-company loans between Acquired Companies
or between Acquired Companies and the Selling Subsidiaries, a list of which is
attached hereto as Exhibit D (the "Intercompany Loans"). The Intercompany Loans
will be reimbursed at Closing by Tokheim as part of the Total Purchase Price.
Section 3. Employees. Schlumberger will provide Tokheim with an amended
version of Schedule 5.20 to the Purchase Agreement updated as of the Closing
Date, within ten business days from the Closing Date. Exhibit E hereto sets
forth a list of five Chinese university graduates hired as part of a Resident
Development Program. Schlumberger is willing to continue executing its
commitments towards these employees should Tokheim be willing to release them.
An amended version of Schedule 7.8(a) is also attached hereto in Exhibit E.
Section 4. Chinese Joint Venture. Pursuant to section 7.17 of the
Purchase Agreement, BUYER was given 90 days form the date of signature of the
Purchase Agreement to notify SCHLUMBERGER of its decision to acquire
SCHLUMBERGER's indirect interest in the Chinese Joint Venture. This time period
is now expired. However, SCHLUMBERGER has agreed to give BUYER a new period of
90 days from the date of this Amendment to notify it of BUYER's decision to
acquire SCHLUMBERGER's interest in the Chinese Joint Venture. Section 7.17 of
the Purchase Agreement is to be read accordingly.
Section 5. Non-Competition. Tokheim acknowledges that pursuant to its
agreement with Schlumberger, Schlumberger has agreed not to transfer to Tokheim
the Abbeville facility that is fully devoted to the RPS Business. Tokheim
agrees that Schlumberger shall be entitled to continue operating the Abbeville
facility as currently operated and that such continuation shall not be deemed a
breach of Schlumberger's non-competition commitment as provided by Section 7.2
of the Purchase Agreement so long as it continue to operate the facility as
currently operated. During the 90-day period as of the date of this Amendment
and after such term, should SCHLUMBERGER be obliged to stay as a shareholder of
the Chinese Joint Venture, SCHLUMBERGER shall not be considered in violation of
any non-competition obligation or warranty as it relates to the Chinese Joint
Venture so long as it conducts the Chinese Joint Venture as currently conducted,
provided SCHLUMBERGER shall exit the share capital of the Chinese Joint Venture
by December 31, 2014.
Section 6. Russia. SCHLUMBERGER has agreed to postpone the transfer of
the RPS Business in Russia pending the incorporation by BUYER of a local entity.
During a period not to exceed 12 months form the date of this Agreement, the
cost (salary, benefits and expenses) of the employees exclusively providing
services to with the RPS Business in Russia, as listed in Schedule 5.20 to the
Purchase Agreement will be billed to BUYER by their employer with no margin.
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Section 7. Amendment of Purchase Agreement.
(a) Section 1.3 of the Purchase Agreement is amended to read as follows:
"The aggregate of the reimbursement of the Intercompany Loans and the purchase
price for the Acquired Shares and the Acquired Assets shall be US dollars
330,000,000 (three hundred and thirty million dollars) (the "Total Purchase
Price"), subject to the assumption by Tokheim and the Acquiring Subsidiaries of
the Assumed Liabilities. The Total purchase Price shall be allocated to each of
the Acquired Companies, and to each of the, or group of, Acquired Assets
relating to each of the Acquired RPS Activities as indicated in Schedule 1.3 of
the Purchase Agreement."
An amended version of Schedule 1.3 is attached hereto as Exhibit F. The rest of
Section 1.3 remains unchanged.
(b) Section 1.4 of the Purchase Agreement is amended to read as follows:
"Payment of the Total Purchase Price for the Acquired Shares and the
Acquired Assets shall be made by BUYER on the Closing Date by: (i)
depositing, by wire transfer in US Dollars, $100,000,000 in immediately
available funds, into an account designated by SCHLUMBERGER for such
purpose, which designation shall be made as soon as practicable by
SCHLUMBERGER, acting as agent for the Selling Subsidiaries; and (ii)
delivering to SCHLUMBERGER the Junior Subordinated Notes as provided in
Section 7, the Senior Subordinated Notes, as provided in Section 8 and the
Warrants as provided in Section 9.
(c) Section 1.6(a) of the Purchase Agreement is amended to read as follows:
"Within thirty (30) calendar days from the Closing, SCHLUMBERGER shall
deliver to BUYER a combined audited balance sheet of the RPS Business as of
the month-end which shall correspond to the Closing Date, as defined in
Section 4.1 hereto (the "Closing Balance Sheet"). The Closing Balance
Sheet shall be prepared in accordance with US GAAP and the Accounting
Principles. To the extent that the Net Equity, shown on the Base Balance
Sheet is higher than the Net Equity shown on the Closing Balance Sheet,
SCHLUMBERGER shall make a payment to BUYER equivalent to the amount of the
difference, subject to a deductible of US dollars 3,000,000 (three million
dollars). To the extent that the Net Equity shown on the Base Balance
Sheet is less than the Net Equity shown on the Closing Balance Sheet, BUYER
shall make a payment to SCHLUMBERGER equivalent to the amount of the
surplus, subject to a deductible of US dollars 3,000,000 (three million
thousand dollars). Any payment resulting from this Section 1.6(a) shall be
referred to as the "Post Closing Adjustment". "Net Equity" ("situation
reelle") shall mean an amount equal to (i) the aggregate book value of the
assets of the RPS Business, excluding cash, cash equivalents and
intercompany receivables, as the case may be, reflected on a balance sheet
prepared at a given date, in accordance with US GAAP and the Accounting
Principles, minus (ii) the aggregate book value of the liabilities,
excluding third party (bank) debt and intercompany payables, as the case
may be, of the RPS Business reflected on that same balance sheet."
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(d) Section 1.6(f) of the Purchase Agreement is amended to add the
phrase", inclusive of the $3,000,000 deductible referred to in Section 1.6(a),"
immediately after the phrase "in no event shall the Post-Closing Adjustment".
(e) Section 4.1 of the Purchase Agreement is amended to read as follows:
"The Closing for the acquisition of the RPS Business shall take places at
the offices of Skadden Arps Slate Meagher & Flom LLP, avenue Louise 523, 1050
Brussels and at the offices of Skadden Arps Slate Meagher & Flom LLP, 333 West
Wacker Drive, Chicago, IL 60606, on September 30, 1998 and October 1, 1998."
(f) Section 9.14 of the Purchase Agreement is amended to read as follows:
"In accordance with Section 5.26(i), SCHLUMBERGER shall arrange and bear
the cost at the Bladel, Netherlands site for monitoring and remediation of
the soil and groundwater contamination currently known by SCHLUMBERGER,
as discussed in part in the Bladel Environmental Report listed in Schedule
9.14, subject to a US dollars 700,000 (seven hundred thousand dollars)
deductible. The Remedial Action required to address this contamination
will be conducted in accordance with applicable Environmental Laws and
under the oversight and with the approval of the appropriate governmental
authorities. SCHLUMBERGER's obligation to arrange and bear the costs for
the Bladel Remedial Action as required under this Section 9.14, expires
eight years form the date of this Agreement, provided, however, that during
this period, SCHLUMBERGER shall make its best efforts to proceed with such
Remedial Action."
Section 8. Services Agreement. On the Closing Date or thereafter,
Schlumberger and Tokheim will enter into one or more services agreements. Under
the agreements, Schlumberger will pay Tokheim a minimum fee of US$850,000 a year
(regardless of use) for a period of five years, payable monthly. The payments
under the services agreements are due in full even if Schlumberger terminates
the agreements or discontinues use of the services at any time during the five
year payment period. The provisions of this Section 6 supersede any prior
agreements or understandings between Schlumberger and Tokheim on this subject.
Section 9. Junior Subordinated Notes. Subject to the terms and
conditions hereof and in the Term Sheet, in payment of a portion of the Purchase
Price Tokheim will issue, and Schlumberger will acquire, junior subordinated
notes of Tokheim in the principal amount of $40 million (the "Junior
Subordinated Notes"), pursuant to a Securities Purchase Agreement substantially
in the form of Exhibit G.
Section 10. Senior Subordinated Notes. Subject to the terms and
conditions hereof and in the Term Sheet, in payment of a portion of the Purchase
Price Tokheim will issue, and Schlumberger will acquire, junior subordinated
notes of Tokheim in the principal amount of $170 million (the "Senior
Subordinated Notes"), pursuant to a Securities Purchase Agreement substantially
in the form of Exhibit G.
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Section 11. Warrants. Subject to the terms and conditions hereof and in
the Term Sheet, in payment of a portion of the Purchase Price Tokheim will
issue, and Schlumberger will acquire, warrants to purchase up to an aggregate of
up to 19.9% of the outstanding shares of common stock of Tokheim (the
"Warrants"), pursuant to a Securities Purchase Agreement substantially in the
form of Exhibit G.
Section 12. Partial Escrow. In order to provide adequate time for
Tokheim to comply with certain provisions of French law, Schlumberger will
continue to hold in escrow the Acquired Assets of the French subsidiary for up
to ten days.
Section 13. Documentation. The Junior Subordinated Notes, the Senior
Subordinated Notes and the Warrants will be governed by definitive agreements
and documentation, including the Securities Purchase Agreement, an indenture
governing the terms of the Junior Subordinated Notes, an indenture governing the
terms of the Senior Subordinated Notes and a Warrant Agreement governing the
terms of the Warrants (collectively, the "Financing Documentation"), in form and
substance reasonably satisfactory to Schlumberger. The Financing Documentation
will be prepared by Gibson, Dunn & Crutcher LLP, special counsel to
Schlumberger. The Financing Documentation will contain such covenants, terms
and conditions as are customary for transactions of this type and consistent
with this Amendment No. 1 and the Term Sheet.
Section 14. Conditions. The obligation of Schlumberger to accept the
Junior Subordinated Notes, the Senior Subordinated Notes and the Warrants in
payment of a portion of the purchase price is subject to fulfillment of the
following conditions:
(a) Financing Documentation. Tokheim and Schlumberger shall have
entered into the Financing Documentation on terms and in form and substance
reasonably satisfactory to Schlumberger.
(b) Bank Financing. Tokheim shall have entered into definitive
documentation on terms and in form and substance reasonably satisfactory to
Schlumberger with respect to an aggregate at least $230 million of senior
bank financing (collectively with all documents and instruments related
thereto or delivered in connection therewith, the "Bank Documents") with a
commercial lender or lenders or a syndicate of commercial lenders. At the
closing, the Bank Documents shall be in full force and effect and the
parties thereto shall be in compliance with all material agreements
thereunder.
(c) Capital Structure. The pro forma consolidated capital structure
of Tokheim and its subsidiaries, after giving effect to the Acquisition,
shall be consistent with the capital structure contemplated herein, and
other than the Bank Financing, the Junior Subordinated Notes, the Senior
Subordinated Notes and other indebtedness reasonably satisfactory to
Schlumberger, Tokheim and its subsidiaries, after giving effect to, and
upon consummation of, the Acquisition, shall have no outstanding
indebtedness for money borrowed.
5
<PAGE>
(d) Opinions. At the closing, Schlumberger shall have received a
legal opinion and other certificates of officers (including with respect to
solvency) from persons, and covering matters, reasonably acceptable to
Schlumberger.
(e) Take-Out Bank. Tokheim shall have engaged BT Alex. Brown,
Donaldson, Lufkin & Jenrette Securities Corporation or other investment
banker reasonably satisfactory to Tokheim and Schlumberger (the "Take-Out
Bank") to privately place securities of Tokheim, the proceeds of which will
be used to prepay the Senior Subordinated Notes.
(f) Rights Plan. Tokheim shall have amended its shareholder rights
plan to provide that the transactions contemplated hereby and by the
documents and instruments referred to herein may be consummated without
triggering any rights under the shareholder rights plan.
Section 15. Board Representation. Within 120 days of the Closing, Tokheim
shall take all necessary action to cause two nominees of Schlumberger, selected
by Tokheim from among Irwin Pfister, James Gunderson or Jean-Paul Bize, to be
added to the Tokheim Board of Directors on January 29, 1999 if the Senior
Subordinated Notes or the Roll-Over Notes are outstanding and have not been paid
in full prior thereto.
Section 16. Termination. Schlumberger's agreements and obligations
hereunder will terminate on October 1, 1998 if the closing has not occurred at
such time.
IN WITNESS WHEREOF, the parties have hereunto set their respective hands as
of the date first above written.
TOKHEIM CORPORATION
By______________________
SCHLUMBERGER LIMITED
By_______________________
6
<PAGE>
EXHIBIT A
Summary Term Sheet
Junior Subordinated Notes
Issuer: Tokheim Corporation.
Guarantors: All obligations under the Junior Subordinated Notes
will be unconditionally guaranteed on a junior
subordinated basis by each of Tokheim's domestic
subsidiaries, and each of Tokheim's non-U.S.
subsidiaries to the extent that they provide credit
support with respect to the Bank Financing
(collectively, the "Guarantors").
Purchaser: Schlumberger Limited
Amount: U.S. $40 million.
Maturity: Ten years from the closing date.
Interest Rate: 12%, payable quarterly in arrears in cash or in kind
at Tokheim's option.
Optional Redemption: At any time, at par plus accrued interest.
Change of Control: Holder has put at 101% of par plus accrued interest.
Use of Proceeds: To fund a portion of the purchase price of the
Acquisition.
Registration Rights: One demand registration right, exercisable at any
time, at Tokheim's expense. Unlimited piggy-back
registration rights at Schlumberger's expense.
Ranking: The obligations of Tokheim and the Guarantors under
the Junior Subordinated Notes will be junior
subordinated obligations of Tokheim and the Guarantors
and will rank (i) junior in right of payment to all
senior bank indebtedness of Tokheim or the Guarantors,
(ii) junior in right of payment to all indebtedness
for borrowed money of Tokheim or the Guarantors
outstanding on the closing date and (iii) junior in
right of payment to all indebtedness for borrowed
money of Tokheim incurred within 18 months after the
closing date.
Mandatory Prepayment: Subject to the terms of the Bank Documents, net
proceeds of sales of debt securities or equity
securities, in a public offering or private
placement by Tokheim or any of its subsidiaries,
shall be used to
A1
<PAGE>
prepay the Junior Subordinated Notes plus accrued
interest and any other amount payable thereunder to
the full extent of the net proceeds so received to the
extent such net proceeds are not used to retire bank
debt or the Senior Subordinated Notes.
Covenants: The documentation for the Junior Subordinated Notes
will contain customary covenants, including without
limitation restrictions on the ability of Tokheim and
its subsidiaries to pay dividends and make certain
other restricted payments and investments, impose
restrictions on the ability of Tokheim's subsidiaries
to pay dividends or make certain payments to Tokheim,
create liens, enter into transactions with affiliates,
and merge, consolidate or transfer substantially all
of their respective assets.
Representations and Customary for transactions of this type.
Warranties
Conditions Precedent: Customary for transactions of this type.
Events of Default: Customary for transactions of this type, including
without limitation payment defaults, covenant
defaults, bankruptcy and insolvency, judgments, cross
acceleration of and failure to pay at final maturity
other indebtedness aggregating $5 million or more,
subject to, in certain cases, notice and grace
provisions.
Governing Law and Forum: The State of New York.
A2
<PAGE>
Senior Subordinated Notes
Issuer: Tokheim Corporation.
Guarantors: All obligations under the Senior Subordinated Notes
will be unconditionally guaranteed on a senior
subordinated basis by each of the Guarantors.
Purchaser: Schlumberger Limited
Amount: U.S. $170 million.
Maturity: 120 days from the date of issuance. In the event that
Tokheim has failed to raise sufficient additional
capital to repay the Senior Subordinated Notes on or
prior to the stated maturity thereof, the Senior
Subordinated Notes will be converted, subject to the
conditions described in the term sheet for the Roll-
Over Notes, to the Roll-Over Notes.
Interest Rate: 12%, payable quarterly in arrears in cash.
Change of Control: Holder has put at 101% of par plus accrued interest.
Use of Proceeds: To fund a portion of the purchase price of the
Acquisition.
Registration Rights: None.
Ranking: The obligations of Tokheim and the Guarantors under
the Senior Subordinated Notes will be senior
subordinated obligations of Tokheim and the Guarantors
and will rank (i) junior in right of payment to all
senior bank indebtedness of Tokheim or the Guarantors,
(ii) pari passu with indebtedness incurred after the
closing to the extent that the proceeds of such
indebtedness are used to repay the Senior Subordinated
Notes and (iii) senior in right of payment to all
other subordinated indebtedness of Tokheim or the
Guarantors.
Mandatory Prepayment: Subject to the terms of the Bank Documents, net
proceeds of sales of debt securities or equity
securities, in a public offering or private placement
by Tokheim or any of its subsidiaries, and net
proceeds of significant asset sales, shall be used to
prepay the Senior Subordinated Notes plus accrued
interest and any other amount payable thereunder to
the full extent of the net proceeds so received to the
extent such net proceeds are not used to retire bank
debt and permanently reduce the bank facility.
A3
<PAGE>
Optional Prepayment: Tokheim may prepay the Senior Subordinated Notes, in
whole or in part, at any time at a redemption price
equal to 100% of the principal amount thereof plus
accrued interest thereon.
Covenants: The documentation for the Senior Subordinated Notes
will contain customary affirmative and negative
covenants, including without limitation restrictions
on the ability of Tokheim and its subsidiaries to
incur additional indebtedness and to incur
indebtedness which is subordinated to senior debt and
not subordinated to the Senior Subordinated Notes, pay
certain dividends and make certain other restricted
payments and investments, impose restrictions on the
ability of Tokheim's subsidiaries to pay dividends or
make certain payments to Tokheim, create liens, make
asset sales, enter into transactions with affiliates,
and merge, consolidate or transfer substantially all
of their respective assets.
Representations and Customary for transactions of this type.
Warranties
Conditions Precedent: Customary for transactions of this type.
Events of Default: Customary for transactions of this type, including
without limitation payment defaults, covenant
defaults, bankruptcy and insolvency, judgments, cross
acceleration of and failure to pay at final maturity
other indebtedness aggregating $5 million or more,
subject to, in certain cases, notice and grace
provisions.
Governing Law and Forum: The State of New York.
A4
<PAGE>
Warrants
Issuer Tokheim
Purchaser Schlumberger
Warrants: Warrants representing up to 19.9% of the outstanding
common stock of Tokheim (the "Warrants") before giving
effect to such issuance with customary anti-dilution
provisions for transactions of this type. The actual
number of shares issuable upon exercise of the
Warrants will be determined by dividing (i) $20
million by (ii) the weighted average closing price of
the Tokheim common stock on the NYSE-Composite Tape
for a two-month period beginning one month prior to
and ending one month after the closing date. If the
number of shares so obtained represents less than
19.9% of the number of shares of Tokheim common stock
outstanding on the closing date, the Warrants will be
exercisable for such number of shares. If the number
of shares so obtained exceeds 19.9%, the actual number
of shares for which the Warrants may be exercised will
be 19.9% of the number of shares of Tokheim common
stock outstanding on the closing date.
Exercise Price: $0.01 per share.
Term: Exercisable at any time during the five-year period
beginning 120 days after the closing date.
Optional Redemption: Can be redeemed in whole or in part within the 120-day
term of the Senior Subordinated Notes, provided that
the Senior Subordinated Notes have been paid in full
and a portion of the Junior Subordinated Notes
(determined by multiplying the then-outstanding
principal amount of Junior Subordinated Notes by a
fraction, the numerator of which is the value of the
warrants being redeemed and the denominator of which
is $20 million) simultaneously is redeemed.
Representations and Customary for transactions of this type.
Warranties
Conditions Precedent: Customary for transactions of this type.
A5
<PAGE>
Roll-Over Notes
Issuer Tokheim
Guarantors: All obligations under the Senior Subordinated Notes
will be unconditionally guaranteed on a senior
subordinated basis by each of the Guarantors.
Purchaser Schlumberger
Amount: The lesser of (i) U.S. $170 million or (ii) the unpaid
principal amount of the Senior Subordinated Notes.
Maturity: Eight years from the date of issuance.
Interest Rate: 12% (the "Base Rate") for the first three months from
the date of issuance
12.5% for the next three months
13.0% for the next three months
13.5% for the next three months
14.0% for the next three months
14.5% thereafter,in each case payable quarterly in
arrears;
The Base Rate will be payable in cash, and interest in
excess of the base rate will be added to the
outstanding principal amount on the applicable
interest payment date.
Conversion Conditions (i) Neither Tokheim nor any Subsidiary is subject to a
bankruptcy or other insolvency proceeding and (ii) no
payment default exists or would exist with the passage
of time or the giving of notice.
Change of Control: Holder has put at 101% of par plus accrued interest.
Use of Proceeds: To fund the repayment of the Senior Subordinated
Notes.
Registration Rights: Holders of the Roll-Over Notes will be entitled to the
benefits of an Exchange and Registration Rights
Agreement, with terms customary for Rule 144A-offered
securities (except as to any provisions increasing the
rate other than as set forth above), pursuant to which
Tokheim will agree to file with the Securities and
Exchange Commission (i) a registration statement under
the Securities Act registering an issue of senior
subordinated notes of Tokheim which are identical in
all material respects to the Roll-Over Notes and (ii)
under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Securities
Act.
A6
<PAGE>
Ranking: The obligations of Tokheim and the Guarantors under
the Roll-Over Notes will be senior subordinated
obligations of Tokheim and the Guarantors and will
rank (i) junior in right of payment to all senior bank
indebtedness of Tokheim or the Guarantors and (ii)
senior in right of payment to all other indebtedness
of Tokheim or the Guarantors.
Mandatory Prepayment: Subject to the terms of the Bank Documents, net
proceeds of sales of debt securities or equity
securities, in a public offering or private placement
by Tokheim or any of its subsidiaries, and net
proceeds of significant asset sales, shall be used to
prepay the Senior Subordinated Notes plus accrued
interest and any other amount payable thereunder to
the full extent of the net proceeds so received to the
extent such net proceeds are not used to retire bank
debt and permanently reduce the bank facility.
Optional Prepayment: Tokheim may prepay the Roll-Over Notes, in whole or in
part, at any time at a redemption price equal to 100%
of the principal amount thereof plus accrued interest
thereon.
Covenants: The documentation for the Senior Subordinated Notes
will contain customary affirmative and negative
covenants, including without limitation restrictions
on the ability of Tokheim and its subsidiaries to
incur additional indebtedness and to incur
indebtedness which is subordinated to senior debt and
not subordinated to the Senior Subordinated Notes, pay
certain dividends and make certain other restricted
payments and investments, impose restrictions on the
ability of Tokheim's subsidiaries to pay dividends or
make certain payments to Tokheim, create liens, make
asset sales, enter into transactions with affiliates,
and merge, consolidate or transfer substantially all
of their respective assets.
Representations and Customary for transactions of this type.
Warranties
Conditions Precedent: Customary for transactions of this type.
Governing Law and Forum: The State of New York.
A7
<PAGE>
EXHIBIT B TO AMENDMENT NO. 1
MASTER AGREEMENT
Schedule D
Acquired Companies and Acquired RPS Activities
ACQUIRED COMPANIES
- ------------------
Schlumberger Technologies GesmbH
A company incorporated in Austria, with a capital of ATS 46,500,000 formed of
one share with a nominal value of ATS 46,500,000 and having its registered
address at Eitzenbergstrasse 4-6, 2544 Leobersdorf, Austria.
Shareholder: Schlumberger B.V., The Netherlands
Schlumberger Tanksysteme GmbH
A company incorporated in Germany, with a capital of DM 5,300,000 divided into 3
shares with respective nominal values of DM 2,505,000, DM 2,495,000, and DM
300,000, and having its registered address at Loherstrasse 1, 58332 Schwelm,
Germany.
Shareholder: Schlumberger GmbH, Germany
Schlumberger Germann GmbH
A company incorporated in Germany, with a capital of DM 50,000 formed of one
share with a nominal value of DM 50,000 and having its registered address at
Brandstuecken 29, 22549 Hamburg, Germany.
Shareholder: Schlumberger GmbH, Germany
Schlumberger Measurement & Systems KFT
A company incorporated in Hungary, with a capital of HUF 19,900,000 divided into
19,900,000 shares with a nominal value of HUF 1 each, and having its registered
address at Csillaghegyi UT 25, 1037 Budapest, Hungary;
Shareholders: MC and C Holdings Limited, British Virgin Island 17,910,000 shares
Schlumberger BV, The Netherlands 1,990,000 shares
Schlumberger Technologies Ltd
A company incorporated in Ireland, with a capital of I.P 10,000 divided into
10,000 shares with a nominal value of IP 1 each, and having its registered
address at Unit 1, Parkway House, Ballymount Road, Ballymount, Dublin 12,
Ireland.
<PAGE>
Shareholders: Schlumberger B.V., the Netherlands 9,999 shares
BVI Holdings Ltd, British Virgin Islands 1 share
Tulla Electronics Ltd
A company incorporated in Ireland, with a capital of I.P 56,576 divided into
56,576 shares with a nominal value of I.P 1 each, having its registered address
at Tulla County Clare, Ireland.
Shareholders: BVI Holdings Ltd, British Virgin Islands 56,575 shares
Schlumberger Eastern Holding Inc., Panama 1 share
CME RIMIC S.r.l
A company incorporated in Italy, with a capital of Lire 20,000,000 formed of one
share of Lire 20,000,000, and having its registered address at Via Milano 178,
Caronno Pertusella (VA), Italy.
Shareholder: Schlumberger Industries S.P.A., Italy
Koppens Automatic Fabrieken B.V.
A company incorporated in the Netherlands, with a capital of DFL 100,000 divided
into 100 shares with a nominal value of DFL 1,000 each, and having its
registered address at Industrieweg 5, 5531 AD Bladel, the Netherlands.
Shareholder: Schlumberger Investment Services B.V., The Netherlands.
Koppens Schlumberger B.V.
A company incorporated in the Netherlands, with a capital of DFL 5,000 divided
into 20 shares with a nominal value of DFL 250 each, and having its registered
address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands.
Shareholder: Schlumberger Investment Services B.V., The Netherlands
Koppens Holding Nederland B.V.
A company incorporated in The Netherlands, with a capital of DFL 28,000 divided
into 28 shares with a nominal value of DFL 1,000 each, and having its registered
address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands.
Shareholder: Schlumberger Limited
Schlumberger Industries S.r.o.
A company incorporated in the Slovak Republic, with a capital of SK 6,200,000
formed of one share with a nominal value of SK 6,200,000, and having its
registered address at Cukrova 14, Bratislava 81108, Slovak Republic.
<PAGE>
Shareholder: Schlumberger B.V., The Netherlands
Koppens Iberica SA
A company incorporated in Spain, with a capital of Ptas 200,000,000 divided into
200,000 shares with a nominal value of Ptas 1,000 each, and having its
registered address at Imprenta 5, Poligono Industrial de Alcobendas, 28100
Alcobendas (Madrid), Spain.
Shareholders: Schlumberger Measurement & Systems SA 196,000 shares
1 share
Cedipsa 4,000 shares
E.T.P.M. S.A
A company incorporated in France, with a capital of FF 39,178,800 divided into
391,788 shares with a nominal value of FF 100 each, and having its registered
address at 9, avenue Galilee, 92350 Le Plessis Robinson, France.
Shareholders: Schlumberger Industries SA, France 391,788 shares
Schlumberger Technologies S.A
A company incorporated in Switzerland, with a capital of CHF 3,750,000 divided
into 2,450 shares with a nominal value of CHF 1,000 each, and having its
registered address at Route du Crochet 7, 1762 Givisiez, Switzerland.
Shareholder: Schlumberger B.V., The Netherlands 3,746 shares
4 individuals 4 shares to bearer
Schlumberger-Xin Yang Retail Petroleum Systems Corporation Limited
A company incorporated in China, with a capital of $2,850,000 and having a
registered address at Xin Yang High Tech Industrial Park, Dao Yi Development
Zone, Shenyang, China (subject to the exercise by BUYER of the option set forth
in section 7.17)
Shareholders: Schlumberger Eastern Holding Inc., Panama 58%
Xin Xin Corporation (non related Schlumberger party) 42%
<PAGE>
ACQUIRED RPS ACTIVITIES
- -----------------------
Czech Republic
Schlumberger RPS, a division of Schlumberger Industries S.r.o, a company
incorporated in Czech Republic, and having commercial and/or industrial offices
located at Pernerova 48, CZ - 186 02 Praha 8.
Russia
Schlumberger RPS, a division of Schlumberger Industries, a company incorporated
in Russia, and having commercial and/or industrial offices located at 18 Schipok
Str., 113054 Moscow.
U.K
Schlumberger RPS, a division of Schlumberger Public Limited Company, a company
incorporated in U.K, and having commercial and/or industrial offices located at
Unit 4, Cliveden Office Village, Lancaster road, High Wycombe, Buckinghamshire
HP12 3YZ and at Unit 3, Baker Road, West Pitkerro Industrial Estate, Dundee DD5
3RT.
USA
Schlumberger RPS, a division of Schlumberger Technologies Inc., a company
incorporated in the State of Delaware, and having commercial and/or industrial
offices at 201 East 1st Street, 2900 N Center and Bonham Manufacturing Center,
1300 Bicentannial Drive, Bonham, TX 75418 and 825-M Greenbier Circle,
Chesapeake, VA 23320
<PAGE>
MASTER AGREEMENT
Schedule E
Acquired Assets / Assumed Liabilities
1. Acquired Assets shall mean:
(a) all machinery, equipment, furniture, office equipment, computer
equipment (including all hardware and software), communications
equipment, vehicles, storage tanks, space and replacement parts, fuel
and other tangible property (and interests in any of the foregoing) of
the Selling Subsidiaries used for purposes of the Acquired RPS
Activities (collectively, the "Equipment"). Listings of the Equipment
are attached hereto for the Acquired Activities in the UK (Schedule
E-1(a)(ii)), the Czech Republic (Schedule E-1(a)(iv)) and Russia
(Schedule E-1(a)(v)), and the USA (Schedule E-1(a)(vi));
(b) all real estate owned by the Selling Subsidiaries and fully dedicated
to the Acquired Activities (collectively the "Real Estate"). A list of
the Real Estate is attached hereto as Schedule E-1(b);
(c) all items of inventory used for purposes of the Acquired RPS
Activities notwithstanding how classified in the financial records of
the Selling Subsidiaries, including all raw materials, work-in-
process, finished goods, supplies, spare parts and samples
(collectively, the "Inventory");
(d) all contracts, agreements options, leases, licenses, sales and
purchase orders, commitments and other instruments of any kind,
whether written or oral, to which the Selling Subsidiaries are a party
and which relate to the Acquired RPS Activities on the Closing Date
(collectively, the "Contracts");
(e) all accounts, with the exception of the bank account cash balances,
accounts receivable and note receivable, together with any unpaid
interest or fees accrued thereon or other amounts due with respect
thereto, of the Selling Subsidiaries, which relate to the Acquired RPS
Activities and any security or collateral therefor, including
recoverable advances and deposits;
(f) all prepaid charges and expenses of the Selling Companies, allocated
to the Acquired RPS Activities, including any such charges and
expenses with respect to ad valorem taxes, leases and rentals and
utilities;
(g) all rights of the Selling Subsidiaries to insurance proceeds with
respect to claims for damages to the Acquired Assets occurring prior
to the Closing Date, unless such proceeds reimburse the Selling
Subsidiaries for the repair or restoration of such Acquired Assets;
(h) all of the Selling Subsidiaries' rights, claims, credits, causes of
action or rights of set-off against third parties relating to the
Acquired RPS Activities or the Acquired Assets, whether liquidated or
unliquidated, fixed or contingent, including claims pursuant to all
warranties, representations and guarantees made by suppliers,
manufacturers, contractors and other third parties in connection with
<PAGE>
products or services purchased by or furnished to Seller for use in
the Acquired RPS Activities or affecting any to the Acquired Assets;
(i) all of the Selling Subsidiaries' registered patents, patent
applications, registered copyrights and applications therefor,
registered trademarks applications therefor and designs as listed in
Schedule 5.9(a) to the Agreement, all know-how, processes, trade
secrets, inventions, and other proprietary data, used exclusively for
purposes of the Acquired RPS Activities, with the exception of the
"SCHLUMBERGER" name, trademark and logos and the following patents
held by the Selling Subsidiary of the French RPS Business:
. Fluid Viscosity Measurement Device (French filing n(degrees)
97.15042)
. Fluid Flow Meter (French filing n(degrees) 97.15043)
. Multicurrency display (French filing n(degrees) 97.15973)
(j) all transferable franchises, licenses, permits or other authorizations
issued or granted by any Governmental Authority that are owned by,
granted to or held or used by the Selling Subsidiaries and used in the
Acquired RPS Activities;
(k) to the extent available, all books, records, files and papers of the
Selling Subsidiaries, whether in hard copy or computer format,
including bank account records, books of account, invoices,
engineering information, sales and promotional literature, manuals and
data, sales and purchase correspondence, lists of present and former
suppliers, personnel and employment records or present and, to the
extent lawful, former employees, and documentation developed or used
for accounting, marketing, engineering, manufacturing or any other
purpose related exclusively to the conduct of the Acquired RPS
Activities at any time prior to the Closing;
(l) to the extent available, all lists of present customers and lists of
former customers of the Selling Subsidiaries for the Acquired RPS
Activities;
2. Assumed Liabilities shall mean:
------------------------------
(a) all obligations and liabilities under Contracts; and
(b) any obligation, liability or debt, other than an Excluded Liability,
incurred or assumed by a Selling Subsidiary in the ordinary course of
business of the Acquired RPS Activities and arising out of the normal
conduct of the RPS Business, including all debt of Selling
Subsidiaries properly accrued on the Base Balance Sheet in the
following categories: suppliers, employee and other creditors,
estimated liability for taxes on income, deferred taxes on income,
other long term liabilities, minority interest, or any subsection
thereto.
3. Excluded Liabilities shall mean:
-------------------------------
(a) any liability of the Selling Subsidiaries that is not attributable to,
or that does not arise out of, the normal conduct of, the RPS
Business;
<PAGE>
(b) any liability whether presently in existence or arising hereafter
which is attributable to an asset that is not included in the Acquired
Assets;
(c) any liability the existence of which constitutes a breach of any
representation or warranty under the Agreement;
(d) any liability of the Selling Subsidiaries for any taxes attributable
to the RPS Business in any period prior to the Closing Date and
overdue of the Closing Date; and
(e) any liability of the RPS Business for outstanding litigation in
France, the USA and the United Kingdom, on the Closing Date.
<PAGE>
MASTER AGREEMENT
Schedule E-1(b)
Real Property
- - UNITED KINGDOM Unit 3, Baker Road,
West Pikerro Industrial Estate,
Dundee DD4 8 AG
- - CZECH REPUBLIC None
- - RUSSIA None
- - USA Bonham Manufacturing Center
1300 Bicentannial Drive
Bonham, TX 75418
<PAGE>
MASTER AGREEMENT
Schedule E-1(a)(VI)
USA--Fixed Assets
<PAGE>
EXHIBIT C TO AMENDMENT NO. 1
MASTER AGREEMENT
Schedule C
The RPS Business
ENTITIES
Schlumberger Technologies GesmbH
A company incorporated in Austria, with a capital of ATS 46,500,000 formed of
one share with a nominal value of ATS 46,500,000 and having its registered
address at Eitzenbergstrasse 4-6, 2544 Leobersdorf, Austria.
Schlumberger Technologies N.V
A company incorporated in Belgium, with a capital of BEF 10,000,000 divided into
2,500 shares with a nominal value of BEF 4,000 each and having its registered
address at Everdongenlaan 31, 2300 Turnhout, Belgium.
Schlumberger Industrier A/S
A company incorporated in Denmark, with a capital of DKK 500,000 divided into 1
share with a nominal value of DKK 500,000 and having its registered address at
Hejrevang 10, POB 186, 3450 Allerod, Denmark and with a foreign registered
branch located at Verkseier, Furulunds vei 11B, PO Box 45, Alnabru, 0614 Oslo,
Norway.
Schlumberger Tanksysteme GmbH
A company incorporated in Germany, with a capital of DM 5,300,000 divided into 3
shares with respective nominal values of DM 2,505,000, DM 2,495,000, and DM
300,000, and having its registered address at Loherstrasse 1, 58332 Schwelm,
Germany.
Schlumberger German GmbH
A company incorporated in Germany, with a capital of DM 50,000 formed of one
share with a nominal value of DM 50,000 and having its registered address at
Bandstuecken 29, 22549 Hamburg, Germany.
Schlumberger Measurement & Systems KFT
A company incorporated in Hungary, with a capital of HUF 19,900,000 divided
into 19,900,000 shares with a nominal value of HUF 1 each, and having its
registered address at Csillaghegyi UT 25, 1037 Budapest, Hungary.
<PAGE>
-2-
Schlumberger Technologies Limited
A company incorporated in Ireland, with a capital of I.P 10,000 divided into
10,000 shares with a nominal value of I.P 1 each, and having its registered
address at Unit 1, Parkway House, Ballymount Road, Ballymount, Dublin 12,
Ireland.
Tulla Electronics Limited
A company incorporated in Ireland, with a capital of I.P 56,576 divided into
56,576 shares with a nominal value of I.P 1 each, having its registered address
at Tulla County Clare, Ireland.
CME RIMIC S.r.l
A company incorporated in Italy, with a capital of Lire 20,000,000 formed of one
share of Lire 20,000,000, and having its registered address at Via Milano 178,
Caronno Pertusella (VA), Italy.
Koppens Automatic Fabrieken B.V.
A company incorporated in the Netherlands, with a capital of DFL 100,000
divided into 100 shares with a nominal value of DFL 1,000 each, and having its
registered address at Industrieweg 5, 5531 AD Bladel, the Netherlands.
Koppens Schlumberger B.V.
A company incorporated in the Netherlands, with a capital of DFL 5,000 divided
into 20 shares with a nominal value of DFL 250 each, and having its registered
address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands.
Houdster Maatschappij Automatic Rotterdam B.V.
A company incorporated in the Netherlands, with a capital of DFL 15,000 divided
into 15 shares with a nominal value of DFL 1,000 each, and having its registered
address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands.
Koppens Holding Nederlands B.V.
A company incorporated in the Netherlands, with a capital of DFL 28,000 divided
into 28 shares with a nominal value of DFL 1,000 each, and having its registered
address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands.
Schlumberger Industries S.r.o.
A company incorporated in the Slovak Republic, with a capital of SK 6,200,000
formed of one share with a nominal value of SK 6,200,000, and having its
registered address at Cukrova 14, Bratislava 81108, Slovak Republic.
<PAGE>
-3-
Schlumberger Technologies S.A
A company incorporated in Switzerland, with a capital of CHF 2,450,000 divided
into 2,450 shares with a nominal value of CHF 1,000 each, and having its
registered address at Route du Crochet 7, 1762 Givisiez, Switzerland.
E.T.P.M. S.A
A company incorporated in France, with a capital of FF 39,178,000 divided into
391,788 shares with a nominal value of FF 100 each, and having its registered
address at 9, avenue Galilee, 92350 Le Plessis Robinson, France.
Pol Germann Schlumberger Spolka Z.o.o
A company incorporated in Poland, with a capital of PLZ 253,500 divided into 780
shares with a nominal value of PLZ325 each and having its registered address at
U1 Narwicka 1, 80-557 Gdansk, Poland.
Rossgermann Joint Stock Company
A company incorporated in Russia, with a capital of Russian Rubel 200,000,000
and having its registered address at 9th, January Street 39, 394000 Voroney,
Russia.
GNC-Systemas e Servicios de Medicao, Limitada
A company incorporated in Portugal, with a capital of ESC 831,017,728 and having
its registered address at Lugar de Louredo, Freguesia de Calendario, Vila Nova
de Famalicao, Portugal.
Schlumberger-Xin Yang Retail Petroleum Systems Corporation Limited
A company incorporated in China, with a capital of $2,850,000 and having a
registered address at Xin Yang High Tech Industrial Park, Dao Yi Development
Zone, Shenyang, China.
DIVISIONS
- ---------
Czech Republic
Schlumberger RPS, a division of Schlumberger Industries S.r.o, a company
incorporated in Czech Republic, and having commercial and/or industrial offices
located at Pernerova 48, CZ-186 02 Praha 8.
France
Schlumberger RPS, a division of Schlumberger Industries SA, a company
incorporated in France, and having commercial and/or industrial offices located
at:
/./ Montrouge - 50, avenue Jean Jaures, 92542 Montrouge Cedex
/./ Abbeville - Z.I. Route de Domqueur, 80100 Abbeville
/./ Lille - Centre Gros N(degrees)2, 2bd du Petit Quinquin, 59815 Lesquin
<PAGE>
-4-
/./ Reims - Z.A. rue Alfred Boelle, 51110 Bourgogne
/./ Nancy - Z.I. Est, 8 allee des Grands Paquis, 54180 Heillecourt
/./ Dijon - 19, rue des Grandes Varennes, Zac d'Ahuy, 21121 Ahuy
/./ Cambrai - 11, rue des Ecluses de Selles, 59405 Cambrai Cedex
/./ Strasbourg - Z.I. 10, avenue de l'Energie, 67800 Bischeim
/./ Lognes - Z.A. du Mandinet 20 rue des Campanules, 77185 Lognes
/./ Saint Brieue - 15 zone des Grands Champs St. Rene, 22120 Hillion
/./ Tours- 2 rue Nicolas Appert, 37300 Joue-les-Tours
/./ Nantes 8, rue du Coutelier, 44805 Saint Herblain Cedex
/./ Limoges - Z.I. de Romanet, Rue leonard Samie, 87000 Limoges
/./ Lyon - C.A Chateau de l'Isle, 5, rue Henri Becquerel, 69320 Feyzin
/./ Chambery - PAE Landiers Nord, 313, av de Villarcher, 73000 Chambery
/./ Nice - Les Cardoulines, route des Dolines, Bt HT 3, 06560 Sophia Antipolis
/./ Bordeaux - Chemin du Solarium, Z.A. de Moulerens, 33170 Gradignan
/./ Toulouse -82 av des Chalets, 31140 Launaguet
/./ Marseille - Z.I. les Estroublans, 1/ere/ av N(degrees) 12. 13127 Vitrolles
/./ Plessis Robinson - 9 av Galilee, 92350 Le Plessis Robinson
Transferred to E.T.P.M. as of September 30, 1998, with the exception of the
Abbeville facility that will continue being operated by Schlumberger Industries
SA.
Italy
Schlumberger RPS, a division of Schlumberger Industries Spa, a company
incorporated in Italy, and having commercial and/or industrial offices at Via
Milano, 178 angolo Via Lodi, 21042 Caronno Pertusella (VA)
Transferred to CME-Rimic as of September 30, 1998.
Russia
Schlumberger RPS, a division of Schlumberger Industries, a company incorporated
in Russia, and having commercial and/or industrial offices located at 18 Schipok
Str., 113054 Moscow.
U.K
Schlumberger RPS, a division of Schlumberger Industries Limited Company, a
company incorporated in U.K, and having commercial and/or industrial offices
located at Unit 4, Cliveden Office Village, Lancaster road, High Wycombe,
Buckinghamshire HP12 3YZ and at Unit 3, Baker Road, West Pitkerro Industrial
Estate, Dundee DD5 3RT.
U.S.A.
Schlumberger RPS, a division of Schlumberger Technologies Inc., a company
incorporated in the State of Delaware, and having commercial and/or industrial
offices at 201 East 1/st/ Street, 2900 N Center and Bonham Manufacturing Center,
1300 Bicentannial Drive, Bonham, TX 75418 and 825-M Greenbrier Circle,
Chesapeake, VA 23320.
<PAGE>
EXHIBIT D TO AMENDMENT NO. 1
INTERCOMPANY LOANS
- --------------------------------------------------------------------------------
LENDING COMPANY BORROWING COMPANY MAXIMUM LOAN
AMOUNT
- --------------------------------------------------------------------------------
Tulla Electronics Limited Schlumberger Technologies IEP 1,500,000
Limited
- --------------------------------------------------------------------------------
GNC-Sistemas e Servicos de Koppens Iberica SA ESP 665,000,000
Medicao Limitada
- --------------------------------------------------------------------------------
Schlumberger Measurement Koppens Iberica SA ESP 385,000,000
& Systems SA
- --------------------------------------------------------------------------------
Schlumberger Industries Engineering, Techniques FRF 90,000,000
Petrolieres, Maitrise "ETPM"
- --------------------------------------------------------------------------------
Schlumberger Industries SpA CME Rimic SRL Lira 15,000,000,000
- --------------------------------------------------------------------------------
Schlumberger Gmbh Schlumberger Germann DM 20,000,000
Gmbh
- --------------------------------------------------------------------------------
Germann GmbH PolGermann Poland DM 750,000
- --------------------------------------------------------------------------------
Schlumberger B.V. Schlumberger Technologies AG NLG 4,600,000
- --------------------------------------------------------------------------------
Schlumberger Investment Koppens Automatic NLG 5,000,000
Services B.V. Fabricken B.V.
- --------------------------------------------------------------------------------
Schlumberger Investment Koppens Schlumberger B.V. NLG 3,000,000
Service B.V.
- --------------------------------------------------------------------------------
Schlumberger Investment Koppens Holding Nederland NLG 10,500,000
Services B.V. B.V.
- --------------------------------------------------------------------------------
Koppens Holding Nederland Schlumberger Technologies NLG 8,000,000
B.V. SA
- --------------------------------------------------------------------------------
Schlumberger B.V. Schlumberger Technologies NLG 4,000,000
GesmbH
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT E TO AMENDMENT NO. 1
MASTER AGREEMENT
Schedule 5.20(a) (i)
RPS Employees
Shuhui Zhu, located in Bladel (The Netherlands),
Gu Jinghua, located in Montrougc (France),
Teguh Setiawan, located in Bladel (The Netherlands),
Nurul Hussinis, located in Chesapeake (USA),
Zhang Le, located in Dundee (UK)
have been hired by Schlumberger as new graduates from Chinese universities and
are part of the Resident Development Program (RDP). Under the RDP, such
individuals are sent to various units around the world for successive 2 year
period and are committed to work for Schlumberger during 4 years prior to
returning to their native country to implement locally their experience.
Such obligation is not any more applicable in the hypothesis of the contemplated
sale of the RPS Activity; however and due to the Schlumberger commitment on that
respect please be informed that if Tokheim is willing to release them,
Schlumberger is prepared to take them back within the Schlumberger group of
companies, in line with our related moral obligations.
<PAGE>
MASTER AGREEMENT
Schedule 7.8 (a)
Employees of other SCHLUMBERGER divisions and entities fully dedicated to the
RPS Business
Employees: South America/Latin America/Asia
- Mexico - Claudia Lora, Sales Manager
- Flavia Cardala, Sales Administration
- Alberto Mesinas, Service Engineer
- Edgar Perez, SW Engineer
- South America:
. Argentina - Javier Garcia, Sales
. Brazil - Antonio de Paula, Sales
. Chile - Emmanuael Lemouroux, Sales
- Asia - Spencer Folk, Technical & Services Asia, Hong
Kong
- Joseph Yap, Mkt & Sales Asia, Singapore
- Paul Podoprat, RPS Technical Centre, Hong Kong
- TK Hing, JV Manager, Shen Yang
- Zeng You, Aipha/Harmony Technical Support
Beijing
- Bing Luo and Yi Xu, Shunde office, service
engineers fully dedicated to the RPS
service activity in China
- India - Anil Shevde, Sales & Service India
- Pramod Bapna, Sales & Services Delhi (presently
on temporary secondment. Planned to return to
Electricity Division in the very near future)
- Harish Suri, Service Engineer Calcutta
- D.S. Gupta, Field Technician Delhi
- Bashir Shiekh, Field Technician Mumbai
- Y. Bhatia, Field Technician Mumbai
- Jagtar Singh, Field Technician Delhi
- Vinay R. Service Engineer Bangalore (shared
resource with the ATE & Telecom Divisions)
- Govindrajan, Field Technician Chennai
<PAGE>
MASTER AGREEMENT EXHIBIT F TO AMENDMENT 1
Schedule 1.3 ------------------------
Allocation of Total Purchase Price
<TABLE>
<CAPTION>
Shares or Assets Shares or Assets Intercompany Loan Intercompany Loan Total
Agreements Agreements
(K USD) (K LOCAL CURRENCY) (K USD) (K LOCAL CURRENCY) (K USD)
<S> <C> <C> <C> <C> <C>
France 24 119 FF 226,692 15 881 FF 90,000 40 000
USA 65 000 65 000
Spain 15 018 ESP 2,540,835 2 682 ESP 385,000 17 700
Germany 46 164 11 836 DM 20,000 58 000
Holland(1) 53 442 10 858 NLG 20,700 64 300
Switzerland 5 187 2 413 NLG 4,600 7 600
UK 42 500 42 500
Ireland 7 200 7 200
Italy 315 Lira 15,526,350 8 985 Lira 15,000,000 9 300
Austria 4 577 2 623 NLG 5,000 7 200
Hungary 5 000 5 000
Czech Republic 4 500 4 500
Slovakia 1 700 1 700
------- ------ -------
274 722 55 278 330 000
======= ====== =======
</TABLE>
(1) Including Belgium and Denmark
<PAGE>
EXHIBIT G
TOKHEIM CORPORATION
SECURITIES PURCHASE AGREEMENT
September 30, 1998
SCHLUMBERGER LIMITED
277 Park Avenue
New York, New York 10172-0266
Ladies and Gentlemen:
Tokheim Corporation, an Indiana corporation (the "Company"), purposes to
issue and sell: (i) $170,000,000 aggregate principal amount of its 12% Senior
Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes"); (ii)
$40,000,000 aggregate principal amount of its 12% Junior Subordinated Notes due
September 30, 2008 (the "Junior Subordinated Notes"); and (iii) warrants (the
"Warrants") to purchase up to 19.9% of the outstanding shares of common stock of
Tokheim. The Senior Subordinated Notes will be issued pursuant to an Indenture
to be dated as of September 30, 1998 (the "Senior Indenture") between the
Company and Harris Trust and Savings Bank, as trustee (the "Senior Trustee"),
substantially in the form of Exhibit A. The Junior Subordinated Notes will be
issued pursuant to an Indenture to be dated as of September 30, 1998 (the
"Junior Indenture") between the Company and Harris Trust and Savings Bank, as
trustee (the "Junior Trustee"), substantially in the form of Exhibit B. In the
event that the Company is unable to repay the Senior Subordinated Notes at their
stated maturity, the Senior Subordinated Notes will convert, subject to certain
conditions, into Increasing Rate Senior Subordinated Notes due 2007 (the "Roll-
Over Notes"). The Company's obligations under the Senior Subordinated Notes and
the Junior Subordinated Notes will be guaranteed by certain of the Company's
subsidiaries (the "Guarantor Subsidiaries"). The Warrants will be issued
pursuant to a Warrant Agreement to be dated as of September 30, 1998 (the
"Warrant Agreement") between the Company and Schlumberger, substantially in the
form of Exhibit C. The Senior Subordinated Notes, Junior Subordinated Notes,
Roll-Over Notes and Warrants are sometimes referred to collectively as the
"Securities". The Company will grant certain registration rights to the holders
of the Securities pursuant to a Registration Rights Agreement to be dated as of
September 30, 1998 (the "Registration Rights Agreement"), substantially in the
form of Exhibit D.
The Company is issuing the Securities to Schlumberger in satisfaction of a
portion of the purchase price payable by the Company to Schlumberger pursuant to
the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities
dated as of June 19, 1998 between the Company and Schlumberger, as amended by
letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and
Amendment No. 1 thereto dated September 30, 1998 (as so amended, the "Purchase
Agreement").
1. Representations, Warranties and Agreements of the Company. The Company
<PAGE>
represents and warrants to, and agrees with, Schlumberger on and as of the date
hereof and the Closing Date (as defined in Section 3) that:
(a) The Company's Annual Report on Form 10-K for the year ended
November 30, 1997 (the "Form 10-K"), Quarterly Reports on Form 10-Q for the
quarters ended February 28, 1998 and May 31, 1998 and Current Reports on
Form 8-K filed subsequent to May 31, 1998 (the "Exchange Act Reports")
taken together do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representation or warranty in this Section 1(a) with
respect to the public disclosure of the transaction contemplated by the
Purchase Agreement.
(b) Assuming the accuracy of the representations and warranties of
Schlumberger contained in Section 2, it is not necessary, in connection
with the issuance of the Securities to Schlumberger, to register the
Securities or the Guarantees (as defined in Section 1(e)) under the
Securities Act or to qualify the Senior Indenture or the Junior Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(c) The Company and each of its subsidiaries (the "Subsidiaries") have
been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation,
are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such power
or authority would not, singularly or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Company and the Subsidiaries taken
as a whole (a "Material Adverse Effect").
(d) The Company has an authorized capitalization as set forth under
the heading "Capitalization" in the Company's Preliminary Offering
Memorandum dated July 31, 1998 relating to the proposed offering of its __%
Senior Subordinated Notes due 2008 (the "Preliminary Offering Memorandum").
All of the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and non-
assessable. All of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable and are, to the extent indicated in the Form 10-K,
owned indirectly by the Company.
(e) The Company has full right, power and authority to execute and
deliver this Agreement, the Senior Indenture, the Junior Indenture, the
Warrant Agreement, the Registration Rights Agreement and the Securities
(collectively, the "Transaction Documents") and to perform its obligations
hereunder and thereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of
2
<PAGE>
each of the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken. Each of the Guarantor
Subsidiaries has full right, power and authority to execute and deliver the
Senior Indenture, the Junior Indenture and their respective guarantees
thereunder (the "Guarantees") and to perform its obligations thereunder; and all
corporate action required to be taken for the due and proper authorization,
execution and delivery of each such agreement or instrument and the consummation
of the transactions contemplated thereby have been duly and validly taken.
(f) This Agreement had been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding agreement of the Company.
(g) The Registration Rights Agreement has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms by
Schlumberger, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and, with respect to
the indemnification provisions, public policy considerations.
(h) The Senior Indenture has been duly authorized by the Company and the
Guarantor Subsidiaries and, when duly executed and delivered in accordance with
its terms by the Senior Trustee, will constitute a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against the
Company and the Guarantor Subsidiaries in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). On the Closing Date,
the Senior Indenture will conform in all material respects to the requirements
of the Trust Indenture Act and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(i) The Junior Indenture has been duly authorized by the Company and the
Guarantor Subsidiaries and, when duly executed and delivered in accordance with
its terms by the Junior Trustee, will constitute a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against the
Company and the Guarantor Subsidiaries in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(j) The Warrant Agreement has been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms by Schlumberger,
will constitute
3
<PAGE>
each of the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken. Each of the Guarantor
Subsidiaries has full right, power and authority to execute and deliver the
Senior Indenture, the Junior Indenture and their respective guarantees
thereunder (the "Guarantees") and to perform its obligations thereunder; and all
corporate action required to be taken for the due and proper authorization,
execution and delivery of each such agreement or instrument and the consummation
of the transactions contemplated thereby have been duly and validly taken.
(f) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding agreement of the Company.
(g) The Registration Rights Agreement has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms by
Schlumberger, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and, with respect to
the indemnification provisions, public policy considerations.
(h) The Senior Indenture has been duly authorized by the Company and the
Guarantor Subsidiaries and, when duly executed and delivered in accordance with
its terms by the Senior Trustee, will constitute a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against the
Company and the Guarantor Subsidiaries in accordance with its terms, except to
the extent that such enforceability may be limited to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). On the Closing Date,
the Senior Indenture will conform in all material respects to the requirements
of the Trust Indenture Act and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(i) The Junior Indenture has been duly authorized by the Company and the
Guarantor Subsidiaries and, when duly executed and delivered in accordance with
its terms by the Junior Trustee, will constitute a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against the
Company and the Guarantor Subsidiaries in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(j) The Warrant Agreement has been duly authorized by the Company and, when
duly executed and delivered in accordance with its terms by Schlumberger, will
constitute
4
<PAGE>
a valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(k) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided herein and
in the Senior Indenture, the Junior Indenture and the Warrant Agreement,
will be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of the Company, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). The Guarantees
have been duly authorized by the Guarantor Subsidiaries and, when duly
executed, authenticated, issued and delivered as provided in the Senior
Indenture and the Junior Indenture, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of
the Guarantor Subsidiaries, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(l) The execution, delivery and performance by the Company and the
Guarantor Subsidiaries of each of the Transaction Documents, the issuance,
authentication, sale and delivery of the Securities and the Guarantees and
compliance by the Company and the Guarantor Subsidiaries with the terms
thereof and of the Purchase Agreement and the consummation of the
transactions contemplated by the Transaction Documents and the Purchase
Agreement will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Guarantor Subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument that remains in effect after the
Closing Date to which the Company or any of the Guarantor Subsidiaries is a
party or by which the Company or any of the Guarantor Subsidiaries is bound
or to which any of the property or assets of the Company or any of the
Guarantor Subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any
of the Guarantor Subsidiaries or any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of the Guarantor
Subsidiaries or any of their properties or assets which would have a
material adverse effect; and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company or any of the Guarantor Subsidiaries of each of
the Transaction Documents or the Purchase Agreement, the issuance,
authentication, sale and delivery of the Securities and the
5
<PAGE>
Guarantees and compliance by the Company and the Guarantor Subsidiaries
with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents and the Purchase Agreement,
except for such consents, approvals, authorizations, filings, registrations
or qualifications (i) which shall have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under the
Securities Act of 1933, as amended (the "Securities Act") and applicable
state securities laws as provided in the Registration Rights Agreement.
(m) PricewaterhouseCoopers, to the knowledge of the Company, are
independent certified public accountants with respect to the Company and
the Subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants ("AICPA")
and its interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Preliminary
Offering Memorandum with respect to the Company comply in all material
respects with the requirements applicable to a registration statement on
Form S-1 under the Securities Act (except that certain supporting schedules
are omitted); such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present, in all material
respects, the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and
the financial information contained in the Preliminary Offering Memorandum
under the headings "Summary--Summary Financial Data of Tokheim",
"Capitalization", "Selected Financial Data of Tokheim" and "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
are derived from the accounting records of the Company and the Subsidiaries
and fairly present the information purported to be shown thereby. The pro
forma financial information contained in the Preliminary Offering
Memorandum has been prepared on a basis consistent with the historical
financial statements contained in the Preliminary Offering Memorandum
(except for the pro forma adjustments specified therein), includes all
material adjustments to the historical financial information required by
Rule 11-02 of Regulation S-X under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") to reflect the
transactions described in the Preliminary Offering Memorandum, gives effect
to assumptions made on a reasonable basis and fairly presents, in all
material respects, the historical and proposed transactions contemplated by
the Preliminary Offering Memorandum, the Transaction Documents and the
Purchase Agreement. The other historical financial and statistical
information and data included in the Preliminary Offering Memorandum with
respect to the Company are, in all material respects, fairly presented.
(n) Except as disclosed in the Exchange Act Reports, there are no
legal or governmental proceedings pending to which the Company or any of
the Subsidiaries is a party or of which any property or assets of the
Company or any of the Subsidiaries is the subject which, singularly or in
the aggregate, if determined adversely to the Company or any of the
Subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and to the best knowledge of the Company, no such proceedings are
threatened or
6
<PAGE>
contemplated by governmental authorities or threatened by others.
(o) No action has been taken and no statute, rule, regulation or order has
been enacted, adopted or issued by any governmental agency or body which
prevents the issuance of the Securities; no injunction, restraining order or
order of any nature by any federal or state court of competent jurisdiction has
been issued with respect to the Company or any of the Subsidiaries which would
prevent or suspend the issuance of the Securities; no action, suit or proceeding
is pending against or, to the best knowledge of the Company, threatened against
or affecting the Company or any of the Subsidiaries before any court or
arbitrator or any governmental agency, body or official, domestic or foreign,
which could reasonably be expected to interfere with or adversely affect the
issuance of the Securities or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or the Purchase Agreement or
any action taken or to be taken pursuant thereto.
(p) Neither the Company nor any of the Subsidiaries is (i) in violation of
its charter or by-laws, (ii) in default in any material respect, and no event
has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which it is a party or by which it is
bound or to which any of its property or assets is subject or (iii) in violation
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject, which would have a material adverse
effect.
(q) The Company and each of the Subsidiaries possess all material licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies which are necessary or desirable for the ownership
of their respective properties or the conduct of their respective businesses as
described in the Preliminary Offering Memorandum, except where the failure to
possess or make the same would not, singularly or in the aggregate, have a
Material Adverse Effect, and neither the Company nor any of the Subsidiaries has
received notification of any revocation or modification of any such license,
certificate, authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in the
ordinary course, except where such revocation or modification or failure to
renew would not have a material adverse effect.
(r) The Company and each of the Subsidiaries have filed all material
federal, state, local and foreign income and franchise tax returns required to
be filed through the date hereof and have paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of the
Subsidiaries which has had (nor does the Company or any of the Subsidiaries have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of the Subsidiaries, could reasonably be expected to have) a
Material Adverse Effect.
7
<PAGE>
(s) Neither the Company nor any of the Subsidiaries is (i)an "investment
company" or a company "controlled by" an investment company within the meaning
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission thereunder or (ii) a
"holding company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(t) The Company and each of the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) To the best of the Company's knowledge, the Company and each of the
Subsidiaries have insurance covering their respective properties, operations,
personnel and businesses, which insurance is in such amounts and insures against
such losses and risks as are adequate to protect the Company and the
Subsidiaries and their respective businesses. Neither the Company nor any of the
Subsidiaries has received notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or necessary to be made
in order to continue such insurance.
(v) The Company and each of the Subsidiaries own or possess adequate rights
to use all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the conduct of
their respective businesses will not conflict in any material respect with, and
the Company and the Subsidiaries have not received any notice of any claim of
conflict with, any such rights of others.
(w) The Company and each of the Subsidiaries have good and valid title in
fee simple to, or have valid rights to lease or otherwise use, all items of real
and personal property which are material to the business of the Company and the
Subsidiaries, in each case free and clear of all liens, encumbrances, claims and
defects and imperfections of title except as set forth in the Bank Credit
Agreement and disclosed in the Preliminary Offering Memorandum or such as (i) do
not materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries or (ii) could not reasonably be
expected to have a Material Adverse Effect.
(x) No labor disturbance by or dispute with the employees of the Company or
any of the Subsidiaries exists or, to the best knowledge of the Company, is
contemplated or
8
<PAGE>
threatened.
(y) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the "Code")) or
"accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of
the events set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has been
waived) has occurred with respect to any employee benefit plan of the Company or
any of the Subsidiaries which could reasonably be expected to have a Material
Adverse Effect; each such employee benefit plan is in compliance in all material
respects with applicable law, including ERISA and the Code; the Company and each
of the Subsidiaries have not incurred and do not expect to incur material
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Company or any of the
Subsidiaries would have any liability; and each such pension plan that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which could reasonably be expected to cause the loss of such qualification.
(z) Neither the Company nor, to the best knowledge of the Company, any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company has: (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(aa) On and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Securities and to the consummation of the
Acquisition) will be Solvent. As used in this paragraph, the term "Solvent"
means, with respect to a particular date, that on such date: (i) the present
fair market value (or present fair salable value) of the assets of the Company
(on a consolidated basis) is not less than the total amount required to pay the
probable liabilities of the Company on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (ii) the
Company is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) assuming the issuance of the
Securities as contemplated by this Agreement, the Company is not incurring debts
or liabilities beyond its ability to pay as such debts and liabilities mature
and (iv) the Company is not engaged in any business or transaction, and is not
about to engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged. In
computing the amount of such contingent liabilities at any time, it is intended
that such liabilities will be
9
<PAGE>
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(bb) Except as set forth herein or described in the Preliminary
Offering Memorandum, there are no outstanding subscriptions, rights,
warrants, calls or options to acquire, or instruments convertible into or
exchangeable for, or agreements or understandings with respect to the sale
or issuance of, any shares of capital stock of or other equity or other
ownership interest in the Company or any of the Subsidiaries.
(cc) None of the proceeds of the sale of the Securities will be used,
directly or indirectly, in violation or conflict with Regulation T, U or X
of the Federal Reserve Board.
(dd) Neither the Company nor any of the Subsidiaries is a party to
any contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or Schlumberger for a brokerage
commission, finder's fee or like payment in connection with the offering
and sale of the Securities.
(ee) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act.
2. Issuance of the Securities. (a) The Company agrees to issue to
Schlumberger, and Schlumberger, on the basis of the representations, warranties
and agreements contained herein and in the Purchase Agreement, and subject to
the terms and conditions set forth herein, agrees to accept from the Company,
the Junior Subordinated Indentures as payment of $40 million of the purchase
price, the Senior Subordinated Notes as payment of S 170 million of the purchase
price, and the Warrants as payment of $20 million of the purchase price, for the
Acquisition.
(b) Schlumberger represents and warrants to the Company that it is
purchasing the Securities for investment purposes and not with a view to the
resale or other distribution thereof.
3. Delivery of the Securities. (a) Delivery of the Securities shall be made
at such place or places as shall be agreed upon by Schlumberger and the Company,
at 10:00 A.M., local time, on September 30, 1998 in connection with the closing
of the Acquisition pursuant to the Purchase Agreement (such date and time of
payment and delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the Securities
shall be made to the Company by crediting the amounts set forth in Section 2(a)
against the purchase price for the Acquisition. Upon delivery, the Securities
shall be in global form, registered in such names and in such denominations as
Schlumberger shall have requested in writing not less than one business day
prior to the Closing Date.
10
<PAGE>
4. Further Agreements of the Company. The Company agrees with Schlumberger:
(a) to advise Schlumberger promptly prior to the Closing Date and, if
requested, confirm such advice in writing, of the happening of any event which
makes any statement of a material fact made in the Exchange Act Reports untrue
or which requires the making of any amendments to or changes in the Exchange Act
Reports in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(b) for so long as the Securities are outstanding, to furnish to
Schlumberger copies of any annual reports, quarterly reports and current reports
filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company to the
Senior Trustee or the Junior Trustee or to the holders of the Securities
pursuant to the Senior Indenture or the Junior Indenture or the Exchange Act or
any rule or regulation of the Commission thereunder;
(c) to do and perform all things required to be done and performed by it
under this Agreement that are within its control prior to or after the Closing
Date, and to use its best efforts to satisfy all conditions precedent on its
part to the delivery of the Securities; and
(d) not to take any action prior to the execution and delivery of the
Senior Indenture or the Junior Indenture which, if taken after such execution
and delivery, would have violated any of the covenants contained in the Senior
Indenture or the Junior Indenture.
5. Conditions of Schlumberger' obligations. The obligations of
Schlumberger hereunder are subject to the accuracy, on and as of the date hereof
and the Closing Date, of the representations and warranties of the Company
contained herein and in the Purchase Agreement, to the accuracy of the
statements of the Company and its officers made in any certificates delivered
pursuant hereto and thereto, to the performance by the Company of its
obligations hereunder and thereunder, and to each of the following additional
terms and conditions:
(a) All conditions to the closing of the Acquisition shall have been
satisfied, and all documents, certificates and opinions required to be delivered
to Schlumberger pursuant to the Purchase Agreement shall have been executed and
delivered to Schlumberger and shall be satisfactory in all material respects to
Schlumberger.
(b) Schlumberger shall not have discovered and disclosed to the Company on
or prior to the Closing Date that the Exchange Act Reports or any amendment
thereto contains an untrue statement of a fact which, in the opinion of counsel
for Schlumberger, is material or omits to state any fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
11
<PAGE>
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Purchase Agreement, and all other legal matters relating to the
Transaction Documents, the Purchase Agreement and the Transactions
contemplated thereby, shall be satisfactory in all material respects to
Schlumberger, and the Company shall have furnished to Schlumberger all
documents and information that it or its counsel may reasonably request to
enable them to pass upon such matters.
(d) Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L.
Roelke, General Counsel of the Company, shall have furnished to
Schlumberger their written opinions, as counsel to the Company, addressed
to Schlumberger and dated the Closing Date, in form and substance
reasonably satisfactory to Schlumberger, substantially to the aggregate
effect set forth in Exhibit E.
(e) Schlumberger shall have received from Gibson, Dunn & Crutcher
LLP, counsel for Schlumberger, such opinion or opinions, dated the Closing
Date, with respect to such matters as Schlumberger may reasonably require,
and the Company shall have furnished to such counsel such documents and
information as they request for the purpose of enabling them to pass upon
such matters.
(f) The Company shall have furnished to Schlumberger a certificate,
dated the Closing Date, of its chief executive officer and its chief
financial officer, stating that (A) such officers have carefully examined
the Exchange Act Reports, (B) in their opinion, the Exchange Act Reports,
as of their respective dates, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(C) as of the Closing Date, the representations and warranties of the
Company in this Agreement and the Purchase Agreement are true and correct
in all material respects, the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder and thereunder on or prior to the Closing
Date, and subsequent to the date of the Purchase Agreement and prior to the
Closing Date there has been no material adverse change in the financial
position or results of operation of the Company or any of the Subsidiaries,
or any change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company and the Subsidiaries taken as a whole.
(g) Schlumberger shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company.
(h) The Senior Indenture shall have been duly executed and delivered
by the Company, the Guarantor Subsidiaries and the Senior Trustee, and the
Senior Subordinated Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Senior Trustee.
12
<PAGE>
(i) The Junior Indenture shall have been duly executed and delivered
by the Company, the Guarantor Subsidiaries and the Junior Trustee, and the
Junior Subordinated Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Junior Trustee.
(j) The Rights Agreement, dated as of January 22, 1997, between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Plan"), shall have been duly amended to exempt the issuance of the Warrant
and the shares issuable thereunder from the operations of the Rights Plan.
(k) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Securities or the closing of the Acquisition; and no
injunction, restraining order or order of any other nature by any federal
or state court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the Securities or
the closing of the Acquisition.
(l) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have occurred any of the
following: (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-counter market shall
have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any exchange
or in the over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or escalation of
hostilities or a declaration by the United States of a national emergency
or war or (iv) a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) the effect of which,
in the case of this clause (iv), is, in the judgment of Schlumberger, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or the delivery of the Securities and the closing of the
Acquisition on the terms and in the manner contemplated by this Agreement
and in the Purchase Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for Schlumberger.
6. Termination. The obligations of Schlumberger hereunder may be
terminated by Schlumberger, in its absolute discretion, by notice to the Company
prior to delivery of the Securities if, prior to that time, any of the
conditions precedent to the closing of the Acquisition shall fail to be
satisfied to the reasonable satisfaction of Schlumberger.
7. Reimbursement of Schlumberger's Expenses. If (a) this Agreement shall
have been
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<PAGE>
terminated pursuant to Section 6 or (b) the Company shall fail to tender the
Securities for delivery to Schlumberger, the Company shall reimburse
Schlumberger for such out-of-pocket expenses (including reasonable fees and
disbursements of counsel) as shall have been reasonably incurred by Schlumberger
in connection with this Agreement and the proposed issuance of the Securities.
8. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and Schlumberger
contained in this Agreement or made by or on behalf of the Company or
Schlumberger pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
9. Notices, etc. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to Schlumberger, shall be delivered or sent by mail or telecopy
transmission to Schlumberger Limited, 277 Park Avenue, New York, New York
10172-0266, Attention: James L. Gunderson (telecopier no.: (212) 350-9409);
or
(b) if to the Company, shall be delivered or sent by mail or telecopy
transmission to Tokheim Corporation, 1600 Wabash Avenue, Fort Wayne,
Indiana 46801-0360, Attention: Douglas K. Pinner (telecopier no.: 219-484-
1110).
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
12. Amendments. No amendment or waiver of any provision of this Agreement,
nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
14
<PAGE>
13. Headings. The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and Schlumberger in
accordance with its terms.
Very truly yours,
TOKHEIM CORPORATION
By
---------------------------
Accepted:
SCHLUMBERGER LIMITED
By
------------------
15
<PAGE>
EXHIBIT A
[Form of Senior Subordinated Indenture]
16
<PAGE>
EXHIBIT B
[Form of Junior Subordinated Indenture]
17
<PAGE>
EXHIBIT C
[Form of Warrant Agreement]
18
<PAGE>
EXHIBIT D
[Form of Exchange and Registration Rights Agreement]
19
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel for the Company]
Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke,
General Counsel of the Company, shall have furnished to Schlumberger their
written opinions, as counsel to the Company, addressed to Schlumberger and dated
the Closing Date, in form and substance reasonably satisfactory to Schlumberger,
substantially to the aggregate effect set forth below:
(i) The Company and each of its subsidiaries (the "Subsidiaries") have been
duly incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the failure to
so qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect").[NR]
(ii) The Company has an authorized capitalization as set forth under the
heading "Capitalization" in the Company's Preliminary Offering Memorandum dated
July 31, 1998 relating to the proposed offering of its _____% Senior
Subordinated Notes due 2008 (the "Preliminary Offering Memorandum"). All of the
outstanding shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable.[NR]
(iii) Assuming the accuracy of the representations and warranties of
Schlumberger contained in Secdon 2, it is not necessary, in connection with the
issuance of the Securities to Schlumberger to register the Securities or the
Guarantees under the Securities Act or to qualify the Senior Indenture or the
Junior Indenture under the Trust Indenture Act.[SASMF]
(iv) The Company has full right, power and authority to execute and deliver
this Agreement, the Senior Indenture, the Junior Indenture, the Warrant
Agreement, the Registration Rights Agreement and the Securities and to perform
its obligations thereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly taken.[NR]
(v) This Agreement has been duly authorized, executed and delivered by the
Company [NR] and constitutes a valid and legally binding agreement of the
20
<PAGE>
Company[SASMF].
(vi) The Registration Rights Agreement has been duly authorized by the
Company[NR] and, assuming due execution and delivery thereof by Schlumberger, is
a valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law)[SASMF].
(vii) The Senior Indenture has been duly authorized by the Company and the
Guarantor Subsidiaries [NR] and, assuming due execution and delivery thereof by
the Senior Trustee, is a valid and legally binding agreement of the Company and
the Guarantor Subsidiaries enforceable against the Company and the Guarantor
Subsidiaries in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law). The Senior Indenture conforms
in all material respects to the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder[SASMF].
(viii) The Junior Indenture has been duly authorized by the Company and
the Guarantor Subsidiaries [NR] and, assuming due execution and delivery
thereof by the Junior Trustee, is a valid and legally binding agreement of the
Company and the Guarantor Subsidiaries enforceable against the Company and the
Guarantor Subsidiaries in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law)[SASMF].
(ix) The Warrant Agreement has been duly authorized by the Company [NR]
and, assuming due execution and delivery thereof by Schlumberger, is a valid and
legally binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law)[SASMF].
(xi) Neither the Company nor any of the Subsidiaries is (i) an "investment
company" or a company "controlled by" an investment company within the meaning
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission thereunder.[SASMF]
21
<PAGE>
EXHIBIT (c)(3)
TOKHEIM CORPORATION
SECURITIES PURCHASE AGREEMENT
September 30, 1998
SCHLUMBERGER LIMITED
277 Park Avenue
New York, New York 10172-0266
Ladies and Gentlemen:
Tokheim Corporation, an Indiana corporation (the "Company"), proposes to
issue and sell: (i) $170,000,000 aggregate principal amount of its 12% Senior
Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes"); (ii)
$40,000,000 aggregate principal amount of its 12% Junior Subordinated Notes due
September 30, 2008 (the "Junior Subordinated Notes"); and (iii) warrants (the
"Warrants") to purchase up to 19.9% of the outstanding shares of common stock of
Tokheim. The Senior Subordinated Notes will be issued pursuant to an Indenture
to be dated as of September 30, 1998 (the "Senior Indenture") between the
Company and Harris Trust and Savings Bank, as trustee (the "Senior Trustee"),
substantially in the form of Exhibit A. The Junior Subordinated Notes will be
issued pursuant to an Indenture to be dated as of September 30, 1998 (the
"Junior Indenture") between the Company and Harris Trust and Savings Bank, as
trustee (the "Junior Trustee"), substantially in the form of Exhibit B. In the
event that the Company is unable to repay the Senior Subordinated Notes at their
stated maturity, the Senior Subordinated Notes will convert, subject to certain
conditions, into Increasing Rate Senior Subordinated Notes due 2007 (the "Roll-
Over Notes"). The Company's obligations under the Senior Subordinated Notes and
the Junior Subordinated Notes will be guaranteed by certain of the Company's
subsidiaries (the "Guarantor Subsidiaries"). The Warrants will be issued
pursuant to a Warrant Agreement to be dated as of September 30, 1998 (the
"Warrant Agreement") between the Company and Schlumberger, substantially in the
form of Exhibit C. The Senior Subordinated Notes, Junior Subordinated Notes,
Roll-Over Notes and Warrants are sometimes referred to collectively as the
"Securities". The Company will grant certain registration rights to the holders
of the Securities pursuant to a Registration Rights Agreement to be dated as of
September 30, 1998 (the "Registration Rights Agreement"), substantially in the
form of Exhibit D.
The Company is issuing the Securities to Schlumberger in satisfaction of a
portion of the purchase price payable by the Company to Schlumberger pursuant to
the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities
dated as of June 19, 1998 between the Company and Schlumberger, as amended by
letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and
Amendment No. 1 thereto dated September 30, 1998 (as so amended, the "Purchase
Agreement").
1. Representations, Warranties and Agreements of the Company. The Company
<PAGE>
represents and warrants to, and agrees with, Schlumberger on and as of the date
hereof and the Closing Date (as defined in Section 3) that:
(a) The Company's Annual Report on Form 10-K for the year ended
November 30, 1997 (the "Form 10-K"), Quarterly Reports on Form 10-Q for the
quarters ended February 28, 1998 and May 31, 1998 and Current Reports on
Form 8-K filed subsequent to May 31, 1998 (the "Exchange Act Reports")
taken together do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representation or warranty in this Section 1(a) with
respect to the public disclosure of the transaction contemplated by the
Purchase Agreement.
(b) Assuming the accuracy of the representations and warranties of
Schlumberger contained in Section 2, it is not necessary, in connection
with the issuance of the Securities to Schlumberger, to register the
Securities or the Guarantees (as defined in Section 1(e)) under the
Securities Act or to qualify the Senior Indenture or the Junior Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(c) The Company and each of its subsidiaries (the "Subsidiaries")
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and
the Subsidiaries taken as a whole (a "Material Adverse Effect").
(d) The Company has an authorized capitalization as set forth under
the heading "Capitalization" in the Company's Preliminary Offering
Memorandum dated July 31, 1998 relating to the proposed offering of its
___% Senior Subordinated Notes due 2008 (the "Preliminary Offering
Memorandum"). All of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable. All of the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid
and non-assessable and are, to the extent indicated in the Form 10-K, owned
indirectly by the Company.
(e) The Company has full right, power and authority to execute and
deliver this Agreement, the Senior Indenture, the Junior Indenture, the
Warrant Agreement, the Registration Rights Agreement and the Securities
(collectively, the "Transaction Documents") and to perform its obligations
hereunder and thereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of
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<PAGE>
each of the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken. Each of the
Guarantor Subsidiaries has full right, power and authority to execute and
deliver the Senior Indenture, the Junior Indenture and their respective
guarantees thereunder (the "Guarantees") and to perform its obligations
thereunder; and all corporate action required to be taken for the due and
proper authorization, execution and delivery of each such agreement or
instrument and the consummation of the transactions contemplated thereby
have been duly and validly taken.
(f) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement of the
Company.
(g) The Registration Rights Agreement has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms
by Schlumberger, will constitute a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law) and, with respect to the indemnification provisions, public policy
considerations.
(h) The Senior Indenture has been duly authorized by the Company and
the Guarantor Subsidiaries and, when duly executed and delivered in
accordance with its terms by the Senior Trustee, will constitute a valid
and legally binding agreement of the Company and the Guarantor Subsidiaries
enforceable against the Company and the Guarantor Subsidiaries in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law). On the Closing Date, the Senior
Indenture will conform in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(i) The Junior Indenture has been duly authorized by the Company and
the Guarantor Subsidiaries and, when duly executed and delivered in
accordance with its terms by the Junior Trustee, will constitute a valid
and legally binding agreement of the Company and the Guarantor Subsidiaries
enforceable against the Company and the Guarantor Subsidiaries in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(j) The Warrant Agreement has been duly authorized by the Company
and, when duly executed and delivered in accordance with its terms by
Schlumberger, will constitute
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<PAGE>
a valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(k) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided herein and
in the Senior Indenture, the Junior Indenture and the Warrant Agreement,
will be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of the Company, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). The Guarantees
have been duly authorized by the Guarantor Subsidiaries and, when duly
executed, authenticated, issued and delivered as provided in the Senior
Indenture and the Junior Indenture, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of
the Guarantor Subsidiaries, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(l) The execution, delivery and performance by the Company and the
Guarantor Subsidiaries of each of the Transaction Documents, the issuance,
authentication, sale and delivery of the Securities and the Guarantees and
compliance by the Company and the Guarantor Subsidiaries with the terms
thereof and of the Purchase Agreement and the consummation of the
transactions contemplated by the Transaction Documents and the Purchase
Agreement will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Guarantor Subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument that remains in effect after the
Closing Date to which the Company or any of the Guarantor Subsidiaries is a
party or by which the Company or any of the Guarantor Subsidiaries is bound
or to which any of the property or assets of the Company or any of the
Guarantor Subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any
of the Guarantor Subsidiaries or any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of the Guarantor
Subsidiaries or any of their properties or assets which would have a
material adverse effect; and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company or any of the Guarantor Subsidiaries of each of
the Transaction Documents or the Purchase Agreement, the issuance,
authentication, sale and delivery of the Securities and the
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<PAGE>
Guarantees and compliance by the Company and the Guarantor Subsidiaries
with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents and the Purchase Agreement,
except for such consents, approvals, authorizations, filings, registrations
or qualifications (i) which shall have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under the
Securities Act of 1933, as amended (the "Securities Act") and applicable
state securities laws as provided in the Registration Rights Agreement.
(m) PricewaterhouseCoopers, to the knowledge of the Company, are
independent certified public accountants with respect to the Company and
the Subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants ("AICPA")
and its interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Preliminary
Offering Memorandum with respect to the Company comply in all material
respects with the requirements applicable to a registration statement on
Form S-1 under the Securities Act (except that certain supporting schedules
are omitted); such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present, in all material
respects, the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and
the financial information contained in the Preliminary Offering Memorandum
under the headings "Summary--Summary Financial Data of Tokheim",
"Capitalization", "Selected Financial Data of Tokheim" and "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
are derived from the accounting records of the Company and the Subsidiaries
and fairly present the information purported to be shown thereby. The pro
forma financial information contained in the Preliminary Offering
Memorandum has been prepared on a basis consistent with the historical
financial statements contained in the Preliminary Offering Memorandum
(except for the pro forma adjustments specified therein), includes all
material adjustments to the historical financial information required by
Rule 11-02 of Regulation S-X under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") to reflect the
transactions described in the Preliminary Offering Memorandum, gives effect
to assumptions made on a reasonable basis and fairly presents, in all
material respects, the historical and proposed transactions contemplated by
the Preliminary Offering Memorandum, the Transaction Documents and the
Purchase Agreement. The other historical financial and statistical
information and data included in the Preliminary Offering Memorandum with
respect to the Company are, in all material respects, fairly presented.
(n) Except as disclosed in the Exchange Act Reports, there are no
legal or governmental proceedings pending to which the Company or any of
the Subsidiaries is a party or of which any property or assets of the
Company or any of the Subsidiaries is the subject which, singularly or in
the aggregate, if determined adversely to the Company or any of the
Subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and to the best knowledge of the Company, no such proceedings are
threatened or
5
<PAGE>
contemplated by governmental authorities or threatened by others.
(o) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities; no injunction,
restraining order or order of any nature by any federal or state court of
competent jurisdiction has been issued with respect to the Company or any
of the Subsidiaries which would prevent or suspend the issuance of the
Securities; no action, suit or proceeding is pending against or, to the
best knowledge of the Company, threatened against or affecting the Company
or any of the Subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the issuance
of the Securities or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or the Purchase
Agreement or any action taken or to be taken pursuant thereto.
(p) Neither the Company nor any of the Subsidiaries is (i) in
violation of its charter or by-laws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to
which it is a party or by which it is bound or to which any of its property
or assets is subject or (iii) in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject, which would have a material adverse effect.
(q) The Company and each of the Subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies which are necessary or desirable for
the ownership of their respective properties or the conduct of their
respective businesses as described in the Preliminary Offering Memorandum,
except where the failure to possess or make the same would not, singularly
or in the aggregate, have a Material Adverse Effect, and neither the
Company nor any of the Subsidiaries has received notification of any
revocation or modification of any such license, certificate, authorization
or permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course, except
where such revocation or modification or failure to renew would not have a
material adverse effect.
(r) The Company and each of the Subsidiaries have filed all material
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof and have paid all taxes due thereon,
and no tax deficiency has been determined adversely to the Company or any
of the Subsidiaries which has had (nor does the Company or any of the
Subsidiaries have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of the Subsidiaries, could reasonably be
expected to have) a Material Adverse Effect.
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<PAGE>
(s) Neither the Company nor any of the Subsidiaries is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the Commission
thereunder or (ii) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(t) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) To the best of the Company's knowledge, the Company and each of
the Subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, which insurance is in such amounts
and insures against such losses and risks as are adequate to protect the
Company and the Subsidiaries and their respective businesses. Neither the
Company nor any of the Subsidiaries has received notice from any insurer or
agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance.
(v) The Company and each of the Subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will
not conflict in any material respect with, and the Company and the
Subsidiaries have not received any notice of any claim of conflict with,
any such rights of others.
(w) The Company and each of the Subsidiaries have good and valid
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property which are material to the business of
the Company and the Subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except as set
forth in the Bank Credit Agreement and disclosed in the Preliminary
Offering Memorandum or such as (i) do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries or (ii) could not reasonably be expected to have a Material
Adverse Effect.
(x) No labor disturbance by or dispute with the employees of the
Company or any of the Subsidiaries exists or, to the best knowledge of the
Company, is contemplated or threatened.
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<PAGE>
(y) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of the Company or any of the Subsidiaries which
could reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company and each of the
Subsidiaries have not incurred and do not expect to incur material
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Company or any of the
Subsidiaries would have any liability; and each such pension plan that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
(z) Neither the Company nor, to the best knowledge of the Company,
any director, officer, agent, employee or other person associated with or
acting on behalf of the Company has: (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(aa) On and immediately after the Closing Date, the Company (after
giving effect to the issuance of the Securities and to the consummation of
the Acquisition) will be Solvent. As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such date: (i)
the present fair market value (or present fair salable value) of the assets
of the Company (on a consolidated basis) is not less than the total amount
required to pay the probable liabilities of the Company on its total
existing debts and liabilities (including contingent liabilities) as they
become absolute and matured, (ii) the Company is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business,
(iii) assuming the issuance of the Securities as contemplated by this
Agreement, the Company is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature and (iv) the Company is
not engaged in any business or transaction, and is not about to engage in
any business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged. In
computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be
8
<PAGE>
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(bb) Except as set forth herein or described in the Preliminary
Offering Memorandum, there are no outstanding subscriptions, rights,
warrants, calls or options to acquire, or instruments convertible into or
exchangeable for, or agreements or understandings with respect to the sale
or issuance of, any shares of capital stock of or other equity or other
ownership interest in the Company or any of the Subsidiaries.
(cc) None of the proceeds of the sale of the Securities will be used,
directly or indirectly, in violation or conflict with Regulation T, U or X
of the Federal Reserve Board.
(dd) Neither the Company nor any of the Subsidiaries is a party to
any contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or Schlumberger for a brokerage
commission, finder's fee or like payment in connection with the offering
and sale of the Securities.
(ee) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act.
2. Issuance of the Securities. (a) The Company agrees to issue to
Schlumberger, and Schlumberger, on the basis of the representations, warranties
and agreements contained herein and in the Purchase Agreement, and subject to
the terms and conditions set forth herein, agrees to accept from the Company,
the Junior Subordinated Indentures as payment of $40 million of the purchase
price, the Senior Subordinated Notes as payment of $170 million of the purchase
price, and the Warrants as payment of $20 million of the purchase price, for the
Acquisition.
(b) Schlumberger represents and warrants to the Company that it is
purchasing the Securities for investment purposes and not with a view to the
resale or other distribution thereof.
3. Delivery of the Securities. (a) Delivery of the Securities shall be
made at such place or places as shall be agreed upon by Schlumberger and the
Company, at 10:00 A.M., local time, on September 30, 1998 in connection with the
closing of the Acquisition pursuant to the Purchase Agreement (such date and
time of payment and delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the Securities
shall be made to the Company by crediting the amounts set forth in Section 2(a)
against the purchase price for the Acquisition. Upon delivery, the Securities
shall be in global form, registered in such names and in such denominations as
Schlumberger shall have requested in writing not less than one business day
prior to the Closing Date.
9
<PAGE>
4. Further Agreements of the Company. The Company agrees with
Schlumberger:
(a) to advise Schlumberger promptly prior to the Closing Date and, if
requested, confirm such advice in writing, of the happening of any event
which makes any statement of a material fact made in the Exchange Act
Reports untrue or which requires the making of any amendments to or changes
in the Exchange Act Reports in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(b) for so long as the Securities are outstanding, to furnish to
Schlumberger copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar forms as may be designated by the Commission,
and such other documents, reports and information as shall be furnished by
the Company to the Senior Trustee or the Junior Trustee or to the holders
of the Securities pursuant to the Senior Indenture or the Junior Indenture
or the Exchange Act or any rule or regulation of the Commission thereunder;
(c) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(d) not to take any action prior to the execution and delivery of the
Senior Indenture or the Junior Indenture which, if taken after such
execution and delivery, would have violated any of the covenants contained
in the Senior Indenture or the Junior Indenture; and
(e) Tokheim shall take all necessary action to cause two nominees of
Schlumberger, selected by Tokheim from among Irwin Pfister, James Gunderson
or Jean-Paul Bize, to be added to the Tokheim Board of Directors on January
29, 1999 if the Senior Subordinated Notes or the Roll-Over Notes are
outstanding and have not been paid in full prior thereto.
5. Conditions of Schlumberger' Obligations. The obligations of
Schlumberger hereunder are subject to the accuracy, on and as of the date hereof
and the Closing Date, of the representations and warranties of the Company
contained herein and in the Purchase Agreement, to the accuracy of the
statements of the Company and its officers made in any certificates delivered
pursuant hereto and thereto, to the performance by the Company of its
obligations hereunder and thereunder, and to each of the following additional
terms and conditions:
(a) All conditions to the closing of the Acquisition shall have been
satisfied, and all documents, certificates and opinions required to be
delivered to Schlumberger pursuant to the Purchase Agreement shall have
been executed and delivered to Schlumberger and shall be satisfactory in
all material respects to Schlumberger.
(b) Schlumberger shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Exchange Act Reports or
any amendment thereto contains an untrue statement of a fact which, in the
opinion of counsel for Schlumberger, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
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<PAGE>
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Purchase Agreement, and all other legal matters relating to the
Transaction Documents, the Purchase Agreement and the transactions
contemplated thereby, shall be satisfactory in all material respects to
Schlumberger, and the Company shall have furnished to Schlumberger all
documents and information that it or its counsel may reasonably request to
enable them to pass upon such matters.
(d) Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L.
Roelke, General Counsel of the Company, shall have furnished to
Schlumberger their written opinions, as counsel to the Company, addressed
to Schlumberger and dated the Closing Date, in form and substance
reasonably satisfactory to Schlumberger, substantially to the aggregate
effect set forth in Exhibit E.
(e) Schlumberger shall have received from Gibson, Dunn & Crutcher
LLP, counsel for Schlumberger, such opinion or opinions, dated the Closing
Date, with respect to such matters as Schlumberger may reasonably require,
and the Company shall have furnished to such counsel such documents and
information as they request for the purpose of enabling them to pass upon
such matters.
(f) The Company shall have furnished to Schlumberger a certificate,
dated the Closing Date, of its chief executive officer and its chief
financial officer, stating that (A) such officers have carefully examined
the Exchange Act Reports, (B) in their opinion, the Exchange Act Reports,
as of their respective dates, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(C) as of the Closing Date, the representations and warranties of the
Company in this Agreement and the Purchase Agreement are true and correct
in all material respects, the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder and thereunder on or prior to the Closing
Date, and subsequent to the date of the Purchase Agreement and prior to the
Closing Date there has been no material adverse change in the financial
position or results of operation of the Company or any of the Subsidiaries,
or any change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company and the Subsidiaries taken as a whole.
(g) Schlumberger shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company.
(h) The Senior Indenture shall have been duly executed and delivered
by the Company, the Guarantor Subsidiaries and the Senior Trustee, and the
Senior Subordinated Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Senior Trustee.
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(i) The Junior Indenture shall have been duly executed and delivered
by the Company, the Guarantor Subsidiaries and the Junior Trustee, and the
Junior Subordinated Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Junior Trustee.
(j) The Rights Agreement, dated as of January 22, 1997, between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Plan"), shall have been duly amended to exempt the issuance of the Warrant
and the shares issuable thereunder from the operations of the Rights Plan.
(k) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Securities or the closing of the Acquisition; and no
injunction, restraining order or order of any other nature by any federal
or state court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the Securities or
the closing of the Acquisition.
(l) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have occurred any of the
following: (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-counter market shall
have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any exchange
or in the over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or escalation of
hostilities or a declaration by the United States of a national emergency
or war or (iv) a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) the effect of which,
in the case of this clause (iv), is, in the judgment of Schlumberger, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or the delivery of the Securities and the closing of the
Acquisition on the terms and in the manner contemplated by this Agreement
and in the Purchase Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for Schlumberger.
6. Termination. The obligations of Schlumberger hereunder may be
terminated by Schlumberger, in its absolute discretion, by notice to the Company
prior to delivery of the Securities if, prior to that time, any of the
conditions precedent to the closing of the Acquisition shall fail to be
satisfied to the reasonable satisfaction of Schlumberger.
7. Reimbursement of Schlumberger's Expenses. If (a) this Agreement shall
have been
12
<PAGE>
terminated pursuant to Section 6 or (b) the Company shall fail to tender the
Securities for delivery to Schlumberger, the Company shall reimburse
Schlumberger for such out-of-pocket expenses (including reasonable fees and
disbursements of counsel) as shall have been reasonably incurred by Schlumberger
in connection with this Agreement and the proposed issuance of the Securities.
8. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and Schlumberger
contained in this Agreement or made by or on behalf of the Company or
Schlumberger pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
9. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to Schlumberger, shall be delivered or sent by mail or
telecopy transmission to Schlumberger Limited, 277 Park Avenue, New York,
New York 10172-0266, Attention: James L. Gunderson (telecopier no.:
(212) 350-9409); or
(b) if to the Company, shall be delivered or sent by mail or telecopy
transmission to Tokheim Corporation, 1600 Wabash Avenue, Fort Wayne,
Indiana 46801-0360, Attention: Douglas K. Pinner (telecopier no.:
219-484-1110).
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
12. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
13
<PAGE>
13. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and Schlumberger in
accordance with its terms.
Very truly yours,
TOKHEIM CORPORATION
By
-----------------------------------
Accepted:
SCHLUMBERGER LIMITED
By
---------------------------
14
<PAGE>
EXHIBIT A
[Form of Senior Subordinated Indenture]
15
<PAGE>
EXHIBIT B
[Form of Junior Subordinated Indenture]
16
<PAGE>
EXHIBIT C
[Form of Warrant Agreement]
17
<PAGE>
EXHIBIT D
[Form of Exchange and Registration Rights Agreement]
18
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel for the Company]
Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke,
General Counsel of the Company, shall have furnished to Schlumberger their
written opinions, as counsel to the Company, addressed to Schlumberger and dated
the Closing Date, in form and substance reasonably satisfactory to Schlumberger,
substantially to the aggregate effect set forth below:
(i) The Company and each of its subsidiaries (the "Subsidiaries")
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and
the Subsidiaries taken as a whole (a "Material Adverse Effect").[NR]
(ii) The Company has an authorized capitalization as set forth under
the heading "Capitalization" in the Company's Preliminary Offering
Memorandum dated July 31, 1998 relating to the proposed offering of its
___% Senior Subordinated Notes due 2008 (the "Preliminary Offering
Memorandum"). All of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable.[NR]
(iii) Assuming the accuracy of the representations and warranties of
Schlumberger contained in Section 2, it is not necessary, in connection
with the issuance of the Securities to Schlumberger to register the
Securities or the Guarantees under the Securities Act or to qualify the
Senior Indenture or the Junior Indenture under the Trust Indenture
Act.[SASMF]
(iv) The Company has full right, power and authority to execute and
deliver this Agreement, the Senior Indenture, the Junior Indenture, the
Warrant Agreement, the Registration Rights Agreement and the Securities and
to perform its obligations thereunder; and all corporate action required to
be taken for the due and proper authorization, execution and delivery of
each of the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.[NR]
(v) This Agreement has been duly authorized, executed and delivered
by the Company [NR] and constitutes a valid and legally binding agreement
of the Company[SASMF].
19
<PAGE>
(vi) The Registration Rights Agreement has been duly authorized by
the Company[NR] and, assuming due execution and delivery thereof by
Schlumberger, is a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law)[SASMF].
(vii) The Senior Indenture has been duly authorized by the Company
and the Guarantor Subsidiaries [NR] and, assuming due execution and
delivery thereof by the Senior Trustee, is a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against
the Company and the Guarantor Subsidiaries in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law). The Senior Indenture conforms in all material respects to the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission applicable to an indenture which is qualified
thereunder[SASMF].
(viii) The Junior Indenture has been duly authorized by the Company
and the Guarantor Subsidiaries [NR] and, assuming due execution and
delivery thereof by the Junior Trustee, is a valid and legally binding
agreement of the Company and the Guarantor Subsidiaries enforceable against
the Company and the Guarantor Subsidiaries in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law)[SASMF].
(ix) The Warrant Agreement has been duly authorized by the Company
[NR] and, assuming due execution and delivery thereof by Schlumberger, is a
valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law)[SASMF].
(xi) Neither the Company nor any of the Subsidiaries is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the Commission
thereunder.[SASMF]
20
<PAGE>
EXHIBIT (c)(4)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
TOKHEIM CORPORATION
12% SENIOR SUBORDINATED NOTE DUE JANUARY 28, 1999
No. 1
$170,000,000
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay to SCHLUMBERGER TECHNOLOGY CORPORATION, as Transfer Agent for the Selling
Subsidiaries as defined in the Master Agreement between Tokheim Corporation and
Schlumberger Limited dated as of June 19, 1998, as amended, or registered
assigns, the principal sum of $170,000,000 on January 28, 1999.
Interest Payment Date: January 28, 1999
Record Date: January 15, 1999
Additional provisions of this security are set forth on the other side of
this security.
Dated: September 30, 1998
TOKHEIM CORPORATION
By_____________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
HARRIS TRUST AND SAVINGS BANK, as Trustee,
certifies that this is one of the securities
referred to in the Senior Indenture
By_________________________
Authorized Signatory
<PAGE>
12% Senior Subordinated Note due January 28, 1999
1. Interest
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay interest on the principal amount of this 12% Senior Subordinated Note due
January 28, 1999 (the "Senior Subordinated Notes") at 12% per annum.
The Company will pay interest on the Senior Subordinated Notes in arrears
in cash on January 28, 1999. Interest on the Senior Subordinated Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance of the Senior Subordinated
Notes. Interest will be computed on the basis of a 360-day year of twelve 30-
day months. The Company will pay interest on overdue interest at the rate borne
by the Senior Subordinated Notes.
2. Method of Payment
The Company will pay interest (except defaulted interest) on and in respect
of the Senior Subordinated Notes to the Persons who are registered holders of
the Senior Subordinated Notes at the close of business on the third business day
next preceding the interest payment date even if such Senior Subordinated Notes
are canceled after the record date and on or before the interest payment date.
Holders must surrender Senior Subordinated Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by
official bank check payable in same day funds or by wire transfer of federal
funds.
3. Paying Agent and Registrar
Initially, Harris Trust and Savings Bank (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to the Holders. The Company may
act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Senior Subordinated Notes under an Indenture dated
as of September 30, 1998 (the "Senior Indenture"), among the Company, the
Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated
Notes include those stated in the Senior Indenture and those made part of the
Senior Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbbb) as in effect on the date of the Senior Indenture (the
"Act"). Terms defined in the Senior Indenture and not defined herein have the
meanings ascribed thereto in the Senior Indenture. The Senior
<PAGE>
Subordinated Notes are subject to all such terms, and Holders are referred to
the Senior Indenture and the Act for a statement of those terms.
The Senior Subordinated Notes are unsecured senior subordinated obligations
of the Company and are limited to $170,000,000 in aggregate principal amount
outstanding. In the event that the Company is unable to repay the Senior
Subordinated Notes at their stated maturity, the Senior Subordinated Notes will
be exchanged, subject to certain conditions, for Increasing Rate Senior
Subordinated Notes due 2007 (the "Roll-Over Notes"). This security is one of
the Senior Subordinated Notes referred to in the Senior Indenture. The Senior
Subordinated Securities include the Senior Subordinated Notes, any Roll-Over
Notes issued in exchange for the Senior Subordinated Notes and any Exchange
Notes issued in exchange for the Roll-Over Notes pursuant to the Senior
Indenture. The Senior Subordinated Notes, the Roll-Over Notes and the Exchange
Notes are treated as a single class of securities under the Senior Indenture.
The Senior Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its subsidiaries; the payment of dividends and
other payments by the Company and its subsidiaries; Investments; sales of assets
of the Company and its subsidiaries; certain transactions with Affiliates;
Liens; and consolidations, mergers and transfers of all or substantially all of
the Company's or its subsidiaries' assets. In addition, the Senior Indenture
prohibits certain restrictions on distributions from subsidiaries.
5. Optional Redemption
Subject to the terms of the Senior Indenture, the Senior Subordinated Notes
may be redeemed at any time, in whole or in part, at the option of the Company
at a redemption price equal to the unpaid principal amount thereof plus accrued
interest thereon to the redemption date (subject to the right of holders of the
Senior Subordinated Notes on the relevant record date to receive interest due on
the relevant interest payment date).
6. Mandatory Redemption
If after the Issue Date the Company or any of its Subsidiaries shall Incur
any Indebtedness, other than Indebtedness Incurred under the Credit Agreement,
or shall issue any Capital Stock, the Company shall redeem Senior Subordinated
Notes in an aggregate principal amount equal to the principal amount of the
Indebtedness so Incurred or the total price at which such Capital Stock was
sold. The redemption price of the Senior Subordinated Notes so redeemed shall
be equal to the unpaid principal amount thereof plus accrued interest thereon to
the redemption date.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of Senior
Subordinated Notes to be redeemed at its registered address all in accordance
with the Senior Indenture. If less than all of the Senior Subordinated Notes
are to be redeemed at any time, selection
2
<PAGE>
of Senior Subordinated Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Senior Subordinated Notes are listed, or, if the Senior
Subordinated Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate; provided that no Senior
Subordinated Notes of $1,000 or less shall be redeemed in part.
8. Repurchase at the Option of the Holder
Upon a Change of Control, any Holder of Senior Subordinated Notes will have
the right, subject to certain conditions set forth in the Senior Indenture, to
cause the Company to repurchase all or any part of the Senior Subordinated Notes
of such Holder at a purchase price equal to 101% of the principal amount of the
Senior Subordinated Notes to be repurchased plus accrued and unpaid interest
thereon, (if any) to the date of repurchase as provided in, and subject to the
terms of, the Senior Indenture.
9. Subordination
The Senior Subordinated Notes are subordinated to Senior Debt of the
Company, as defined in the Senior Indenture. To the extent provided in the
Senior Indenture, Senior Debt of the Company must be paid before the Senior
Subordinated Notes may be paid. The Company agrees, and each Holder by
accepting a Senior Subordinated Note agrees, to the subordination provisions
contained in the Senior Indenture and authorizes the Trustee to give it effect
and appoints the Trustee as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Senior Subordinated Notes are in registered form without coupons. A
Holder may transfer or exchange Senior Subordinated Notes in accordance with the
Senior Indenture. Upon any transfer or exchange, the Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes required by law or permitted by the
Senior Indenture. The Registrar need not register the transfer of or exchange
any Senior Subordinated Notes selected for redemption (except, in the case of a
Senior Subordinated Note to be redeemed in part, the portion of the Senior
Subordinated Note not to be redeemed) or to transfer or exchange any Senior
Subordinated Notes for a period of 15 days prior to a selection of Senior
Subordinated Notes to be redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The Holder of this Senior Subordinated Note may be treated as the owner of
it for all purposes.
3
<PAGE>
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Senior Indenture, the
Company at any time may terminate some or all of its obligations under the
Senior Subordinated Notes and the Senior Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Senior Subordinated Notes to redemption or maturity, as the
case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Senior Indenture, from time
to time, the Company, the Guarantors and the Trustee, without the consent of the
Holders, may amend the Senior Indenture or the Senior Subordinated Notes for the
following purposes, so long as such change does not, in the opinion of the
Trustee, adversely affect the rights of any of the Holders in any material
respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for
uncertificated Senior Subordinated Notes in addition to or in place of
certificated Senior Subordinated Notes (provided that the uncertificated Senior
Subordinated Notes are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Senior Subordinated
Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for
the assumption of the Company's or any Guarantor's obligations to Holders of
Senior Subordinated Notes in the case of a merger, consolidation or sale of
assets; (iv) to release any Subsidiary Guarantee in accordance with the
provisions of the Senior Indenture; (v) to provide for additional Guarantors;
(vi) to make any change that would provide any additional rights or benefits to
the Holders of Senior Subordinated Notes or that does not adversely affect the
legal rights under the Senior Indenture of any such Holder; or (vii) to comply
with requirements of the SEC in order to effect or maintain the qualification of
the Senior Indenture under the TIA.
The Company, the Guarantors and the Trustee may amend the Senior Indenture
or the Senior Subordinated Notes with the written consent of the Holders of at
least a majority in principal amount of the Senior Subordinated Notes. However,
without the consent of each affected Holder of a Senior Subordinated Notes, an
amendment may not: (i) reduce the principal amount of Senior Subordinated Notes
whose Holders must consent to an amendment; (ii) reduce the rate of or change or
have the effect of changing the time for payment of interest, including
defaulted interest, on any Senior Subordinated Note; (iii) reduce the principal
of or change or have the effect of changing the fixed maturity of any Senior
Subordinated Note, or change the date on which any Senior Subordinated Note may
be subject to redemption or repurchase, or reduce the redemption
4
<PAGE>
or repurchase price therefor; (iv) make any Senior Subordinated Notes payable in
money other than that stated in the Senior Subordinated Notes; (v) make any
change in provisions of the Senior Indenture protecting the right of each Holder
to receive payment of principal of and interest on such Holder's Senior
Subordinated Notes on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of Senior
Subordinated Notes to waive Defaults or Events of Default; (vi) modify or change
any provision of the Senior Indenture or the related definitions affecting the
subordination or ranking of the Senior Subordinated Notes in a manner which
adversely affects the Holders; provided, however, that it is understood that any
amendment, the purpose of which is to permit the Incurrence of additional
Indebtedness under the Indenture shall not be construed as adversely affecting
the ranking of the Senior Subordinated Notes; or (viii) make any change to the
Subsidiary Guarantees in any manner that adversely affects the rights of the
Holders.
15. Defaults and Remedies
Under the Senior Indenture, the following events are "Events of Default":
(a) the failure to pay interest on any Senior Subordinated Note when the same
becomes due and payable and such default continues for a period of 30 days
(whether or not such payment shall be prohibited by the provisions of Article
X); (b) the failure to pay the principal on any Senior Subordinated Note when
such principal becomes due and payable, at maturity, upon redemption or
otherwise, whether or not such payment shall be prohibited by the provisions of
Article X; (c) a default in the observance or performance of any other covenant
or agreement contained in the Senior Indenture, subject to applicable grace
periods; (d) there shall be a default under any Indebtedness of the Company or
any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0
million or more at any one time outstanding; (e) certain judgments in an
aggregate amount in excess of $5.0 million; or (f) certain events of voluntary
or involuntary bankruptcy.
If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Senior Subordinated Notes may declare the principal of and
accrued interest on all the Senior Subordinated Notes to be due and payable by
notice in writing to the Company and the Trustee, and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Credit Agreement or the ESOP Credit Agreement, shall become immediately due
and payable upon the first to occur of an acceleration under the Credit
Agreement or the ESOP Credit Agreement or five business days after receipt by
the Company and the Representative under the Credit Agreement or the ESOP Credit
Agreement of such notice of acceleration. If an Event of Default specified in
Section 6.01(f) or (g) with respect to the Company occurs and is continuing,
then all unpaid principal of and accrued and unpaid interest on all of the
outstanding Senior Subordinated Notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
5
<PAGE>
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Senior Indenture, in its individual or any other capacity, may become the owner
or pledgee of securities and may otherwise deal with and collect obligations
owed to it by the Company and may otherwise deal with the Company with the same
rights it would have if it were not Trustee.
17. No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder of the Company,
as such, will have any liability for any obligations of the Company under the
Senior Subordinated Notes, the Senior Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
18. Governing Law
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
19. Authentication
This security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this security.
20. Abbreviations
Customary abbreviations may be used in the name of a securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Senior Subordinated Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
6
<PAGE>
The Company will furnish to any securityholder upon written request and
without charge to the securityholder a copy of the Senior Indenture which has in
it the text of this security in larger type. Requests may be made to:
TOKHEIM CORPORATION
1600 Wabash Avenue
Fort Wayne, IN 46801-0360
Attention: Douglas Pinner
7
<PAGE>
ASSIGNMENT FORM
To assign this security, fill in the form below:
I or we assign and transfer this security to
_______________________________________________________
(Print or type assignee's name, address and zip code)
_______________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________________________________ ,as agent,
to transfer this security on the books of the Company. The agent may substitute
another to act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box:
[_] 4.06 Asset Sale [_] 4.08 Change of Control
If you want to elect to have only part of this security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the
amount: $ .
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on the other side of the Security)
__________________
Tax I.D. number
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)
9
<PAGE>
EXHIBIT (c)(5)
TOKHEIM CORPORATION
Senior Subordinated Notes
INDENTURE
Dated as of September 30, 1998
HARRIS TRUST AND SAVINGS BANK,
Trustee
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 20
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 21
SECTION 1.04. Rules of Construction.................................... 22
ARTICLE II THE SENIOR SUBORDINATED SECURITIES............................... 22
SECTION 2.01. Form and Dating; Issuance................................ 22
SECTION 2.02. Execution and Authentication............................. 23
SECTION 2.03. Registrar and Paying Agent............................... 24
SECTION 2.04. Paying Agent To Hold Money in Trust...................... 25
SECTION 2.05. Senior Subordinated Securityholder Lists................. 26
SECTION 2.06. Registration of Transfer and Exchange.................... 26
SECTION 2.07. Replacement Senior Subordinated Securities............... 27
SECTION 2.08. Outstanding Senior Subordinated Securities............... 27
SECTION 2.09. Temporary Senior Subordinated Securities................. 28
SECTION 2.10. Cancellation............................................. 28
SECTION 2.11. Defaulted Interest....................................... 28
SECTION 2.12. CUSIP Numbers............................................ 28
SECTION 2.13. Book-Entry Provisions for Global Senior Subordinated
Securities............................................... 29
SECTION 2.14. Special Transfer Provisions.............................. 30
ARTICLE III REDEMPTION...................................................... 30
SECTION 3.01. Notices to Trustee....................................... 30
<PAGE>
SECTION 3.02. Selection............................................... 30
SECTION 3.03. Notice.................................................. 31
SECTION 3.04. Effect of Notice of Redemption.......................... 32
SECTION 3.05. Deposit of Redemption Price............................. 32
SECTION 3.06. Senior Subordinated Securities Redeemed in Part......... 32
SECTION 3.07. Optional Redemption..................................... 32
SECTION 3.08. Mandatory Redemption.................................... 32
ARTICLE IV COVENANTS....................................................... 33
SECTION 4.01. Payment of Senior Subordinated Securities............... 33
SECTION 4.02. Reports................................................. 33
SECTION 4.03. Incurrence of Indebtedness.............................. 33
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Subsidiaries............................................ 35
SECTION 4.06. Asset Sales............................................. 35
SECTION 4.07. Transactions with Affiliates............................ 38
SECTION 4.08. Change of Control....................................... 39
SECTION 4.09. Compliance Certificate.................................. 41
SECTION 4.10. Preferred Stock of Subsidiaries......................... 42
SECTION 4.11. Liens................................................... 42
SECTION 4.12. Additional Subsidiary Guarantees........................ 42
SECTION 4.13. No Layering............................................. 42
ARTICLE V SUCCESSOR COMPANY................................................ 43
SECTION 5.01. Merger, Consolidation or Sale of All or
Substantially All Assets of the Company................. 43
SECTION 5.02. Merger, Consolidation or Sale of All or
Substantially All Assets of a Guarantor................. 44
ARTICLE VI DEFAULTS AND REMEDIES........................................... 44
SECTION 6.01. Events of Default and Remedies.......................... 44
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SECTION 6.02. Acceleration.............................................46
SECTION 6.03. Other Remedies...........................................46
SECTION 6.04. Waiver of Past Defaults..................................46
SECTION 6.05. Control by Majority......................................47
SECTION 6.06. Limitation on Suits......................................47
SECTION 6.07. Rights of Holders to Receive Payment.....................48
SECTION 6.08. Collection Suit by Trustee...............................48
SECTION 6.09. Trustee May File Proofs of Claim.........................48
SECTION 6.10. Priorities...............................................48
SECTION 6.11. Undertaking for Costs....................................49
SECTION 6.12. Waiver of Stay or Extension Laws.........................49
ARTICLE VII THE TRUSTEE.....................................................49
SECTION 7.01. Duties of Trustee........................................49
SECTION 7.02. Rights of Trustee........................................50
SECTION 7.03. Individual Rights of Trustee.............................51
SECTION 7.04. Trustee's Disclaimer.....................................51
SECTION 7.05. Notice of Defaults.......................................51
SECTION 7.06. Reports by Trustee to Holders............................52
SECTION 7.07. Compensation and Indemnity...............................52
SECTION 7.08. Replacement of Trustee...................................53
SECTION 7.09. Successor Trustee by Merger..............................54
SECTION 7.10. Eligibility; Disqualification............................54
SECTION 7.11. Preferential Collection of Claims Against Company........54
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE.............................55
SECTION 8.01. Legal Defeasance and Covenant Defeasance.................55
SECTION 8.02. Conditions to Legal or Covenant Defeasance...............56
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SECTION 8.03. Deposited Money and Government Senior Subordinated
Securities to be Held in Trust; Other Miscellaneous Provisions.....57
SECTION 8.04. Repayment to Company.....................................57
SECTION 8.05. Reinstatement............................................57
SECTION 8.06. Satisfaction and Discharge of Indenture..................58
ARTICLE IX AMENDMENTS.......................................................59
SECTION 9.01. Without Consent of Holders...............................59
SECTION 9.02. With Consent of Holders..................................60
SECTION 9.03. Compliance with Trust Indenture Act......................61
SECTION 9.04. Revocation and Effect of Consents and Waivers............61
SECTION 9.05. Notation on or Exchange of Senior Subordinated
Securities........................................................61
SECTION 9.06. Trustee To Sign Amendments...............................62
SECTION 9.07. Payment for Consent......................................62
ARTICLE X SUBORDINATION.....................................................62
SECTION 10.01. Agreement To Subordinate................................62
SECTION 10.02. Liquidation, Dissolution, Bankruptcy....................62
SECTION 10.03. Default on Senior Debt..................................63
SECTION 10.04. Acceleration of Payment of Senior Subordinated
Securities.........................................................63
SECTION 10.05. When Distribution Must Be Paid Over.....................64
SECTION 10.06. Subrogation.............................................64
SECTION 10.07. Relative Rights.........................................64
SECTION 10.08. Subordination May Not Be Impaired by Company............64
SECTION 10.09. Rights of Trustee and Paying Agent......................64
SECTION 10.10. Distribution or Notice to Representative................65
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ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE.....65
SECTION 10.12. Trust Funds Not Subordinated............................65
SECTION 10.13. Trustee Entitled To Rely................................65
SECTION 10.14. Trustee To Effectuate Subordination.....................66
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt........66
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions.........................................................66
SECTION 10.17. Trustee's Compensation Not Prejudiced...................66
ARTICLE XI SUBSIDIARY GUARANTEES............................................66
SECTION 11.01. Subsidiary Guarantees...................................66
SECTION 11.02. Limitation on Liability.................................68
SECTION 11.03. Successors and Assigns..................................68
SECTION 11.04. No Waiver...............................................69
SECTION 11.05. Modification............................................69
ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES......................69
SECTION 12.01. Agreement To Subordinate................................69
SECTION 12.02. Liquidation, Dissolution, Bankruptcy....................69
SECTION 12.03. Default on Guarantor Senior Debt........................70
SECTION 12.04. Demand for Payment......................................70
SECTION 12.05. When Distribution Must Be Paid Over.....................71
SECTION 12.06. Subrogation.............................................71
SECTION 12.07. Relative Rights.........................................71
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor........71
SECTION 12.09. Rights of Trustee and Paying Agent......................71
SECTION 12.10. Distribution or Notice to Representative................72
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SECTION 12.11. Article XII Not To Prevent Events of Default or
Limit Right To Accelerate.........................................72
SECTION 12.12. Trustee Entitled To Rely...............................72
SECTION 12.13. Trustee To Effectuate Subordination....................73
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
Guarantor.........................................................73
SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on
Subordination Provisions..........................................73
ARTICLE XIII MISCELLANEOUS.................................................73
SECTION 13.01. Trust Indenture Act Controls...........................73
SECTION 13.02. Notices................................................73
SECTION 13.03. Communication by Holders with Other Holders............74
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.....74
SECTION 13.05. Statements Required in Certificate or Opinion..........75
SECTION 13.06. When Senior Subordinated Securities Disregarded........75
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar...........75
SECTION 13.08. Legal Holidays.........................................75
SECTION 13.09. GOVERNING LAW..........................................76
SECTION 13.10. No Recourse Against Others.............................76
SECTION 13.11. Successors.............................................76
SECTION 13.12. Multiple Originals.....................................76
SECTION 13.13. Table of Contents; Headings............................76
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INDENTURE, dated as of September 30, 1998, among TOKHEIM CORPORATION, an
Indiana corporation (the "Company"), Management Solutions, Inc., a Colorado
corporation, Tokheim Equipment Corporation, a Delaware corporation, Tokheim RPS,
LLC, a Delaware corporation, Sunbelt Hose & Petroleum Equipment, Inc., a Georgia
corporation, Envirotronic Systems, Inc., an Indiana corporation, Gasboy
International, Inc., a Pennsylvania corporation, Tokheim Automation Corporation,
a Texas corporation, Tokheim Investment Corp., a Texas corporation, as
guarantors (collectively, the "Initial Guarantors"), and HARRIS TRUST AND
SAVINGS BANK, an Illinois banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of (i) the Company's 12% Senior
Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes") issued
on the date hereof, (ii) any Roll-Over Notes (as defined herein) that may be
issued upon the Stated Maturity (as defined herein) of the Senior Subordinated
Notes and (iii) any Exchange Notes (as defined herein) if and when issued as
provided in the Registration Rights Agreement (as defined herein) in exchange
for any Roll-Over Notes. The Senior Subordinated Notes, any Roll-Over Notes and
any Exchange Notes are collectively referred to as the "Senior Subordinated
Securities".
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, merger or consolidation.
"Acquisition" means the acquisition by the Company of the fuel dispenser,
systems and services business of Schlumberger.
"Additional Exchange Note" means any Exchange Note issued in lieu of cash
payment of interest accrued on any outstanding Exchange Note (including on any
Additional Exchange Note) pursuant hereto.
"Additional Roll-Over Note" means any Roll-Over Note issued in lieu of cash
payment of interest accrued on any outstanding Roll-Over Note (including on any
Additional Roll-Over Note) pursuant hereto and thereto.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person; provided,
however, that neither Schlumberger nor any of its
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Affiliates shall be deemed to be an Affiliate of the Company. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or any Subsidiary of the Company, or
shall be merged with or into the Company or any Subsidiary of the Company, or
(b) the acquisition by the Company or any Subsidiary of the Company of the
assets of any Person (other than a Subsidiary of the Company) which constitute
all or substantially all of the assets of such Person or comprises any division
or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Subsidiaries (including any Sale and Leaseback Transaction) to any Person
other than the Company or a Wholly Owned Subsidiary of the Company of (a) any
Capital Stock of any Subsidiary of the Company or (b) any other property or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business; provided, however, that Asset Sales shall not
include (i) a transaction or series of related transactions for which the
Company or its Subsidiaries receive aggregate consideration of less than
$500,000 and (ii) the sale, lease, conveyance, disposition or other transfer (w)
of all or substantially all of the assets of the Company as permitted under
Section 5.01, (x) pursuant to any foreclosure of assets or other remedy provided
by applicable law to a creditor of the Company or any Subsidiary of the Company
with a Lien on such assets, which Lien is permitted under Section 4.11; provided
that such foreclosure or other remedy is conducted in a commercially reasonable
manner or in accordance with any bankruptcy law, (y) involving only Cash
Equivalents or inventory in the ordinary course of business or obsolete
equipment in the ordinary course of business consistent with past practices of
the Company or (z) involving only the lease or sublease of any real or personal
property in the ordinary course of business.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in the State of New York or the City of Chicago,
Illinois are authorized or required by law to close.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations
2
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under GAAP and, for purposes of this definition, the amount of such obligations
at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether or
not otherwise in compliance with the provisions of the Indenture); (ii) any
Person or group of related Persons for purposes of Section 13(d) of the Exchange
Act shall become the owner, directly or indirectly, beneficially or of record,
of shares representing either more than 40% of the aggregate ordinary voting
power represented by the issued and outstanding Capital Stock of the Company or
more than 40% of the aggregate issued and outstanding Common Stock of the
Company; or (iii) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the Board of
Directors of the Company at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the Board of
Directors of the Company then still in office who either were members of such
Board of Directors at the beginning of such period or whose election as a member
of such Board of Directors was previously so approved.
"Code" means the Internal Revenue Code of 1986, as amended.
3
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"Commodity Hedging Agreement" means any futures contract or other similar
agreement or arrangement designed to protect the Company or any Subsidiary
against fluctuations in commodities prices.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the
extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes
of such Person and its Subsidiaries paid or accrued in accordance with GAAP for
such period (other than income taxes attributable to extraordinary, unusual or
nonrecurring gains or losses or taxes attributable to sales or dispositions
outside the ordinary course of business or other transactions the effect of
which has been excluded from Consolidated Net Earnings), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Earnings for such period, all as determined on a
consolidated basis for such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four most
recent full fiscal quarters for which financial information is available (the
"Four Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to (i) the Incurrence or repayment of any
Indebtedness of such Person or any of its Subsidiaries (and the application of
the proceeds thereof) giving rise to the need to make such calculation and any
Incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), other than the Incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working
capital or revolving credit facilities, occurring during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such Incurrence or repayment, as the case
may be (and the application of the proceeds thereof), occurred on the first day
of the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions
(including any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Subsidiaries (including any
Person who becomes a Subsidiary as a result of the Asset Acquisition) Incurring,
assuming or otherwise being liable for Acquired Indebtedness and also including
any Consolidated EBITDA (provided that such Consolidated EBITDA shall be
included only to the extent includible
4
<PAGE>
pursuant to the definition of "Consolidated Net Earnings") attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale during the
Four Quarter Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
Incurrence, assumption or liability for any such Acquired Indebtedness) occurred
on the first day of the Four Quarter Period. If such Person or any of its
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the Incurrence of such guaranteed
Indebtedness as if such Person or any Subsidiary of such Person had directly
Incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on the Transaction Date; (2)
if interest on any Indebtedness actually Incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate or other rates, then the
interest rate in effect on the Transaction Date will be deemed to have been in
effect during the Four Quarter Period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Swap Obligations, shall
be deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Subsidiaries (other than dividends paid
in Qualified Capital Stock of the Company or dividends to the extent payable to
the Company or its Subsidiaries) paid, accrued or scheduled to be paid or
accrued during such period times (other than in the case of Preferred Stock of
such Person and its Subsidiaries for which the dividends are tax deductible for
federal income tax purposes) (y) a fraction, the numerator of which is one and
the denominator of which is one minus the then current effective consolidated
federal, state and local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including (a) any amortization of
debt discount (but excluding the amortization of debt issuance costs), (b) the
net costs under Interest Swap Obligations, (c) all capitalized interest and (d)
the interest portion of any deferred payment obligation; and (ii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Earnings" means, with respect to any Person, for any
period, the aggregate net earnings (or loss) of such Person and its Subsidiaries
for such period on a
5
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consolidated basis (before preferred stock dividend requirements), determined in
accordance with GAAP; provided that there shall be excluded therefrom (a) after-
tax gains or losses from Asset Sales or abandonments or reserves relating
thereto, (b) after-tax items classified as extraordinary or nonrecurring gains
or losses, (c) the net earnings of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Subsidiary of the
referent Person or is merged or consolidated with the referent Person or any
Subsidiary of the referent Person, (d) the net earnings (but not loss) of any
Subsidiary of the referent Person to the extent that the declaration of
dividends or similar distributions by that Subsidiary of that income is
restricted by a contract, operation of law or otherwise, (e) the net earnings of
any Person, other than a Subsidiary of the referent Person, except to the extent
of cash dividends or distributions paid to the referent Person or to a Wholly
Owned Subsidiary of the referent Person by such Person, (f) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of Consolidated Net Earnings accrued at any time following
the Issue Date, (g) income or loss attributable to discontinued operations
(including operations disposed of during such period whether or not such
operations were classified as discontinued), (h) in the case of a successor to
the referent Person by consolidation or merger or as a transferee of the
referent Person's assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets and (i) all gains or losses
from the cumulative effect of any change in accounting principles.
"Consolidated Net Worth" of any Person means the consolidated shareholders'
equity of such Person, determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to Disqualified Capital
Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Subsidiaries reducing Consolidated Net Earnings of such
Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such charges constituting an
extraordinary item or loss or any such charge which requires an accrual of or a
reserve relating to possible cash charges or expenditures for any future or past
period).
"Credit Agreement" means the Credit Agreement among the Company, certain of
its Subsidiaries, the lenders party thereto in their capacities as lenders
thereunder and The First National Bank of Chicago, as administrative agent,
together with the related documents thereto (including any guarantee agreements
and security documents), in each case as such agreements may be amended
(including any amendment and restatement thereof), supplemented or otherwise
modified from time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including increasing the
amount of available borrowings thereunder (provided that such increase in
borrowings is permitted under Section 4.03) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
6
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"Custodian" means the custodian with respect to any Global Senior
Subordinated Security (as appointed by the Depository), or any successor entity
thereto as provided in Section 2.03.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository" means, with respect to the Senior Subordinated Securities
issuable or issued in whole or in part in global form, the person specified in
Section 2.03 as the Depository with respect to the Senior Subordinated
Securities, until a successor shall have been appointed and become such pursuant
to the applicable provisions of this Indenture, and thereafter, "Depository"
shall mean or include such successor.
"Designated Senior Debt" means (i) Indebtedness under or in respect of the
Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness
constituting Senior Debt which, at the time of determination, has an aggregate
principal amount of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"Designated Guarantor Senior Debt" means (i) Indebtedness of a Guarantor
under or in respect of the Credit Agreement or the ESOP Credit Agreement and
(ii) any other Indebtedness constituting Senior Debt which, at the time of
determination, has an aggregate principal amount of at least $25.0 million and
is specifically designated in the instrument evidencing such Senior Debt as
"Designated Guarantor Senior Debt" by the Guarantor.
"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Senior Subordinated Securities.
"ESOP Credit Agreement" means that certain credit agreement among the
Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, N.A., and certain
other banks, together with the related documents thereto (including any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder (provided that such
increase in borrowings is permitted under Section 4.03) all or any portion of
the Indebtedness under such agreement or any successor or replacement agreement
and whether by the same or any other agent, lender or group of lenders.
"Escrow Agent" means Bankers Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
7
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"Exchange Notes" means any of the Senior Subordinated Securities issued in
exchange for Roll-Over Notes pursuant to an exchange offer conducted by the
Company in compliance with the provisions of the Registration Rights Agreement.
"Exchange Offer" means an offer to exchange Exchange Notes for Roll-Over
Notes pursuant to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means a registration statement
filed by the Company with the Commission as required by Section 1 of the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arms'-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Senior Subordinated Security" means a Senior Subordinated Security
that is in the form of Exhibit A, Exhibit B or Exhibit C hereto that includes
the Global Senior Subordinated Securities Legend therein.
"Global Senior Subordinated Securities Legend" means the legend set forth
in the first paragraph of Exhibit A.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness.
"Guarantor Senior Debt" means, the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other Obligations with respect to, any Indebtedness of the
Guarantors, whether outstanding on the Issue Date or thereafter created,
Incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Senior Subordinated Securities. Without limiting the
generality of the foregoing, "Guarantor Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not
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such interest is an allowed claim under applicable law) on, and all other
monetary obligations of the Guarantors owing in respect of, Guarantees of (w)
the Senior Notes issued on the Issue Date in the amount of $22.5 million
(including any Refinancing thereof, the "Senior Notes"), (x) the Credit
Agreement and the ESOP Credit Agreement, including obligations to pay principal
and interest, reimbursement obligations under letters of credit, fees, expenses
and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements,
in each case whether outstanding on the Issue Date or thereafter Incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include (i) any
Indebtedness of a Guarantor to a Subsidiary of the Guarantor, (ii) Indebtedness
to, or guaranteed on behalf of, any shareholder, director, officer or employee
of the Guarantor or any Subsidiary of the Guarantor (including, without
limitation, amounts owed for compensation), (iii) Indebtedness to trade
creditors and other amounts Incurred in connection with obtaining goods,
materials or services, (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other taxes owed or owing
by the Guarantors, (vi) Indebtedness Incurred in violation of the provisions of
Section 4.03, (vii) Indebtedness which, when Incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to the Company and (viii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebtedness of the
Company, other than the Senior Notes.
"Holder" or "Senior Subordinated Securityholder" means the Person in whose
name a Senior Subordinated Security is registered on the Registrar's books.
"Indebtedness" means with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or
other obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business that are not
overdue by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) all indebtedness
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) guarantees and other contingent
obligations in respect of Indebtedness referred to in clauses (i) through (v)
above and clause (viii) below, (vii) all indebtedness of any other Person of the
type referred to in clauses (i) through (vi) which are secured by any lien on
any property or asset of such Person, the amount of such Obligation being deemed
to be the lesser of the fair market value of such property or asset or the
amount of the Obligation so secured, (viii) all indebtedness under Currency
Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any. For purposes hereof, the "maximum
fixed repurchase price" of any Disqualified Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant
any provision hereof, and if such price is based upon, or measured by, the
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fair market value of such Disqualified Capital Stock, such fair market value
shall be determined reasonably and in good faith by the Board of Directors of
the issuer of such Disqualified Capital Stock.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Financial Advisor" means a firm (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Maturity Date" means January 28, 1999, the maturity date of the
Senior Subordinated Notes.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include interest rate swaps, caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including a guarantee) or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any other Person.
"Investment" shall exclude extensions of trade credit by the Company and its
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Subsidiary, as the case may be. For the
purposes of Section 4.04, the amount of any Investment shall be the original
cost of such Investment plus the cost of all additional Investments by the
Company or any of its Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment: provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Earnings.
"Issue Date" means the date of original issuance of the Senior Subordinated
Notes.
"Junior Subordinated Notes" means the Company's 12% Junior Subordinated
Notes due September 30, 2008 issued pursuant to the Securities Purchase
Agreement in partial payment of the Company's obligations under the Purchase
Agreement.
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"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Subsidiaries from such Asset Sale net of (a)
reasonable out-of-pocket expenses and fees relating to such Asset Sale
(including legal, accounting, brokerage and investment banking fees and sales
commissions), (b) taxes paid or payable after taking into account any reduction
in consolidated tax liability due to available tax credits or deductions and any
tax sharing arrangements, (c) repayment of Indebtedness that is required to be
repaid in connection with such Asset Sale and (d) appropriate amounts to be
provided by the Company or any Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Subsidiary, as the case may be, after such
Asset Sale, including pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of
the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Indebtedness" means, without duplication, each of the following:
(i) Indebtedness under the Senior Subordinated Securities and this
Indenture, and Indebtedness Incurred after the Issue Date in connection
with a mandatory redemption of the Senior Subordinated Indebtedness
pursuant to Section 3.08;
(ii) Indebtedness Incurred pursuant to the Credit Agreement, the ESOP
Credit Agreement and the Senior Notes in an aggregate principal amount at
any time outstanding not to exceed (A) $7.62 million with respect to the
Indebtedness under the ESOP Credit Agreement, less the amount of all
mandatory principal payments, if any (excluding any such payments to the
extent refinanced at the time of payment under a replaced ESOP Credit
Agreement), (B) $250.0 million in the aggregate with respect to
Indebtedness under the Credit Agreement, reduced
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by any required permanent repayments, if any (which are accompanied by a
corresponding permanent commitment reduction), thereunder and (C) $22.5
million with respect to the Senior Notes;
(iii) Other Indebtedness of the Company and its Subsidiaries outstanding on
the Issue Date (after giving effect to the Acquisition), including the
Junior Subordinated Notes and bank overdrafts and any indebtedness with
respect to the 11 1/2% Notes not repurchased, reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid
or permanent reductions thereon;
(iv) Interest Swap Obligations of the Company covering Indebtedness of the
Company or any of its Subsidiaries and Interest Swap Obligations of any
Subsidiary of the Company covering Indebtedness of such Subsidiary;
provided, however, that (x) such Interest Swap Obligations are designed to
protect the Company and its Subsidiaries from fluctuations in interest
rates on Indebtedness Incurred in accordance with the Indenture (and are
used for bona fide hedging, and not speculative, purposes); and (y) the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates at the time entered into;
(v) Indebtedness under Currency Agreements; provided that in the case of
Currency Agreements which relate to Indebtedness, such Currency Agreements
(i) are designed to protect against fluctuations in currency value (and are
used for bona fide hedging, and not speculative, purposes) and (ii) do not
increase the Indebtedness of the Company and its Subsidiaries outstanding
other than as a result of fluctuations in foreign currency exchange rates
or by reason of fees, indemnities and compensation payable thereunder;
(vi) Indebtedness of a Wholly Owned Subsidiary of the Company to the
Company or to a Wholly Owned Subsidiary of the Company for so long as such
Indebtedness is held by the Company or a Wholly Owned Subsidiary of the
Company, in each case subject to no Lien held by a Person other than the
Company or a Wholly Owned Subsidiary of the Company other than a Lien
required under the Credit Agreement; provided that if as of any date any
Person other than the Company or a Wholly Owned Subsidiary of the Company
owns or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the Incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Subsidiary of the
Company for so long as such Indebtedness is held by a Wholly Owned
Subsidiary of the Company, in each case subject to no Lien other than a
Lien required under the Credit Agreement; provided that (a) any
Indebtedness of the Company to any
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Wholly Owned Subsidiary of the Company is unsecured and subordinated,
pursuant to a written agreement, to the Company's obligations under the
Indenture and the Senior Subordinated Securities and (b) if as of any date
any Person other than a Wholly Owned Subsidiary of the Company owns or
holds any such Indebtedness or any Person holds a Lien in respect of such
Indebtedness, such date shall be deemed the Incurrence of Indebtedness not
constituting Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except
in the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business; provided, however, that such Indebtedness is
extinguished within ten business days of Incurrence;
(ix) Indebtedness of the Company or any of its Subsidiaries represented by
letters of credit for the account of the Company or such Subsidiary, as the
case may be, in order to provide security for workers' compensation claims,
payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business;
(x) Refinancing Indebtedness;
(xi) Indebtedness Incurred by the Company or any Subsidiary of the Company
in connection with the purchase or improvement of property (real or
personal) or equipment or other capital expenditures in the ordinary course
of business or consisting of Capitalized Lease Obligations, provided that
(i) at the time of the Incurrence thereof, such Indebtedness, together with
any other Indebtedness Incurred during the most recently completed four
fiscal quarter period in reliance upon this clause (xi) does not exceed, in
the aggregate, 3% of the net sales of the Company and the Subsidiaries
during the most recently completed four fiscal quarter period on a
consolidated basis (calculated on a pro forma basis if the date of
Incurrence is prior to the end of the fourth fiscal quarter following the
Issue Date) and (ii) such Indebtedness, together with all then outstanding
Indebtedness Incurred in reliance upon this clause (xi) does not exceed, in
the aggregate, 3% of the aggregate net sales of the Company and its
Subsidiaries during the most recently completed twelve fiscal quarter
period on a consolidated basis (calculated on a pro forma basis if the date
of Incurrence is prior to the end of the twelfth fiscal quarter following
the Issue Date);
(xii) Indebtedness arising from agreements of the Company or a Subsidiary
of the Company providing for indemnification, adjustment of purchase price
or similar obligations, in each case, Incurred in connection with the
disposition of any business, assets or Subsidiary, other than guarantees of
Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition; provided that the maximum
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aggregate liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds actually received by the Company and the
Subsidiary in connection with such disposition;
(xiii) Obligations in respect of performance bonds and completion
guarantees provided by the Company or any Subsidiary of the Company in the
ordinary course of business;
(xiv) Guarantees by the Company or a Subsidiary of the Company of
Indebtedness Incurred by the Company or a Subsidiary of the Company so long
as the Incurrence of such Indebtedness by the Company or any such
Subsidiary of the Company is otherwise permitted by the terms of the
Indenture;
(xv) the Junior Subordinated Notes;
(xvi) Indebtedness Incurred by the Company or any Subsidiary of the
Company in exchange for the use of Traits as collateral made in the
ordinary course of business to financial institutions which Indebtedness
has a value of no less than 90% of face value of such Traits;
(xvii) Indebtedness of the Company or a Subsidiary of the Company to a
Subsidiary of the Company that is not a Wholly Owned Subsidiary in the
aggregate principal amount not to exceed at any one time $10.0 million;
provided that if as of any date any Person other than a Subsidiary of the
Company that is not a Wholly Owned Subsidiary owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the Incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness; and
(xviii) $10.0 million of other indebtedness of the Company or any of its
Subsidiaries (which amount may, but need not, be Incurred in whole or in
part under the Credit Agreement).
"Permitted Investments" means: (i) Investments by the Company or any
Subsidiary of the Company in any Person that is or will become immediately after
such Investment a Wholly Owned Subsidiary of the Company or that will merge or
consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii)
Investments in the Company by any Subsidiary of the Company; provided that any
Indebtedness evidencing such Investment is unsecured and subordinated, pursuant
to a written agreement and to the same extent that the Senior Subordinated
Securities are subordinated to Senior Debt, to the Company's obligations under
the Senior Subordinated Securities and this Indenture; (iii) Investments in cash
and Cash Equivalents; (iv) loans and advances to employees and officers of the
Company and its Subsidiaries in the ordinary course of business for bona fide
business purposes; (v) Currency Agreements and Interest Swap Obligations entered
into in the ordinary course of the Company's or its Subsidiaries' businesses and
otherwise in compliance with this Indenture; (vi) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
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similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or its Subsidiaries as a result
of consideration received in connection with an Asset Sale made in compliance
with the provisions of Section 4.06; (viii) Investments existing on the Issue
Date; (ix) Investments in an African Subsidiary in an aggregate amount not to
exceed $2.0 million for which the Company is committed on the Issue Date; and
(x) additional Investments in an aggregate amount not exceeding $5.0 million.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims either
(a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
Incurred in the ordinary course of business for sums not yet delinquent for
a period of more than 60 days or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(iii) Liens Incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security;
(iv) Liens securing letters of credit issued in the ordinary course of
business consistent with past practice in connection with the items
referred to in clause (iii), or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(v) judgment Liens not giving rise to an Event of Default so long as such
Lien is adequately bonded and any appropriate legal proceedings which may
have been duly initiated for the review of such judgment shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired;
(vi) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Subsidiaries;
(vii) any interest or title of a lessor under any Capitalized Lease
Obligation: provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
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(viii) purchase money Liens to finance property or assets of the Company
or any Subsidiary of the Company acquired in the ordinary course of
business; provided, however, that (A) the related purchase money
Indebtedness shall not exceed the cost of such property or assets and shall
not be secured by any property or assets of the Company or any Subsidiary
of the Company other than the property and assets so acquired and (B) the
Lien securing such Indebtedness shall be created within 90 days of such
acquisition:
(ix) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(x) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
such letters of credit and products and proceeds thereof;
(xi) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of the Company
or any of its Subsidiaries, including rights of offset and set-off;
(xii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) Liens securing Acquired Indebtedness Incurred in accordance with the
provisions of Section 4.03; provided that (A) such Liens secured such
Acquired Indebtedness at the time of and prior to the Incurrence of such
Acquired Indebtedness by the Company or a Subsidiary of the Company and
were not granted in connection with, or in anticipation of, the Incurrence
of such Acquired Indebtedness by the Company or a Subsidiary of the Company
and (B) such Liens do not extend to or cover any property or assets of the
Company or of any of its Subsidiaries other than the property or assets
that secured the Acquired Indebtedness prior to the time such Indebtedness
became Acquired Indebtedness of the Company or a Subsidiary of the Company
and are no more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the Incurrence of such Acquired Indebtedness
by the Company or a Subsidiary of the Company:
(xv) Leases or subleases granted to others not interfering in any material
respect with the business of the Company or any of its Subsidiaries:
(xvi) Any interest or title of a lessor in the property subject to any
lease, whether characterized as capitalized or operating other than any
such interest or title resulting from or arising out of a default by the
Company or any of its Subsidiaries of its obligations under such lease;
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(xvii) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of personal property
that are otherwise permitted under the Indenture and under which the
Company or any of its Subsidiaries is lessee;
(xviii) Liens placed on Traits used as collateral in exchange for loans
provided to the Company or its Subsidiaries; and
(xix) Liens in favor of the Trustee and any substantially equivalent Lien
granted to any trustee or similar institution under any indenture governing
Indebtedness permitted to be Incurred or outstanding under the Indenture.
"Person" means an individual, partnership, corporation, unincorporated
organization. trust or joint venture, or a governmental agency or political
subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Purchase Agreement" means the Master Agreement for Purchase and Sale of
Shares, Assets and Liabilities, dated as of June 19, 1998, between the Company
and Schlumberger, as amended by the letter agreements dated July 21, 1998, July
31, 1998 and August 28, 1998 and by Amendment No. 1 thereto dated September 30,
1998.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Subsidiary of the Company of Indebtedness Incurred in accordance with the
provisions of Section 4.03 (other than pursuant to clause (iv), (v), (vi),
(vii), (viii), (ix), (xi) or (xvi) of the definition of Permitted Indebtedness),
in each case that does not (1) result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium or penalty required to be paid under
the terms of the instrument governing such Indebtedness and plus the amount of
reasonable fees and expenses incurred by the Company in connection with such
Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; provided that (x) if such
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Senior
Subordinated Securities, then such Refinancing Indebtedness shall be subordinate
to the
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Senior Subordinated Securities at least to the same extent and in the same
manner as the Indebtedness being Refinanced.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of September 30, 1998, among the Company, the Initial Guarantors and
Schlumberger, as such agreement may be amended, modified, or supplemented from
time to time in accordance with the terms thereof.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Securities Legend" means the legend set forth in Exhibit A.
"Roll-Over Notes" means any of the Company's Increasing Rate Senior
Subordinated Notes due 2007 issued upon the Stated Maturity of the Senior
Subordinated Notes pursuant to the provisions of the Securities Purchase
Agreement and this Indenture.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Subsidiary of any property, whether owned by the
Company or any Subsidiary at the Issue Date or later acquired, which has been or
is to be sold or transferred by the Company or such Subsidiary to such Person or
to any other Person from whom funds have been or are to be advanced by such
Person on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Securities Purchase Agreement" means the Securities Purchase Agreement,
dated as of September 30, 1998 between the Company and Schlumberger providing
for the issuance by the Company of (i) the Senior Subordinated Securities, (ii)
the Junior Subordinated Notes and (iii) the Warrants.
"Senior Debt" means, the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other Obligations with respect to, any Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter created, Incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Senior Subordinated Securities. Without limiting the generality of the
foregoing, "Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under
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applicable law) on, and all other monetary obligations of the Company owing in
respect of, (x) the Credit Agreement, the ESOP Credit Agreement and the Senior
Notes, including obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities, (y) all
Interest Swap Obligations and (z) Currency Agreements, in each case whether
outstanding on the Issue Date or thereafter Incurred. Notwithstanding the
foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company
to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf
of, any shareholder, director, officer or employee of the Company or any
Subsidiary of the Company (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts Incurred
in connection with obtaining goods, materials or services, (iv) Indebtedness
represented by Disqualified Capital Stock, (v) any liability for federal, state,
local or other taxes owed or owing by the Company, (vi) Indebtedness Incurred in
violation of the provisions of Section 4.03, (vii) Indebtedness which, when
Incurred and without respect to any election under Section 1111(b) of Title 11,
United States Code, is without recourse to the Company and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company, other than the Senior Notes.
"Senior Subordinated Securities" has the meaning stated in the recital of
this Indenture and more particularly means any Senior Subordinated Securities
authenticated and delivered under this Indenture. For all purposes of this
Indenture, the term "Senior Subordinated Securities" shall include any Roll-Over
Notes to be issued and exchanged for any Senior Subordinated Notes, and any
Exchange Notes to be issued and exchanged for any Roll-Over Notes, pursuant to
this Indenture, the Securities Purchase Agreement or the Registration Rights
Agreement.
"Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v)
of Regulation S-X under the Securities Act.
"Schlumberger" means Schlumberger Limited, a Netherlands Antilles
corporation.
"Stated Maturity" means, with respect to any installment of interest or
principal on any Senior Subordinated Securities, the date on which such payment
of interest or principal was scheduled to be paid pursuant hereto, and shall not
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date scheduled for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Senior Subordinated Securities
or the applicable Subsidiary Guarantee pursuant to written agreement.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
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"Subsidiary Guarantee" shall mean any Guarantee of the Senior Subordinated
Securities by any Guarantor pursuant to Article XI.
"Subsidiary Guarantors" means any Subsidiary of the Company which
Guarantees the Senior Subordinated Securities pursuant to Article XI.
"TIA" means the Trust Indenture Act of 1939, as amended and as in effect on
the date of this Indenture.
"Traits" means accounts receivable sold without recourse.
"Transfer Restricted Securities" means Senior Subordinated Securities that
bear or are required to bear the Restricted Securities Legend.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Warrants" means the warrants to purchase shares of Common Stock of the
Company issued pursuant to the Warrant Agreement and the Securities Purchase
Agreement in partial payment of the purchase price under the Purchase Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of September 30,
1998 between the Company and Schlumberger.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person
of which all the outstanding voting securities (other than in the case of a
foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
SECTION 1.02. Other Definitions.
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<TABLE>
<CAPTION>
Term Defined in Section
-------------------------------- -----------------------------------------
<S> <C>
"Affiliate Transaction"................................4.07
"Agent Members"........................................2.13(a)
"Bankruptcy Law".......................................6.01
"Blockage Period".....................................10.03, 12.03
"Change of Control Offer"..............................4.08(a)
"Change of Control Payment Date".......................4.08(c)
"Covenant Defeasance"..................................8.01(c)
"CUSIP"................................................2.12
"Default Notice"......................................10.03, 12.03
"Event of Default".....................................6.01
"Net Proceeds Offer"...................................4.06(a)
"Guaranteed Obligations"..............................11.01
"Incur"................................................4.03
"Indemnified Party"....................................7.07
"Legal Defeasance".....................................8.01(b)
"Legal Holiday".......................................13.08
"Net Proceeds Offer Trigger Date"......................4.06
"Notice of Default"....................................6.01
"outstanding"..........................................8.01(b)
"Paying Agent".........................................2.03
"Net Proceeds Offer"...................................4.06(a)
"Net Proceeds Offer Amount"............................4.06
"Net Proceeds Offer Payment Date"......................4.06
"Net Proceeds Trigger Date"............................4.06
"Reference Date".......................................4.04
"Registrar"............................................2.03
"Replacement Assets"...................................4.06(a)
"Restricted Payments"..................................4.04(a)
"Securities Register"..................................2.06
"Senior Subordinated Notes".....................Recitals
"Surviving Entity".....................................5.01
"Trustee"..............................................8.03
</TABLE>
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Senior Subordinated Securities.
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"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Senior Subordinated Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular; and
(6) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE II
THE SENIOR SUBORDINATED SECURITIES
----------------------------------
SECTION 2.01. Form and Dating; Issuance. (a) The Senior Subordinated
Notes issued on the date hereof and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture, and as otherwise
provided in this Article II. Any Roll-Over Notes and the Trustee's certificate
of authentication thereon shall be substantially in the form of Exhibit B, which
is hereby incorporated in and expressly made a part of this Indenture, and as
otherwise provided in this Article II. Any Exchange Notes and the Trustee's
certificate of authentication thereon shall be substantially in the form of
Exhibit C, which is hereby incorporated in and expressly made a part of this
Indenture, and as otherwise provided in this Article II. The Senior
Subordinated Securities may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company or any Guarantor is
subject, if any, or usage. Each Senior Subordinated Security shall be dated the
date of its authentication. The terms of the Senior Subordinated Securities set
forth in Exhibit A, Exhibit B and Exhibit C are part of the terms of
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<PAGE>
this Indenture. The Senior Subordinated Securities shall be issuable only in
registered form without coupons of $1,000 and integral multiples thereof, or, in
the case of Additional Roll-Over Notes or Additional Exchange Notes, $100 or any
integral multiple thereof (or any lesser amount to the extent necessary).
(b) The Senior Subordinated Notes are being issued by the Company pursuant
to the Securities Purchase Agreement in partial satisfaction of its payment
obligations under to the Purchase Agreement. Upon initial issuance, the Senior
Subordinated Notes may be represented by certificates registered in the names of
the Holders or by one or more Global Senior Subordinated Securities. The
aggregate principal amount of any Global Senior Subordinated Security may from
time to time be increased or decreased by adjustments made on the records of the
Trustee as Custodian.
(c) On the Issue Date, the Company will issue, and the Trustee will
authenticate in accordance with Section 2.02, the Senior Subordinated Notes in
an aggregate principal amount of $170,000,000.
(d) If the Company fails to refinance the Senior Subordinated Notes on or
prior to the Initial Maturity Date, the Holders, subject to the provisions of
this Section 2.01(d), on the Initial Maturity Date will exchange their Senior
Subordinated Notes for Roll-Over Notes in an equal aggregate principal amount
and the Company will issue, and the Trustee will authenticate in accordance with
Section 2.02, Roll-Over Notes in an original aggregate principal amount of
$170,000,000. The obligation of the Holders to exchange their Senior
Subordinated Notes for Roll-Over Notes is subject to the following conditions:
(i) the Company shall have paid in full in cash all interest accrued on the
Senior Subordinated Notes through the Initial Maturity Date; (ii) no Default or
Event of Default under Section 6.01(f) or (g) shall have occurred and be
continuing; and (iii) no Default or Event of Default under Section 6.01(d) or
(e) shall have occurred and be continuing.
(e) At such time as an Exchange Offer Registration Statement has been
declared effective by the Commission and an Exchange Offer has been consummated
as contemplated by the Registration Rights Agreement, the Company will issue,
and the Trustee will authenticate in accordance with Section 2.02, Exchange
Notes in an aggregate principal amount equal to the principal amount of Roll-
Over Notes surrendered for exchange as contemplated by the Registration Rights
Agreement.
SECTION 2.02. Execution and Authentication. One or more Officers of the
Company shall sign the Senior Subordinated Securities by manual or facsimile
signature.
If an Officer whose signature is on a Senior Subordinated Security no
longer holds that office at the time the Trustee authenticates the Senior
Subordinated Security, the Senior Subordinated Security shall be valid
nevertheless.
A Senior Subordinated Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of authentication on the
Senior Subordinated Security. The
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<PAGE>
signature shall be conclusive evidence that the Senior Subordinated Security has
been authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery upon a
written order of the Company signed by two of its Officers (1) Senior
Subordinated Notes for original issue on the date hereof in an aggregate
principal amount of $170,000,000, (2) subject to Section 2.01(d), Roll-Over
Notes in an aggregate principal amount of up to $170,000,000 and (3) subject to
Section 2.01(e), Exchange Notes issued upon surrender of an equal aggregate
principal amount of Roll-Over Notes pursuant to the Registration Rights
Agreement in an Exchange Offer. Such order shall specify the amount of the
Senior Subordinated Securities to be authenticated, the date on which the
original issue of Senior Subordinated Securities is to be authenticated and
whether the Senior Subordinated Securities are to be Senior Subordinated Notes,
Roll-Over Notes or Exchange Notes. In the case of a written order of the
Company relating to the issuance of Additional Roll-Over Notes or Additional
Exchange Notes, such written order shall also demonstrate the computation of the
principal amount of Additional Roll-Over Notes or Additional Exchange Notes
issuable to each Holder. The aggregate principal amount of Senior Subordinated
Notes outstanding at any time may not exceed $170,000,000. The aggregate
principal amount of Roll-Over Notes or Exchange Notes at any time outstanding
may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate principal
amount of Additional Roll-Over Notes or Additional Exchange Notes issued by the
Company pursuant to the terms hereof in respect of interest in excess of 12%
per annum accrued on outstanding Roll-Over Notes or Exchange Notes (including
outstanding Additional Roll-Over Notes and Additional Exchange Notes).
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Senior Subordinated Securities. Any such
appointment shall be evidenced by an instrument signed by a Trust Officer of the
Trustee, a copy of which shall be furnished to the Company. Unless limited by
the terms of such appointment, an authenticating agent may authenticate Senior
Subordinated Securities whenever the Trustee may do so. After any such
appointment, each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Senior Subordinated Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Senior Subordinated Securities may be presented for payment (the
"Paying Agent"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be
24
<PAGE>
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Senior Subordinated Securities.
The Company initially appoints The Depository Trust Company to act as
Depository with respect to the Global Senior Subordinated Securities, and the
Trustee shall initially be the Senior Subordinated Securities Custodian with
respect to the Global Senior Subordinated Securities.
The Company may remove any Registrar or Paying Agent upon written notice to
such Registrar or Paying Agent and to the Trustee, provided that no such removal
shall become effective until (1) acceptance of an appointment by a successor as
evidenced by an appropriate agreement entered into by the Company and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (2) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time
upon not less than three Business Days' prior written notice to the Company;
provided, however, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Senior Subordinated Security, the
Company shall deposit with the Paying Agent (or if the Company is acting as
Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Senior Subordinated Securityholders or the Trustee all money held by
the Paying Agent for the payment of principal of or interest on the Senior
Subordinated Securities and shall notify the Trustee in writing of any default
by the Company in making any such payment within one Business Day thereof. If
the Company acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section
2.04, the Paying Agent shall have no further liability for the money delivered
to the Trustee.
Any money deposited with any Paying Agent, or then held by the Company in
trust for the payment of principal or interest on any Senior Subordinated
Security and remaining unclaimed for two years after such principal and interest
has become due and payable shall be paid to the Company at its request, or, if
then held by the Company, shall be discharged from such trust; and the Senior
Subordinated Securityholders shall thereafter, as general unsecured creditors,
look only to the Company for payment thereof, and all liability of the Paying
Agent with respect to such money, and all liability of the Company as trustee
thereof, shall thereupon cease.
25
<PAGE>
SECTION 2.05. Senior Subordinated Securityholder Lists. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders of Senior
Subordinated Securities. If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Senior Subordinated Securities.
SECTION 2.06. Registration of Transfer and Exchange. The Senior
Subordinated Securities shall be issued in registered form only. The Company
shall cause to be kept at the principal corporate trust office of the Trustee a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Senior Subordinated Securities and the registration of transfer of Senior
Subordinated Securities entitled to be registered or transferred as herein
provided. To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Senior Subordinated Securities at the
Registrar's or co-registrar's request. The Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with any registration of transfer or exchange pursuant to this
Section 2.06. The Company shall not be required to make, and the Registrar need
not register, transfers or exchanges of Senior Subordinated Securities selected
for redemption (except, in the case of Senior Subordinated Securities to be
redeemed in part, the portion thereof not to be redeemed) or transfers or
exchanges of any Senior Subordinated Securities for a period of 15 days before a
selection of Senior Subordinated Securities to be redeemed.
Prior to the due presentation for registration of transfer of any Senior
Subordinated Security, the Company, the Guarantors, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the Person in whose
name a Senior Subordinated Security is registered as the absolute owner of such
Senior Subordinated Security for the purpose of receiving payment of principal
of and accrued and unpaid interest on such Senior Subordinated Security and for
all other purposes whatsoever, whether or not such Senior Subordinated Security
is overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary.
Any Holder of a Global Senior Subordinated Security shall, by acceptance of
such Global Senior Subordinated Security, agree that transfers of beneficial
interests in such Global Senior Subordinated Security may be effected only
through the Depository, in accordance with the provisions of this Indenture and
such Depository's usual procedures.
All Senior Subordinated Securities issued upon any registration of transfer
or exchange pursuant to this Section 2.06 will evidence the same debt and will
be entitled to the same benefits under this Indenture as the Senior Subordinated
Securities surrendered upon such registration of transfer or exchange.
SECTION 2.07. Replacement Senior Subordinated Securities. If a mutilated
Senior Subordinated Security is surrendered to the Registrar or if the Holder of
a Senior Subordinated
26
<PAGE>
Security claims that the Senior Subordinated Security has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall authenticate
a replacement Senior Subordinated Security if the Holder satisfies any
reasonable requirements of the Trustee and the Company including evidence of the
destruction, loss or theft of the Senior Subordinated Security. If required by
the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Trustee to protect the Company, the Trustee,
the Paying Agent, the Registrar and any co-registrar from any loss that any of
them may suffer if a Senior Subordinated Security is replaced. The Company and
the Trustee may charge the Holder for their expenses in replacing a Senior
Subordinated Security, including the payment of a sum sufficient to cover any
tax or other governmental charge that may be required. In the event any such
mutilated, lost, destroyed or wrongfully taken Senior Subordinated Security has
become or is about to become due and payable, the Company in its discretion may
pay such Senior Subordinated Security instead of issuing a new Senior
Subordinated Security in replacement thereof.
Every replacement Senior Subordinated Security is an additional obligation
of the Company.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, lost, destroyed or wrongfully taken Senior Subordinated
Securities.
SECTION 2.08. Outstanding Senior Subordinated Securities. The Senior
Subordinated Securities outstanding at any time are all Senior Subordinated
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. A Senior Subordinated Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Senior Subordinated
Security.
If a Senior Subordinated Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Senior Subordinated Security is held by a
protected purchaser (as defined in Article 8 of the Uniform Commercial Code).
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Senior
Subordinated Securities (or portions thereof) to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Holders of Senior Subordinated Securities on that date pursuant to the terms
of this Indenture, then on and after that date such Senior Subordinated
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Temporary Senior Subordinated Securities. Until definitive
Senior Subordinated Securities and Global Senior Subordinated Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Senior Subordinated Securities. Temporary Senior Subordinated
Securities shall be substantially in the form of
27
<PAGE>
definitive Senior Subordinated Securities but may have variations that the
Company considers appropriate for temporary Senior Subordinated Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Senior Subordinated Securities and deliver them in
exchange for temporary Senior Subordinated Securities upon surrender of such
temporary Senior Subordinated Securities at the office or agency of the Company,
without charge to the Holder.
SECTION 2.10. Cancellation. The Company at any time may deliver Senior
Subordinated Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Senior Subordinated Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Senior Subordinated Securities surrendered for
registration of transfer, exchange, payment or cancellation and deliver canceled
Senior Subordinated Securities to the Company pursuant to written direction by
an Officer of the Company. The Company may not issue new Senior Subordinated
Securities to replace Senior Subordinated Securities that have been redeemed,
paid or delivered to the Trustee for cancellation. The Trustee shall not
authenticate Senior Subordinated Securities in place of canceled Senior
Subordinated Securities other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Senior Subordinated Securities, the Company shall pay the
defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to the
persons who are Holders of Senior Subordinated Securities on a subsequent
special record date. The Company shall fix or cause to be fixed any such
special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail or cause to be mailed to each Holder of Senior
Subordinated Securities a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements (if applicable) of any securities
exchange on which the Senior Subordinated Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this paragraph, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Senior
Subordinated Securities may use "CUSIP" numbers (if then generally in use) and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Senior Subordinated Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Senior Subordinated Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.
SECTION 2.13. Book-Entry Provisions for Global Senior Subordinated
Securities. If the Senior Subordinated Securities are issued in the form of a
Global Senior Subordinated Security, the following provisions shall apply:
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<PAGE>
(a) Each Global Senior Subordinated Security initially shall (i) be
registered in the name of the Depository for such Global Senior Subordinated
Security or the nominee of such Depository and (ii) be delivered to the Trustee
as the initial Custodian for such Depository. Beneficial interests in Global
Senior Subordinated Securities may be held indirectly through members of or
participants in ("Agent Members") the Depository).
Agent Members shall have no rights under this Indenture with respect to any
Global Senior Subordinated Security held on their behalf by the Depository, or
the Trustee as Custodian, or under such Global Senior Subordinated Security, and
the Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Senior Subordinated
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or shall impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Senior Subordinated Security.
(b) Transfers of a Global Senior Subordinated Security shall be limited to
transfers of such Global Senior Subordinated Security in whole, but not in part,
to the Depository, its successors or their respective nominees. Interests of
beneficial owners in a Global Senior Subordinated Security may be transferred in
accordance with the rules and procedures of the Depository (and Agent Member, if
applicable) and the provisions of Section 2.14. The Trustee shall register the
transfer of Senior Subordinated Securities to all beneficial owners in exchange
for their beneficial interests in a Global Senior Subordinated Security if (i)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Global Senior Subordinated Security or the Depository
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depository is required to be so registered in order to act as Depository,
and in each case a successor Depository is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Senior
Subordinated Security shall be so exchangeable or (iii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to permit such transfers.
SECTION 2.14. Special Transfer Provisions. Unless and until a Transfer
Restricted Security is transferred or exchanged under an effective registration
statement under the Securities Act, the following provisions shall apply:
(a) Upon the transfer, exchange or replacement of Senior Subordinated
Securities not bearing the Restricted Securities Legend, the Registrar shall
deliver Senior Subordinated Securities that do not bear the Restricted
Securities Legend. Upon the transfer, exchange or replacement of Senior
Subordinated Securities bearing the Restricted Securities Legend, the Registrar
shall deliver only Senior Subordinated Securities that bear the Restricted
Securities Legend unless there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
29
<PAGE>
(b) By its acceptance of any Senior Subordinated Security bearing the
Restricted Securities Legend, each Holder of such a Senior Subordinated Security
acknowledges that transfer of such Senior Subordinated Security may be
restricted pursuant to the provisions of the Securities Act as set forth in the
Restricted Securities Legend and agrees that it shall transfer such Senior
Subordinated Security only in a transaction that is exempt from the registration
requirements of the Securities Act.
ARTICLE III
REDEMPTION
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem Senior
Subordinated Securities pursuant to Section 3.07 or is required to redeem Senior
Subordinated Securities pursuant to Section 3.08, it shall notify the Trustee in
writing of the redemption date, the principal amount of Senior Subordinated
Securities to be redeemed and the paragraph of the Senior Subordinated
Securities pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section 3.01 at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection. If less than all of the Senior Subordinated
Securities are to be redeemed at any time, selection of Senior Subordinated
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Senior Subordinated Securities are listed, or, if the Senior Subordinated
Securities are not so listed, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided that no Senior
Subordinated Security of $1,000 or less shall be redeemed in part. If any
Senior Subordinated Security is to be redeemed in part only, the notice of
redemption that relates to such Senior Subordinated Security shall state the
portion of the principal amount thereof to be redeemed. On and after the
redemption date, interest ceases to accrue on Senior Subordinated Securities or
portions of them called for redemption.
SECTION 3.03. Notice. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Senior Subordinated Securities to be redeemed at its registered
address. Notices of redemption may not be conditional. The Trustee shall
notify the Company promptly of the Senior Subordinated Securities or portions of
Senior Subordinated Securities to be redeemed.
The notice shall identify the Senior Subordinated Securities to be redeemed
and shall state:
(1) the redemption date;
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(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Senior Subordinated Securities called for redemption must
be surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Senior Subordinated
Securities are to be redeemed, the certificate numbers and principal
amounts of the particular Senior Subordinated Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Senior Subordinated Securities
(or portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Senior Subordinated Securities pursuant to
which the Senior Subordinated Securities called for redemption are being
redeemed;
(8) the CUSIP number, if any, printed on the Senior Subordinated
Securities being redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Senior Subordinated Securities.
At the Company's request (which may be revoked at any time in writing prior
to the time at which the Trustee shall have given such notice to the Holders),
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. In such event, the Company shall provide the Trustee with
the information required by this Section 3.03.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Senior Subordinated Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such Senior Subordinated Securities shall be
paid at the redemption price stated in the notice, plus accrued interest to the
redemption date; provided that if the redemption date is after a regular record
date and on or prior to the interest payment date, the accrued interest shall be
payable to the Holder of the redeemed Senior Subordinated Securities registered
on the relevant record date. If mailed in the manner herein, the notice shall
be conclusively presumed to have been given whether or not the Holder receives
such notice. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company is the Paying Agent, shall segregate and hold in trust) money sufficient
to pay the redemption price of and accrued interest on all Senior Subordinated
Securities to be redeemed on the redemption date other than
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Senior Subordinated Securities or portions of Senior Subordinated Securities
called for redemption that have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.06. Senior Subordinated Securities Redeemed in Part. Upon
surrender of a Senior Subordinated Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Senior Subordinated Security equal in principal amount
to the unredeemed portion of the Senior Subordinated Security surrendered.
SECTION 3.07. Optional Redemption. The Senior Subordinated Securities may
be redeemed at any time, in whole or in part, at the option of the Company at a
redemption price equal to the unpaid principal amount thereof plus accrued
interest thereon to the redemption date (subject to the right of Holders on the
relevant record date to receive interest due on the relevant interest payment
date).
SECTION 3.08. Mandatory Redemption. If after the Issue Date the Company
or any of its Subsidiaries shall Incur any Indebtedness, other than Indebtedness
Incurred under the Credit Agreement, or shall issue any Capital Stock, the
Company shall redeem Senior Subordinated Securities in an aggregate principal
amount equal to the principal amount of the Indebtedness so Incurred or the
total price at which such Capital Stock was sold. The redemption price of the
Senior Subordinated Securities so redeemed shall be equal to the unpaid
principal amount thereof plus accrued interest thereon to the redemption date.
ARTICLE IV
COVENANTS
---------
SECTION 4.01. Payment of Senior Subordinated Securities. The Company
shall promptly pay the principal of and interest on the Senior Subordinated
Securities on the dates and in the manner provided in the Senior Subordinated
Securities and in this Indenture (including the payment of interest on the Roll-
Over Notes or the Exchange Notes by the delivery of Additional Roll-Over Notes
or Additional Exchange Notes as contemplated herein and in the Indenture).
Principal and interest shall be considered paid on the date due if on such date
the Trustee or the Paying Agent (but only if other than the Company) holds by
10:00 a.m., New York City time, in accordance with this Indenture available
funds (or Additional Roll-Over Notes or Additional Exchange Notes, in the case
of interest in excess of 12% per annum) sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Holders of Senior Subordinated
Securities on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Senior Subordinated Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. Reports. The Company will deliver to the Trustee, within
15 day after the filing of the same with the Commission, copies of the quarterly
and annual reports and of the
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information, documents and other reports, if any, which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the Commission, to the extent permitted, and provide the Trustee and
Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company
will also comply with the other provisions of TIA (S) 3 14(a).
SECTION 4.03. Incurrence of Indebtedness. The Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume, guarantee, acquire, become liable, contingently or otherwise, with
respect to, or otherwise become responsible for payment of (collectively,
"Incur") any Indebtedness (other than Permitted Indebtedness): provided,
however, that if no Default or Event of Default shall have occurred and be
continuing at the time of or as a consequence of the Incurrence of any such
Indebtedness the Company may Incur Indebtedness (including Acquired
Indebtedness) and Subsidiaries of the Company may Incur Acquired Indebtedness,
in each case if on the date of the Incurrence of such Indebtedness, after giving
effect to the Incurrence thereof, the Consolidated Fixed Charge Coverage Ratio
of the Company is greater than 2.00 to 1.00 if Incurred on or prior to the
second anniversary of the Issue Date or greater than 2.25 to 1.00 if Incurred
thereafter.
SECTION 4.04. Restricted Payments. The Company will not, and will not
cause or permit any of its Subsidiaries to, directly or indirectly, (a) declare
or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Company) on or in
respect of shares of the Company's Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock (other than any warrant issued by the Company in connection with
the Acquisition), (c) make any Investment other than Permitted Investments) or
(d) repurchase or redeem any Indebtedness junior in right of payment to the
Securities Subordinated Securities, or make any cash payments of interest
thereon (other than refinancing such junior Indebtedness with debt instruments
having similar payment-in-kind and subordination features) (each of the
foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to
as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default or an Event of Default
shall have occurred and be continuing, or (ii) the Company is not able to Incur
at least $1.00 of additional Indebtedness other than Permitted Indebtedness) in
compliance with the provisions of Section 4.03 or (iii) the aggregate amount of
Restricted Payments (including such proposed Restricted Payment) made subsequent
to the Issue Date (the amount expended for such purposes, if other than cash,
being the Fair market value of such property as determined reasonably and in
good faith by the Board of Directors of the Company) shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Earnings (or, if cumulative
Consolidated Net Earnings shall be a loss, minus 100% of such loss) of the
Company earned subsequent to the Issue Date and on or prior to the date the
Restricted Payment occurs (the "Reference Date"), treating such period as a
single accounting period; plus (x) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date and on or prior to the
Reference Date of Qualified Capital Stock of
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the Company plus (y) 100% of the net cash proceeds from the sale of Investments
by the Company (other than Permitted Investments) provided that such Investment
was made after the Issue Date; plus (z) without duplication of any amounts
included in clause (iii)(x) above, 100% of the aggregate net cash proceeds of
any equity contribution received by the Company from a holder of the Company's
Capital Stock (excluding, in the case of clauses (iii)(x) and (z), any net cash
proceeds from a sale of Capital Stock of the Company to the extent utilized as
provided in clause (2)(ii) of the next succeeding paragraph).
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do no prohibit: (1) the payment of any dividend within 60
days after the date of declaration of such dividend if such dividend would have
been permitted on the date of declaration; or (2) the acquisition of any shares
of Capital Stock of the Company, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of the
net cash proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;
or (3) dividends on, and redemptions of, the shares of the Company's preferred
stock held by the trust of the Company's retirement savings plan in accordance
with the terms thereof on the date of this Indenture; or (4) payments to redeem
or repurchase stock or similar rights from management of the Company in
connection with the repurchase provisions under employee stock option or stock
purchase agreements or other agreements to compensate management employees upon
the termination of employment, death or disability of any such person; provided
that such redemptions or repurchases shall not exceed $1.0 million. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date in accordance with clause (iii) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1) and (4) shall be included in
such calculation.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment complies with the Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to (a) pay dividends or make any other distributions
on or in respect of its Capital Stock; (b) make loans or advances or to pay or
guarantee any Indebtedness or other obligation owed to the Company or any other
Subsidiary of the Company, provided that the terms of the Credit Agreement may
restrict loans or advances from the Company and those of its Subsidiaries that
are borrowers under the Credit Agreement to any of the Company's Subsidiaries
that are not borrowers under the Credit Agreement or Guarantees by the Company
or Subsidiaries of the Company that are borrowers under the Credit Agreement of
any Indebtedness or other obligation owed by any of the Company's Subsidiaries
that are not borrowers under the Credit Agreement; or (c) transfer any of its
property or assets to the Company or any other Subsidiary of the Company, except
for such encumbrances or
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restrictions existing under or by reason of: (1) applicable law; (2) this
Indenture; (3) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of any Subsidiary of the Company; (4) any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person or the properties or assets of the Person so acquired; (5)
agreements existing on the Issue Date to the extent and in the manner such
agreements are in effect on the Issue Date; (6) the Credit Agreement or the ESOP
Credit Agreement; or (7) an agreement governing Indebtedness Incurred to
Refinance the Indebtedness issued, assumed or Incurred pursuant to an agreement
referred to in clause (2), (4) or (5) above; provided, however, that the
provisions relating to such encumbrance or restriction contained in any such
Refinancing Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4) or (5).
SECTION 4.06. Asset Sales.
(a) The Company will not, and will not permit any of its Subsidiaries to,
consummate an Asset Sale unless (i) the Company or the applicable Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Company's Board of Directors), (ii) with respect
to Asset Sales by the Company or any Wholly Owned Subsidiary of the Company, at
least 80% of the consideration received by the Company or such Subsidiary, as
the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition and (iii) upon the
consummation of an Asset Sale, the Company shall apply, or cause such Subsidiary
to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of
receipt thereof (A) to prepay any Senior Debt or Indebtedness of any Subsidiary
of the Company, (B) to make an investment in properties and assets that replace
the properties and assets that were the subject of such Asset Sale or in
properties or assets that will be used in the business of the Company and its
Subsidiaries as existing on the Issue Date or in businesses reasonably related
thereto ("Replacement Assets") or (C) a combination of prepayment and investment
permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 366th day
after an Asset Sale or such earlier date, if any, as the Board of Directors of
the Company or of such Subsidiary determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and
(iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger
Date"), such aggregate amount of Net Cash Proceeds which have not been applied
on or before such Net Proceeds Offer Trigger Date as permitted in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a "Net
Proceeds Offer Amount") shall be applied by the Company or such Subsidiary to
make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net
Proceeds Offer Payment Date") not less than 30 nor more than 45 days following
the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata
basis, that amount of Senior Subordinated Securities equal to the Net Proceeds
Offer Amount at a price equal to 100% of the principal amount of the Senior
Subordinated Securities to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase. The Company may defer the Net
Proceeds Offer until there is an aggregate unutilized Net Proceeds
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Offer Amount equal to or in excess of $5.0 million resulting from one or more
Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and
not just the amount in excess of $5.0 million, shall be applied as required
pursuant to this paragraph).
(b) Notwithstanding the provisions of Section 4.06(a), the Company and its
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraph to the extent (i) at least 80% of the consideration for such
Asset Sale constitutes Replacement Assets and the remainder constitutes cash or
Cash Equivalents and (ii) such Asset Sale is for Fair market value; provided
that any consideration not constituting Replacement Assets received by the
Company or any of its Subsidiaries in connection with any Asset Sale permitted
to be consummated under this paragraph shall constitute Net Cash Proceeds
subject to the provisions of Section 4.06(a).
(c) Each Net Proceeds Offer will be mailed to the record Holders as shown
on the Security Register within 25 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee. Upon receiving notice of the Net Proceeds
Offer, Holders may elect to tender their Senior Subordinated Securities in whole
or in part in integral multiples of $1,000 in exchange for cash. To the extent
Holders properly tender Senior Subordinated Securities in an amount exceeding
the Net Proceeds Offer Amount, Senior Subordinated Securities of tendering
Holders will be purchased on a pro rata basis (based on amounts tendered). A
Net Proceeds Offer shall remain open for a period of 20 business days or such
longer period as may be required by law.
Each notice of a Net Proceeds Offer pursuant to this Section 4.06 shall be
mailed or caused to be mailed, by first class mail, by the Company not more than
25 days after the Net Proceeds Offer Trigger Date to all Holders at their last
registered addresses as of a date within 15 days of the mailing of such notice,
with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Senior Subordinated
Securities pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.06 and that all Senior Subordinated Securities
tendered will be accepted for payment; provided, however, that
if the aggregate principal amount of Senior Subordinated
Securities tendered in a Net Proceeds Offer plus accrued
interest at the expiration of such offer exceeds the aggregate
amount of the Net Proceeds Offer, the Company shall select the
Senior Subordinated Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by
the Company so that only Senior Subordinated Securities in
denominations of $1,000 or multiples thereof shall be
purchased);
(ii) the purchase price (including the amount of accrued interest)
and the Net Proceeds Offer Payment Date; provided that the Net
Proceeds Offer Payment Date for the Senior Subordinated
Securities shall be a date subsequent to any payment dates for
the purchase or other repayment of Senior Debt having similar
provisions;
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(iii) that any Note not tendered will continue to accrue interest;
(iv) that unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Net Proceeds
Offer shall cease to accrue interest after the Net Proceeds
Offer Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a
Net Proceeds Offer will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business
on the third Business Day prior to the Net Proceeds Offer
Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior
to the Net Proceeds Offer Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Senior Subordinated
Securities the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note
purchased; and
(vii) that Holders whose Senior Subordinated Securities are purchased
only in part will be issued new Senior Subordinated Securities
in a principal amount equal to the unpurchased portion of the
Senior Subordinated Securities surrendered; provided that each
Note purchased and each new Note issued shall be in an original
principal amount of $1,000 or integral multiples thereof,
On or before the Net Proceeds Offer Payment Date, the Company shall (i)
accept for payment Senior Subordinated Securities or portions thereof tendered
pursuant to the Net Proceeds Offer which are to be purchased in accordance with
item (c)(i) above, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Senior Subordinated Securities to be purchased and (iii) deliver to the Trustee
Senior Subordinated Securities so accepted together with an Officers'
Certificate stating the Senior Subordinated Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the Holders
of Senior Subordinated Securities so accepted payment in an amount equal to the
purchase price plus accrued interest, if any. For purposes of this Section
4.06, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated Securities
pursuant to a Net Proceeds Offer shall be returned by the Trustee to the
Company.
(e) The Company will comply with the requirements of Rule 14e-l under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Senior Subordinated Securities pursuant to a Net Proceeds Offer.
To the extent that the provisions of any securities
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laws or regulations conflict with the provisions of this Section 4.06, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.06 by
virtue thereof.
SECTION 4.07. Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under Section 4.07(b) and (y) Affiliate Transactions on
terms that are no less favorable to the Company or such Subsidiary than those
that could reasonably have been obtained in a comparable transaction at such
time on an arm's-length basis from a Person that is not an Affiliate of the
Company or such Subsidiary. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value in
excess of $1.0 million shall be approved by the Board of Directors of the
Company or such Subsidiary, as the case may be, such approval to be evidenced by
a Board Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Subsidiary of the Company enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves aggregate
payments or other property with a fair market value of more than $5.0 million,
the Company or such Subsidiary, as the case may be, shall, prior to the
consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in Section 4.07(a) shall not apply to: (i)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors or employees of the Company or any Subsidiary of the Company
as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Wholly
Owned Subsidiaries or exclusively between or among such Wholly Owned
Subsidiaries, provided such transactions are not otherwise prohibited by the
Indenture; (iii) Restricted Payments permitted by the Indenture; (iv)
transactions permitted by, and complying with, the provisions of Article V; (v)
transactions with distributors or other purchases or sales of goods or services,
in each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture which are fair to the Company, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (vi) any management agreement
as in effect as of the Issue Date or any amendment thereto or any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date and any similar agreements entered into
after the Issue Date; and (vii) intercompany loans from the Company to any of
its Subsidiaries; provided such loans are otherwise in compliance with the terms
of the Indenture.
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SECTION 4.08. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have the
right to require that the Company purchase all or a portion of such Holder's
Senior Subordinated Securities pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in any event
within 30 days following any Change of Control, the Company will (i) repay in
full all Indebtedness and terminate all commitments under the Credit Agreement
and all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Agreement and all other such Senior Debt and to
repay the Indebtedness owed to each lender which has accepted such offer or (ii)
obtain the requisite consents under the Credit Agreement and all other Senior
Debt to permit the repurchase of the Senior Subordinated Securities as provided
below.
(c) Within 30 days following the date upon which the Change of Control
occurred (the "Change of Control Date"), the Company will send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Senior Subordinated Securities pursuant to the Change of Control Offer.
Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.08 and that all Senior Subordinated Securities tendered
and not withdrawn will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed, other
than as may be required by law) (the "Change of Control Payment
Date"); provided that the Change of Control Payment Date for the
Senior Subordinated Securities shall be a date subsequent to any
payment dates for the purchase or other repayment of Senior Debt
having similar provisions;
(3) that any Senior Subordinated Securities not tendered will
continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Senior Subordinated Securities accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after
the Change of Control Payment Date;
(5) that Holders electing to have a Senior Subordinated Security
purchased pursuant to a Change of Control Offer will be required
to surrender the
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Senior Subordinated Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Senior
Subordinated Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Senior Subordinated Securities the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Senior Subordinated
Securities purchased;
(7) that Holders whose Senior Subordinated Securities are purchased
only in part will be issued new Senior Subordinated Securities in
a principal amount equal to the unpurchased portion of the Senior
Subordinated Securities surrendered; provided that each Senior
Subordinated Security purchased and each new Senior Subordinated
Security issued shall be in an original principal amount of
$1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Senior Subordinated Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the purchase price plus accrued interest, if any,
of all Senior Subordinated Securities so tendered and (iii) deliver to the
Trustee Senior Subordinated Securities so accepted together with an Officers'
Certificate stating the Senior Subordinated Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the Holders
of Senior Subordinated Securities so accepted payment in an amount equal to the
purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Senior Subordinated Securities equal
in principal amount to any unpurchased portion of the Senior Subordinated
Securities surrendered. Any Senior Subordinated Securities not so accepted
shall be promptly mailed by the Company to the Holder thereof. For purposes of
this Section 4.08, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Senior Subordinated Securities
pursuant to a Change of Control Offer shall be returned by the Trustee to the
Company.
(d) Neither the Board of Directors of the Company nor the Trustee may waive
the provisions of this Section 4.08 relating to a Holder's right to redemption
upon a Change of Control. The Company will comply with the requirements of Rule
14e-l under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Senior Subordinated Securities pursuant to a Change of
Control Offer. To the extent that the provisions of any securities laws or
regulations
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conflict with the provisions of this Section 4.08, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the provisions of this Section 4.08 by virtue
thereof.
SECTION 4.09. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do have such knowledge, the certificate
shall describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.
SECTION 4.10. Preferred Stock of Subsidiaries. The Company will not
permit any of its Subsidiaries to issue any Preferred Stock (other than to the
Company or to a Wholly Owned Subsidiary of the Company) or permit any Person
(other than the Company or a Wholly Owned Subsidiary of the Company) to own any
Preferred Stock of any Subsidiary of the Company.
SECTION 4.11. Liens. The Company will not, and will not cause or
permit any of its Subsidiaries to, directly or indirectly, create, Incur, assume
or permit or suffer to exist any Liens of any kind against or upon any property
or assets of the Company or any of its Subsidiaries whether owned on the Issue
Date or acquired after the Issue Date, or any proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom unless (i) in
the case of Liens securing Indebtedness that is expressly subordinate or junior
in right of payment to the Senior Subordinated Securities, the Senior
Subordinated Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens and (ii) in all other cases,
the Senior Subordinated Securities are equally and ratably secured, except for
(A) Liens existing as of the Issue Date to the extent and in the manner such
Liens are in effect on the Issue Date; (B) Liens securing Senior Debt; (C) Liens
securing the Senior Subordinated Securities; (D) Liens of the Company or a
Wholly Owned Subsidiary of the Company on assets of any Subsidiary of the
Company; (E) Liens securing Refinancing Indebtedness which is Incurred to
Refinance any Indebtedness which has been secured by a Lien permitted under the
Indenture and which has been Incurred in accordance with the provisions of the
Indenture; provided, however, that such Liens (x) are no less favorable to the
Holders and are not more favorable to the lienholders with respect to such Liens
than the Liens in respect of the Indebtedness being Refinanced and (y) do not
extend to or cover any property or assets of the Company or any of its
Subsidiaries not securing the Indebtedness so Refinanced; and (F) Permitted
Liens.
SECTION 4.12. Additional Subsidiary Guarantees. All current and future
Subsidiaries of the Company that Guarantee Indebtedness under the Credit
Agreement will be Subsidiary Guarantors in accordance with the terms of this
Indenture. Any future Subsidiary that Guarantees Indebtedness under the Credit
Agreement shall become a Subsidiary Guarantor and shall execute and deliver to
the Trustee a supplemental indenture substantially in the form of Exhibit E
pursuant to which such Subsidiary shall Guarantee payment of the Senior
Subordinated Securities pursuant to Article XI.
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SECTION 4.13. No Layering. The Company will not Incur or suffer to exist
Indebtedness that is senior in right of payment to the Senior Subordinated
Securities and subordinate in right of payment to any other Indebtedness of the
Company, except that the Senior Notes may rank senior in right of payment to the
Senior Subordinated Securities and junior in right of payment to the Credit
Agreement.
ARTICLE V
SUCCESSOR COMPANY
-----------------
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All
Assets of the Company.
(a) The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Company's Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Company's Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of and interest on all of the Senior
Subordinated Securities and the performance of every covenant of the Senior
Subordinated Securities, the Indenture and the Registration Rights Agreement on
the part of the Company to be performed or observed; (ii) immediately after
giving effect to such transaction and the assumption contemplated by clause
(i)(2)(y) above (including giving effect to any Indebtedness and Acquired
Indebtedness Incurred or anticipated to be Incurred in connection with or in
respect of such transaction), the Company or such Surviving Entity, as the case
may be, shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction;
(iii) immediately before and immediately after giving effect to such transaction
and the assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to
be Incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and (iv) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease, conveyance
or other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with the applicable
provisions of the Indenture and that all conditions precedent in the Indenture
relating to such transaction have been satisfied.
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(b) Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the provisions
of Section 5.01(a), in which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under the Indenture and the Senior Subordinated Securities with the same effect
as if such surviving entity had been named as such.
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All
Assets of a Guarantor. No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person (other
than the Company or another Guarantor) unless:
(i) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of such
Guarantor under the Senior Subordinated Securities and this Indenture
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iii) the Guarantor or such Surviving Entity, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the
Guarantor's or such other Person's Consolidated Net Worth, as the case may
be, immediately prior to such transaction.
Notwithstanding the foregoing clauses (ii) and (iii) above, (a) any
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to any Subsidiary Guarantor and (b) any Guarantor may
merge with an Affiliate incorporated solely for the purpose of reincorporating
such Guarantor in another jurisdiction.
ARTICLE VI
DEFAULTS AND REMEDIES
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SECTION 6.01. Events of Default and Remedies. The following events are
"Events of Default":
(a) the failure to pay interest on any Senior Subordinated
Securities when the same becomes due and payable and such default continues
for a period of 30 days (whether or not such payment shall be prohibited by
the provisions of Article X);
(b) the failure to pay the principal on any Senior Subordinated
Securities when such principal becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to
purchase Senior Subordinated Securities tendered pursuant to a Change of
Control Offer or a Net Proceeds Offer), whether or not such payment shall
be prohibited by the provisions of Article X;
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(c) a default in the observance or performance of any other
covenant or agreement contained in the Indenture which default continues
for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from
the Trustee or the Holders of least 25% of the outstanding principal amount
of the Senior Subordinated Securities (except in the case of a default with
respect to the provisions of Article V, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
(d) there shall be a default under any Indebtedness of the Company
or any Subsidiary, whether such Indebtedness now exists or shall
hereinafter be created, if both (A) such default either (1) results from
the failure to pay any such Indebtedness at its stated final maturity or
(2) relates to an obligation other than the obligation to pay such
Indebtedness at its stated final maturity and results in the holder or
holders of such Indebtedness causing such Indebtedness to become due prior
to its stated final maturity and (B) the amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at stated final maturity or the
maturity of which has been so accelerated, aggregates $10.0 million or more
at any one time outstanding;
(e) one or more judgments in an aggregate amount in excess of $5.0
million (which are not covered by third party insurance as to which the
insurer has not disclaimed coverage) shall have been rendered against the
Company or any of its Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; or
(f) the Company or any Subsidiary that is a Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law: (A) commences a
voluntary case; (B) consents to the entry of an order for relief against it
in an involuntary case; (C) consents to the appointment of a custodian of
it or for any substantial part of its property; (D) makes a general
assignment for the benefit of its creditors; or takes any comparable action
under any foreign laws relating to insolvency;
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (A) is for relief against the Company or any
Subsidiary that is a Significant Subsidiary in an involuntary case; (B)
appoints a custodian of the Company or any Subsidiary that is a Significant
Subsidiary or for any substantial part of its property; or (C) orders the
winding up or liquidation of the Company or any Subsidiary that is a
Significant Subsidiary; or (D) any similar relief is granted under any
foreign laws and the order or decree relating thereto remains unstayed and
in effect for 60 days;
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar federal or
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state law for the relief of debtors. For purposes of this Section 6.01, the term
"custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.01(f) or (g) with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Senior Subordinated Securities may declare the principal
of and accrued interest on all the Senior Subordinated Securities to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement
or the ESOP Credit Agreement, shall become immediately due and payable upon the
first to occur of an acceleration under the Credit Agreement or the ESOP Credit
Agreement or five business days after receipt by the Company and the
Representative under the Credit Agreement or the ESOP Credit Agreement of such
Acceleration Notice. If an Event of Default specified in Section 6.01(f) or (g)
with respect to the Company occurs and is continuing, then all unpaid principal
of and accrued and unpaid interest on all of the outstanding Senior Subordinated
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the Senior
Subordinated Securities as described in the preceding paragraph, the Holders of
a majority in principal amount of Senior Subordinated Securities may rescind and
cancel such declaration and its consequences (i) if the rescission would not
conflict with any judgment or decree, (ii) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (iii) to the extent the payment
of such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) if the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of an
Event of Default of the type described in Section 6.01(f) or (g), the Trustee
shall have received an Officers' Certificate and an Opinion of Counsel that such
Event of Default has been cured or waived. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Senior Subordinated Securities or to enforce
the performance of any provision of the Senior Subordinated Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior Subordinated Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of Senior
Subordinated Securities in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of
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or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Senior Subordinated Securities then
outstanding by written notice to the Trustee may on behalf of the Holders of all
of the Senior Subordinated Securities waive any existing Default or Event of
Default and its consequences except (i) a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Senior Subordinated
Securities or (ii) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Senior Subordinated Securityholder
affected. When a Default is waived, it is deemed cured and ceases to exist and
any Event of Default arising therefrom shall be deemed to have been cured and
waived for every purpose under this Indenture, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any consequent
right.
SECTION 6.05. Control by Majority. The Holders of a majority in aggregate
principal amount of the outstanding Senior Subordinated Securities may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee by
this Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of other Holders of
Senior Subordinated Securities, it being understood that subject to Section 7.01
the Trustee shall have no duty or obligation to determine whether or not such
actions or forbearances are unduly prejudicial to such Holders, or would involve
the Trustee in personal liability; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to receive
payment of principal or interest when due, a Holder of Senior Subordinated
Securities may not pursue any remedy with respect to this Indenture or the
Senior Subordinated Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Senior Subordinated Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
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(5) the Holders of a majority in aggregate principal amount of the
Senior Subordinated Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on such Holder's Senior Subordinated Securities, on or
after the respective due dates expressed in the Senior Subordinated Securities,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any unpaid
interest to the extent lawful) and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company, any Subsidiary or any Guarantor,
their creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent required by
Article X;
THIRD: to Holders for amounts due and unpaid on the Senior
Subordinated Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Subordinated Securities for principal and interest,
respectively; and
FOURTH: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Senior Subordinated Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor
any Guarantor (to the extent they may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this Section 7.01(c) does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise Incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Senior
Subordinated Securities at the time outstanding, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney.
(f) The Trustee shall not be required to give any note, bond or surety in
respect of the execution of the trusts and powers under this Indenture.
(g) The permissive rights of the Trustee to take any action enumerated in
this Indenture shall not be construed as a duty to take such action.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Senior Subordinated
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Senior Subordinated Securities and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the issuance of the Senior Subordinated Securities or in the
Senior Subordinated Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing
and if it is actually known to the Trustee, the Trustee shall mail to each
Holder of Senior Subordinated Securities at the expense of the Company notice of
the Default within the earlier of 90 days after it occurs or 30 days after it is
known to a Trust Officer or written notice of it is received by the Trustee.
Except in the case of a Default in payment of principal of or interest on any
Senior Subordinated Security, the Trustee may withhold the notice if and so long
as a committee of its trust officers in good faith determines that withholding
the notice is in the interests of the Holders of the Senior Subordinated
Securities. Notwithstanding anything to the contrary expressed in this
Indenture, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default hereunder, except in the case of an Event of Default under
Section 6.01(a) and (b) if the Trustee is acting as the Paying Agent, unless and
until a Trust Officer receives written notice thereof at its Corporate Trust
Office specified in Section 13.02, from the Company or a Holder that such
Default or Event of Default has occurred.
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SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit
to the Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the TIA at the times and in the manner
provided pursuant thereto. To the extent that any such report is required by
the TIA with respect to any 12-month period, such report shall cover the 12-
month period ending December 31 and shall be transmitted by the next succeeding
March 1.
A copy of each report at the time of its mailing to Holders of Senior
Subordinated Securities shall be filed with the SEC and each stock exchange (if
any) on which the Senior Subordinated Securities are listed. The Company agrees
to notify promptly the Trustee whenever the Senior Subordinated Securities
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as is agreed to in writing by the
Trustee and Company for the Trustee's services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket disbursements, advances and expenses Incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, jointly but not severally, shall
indemnify the Trustee and its officers, directors, shareholders, agents and
employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, liability or expense (including reasonable
attorneys' fees) Incurred by them without negligence or bad faith on their part
arising out of or in connection with the acceptance or administration of this
Indenture or the Senior Subordinated Securities and the performance of their
duties hereunder, including the cost and expense of enforcing this Indenture
against the Company (including this Section 7.07), and defending itself against
any claim (whether asserted by a Holder or any other person). The Trustee and
its officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided that any failure so to notify the Company shall not relieve
the Company or any Subsidiary Guarantor of its indemnity obligations hereunder.
The Company shall defend the claim and the Indemnified Party shall provide
reasonable cooperation at the Company's expense in the defense. Such
Indemnified Parties may have separate counsel and the Company shall pay the fees
and expenses of such counsel; provided that the Company shall not be required to
pay such fees and expenses if it assumes such Indemnified Parties' defense and,
in such Indemnified Parties' reasonable judgment, there is no conflict of
interest between the Company and such parties in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense Incurred by an Indemnified Party through such party's own
willful misconduct, negligence or bad faith. The Company need not pay any
settlement made without its consent (which consent shall not be unreasonably
withheld).
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To secure the Company's payment obligations in this Section 7.07 and all
other obligations to the Trustee pursuant to this Indenture, including all fees,
expenses and rights to indemnification, the Trustee shall have a lien on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest on particular Senior Subordinated
Securities. Such lien shall survive the satisfaction and discharge of this
Indenture and the resignation or removal of the Trustee. The Trustee's right to
receive payment of any amounts due under this Indenture shall not be
subordinated to any other indebtedness of the Company and the Senior
Subordinated Securities shall be subordinate to the Trustee's rights to receive
such payment.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any Bankruptcy Law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence
of a Default specified in Section 6.01(f) or (g) with respect to the Company,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time
by so notifying the Company in writing. The Holders of a majority in principal
amount of the Senior Subordinated Securities may remove the Trustee by so
notifying the Trustee and the Company in writing and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Senior Subordinated Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of Senior Subordinated Securities. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in aggregate principal amount of the Senior Subordinated Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder of Senior
Subordinated Securities may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Senior Subordinated Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Senior Subordinated Securities so authenticated; and in case at that time any of
the Senior Subordinated Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Senior Subordinated Securities
either in the name of any predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Senior Subordinated Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated therein.
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ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.01(b) or 8.01(c) be applied to all outstanding Senior
Subordinated Securities upon compliance with the conditions set forth below in
this Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) of the option
applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
deemed to have been discharged from their obligations with respect to all
outstanding Senior Subordinated Securities and any Subsidiary Guarantee on the
date the conditions set forth below are satisfied ("Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and each Guarantor shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Subordinated Securities and any Subsidiary Guarantee, which
Senior Subordinated Securities and Subsidiary Guarantees shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.03 and the other
Sections of this Indenture referred to in clauses (i) and (ii) below, and to
have satisfied all their other obligations under such Senior Subordinated
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Senior
Subordinated Securities to receive payments in respect of the principal of and
interest on such Senior Subordinated Securities, solely from the trust fund
described in Section 8.02, when such payments are due, (ii) the Company's
obligations with respect to the Senior Subordinated Securities under Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07 and 7.08, which shall survive until the
Senior Subordinated Securities have been paid in full (thereafter, the Company's
obligations in Section 7.07 shall survive), and (iii) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise its
option under this Section 8.01(b) notwithstanding the prior exercise of its
option under Section 8.01(c).
(c) Upon the Company's exercise under Section 8.01(a) of the option
applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.14 and Article V with respect to
the outstanding Senior Subordinated Securities on and after the date the
conditions set forth below are satisfied ("Covenant Defeasance"), and the Senior
Subordinated Securities shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration of act of Holders (and
the consequences of any thereof) in connection with such Sections, but shall
continue to be deemed "outstanding" for all the other purposes hereunder. For
this purpose, Covenant Defeasance means that, with respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to
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any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01, but, except as
specified above, the remainder of this Indenture and such Senior Subordinated
Securities shall be unaffected thereby.
SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.01(b) or 8.01(c)
to the outstanding Senior Subordinated Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders, cash in U.S. dollars, non-callable U.S. government obligations
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of and interest on the Senior Subordinated Securities on the stated
date for payment thereof or on the applicable redemption date, as the case may
be; (ii) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred; (iii) in
the case of Covenant Defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default under, the
Indenture or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others; and (vii) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with, except that the Opinion of
Counsel shall speak only to clauses (ii), (iii) and (v) of this Section 8.02.
SECTION 8.03. Deposited Money and Government Senior Subordinated
Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to
Section 8.04, all money and U.S.
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Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.03, the "Trustee") pursuant to Section 8.02 in respect of the outstanding
Senior Subordinated Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Senior Subordinated
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of the Senior Subordinated Securities of all sums due
and to become due thereon in respect of principal and interest, but such money
need not be segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 8.02 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.02(a)), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of or interest on any Senior Subordinated Security and remaining
unclaimed for two years after such principal or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Senior
Subordinated Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company, cause to be published once, in The New York
Times (national edition) and The Wall Street Journal (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or U.S. Government Obligations in accordance
with this Article VIII by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Senior
Subordinated Securities shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with this Article VIII;
provided, however, that, if the Company or any Guarantor makes any payment of
principal of or interest on any Senior Subordinated Security following the
reinstatement of its obligations, the Company or any Guarantor, as the case may
be, shall be subrogated to the rights of the Holders of such Senior Subordinated
Securities to receive such payment from the money held by the Trustee or Paying
Agent.
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SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request
of the Company, this Indenture will be discharged and will cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of the Senior Subordinated Securities, as expressly provided for herein
or pursuant hereto), the Company and the Guarantors will be discharged from
their obligations under the Senior Subordinated Securities and the Subsidiary
Guarantees, and the Trustee, at the expense of the Company, will execute proper
instruments acknowledging satisfaction and discharge of the Indenture when:
(a) either (i) all the Senior Subordinated Securities theretofore
authenticated and delivered (other than mutilated, destroyed, lost or stolen
Senior Subordinated Securities that have been replaced or paid and Senior
Subordinated Securities that have been subject to defeasance under this Article
VIII) have been delivered to the Trustee for cancellation or (ii) all Senior
Subordinated Securities not theretofore delivered to the Trustee for
cancellation (A) have become due and payable, (B) will become due and payable at
maturity within one year or (C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and
the Company, in the case of (A), (B) or (C) above, has irrevocably deposited or
caused to be deposited with the Trustee funds in trust for such purpose in an
amount sufficient to pay and discharge, without the need to reinvest any
proceeds thereof, the entire Indebtedness on such Senior Subordinated Securities
not theretofore delivered to the Trustee for cancellation, for principal and
interest on the Senior Subordinated Securities to the date of such deposit (in
the case of Senior Subordinated Securities that have become due and payable) or
to the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable under the
Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided in
this Indenture relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section
8.06, the obligations of the Trustee under Section 8.06 and Section 2.04 shall
survive.
ARTICLE IX
Amendments
----------
SECTION 9.01. Without Consent of Holders. From time to time, the Company,
the Guarantors and the Trustee, without the consent of the Holders, may amend
this Indenture or the Senior Subordinated Securities for the following purposes,
so long as such change does not, in the opinion of the Trustee, adversely affect
the rights of any of the Holders in any material respect. As to such matters,
the Trustee shall be entitled to rely, and shall be protected in relying, upon
an Opinion of Counsel.
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(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Senior Subordinated Securities in
addition to or in place of certificated Senior Subordinated Securities
(provided that the uncertificated Senior Subordinated Securities are issued
in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Senior Subordinated Securities are
described in Section 163(f)(2)(B) of the Code);
(3) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Senior Subordinated Securities in the
case of a merger, consolidation or sale of assets;
(4) to release any Subsidiary Guarantee in accordance with the
provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights or
benefits to the Holders of Senior Subordinated Securities or that does not
adversely affect the legal rights under this Indenture of any such Holder;
or
(7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section 9.01.
SECTION 9.02. With Consent of Holders. The Company, the Guarantors and
the Trustee may amend this Indenture or the Senior Subordinated Securities with
the written consent of the Holders of at least a majority in principal amount of
the Senior Subordinated Securities. However, without the consent of each
affected Holder of a Senior Subordinated Security, an amendment may not:
(i) reduce the principal amount of Senior Subordinated Securities
whose Holders must consent to an amendment; ;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Senior Subordinated Securities;
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(iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Senior Subordinated Securities, or
change the date on which any Senior Subordinated Securities may be subject
to redemption or repurchase, or reduce the redemption or repurchase price
therefor;
(iv) make any Senior Subordinated Securities payable in money other
than that stated in the Senior Subordinated Securities;
(v) make any change in provisions of the Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Senior Subordinated Securities on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders of
a majority in principal amount of Senior Subordinated Securities to waive
Defaults or Events of Default;
(vi) modify or change any provision of the Indenture or the related
definitions affecting the subordination or ranking of the Senior
Subordinated Securities in a manner which adversely affects the Holders;
provided, however, that it is understood that any amendment, the purpose of
which is to permit the Incurrence of additional Indebtedness under the
Indenture shall not be construed as adversely affecting the ranking of the
Senior Subordinated Securities; or
(viii) make any change to the Subsidiary Guarantees in any manner
that adversely affects the rights of the Holders.
In addition, without the consent of Holders of not less than 66-2/3% in
aggregate principal amount of Senior Subordinated Securities then outstanding,
no such amendment, supplement or waiver may amend, change or modify in any
material respect the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control or make and consummate a
Net Proceeds Offer with respect to any Asset Sale that has been consummated or
modify any of the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
No amendment under this Section 9.02 may make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to Holders of Senior Subordinated Securities a notice briefly
describing such amendment. The failure to give such notice to all Holders of
Senior Subordinated Securities, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
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SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Senior Subordinated Securities shall comply with the TIA
as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Senior Subordinated Security shall
bind the Holder and every subsequent Holder of that Senior Subordinated Security
or portion of the Senior Subordinated Security that evidences the same debt as
the consenting Holder's Senior Subordinated Security, even if notation of the
consent or waiver is not made on the Senior Subordinated Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Senior Subordinated Security or portion of the Senior Subordinated
Security if the Trustee receives written notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Senior Subordinated Securityholder. Except if
otherwise specified in such amendment or waiver, an amendment or waiver becomes
effective once the requisite number of consents are received by the Company or
the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Senior Subordinated Securities entitled to
give their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05. Notation on or Exchange of Senior Subordinated Securities.
If an amendment changes the terms of a Senior Subordinated Security, the Trustee
may require the Holder of the Senior Subordinated Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Senior
Subordinated Security regarding the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Senior Subordinated Security shall issue and the Trustee shall
authenticate a new Senior Subordinated Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Senior Subordinated
Security shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this Indenture
that such amendment is the legal, valid and binding obligation of the Company
and the Guarantors enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
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SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate
of the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Senior Subordinated Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE X
Subordination
-------------
SECTION 10.01. Agreement To Subordinate. The Company agrees, and each
Senior Subordinated Securityholder by accepting a Senior Subordinated Security
agrees, that the Indebtedness evidenced by the Senior Subordinated Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment in full in cash or Cash Equivalents of all
Obligations on Senior Debt, whether outstanding on the Issue Date or thereafter
Incurred, and that the subordination is for the benefit of and enforceable by
the holders of Senior Debt. All provisions of this Article X shall be subject
to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any liquidation, dissolution, winding-
up, reorganization, assignment for the benefit of creditors or marshaling of
assets of the Company or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to the Company or its
property, whether voluntary or involuntary, all Obligations due upon all Senior
Debt shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Senior Debt, by the
Company or any of its Subsidiaries before any payment or distribution of any
kind or character is made on account of any Obligations on the Senior
Subordinated Securities, or for the acquisition by the Company or any of its
Subsidiaries of any of the Senior Subordinated Securities for cash or property.
If any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Debt, no payment of any kind
or character (other than payments by a trust previously established pursuant to
the provisions of Article VIII) shall be made by the Company or any of its
Subsidiaries with respect to any Obligations on the Senior Subordinated
Securities or to acquire any of the Senior Subordinated Securities for cash or
property.
SECTION 10.03. Default on Senior Debt. In addition, if any other event of
default occurs and is continuing with respect to any Designated Senior Debt, as
such event of default is defined in the instrument creating or evidencing such
Designated Senior Debt, permitting the holders of such Designated Senior Debt
then outstanding to accelerate the maturity thereof and if the Representative
for the respective issue of Designated Senior Debt gives written notice of the
event of default to the Trustee (a "Default Notice"), then, unless and until all
events of default
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have been cured or waived or have ceased to exist or the Trustee receives notice
from the Representative for the respective issue of Designated Senior Debt
terminating the Blockage Period (as defined below), during the 180 days after
the delivery of such Default Notice (the "Blockage Period"), neither the Company
nor any of its Subsidiaries shall (x) make any payment of any kind or character
(other than payments by a trust previously established pursuant to the
provisions of Article VIII) with respect to any Obligations on the Senior
Subordinated Notes or (y) acquire any of the Senior Subordinated Notes for cash
or property. Notwithstanding anything herein to the contrary, in no event will
a Blockage Period extend beyond 180 days from the date of the commencement of
the Blockage Period, and only one such Blockage Period may be commenced within
any 365 consecutive days. No event of default which existed or was continuing
on the date of the commencement of any Blockage Period with respect to the
Designated Senior Debt shall be, or be made, the basis for commencement of a
second Blockage Period by the Representative of such Designated Senior Debt
whether or not within a period of 365 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Blockage Period that, in either case, would give rise to an
event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
SECTION 10.04. Acceleration of Payment of Senior Subordinated Securities.
If payment of the Senior Subordinated Securities is accelerated because of an
Event of Default, the Company shall promptly notify the Representative of the
lenders under the Credit Agreement of the acceleration. If any Indebtedness
under the Credit Agreement is outstanding, the Company may not make any payment
on account of such accelerated Senior Subordinated Securities until five
Business Days after such holders of such Indebtedness receive notice of such
acceleration and, thereafter, may pay the Senior Subordinated Securities only if
this Article X otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a distribution is
made to Holders of Senior Subordinated Securities that because of this Article X
should not have been made to them, the Holders who receive such distribution
shall hold it in trust for holders of Senior Debt and pay it over to them as
their interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is paid
in full and until the Senior Subordinated Securities are paid in full, Holders
of Senior Subordinated Securities shall be subrogated to the rights of holders
of Senior Debt of the Company to receive distributions applicable to Senior Debt
of the Company. A distribution made under this Article X to holders of Senior
Debt of the Company which otherwise would have been made to Holders of Senior
Subordinated Securities is not, as between the Company and Holders of Senior
Subordinated Securities, a payment by the Company on Senior Debt of the Company.
SECTION 10.07. Relative Rights. This Article X defines the relative
rights of Holders of Senior Subordinated Securities and holders of Senior Debt
of the Company. Nothing in this Indenture shall:
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(1) impair, as between the Company and the Holders of Senior
Subordinated Securities the obligations of the Company, which is absolute
and unconditional, to pay principal of and interest on the Senior
Subordinated Securities in accordance with their terms; or
(2) prevent the Trustee or any Holder of Senior Subordinated
Securities from exercising its available remedies upon a Default, subject
to the rights of holders of Senior Debt of the Company to receive
distributions otherwise payable to Holders of Senior Subordinated
Securities.
SECTION 10.08. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Debt of the Company to enforce the subordination of the
Indebtedness evidenced by the Senior Subordinated Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Senior Subordinated Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article X. The Company, the Registrar or co-
registrar, the Paying Agent, a Representative or a holder of Senior Debt of the
Company may give the notice; provided, however, that, if an issue of Senior Debt
of the Company has a Representative, only the Representative may give the
notice. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Debt of the Company (or a Representative of such holder) to establish
that such notice has been given by a holder of such Senior Debt of the Company
or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior Debt of
the Company with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of Senior Debt of the
Company; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment pursuant to the Senior
Subordinated Securities by reason of any provision in this Article X shall not
be construed as preventing the occurrence of a Default. Nothing in this Article
X shall have any effect on the right of the Holders of Senior Subordinated
Securities or the Trustee to accelerate the maturity of the Senior Subordinated
Securities.
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SECTION 10.12. Trust Funds Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article VIII by the Trustee for the
payment of principal of and interest on the Senior Subordinated Securities shall
not be subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article X, and no Holder of the Senior
Subordinated Securities shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article X, the Trustee and the Holders of Senior Subordinated
Securities shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders of Senior Subordinated Securities or (iii) upon the Representative
for the holders of Senior Debt of the Company for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of the Senior Debt of the Company and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article X. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Debt of the Company to
participate in any payment or distribution pursuant to this Article X, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the Company held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections 7.01
and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each Holder of a
Senior Subordinated Security by accepting such Senior Subordinated Security
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination between
the Holders and the holders of Senior Debt of the Company as provided in this
Article X and appoints the Trustee as attorney-in-fact for any and all such
purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With
respect to the holders of Senior Debt of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article X. The Trustee shall not be deemed to
owe any fiduciary or other duty to the holders of Senior Debt of the Company and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders of Senior Subordinated Securities or the Company or any
other Person, money or assets to which any holders of Senior Debt of the Company
shall be entitled by virtue of this Article X or otherwise.
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SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions. Each Holder by accepting a Senior Subordinated Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of the Company, whether such Senior Debt was created or acquired before or
after the issuance of the Senior Subordinated Securities, to acquire and
continue to hold, or to continue to hold, such Senior Debt and such holder of
Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this
Article X shall apply to amounts due to the Trustee pursuant to other sections
of this Indenture.
ARTICLE XI
SUBSIDIARY GUARANTEES
---------------------
SECTION 11.01. Subsidiary Guarantees. Each Guarantor hereby jointly and
severally unconditionally and irrevocably guarantees as a primary obligor and
not merely as a surety, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of and interest on the
Senior Subordinated Securities when due, whether at maturity, by acceleration,
by redemption or otherwise, and all other monetary obligations of the Company
under this Indenture (including obligations to the Trustee) and the Senior
Subordinated Securities and (b) the full and punctual performance of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Senior Subordinated Securities (all of the
foregoing being collectively called the "Guaranteed Obligations"). Each
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed, in whole or in part, without notice or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Article XI
notwithstanding any extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest
to the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Senior Subordinated Securities or the Guaranteed Obligations. The obligations
of each Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the Senior
Subordinated Securities or any other agreement or otherwise; (b) any extension
or renewal of any Guaranteed Obligations; (c) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, the Senior
Subordinated Securities or any other agreement; (d) the release of any security
held by any Holder or the Trustee for the Guaranteed Obligations or any of them;
(e) the failure of any Holder or Trustee to exercise any right or remedy against
any other guarantor of the Guaranteed Obligations; or (f) any change in the
ownership of such Guarantor.
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Each Guarantor further agrees that its Subsidiary Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Senior Subordinated Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Subsidiary Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, each Guarantor hereby promises
to and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii)
accrued and unpaid interest, premium and Liquidated Damages, if any, on such
Guaranteed Obligations (but only to the extent not prohibited by law) and (iii)
all other monetary Guaranteed Obligations of the Company to the Holders and the
Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Subsidiary Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
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Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.
Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder
in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that can be guaranteed (after giving effect to all its Guarantees of
Indebtedness under the Credit Agreement) without rendering this Indenture, as it
relates to any Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 11.03. Successors and Assigns. This Article XI shall be binding
upon each Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Senior Subordinated Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of any
provision of this Article XI, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
or further notice or demand in the same, similar or other circumstances.
ARTICLE XII
SUBORDINATION OF THE SUBSIDIARY GUARANTEES
------------------------------------------
SECTION 12.01. Agreement To Subordinate. The Guarantor agrees, and each
Senior Subordinated Securityholder by accepting a Senior Subordinated Security
agrees, that such Guarantor's obligations under its Subsidiary Guarantee are
subordinated in right in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment in full in cash or Cash
Equivalents of all Obligations on Guarantor Senior Debt, whether outstanding on
the Issue Date or thereafter Incurred, and that the subordination is for the
benefit of and
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enforceable by the holders of Guarantor Senior Debt. All provisions of this
Article XII shall be subject to Section 10.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of any Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding relating to any Guarantor
or its property, whether voluntary or involuntary, all Obligations due upon all
Guarantor Senior Debt shall first be paid in full in cash or Cash Equivalents,
or such payment duly provided for to the satisfaction of the holders of
Guarantor Senior Debt, by the Company or any of its Subsidiaries before any
payment or distribution of any kind or character is made on account of any
Guaranteed Obligations by such Guarantor, or for the acquisition by such
Guarantor of any of the Senior Subordinated Securities for cash or property. If
any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Guarantor Senior Debt, no payment
of any kind or character (other than payments by a trust previously established
pursuant to the provisions of Article VIII) shall be made by such Guarantor with
respect to any Guaranteed Obligations or to acquire any of the Senior
Subordinated Securities for cash or property.
SECTION 12.03. Default on Guarantor Senior Debt. In addition, if any
other event of default occurs and is continuing with respect to any Designated
Guarantor Senior Debt, as such event of default is defined in the instrument
creating or evidencing such Designated Guarantor Senior Debt, permitting the
holders of such Designated Guarantor Senior Debt then outstanding to accelerate
the maturity thereof and if the Representative for the respective issue of
Designated Senior Debt gives written notice of the event of default to the
Trustee (a "Guarantor Default Notice"), then, unless and until all events of
default have been cured or waived or have ceased to exist or the Trustee
receives notice from the Representative for the respective issue of Designated
Senior Debt terminating the Guarantor Blockage Period (as defined below), during
the 180 days after the delivery of such Guarantor Default Notice (the "Guarantor
Blockage Period"), such Guarantor shall not (x) make any payment of any kind or
character (other than payments by a trust previously established pursuant to the
provisions of Article VIII) with respect to any Guaranteed Obligations or (y)
acquire any of the Senior Subordinated Securities for cash or property.
Notwithstanding anything herein to the contrary, in no event will a Guarantor
Blockage Period extend beyond 180 days from the date of the commencement of the
Guarantor Blockage Period, and only one such Guarantor Blockage Period may be
commenced within any 365 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any Guarantor Blockage Period
with respect to the Designated Senior Debt of such Guarantor shall be, or be
made, the basis for commencement of a second Guarantor Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
365 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Guarantor Blockage
Period that, in either case, would give rise to an
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event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
SECTION 12.04. Demand for Payment. If payment of the Senior Subordinated
Securities is accelerated because of an Event of Default and a demand for
payment is made on a Guarantor pursuant to Article XI, the Trustee shall
promptly notify the Company, and the Company shall promptly (and in no event
more than five Business Days after receipt of such notice) notify the
Representative of the lenders under the Credit Agreement of the acceleration.
If any Indebtedness under the Credit Agreement is outstanding, such Guarantor
may not pay its Guaranteed Obligations under its Subsidiary Guarantee until five
Business Days after the holders of such Indebtedness receive notice of such
demand and, thereafter, may pay its Guaranteed Obligations under its Subsidiary
Guarantee only if this Article XII otherwise permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a distribution is
made to holders of Senior Subordinated Securities that because of this Article
XII should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Guarantor Senior Debt of the relevant
Guarantor and pay it over to them as their interests may appear.
SECTION 12.06. Subrogation. After all Guarantor Senior Debt of a
Guarantor is paid in full and until the Holders of Senior Subordinated
Securities are paid in full, Holders of Senior Subordinated Securities shall be
subrogated to the rights of holders of Guarantor Senior Debt of such Guarantor
to receive distributions applicable to Guarantor Senior Debt of such Guarantor.
A distribution made under this Article XII to holders of Guarantor Senior Debt
of such Guarantor which otherwise would have been made to Holders is not, as
between such Guarantor and Holders of Senior Subordinated Securities, a payment
by such Guarantor on Guarantor Senior Debt of such Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the relative
rights of Holders of Senior Subordinated Securities and holders of Guarantor
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Holders of Senior Subordinated
Securities, the obligation of a Guarantor which is absolute and
unconditional, to pay its Obligations under its Subsidiary Guarantee to the
extent set forth in Article XI; or
(2) prevent the Trustee or any Holder of Senior Subordinated
Securities from exercising its available remedies upon a default by a
Guarantor under its Obligations under its Subsidiary Guarantee, subject to
the rights of holders of Senior Debt of such Guarantor to receive
distributions otherwise payable to Holders of Senior Subordinated
Securities.
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No right
of any holder of Senior Debt of a Guarantor to enforce the subordination of the
Obligations under the
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Subsidiary Guarantee of such Guarantor shall be impaired by any act or failure
to act by such Guarantor or by its failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Senior Subordinated Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article XII. A Guarantor, the Registrar or co-registrar, the
Paying Agent, a Representative or a holder of Senior Debt of a Guarantor may
give the notice; provided, however, that, if an issue of Guarantor Senior Debt
has a Representative, only the Representative may give the notice. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Guarantor Senior Debt (or a
Representative of such holder) to establish that such notice has been given by a
holder of such Senior Debt or Representative thereof.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Debt with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Guarantor Senior Debt which may at any time be
held by it, to the same extent as any other holder of Guarantor Senior Debt; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article XII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Debt, the distribution may be made and the notice given to their Representative
(if any).
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right
To Accelerate. The failure of a Guarantor to make a payment on any of its
Obligations under its Subsidiary Guarantee by reason of any provision in this
Article XII shall not be construed as preventing the occurrence of a default by
such Guarantor under its Subsidiary Guarantee. Nothing in this Article XII
shall have any effect on the right of the Holders of Senior Subordinated
Securities or the Trustee to make a demand for payment on a Guarantor pursuant
to Article XII.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article XII, the Trustee and the Holders of Senior Subordinated
Securities shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders of Senior Subordinated Securities or (iii) upon the Representatives
for the holders of Guarantor Senior Debt for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Guarantor Senior Debt and other Indebtedness of a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed
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thereon and all other facts pertinent thereto or to this Article XII. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Guarantor Senior Debt to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Debt of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article XI.
SECTION 12.13. Trustee To Effectuate Subordination. Each Holder of Senior
Subordinated Securities by accepting a Senior Subordinated Security authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
of Senior Subordinated Securities and the holders of Guarantor Senior Debt of
each of the Guarantors as provided in this Article XII and appoints the Trustee
as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
Guarantor. The Trustee shall not be deemed to owe any fiduciary or other duty
to the holders of Guarantor Senior Debt and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Senior Subordinated
Securityholders or the relevant Guarantor or any other Person, money or assets
to which any holders of Guarantor Senior Debt of such Guarantor shall be
entitled by virtue of this Article XII or otherwise.
SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on
Subordination Provisions. Each holder of a Senior Subordinated Security by
accepting such Senior Subordinated Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Debt, whether such
Guarantor Senior Debt was created or acquired before or after the issuance of
the Senior Subordinated Securities, to acquire and continue to hold, or to
continue to hold, such Guarantor Senior Debt and such holder of Guarantor Senior
Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Guarantor Senior Debt.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
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if to the Company:
Tokheim Corporation
1600 Wabash Avenue
Fort Wayne, IN 46801-0360
Attention of: Douglas K. Pinner
if to the Trustee:
Harris Trust and Savings Bank
311 W. Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trustee
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications. Any notice or
communication to the Company or the Trustee shall be deemed to have been given
or made as of the date so delivered if personally delivered; and five calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that a change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder of Senior Subordinated
Securities shall be made in compliance with Section 313(c) of the TIA and mailed
to such Holder at such Holder's address as it appears on the Security Register
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder of Senior
Subordinated Securities or any defect in it shall not affect its sufficiency
with respect to other Holders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.
SECTION 13.03. Communication by Holders with Other Holders. Holders of
Senior Subordinated Securities may communicate pursuant to TIA (S) 312(b) with
other Holders with respect to their rights under this Indenture or the Senior
Subordinated Securities. The Company, the Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
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(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
To the extent applicable, the Company shall comply with the provisions of
TIA (S) 314(c)(3).
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Senior Subordinated Securities Disregarded. In
determining whether the Holders of the required principal amount of Senior
Subordinated Securities have concurred in any direction, waiver or consent,
Senior Subordinated Securities owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Senior
Subordinated Securities which the Trustee actually knows are so owned shall be
so disregarded.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Holders of Senior
Subordinated Securities. The Registrar and the Paying Agent may make reasonable
rules for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SENIOR SUBORDINATED
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Senior Subordinated Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Senior Subordinated Security, each Holder waives and
releases all such liability. The waiver and release shall be part of the
consideration for the issue of the Senior Subordinated Securities.
SECTION 13.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Senior Subordinated Securities shall bind
their successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents, cross-
reference sheet and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
TOKHEIM CORPORATION
By:___________________________
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:___________________________
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:___________________________
Name:
Title:
TOKHEIM RPS, LLC
By:___________________________
Name:
Title:
ENVIRONTRONIC SYSTEMS, INC.
By:___________________________
Name:
Title:
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SUNBELT HOSE & PETROLEUM EQUIPMENT
INC.,
By:___________________________
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:___________________________
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:___________________________
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:___________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as
Trustee,
By:___________________________
Name:
Title:
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EXHIBIT (c)(6)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
TOKHEIM CORPORATION
12% JUNIOR SUBORDINATED NOTE DUE 2008
No. 1
$40,000,000
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay to SCHLUMBERGER TECHNOLOGY CORPORATION, as Transfer Agent for the Selling
Subsidiaries as defined in the Master Agreement between Tokheim Corporation and
Schlumberger Limited dated as of June 19, 1998, as amended, or registered
assigns, the principal sum of $40,000,000 on September 30, 2008.
Interest Payment Dates: December 30, March 30, June 30 and September 30
Record Dates: December 15, March 15, June 15 and September 15
Additional provisions of this security are set forth on the other side of
this security.
Dated: September 30, 1998
TOKHEIM CORPORATION
By:
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
HARRIS TRUST AND SAVINGS BANK, as Trustee,
certifies that this is one of the securities
referred to in the Junior Indenture,
By
Authorized Signatory
<PAGE>
12% Junior Subordinated Note due 2008
1. Interest
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay interest on the principal amount of this security at the rate per annum
shown above.
The Company will pay interest quarterly in arrears, in cash or in kind at
its option, on December 30, March 30, June 30 and September 30. Interest on the
Junior Subordinated Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Issue Date
with respect to the Junior Subordinated Note. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company shall pay interest
on overdue principal at the rate borne by the Junior Subordinated Notes, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful. To the extent that a cash interest payment made is not
sufficient to pay the interest payments due upon any Interest Payment Date under
the Junior Subordinated Notes in full in cash, then the cash shall be allocated
to the interest payments pro rata among the holders of such notes in the
proportion that the aggregate amount of interest due under such notes held by
the holder thereof bears to the combined aggregate amount of interest due under
all Junior Subordinated Notes. To the extent any interest payment on Junior
Subordinated Notes due upon any Interest Payment Date is not paid in full in
cash, the Company shall pay such interest payment by the issuance of Additional
Junior Subordinated Notes having a principal amount equal to the amount of
interest not paid in cash on such Interest Payment Date.
2. Method of Payment
The Company will pay interest (except defaulted interest) on and in respect
of the Junior Subordinated Notes to the Persons who are registered holders of
the Junior Subordinated Notes at the close of business on the December 15, March
15, June 15 and September 15 next preceding the interest payment date even if
such securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Junior Subordinated Notes to a Paying
Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal and interest by check payable in such money or by wire transfer of
federal funds.
3. Paying Agent and Registrar
Initially, Harris Trust and Savings Bank (the "Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company or any
domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Junior Subordinated Notes under an Indenture dated
as of
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September 30, 1998 (the "Junior Indenture"), among the Company, the Initial
Guarantors and the Trustee. The terms of the Junior Subordinated Notes include
those stated in the Junior Indenture and those made part of the Junior Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date of the Junior Indenture (the "Act"). Terms defined in
the Junior Indenture and not defined herein have the meanings ascribed thereto
in the Junior Indenture. The Junior Subordinated Notes are subject to all such
terms, and securityholders are referred to the Junior Indenture and the Act for
a statement of those terms.
The Junior Subordinated Notes are unsecured Junior subordinated obligations
of the Company. The aggregate principal amount of Junior Subordinated Notes at
any time outstanding may not exceed the sum of (i) $40,000,000 plus (ii) the
aggregate principal amount of Additional Junior Subordinated Notes issued by the
Company pursuant to the terms of the Junior Indenture in respect of interest
accrued on outstanding Junior Subordinated Notes (including outstanding
Additional Junior Subordinated Notes). This security is one of the Junior
Subordinated Notes referred to in the Junior Indenture. The Junior Indenture
imposes certain limitations on the Incurrence of Indebtedness by the Company and
its subsidiaries; the payment of dividends and other payments by the Company and
its subsidiaries; Investments; sales of assets of the Company and its
subsidiaries; certain transactions with Affiliates; Liens; and consolidations,
mergers and transfers of all or substantially all of the Company's or its
subsidiaries' assets. In addition, the Junior Indenture prohibits certain
restrictions on distributions from subsidiaries.
5. Optional Redemption
Subject to the terms of the Junior Indenture, the Junior Subordinated Notes may
be redeemed at any time, in whole or in part, at the option of the Company at a
redemption price equal to the unpaid principal amount thereof plus accrued
interest thereon to the redemption date (subject to the right of holders of the
Junior Subordinated Notes on the relevant record date to receive interest due on
the relevant interest payment date).
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of Junior
Subordinated Notes to be redeemed at its registered address all in accordance
with the Junior Indenture. If less than all of the Junior Subordinated Notes
are to be redeemed at any time, selection of Junior Subordinated Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Junior
Subordinated Notes are listed, or, if the Junior Subordinated Notes are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Junior Subordinated Notes of $1,000 or
less shall be redeemed in part.
7. Repurchase at the Option of the Holder
Upon a Change of Control, any Holder of Junior Subordinated Notes will have
the right, subject to certain conditions set forth in the Junior Indenture, to
cause the Company to
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repurchase all or any part of the Junior Subordinated Notes of such Holder at a
purchase price equal to 101% of the principal amount of the Junior Subordinated
Notes to be repurchased plus accrued and unpaid interest thereon, (if any) to
the date of repurchase as provided in, and subject to the terms of, the Junior
Indenture.
8. Subordination
The Junior Subordinated Notes are subordinated to Senior Debt of the
Company, as defined in the Junior Indenture. To the extent provided in the
Junior Indenture, Senior Debt of the Company must be paid before the Junior
Subordinated Notes may be paid. The Company agrees, and each securityholder by
accepting a Junior Subordinated Note agrees, to the subordination provisions
contained in the Junior Indenture and authorizes the Trustee to give it effect
and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Junior Subordinated Notes are in registered form without coupons. A
Holder may transfer or exchange Junior Subordinated Notes in accordance with the
Junior Indenture. Upon any transfer or exchange, the Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes required by law or permitted by the
Junior Indenture. The Registrar need not register the transfer of or exchange
any Junior Subordinated Notes selected for redemption (except, in the case of a
Junior Subordinated Note to be redeemed in part, the portion of the Junior
Subordinated Note not to be redeemed) or to transfer or exchange any Junior
Subordinated Notes for a period of 15 days prior to a selection of Junior
Subordinated Notes to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Junior Subordinated Note may be treated as
the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions set forth in the Junior Indenture, the
Company at any time may terminate some or all of its obligations under the
Junior Subordinated Notes and the Junior Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Junior Subordinated Notes to redemption or maturity, as the
case may be.
4
<PAGE>
13. Amendment, Waiver
Subject to certain exceptions set forth in the Junior Indenture, from time
to time, the Company, the Guarantors and the Trustee, without the consent of the
Holders, may amend the Junior Indenture or the Junior Subordinated Notes for the
following purposes, so long as such change does not, in the opinion of the
Trustee, adversely affect the rights of any of the Holders in any material
respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for
uncertificated Junior Subordinated Notes in addition to or in place of
certificated Junior Subordinated Notes (provided that the uncertificated Junior
Subordinated Notes are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Junior Subordinated
Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for
the assumption of the Company's or any Guarantor's obligations to Holders of
Junior Subordinated Notes in the case of a merger, consolidation or sale of
assets; (iv) to release any Subsidiary Guarantee in accordance with the
provisions of the Junior Indenture; (v) to provide for additional Guarantors;
(vi) to make any change that would provide any additional rights or benefits to
the Holders of Junior Subordinated Notes or that does not adversely affect the
legal rights under the Junior Indenture of any such Holder; or (vii) to comply
with requirements of the SEC in order to effect or maintain the qualification of
the Junior Indenture under the TIA.
The Company, the Guarantors and the Trustee may amend the Junior Indenture
or the Junior Subordinated Notes with the written consent of the Holders of at
least a majority in principal amount of the Junior Subordinated Notes. However,
without the consent of each affected Holder of a Junior Subordinated Note, an
amendment may not: (i) reduce the principal amount of Junior Subordinated Notes
whose Holders must consent to an amendment; (ii) reduce the rate of or change or
have the effect of changing the time for payment of interest, including
defaulted interest, on any Junior Subordinated Note; (iii) reduce the principal
of or change or have the effect of changing the fixed maturity of any Junior
Subordinated Note, or change the date on which any Junior Subordinated Note may
be subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor; (iv) make any Junior Subordinated Notes payable in money other
than that stated in the Junior Subordinated Notes; (v) make any change in
provisions of the Junior Indenture protecting the right of each Holder to
receive payment of principal of and interest on such Holder's Junior
Subordinated Notes on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of Junior
Subordinated Notes to waive Defaults or Events of Default; (vi) modify or change
any provision of the Junior Indenture or the related definitions affecting the
subordination or ranking of the Junior Subordinated Notes in a manner which
adversely affects the Holders; provided, however, that it is understood that any
amendment, the purpose of which is to permit the Incurrence of additional
Indebtedness under the Indenture shall not be construed as adversely affecting
the ranking of the Junior Subordinated Notes; or (viii) make any change to the
Subsidiary Guarantees in any manner that adversely affects the rights of the
Holders.
14. Defaults and Remedies
Under the Junior Indenture, the following events are "Events of Default":
(a) the failure to
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pay interest on any Junior Subordinated Note when the same becomes due and
payable and such default continues for a period of 30 days (whether or not such
payment shall be prohibited by the provisions of Article X); (b) the failure to
pay the principal on any Junior Subordinated Note when such principal becomes
due and payable, at maturity, upon redemption or otherwise, whether or not such
payment shall be prohibited by the provisions of Article X; (c) a default in the
observance or performance of any other covenant or agreement contained in the
Junior Indenture, subject to applicable grace periods; (d) there shall be a
default under any Indebtedness of the Company or any Subsidiary resulting in
acceleration of Indebtedness aggregating $10.0 million or more at any one time
outstanding; (e) certain judgments in an aggregate amount in excess of $5.0
million; or (f) certain events of voluntary or involuntary bankruptcy.
If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) of the Junior Indenture with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Junior Subordinated Notes may declare the principal of and
accrued interest on all the Junior Subordinated Notes to be due and payable by
notice in writing to the Company and the Trustee, and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Credit Agreement or the ESOP Credit Agreement, shall become immediately due
and payable upon the first to occur of an acceleration under the Credit
Agreement or the ESOP Credit Agreement or five business days after receipt by
the Company and the Representative under the Credit Agreement or the ESOP Credit
Agreement of such notice of acceleration. If an Event of Default specified in
Section 6.01(f) or (g) with respect to the Company occurs and is continuing,
then all unpaid principal of and accrued and unpaid interest on all of the
outstanding Junior Subordinated Notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Junior Indenture, in its individual or any other capacity, may become the owner
or pledgee of securities and may otherwise deal with and collect obligations
owed to it by the Company and may otherwise deal with the Company with the same
rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder of the Company,
as such, will have any liability for any obligations of the Company under the
Junior Subordinated Notes, the Junior Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
17. Governing Law
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE
6
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EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
18. Authentication
This security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this security.
19. Abbreviations
Customary abbreviations may be used in the name of a securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Junior Subordinated Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any securityholder upon written request and
without charge to the securityholder a copy of the Junior Indenture which has in
it the text of this security in larger type. Requests may be made to:
TOKHEIM CORPORATION
1600 Wabash Avenue
Fort Wayne, Indiana 46801-0360
Attention: Douglas Pinner
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<PAGE>
ASSIGNMENT FORM
To assign this security, fill in the form below:
I or we assign and transfer this security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________, as agent, to transfer this security on
the books of the Company. The agent may substitute another to act for him.
Date: Your Signature:
Signature Guarantee:
(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)
Sign exactly as your name appears on the other side of this Security.
8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Junior Indenture, check the box:
4.06 Asset Sale 4.08 Change of Control
If you want to elect to have only part of this security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Junior Indenture, state the
amount: $_____.
Date: Your Signature:
Signature Guarantee:
(Sign exactly as your name appears on the other side of the Security)
Tax I.D. number
Signature Guarantee:
(Signature must be guaranteed by a participant in a recognized signature
guarantee medallion program)
9
<PAGE>
EXHIBIT (c)(7)
TOKHEIM CORPORATION
Junior Subordinated Notes
INDENTURE
Dated as of September 30, 1998
HARRIS TRUST AND SAVINGS BANK,
Trustee
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 12
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 13
SECTION 1.04. Rules of Construction.................................... 13
ARTICLE II THE JUNIOR SUBORDINATED NOTES.................................... 13
SECTION 2.01. Form and Dating; Issuance................................ 13
SECTION 2.02. Execution and Authentication............................. 14
SECTION 2.03. Registrar and Paying Agent............................... 15
SECTION 2.04. Paying Agent To Hold Money in Trust...................... 15
SECTION 2.05. Junior Subordinated Noteholder Lists..................... 16
SECTION 2.06. Registration of Transfer and Exchange.................... 16
SECTION 2.07. Replacement Junior Subordinated Notes.................... 17
SECTION 2.08. Outstanding Junior Subordinated Notes.................... 17
SECTION 2.09. Temporary Junior Subordinated Notes...................... 18
SECTION 2.10. Cancellation............................................. 18
SECTION 2.11. Defaulted Interest....................................... 18
SECTION 2.12. CUSIP Numbers............................................ 19
SECTION 2.13. Book-Entry Provisions for Global
Junior Subordinated Notes................................ 19
SECTION 2.14. Special Transfer Provisions.............................. 20
ARTICLE III REDEMPTION...................................................... 20
SECTION 3.01. Notices to Trustee....................................... 20
SECTION 3.02. Selection................................................ 21
SECTION 3.03. Notice................................................... 21
<PAGE>
SECTION 3.04. Effect of Notice of Redemption.......................... 22
SECTION 3.05. Deposit of Redemption Price............................. 22
SECTION 3.06. Junior Subordinated Notes Redeemed in Part.............. 22
SECTION 3.07. Optional Redemption..................................... 22
ARTICLE IV COVENANTS....................................................... 23
SECTION 4.01. Payment of Junior Subordinated Notes.................... 23
SECTION 4.02. Reports................................................. 23
SECTION 4.03. Restricted Payments..................................... 23
SECTION 4.04. Dividend and Other Payment Restrictions Affecting
Subsidiaries............................................ 24
SECTION 4.05. Transactions with Affiliates............................ 25
SECTION 4.06. Change of Control....................................... 26
SECTION 4.07. Compliance Certificate.................................. 28
SECTION 4.08. Additional Subsidiary Guarantees........................ 28
ARTICLE V SUCCESSOR COMPANY................................................ 29
SECTION 5.01. Merger, Consolidation or Sale of All or
Substantially All Assets of the Company................. 29
SECTION 5.02. Merger, Consolidation or Sale of All or
Substantially All Assets of a Guarantor................. 30
ARTICLE VI DEFAULTS AND REMEDIES........................................... 30
SECTION 6.01. Events of Default and Remedies.......................... 30
SECTION 6.02. Acceleration............................................ 32
SECTION 6.03. Other Remedies.......................................... 32
SECTION 6.04. Waiver of Past Defaults................................. 33
SECTION 6.05. Control by Majority..................................... 33
SECTION 6.06. Limitation on Suits..................................... 33
SECTION 6.07. Rights of Holders to Receive Payment.................... 34
SECTION 6.08. Collection Suit by Trustee.............................. 34
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SECTION 6.09. Trustee May File Proofs of Claim........................ 34
SECTION 6.10. Priorities.............................................. 34
SECTION 6.11. Undertaking for Costs................................... 35
SECTION 6.12. Waiver of Stay or Extension Laws........................ 35
ARTICLE VII THE TRUSTEE.................................................... 35
SECTION 7.01. Duties of Trustee....................................... 35
SECTION 7.02. Rights of Trustee....................................... 36
SECTION 7.03. Individual Rights of Trustee............................ 37
SECTION 7.04. Trustee's Disclaimer.................................... 37
SECTION 7.05. Notice of Defaults...................................... 37
SECTION 7.06. Reports by Trustee to Holders........................... 38
SECTION 7.07. Compensation and Indemnity.............................. 38
SECTION 7.08. Replacement of Trustee.................................. 39
SECTION 7.09. Successor Trustee by Merger............................. 40
SECTION 7.10. Eligibility; Disqualification........................... 40
SECTION 7.11. Preferential Collection of Claims Against Company....... 40
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................ 41
SECTION 8.01. Legal Defeasance and Covenant Defeasance................ 41
SECTION 8.02. Conditions to Legal or Covenant Defeasance.............. 42
SECTION 8.03. Deposited Money and Government Junior
Subordinated Notes to be Held in Trust;
Other Miscellaneous Provisions.......................... 43
SECTION 8.04. Repayment to Company.................................... 43
SECTION 8.05. Reinstatement........................................... 43
SECTION 8.06. Satisfaction and Discharge of Indenture................. 44
ARTICLE IX AMENDMENTS...................................................... 45
SECTION 9.01. Without Consent of Holders.............................. 45
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SECTION 9.02. With Consent of Holders.................................. 46
SECTION 9.03. Compliance with Trust Indenture Act...................... 47
SECTION 9.04. Revocation and Effect of Consents and Waivers............ 47
SECTION 9.05. Notation on or Exchange of Junior Subordinated Notes..... 47
SECTION 9.06. Trustee To Sign Amendments............................... 47
SECTION 9.07. Payment for Consent...................................... 48
ARTICLE X SUBORDINATION..................................................... 48
SECTION 10.01. Agreement To Subordinate................................ 48
SECTION 10.02. Liquidation, Dissolution, Bankruptcy.................... 48
SECTION 10.03. Default on Senior Debt.................................. 49
SECTION 10.04. Acceleration of Payment of Junior Subordinated Notes.... 49
SECTION 10.05. When Distribution Must Be Paid Over..................... 49
SECTION 10.06. Subrogation............................................. 50
SECTION 10.07. Relative Rights......................................... 50
SECTION 10.08. Subordination May Not Be Impaired by Company............ 50
SECTION 10.09. Rights of Trustee and Paying Agent...................... 50
SECTION 10.10. Distribution or Notice to Representative................ 51
ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE...... 51
SECTION 10.12. Trust Funds Not Subordinated............................ 51
SECTION 10.13. Trustee Entitled To Rely................................ 51
SECTION 10.14. Trustee To Effectuate Subordination..................... 52
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt........ 52
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions.............................................. 52
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SECTION 10.17. Trustee's Compensation Not Prejudiced.................. 52
ARTICLE XI SUBSIDIARY GUARANTEES........................................... 52
SECTION 11.01. Subsidiary Guarantees.................................. 52
SECTION 11.02. Limitation on Liability................................ 54
SECTION 11.03. Successors and Assigns................................. 54
SECTION 11.04. No Waiver.............................................. 54
SECTION 11.05. Modification........................................... 55
ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES..................... 55
SECTION 12.01. Agreement To Subordinate............................... 55
SECTION 12.02. Liquidation, Dissolution, Bankruptcy................... 55
SECTION 12.03. Default on Guarantor Senior Debt....................... 56
SECTION 12.04. Demand for Payment..................................... 56
SECTION 12.05. When Distribution Must Be Paid Over.................... 56
SECTION 12.06. Subrogation............................................ 57
SECTION 12.07. Relative Rights........................................ 57
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor....... 57
SECTION 12.09. Rights of Trustee and Paying Agent..................... 57
SECTION 12.10. Distribution or Notice to Representative............... 58
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit
Right To Accelerate............................................... 58
SECTION 12.12. Trustee Entitled To Rely............................... 58
SECTION 12.13. Trustee To Effectuate Subordination.................... 58
SECTION 12.14. Trustee Not Fiduciary for Holders of Guarantor Senior
Debt.............................................................. 59
SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on
Subordination Provisions \f C \l.................................. 59
ARTICLE XIII MISCELLANEOUS................................................. 59
SECTION 13.01. Trust Indenture Act Controls........................... 59
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SECTION 13.02. Notices................................................ 59
SECTION 13.03. Communication by Holders with Other Holders............ 60
SECTION 13.04. Certificate and Opinion as to Conditions Precedent..... 60
SECTION 13.05. Statements Required in Certificate or Opinion.......... 60
SECTION 13.06. When Junior Subordinated Notes Disregarded............. 61
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar........... 61
SECTION 13.08. Legal Holidays......................................... 61
SECTION 13.09. GOVERNING LAW.......................................... 61
SECTION 13.10. No Recourse Against Others............................. 61
SECTION 13.11. Successors............................................. 62
SECTION 13.12. Multiple Originals..................................... 62
SECTION 13.13. Table of Contents; Headings............................ 62
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INDENTURE, dated as of September 30, 1998, among TOKHEIM CORPORATION, an
Indiana corporation (the "Company"), TOKHEIM CORPORATION, an Indiana corporation
(the "Company"), Management Solutions, Inc., a Colorado corporation, Tokheim
Equipment Corporation, a Delaware corporation, Tokheim RPS, LLC, a Delaware
corporation, Sunbelt Hose & Petroleum Equipment, Inc., a Georgia corporation,
Envirotronic Systems, Inc., an Indiana corporation, Gasboy International, Inc.,
a Pennsylvania corporation, Tokheim Automation Corporation, a Texas corporation,
Tokheim Investment Corp., a Texas corporation,, as guarantors (collectively, the
"Initial Guarantors"), and HARRIS TRUST AND SAVINGS BANK, an Illinois banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 12% Junior
Subordinated Notes due September 28, 2008 (the "Junior Subordinated Notes").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, merger or consolidation.
"Acquisition" means the acquisition by the Company of the fuel dispenser,
systems and services business of Schlumberger.
"Additional Junior Subordinated Note" means any Junior Subordinated Note
issued in lieu of cash payment of interest accrued on any outstanding Junior
Subordinated Note (including on any Additional Junior Subordinated Note)
pursuant hereto.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person; provided,
however, that neither Schlumberger nor any of its Affiliates shall be deemed to
be an Affiliate of the Company. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
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"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day other than a Saturday, Sunday or other day on
which banking institutions in the State of New York or the City of Chicago,
Illinois are authorized or required by law to close.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-l from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) the approval by the holders of Capital Stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company (whether or
not otherwise in compliance with the provisions of the Indenture); (ii) any
Person or group of related Persons for purposes of Section 13(d) of the Exchange
Act shall become the owner, directly or indirectly, beneficially or
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of record, of shares representing either more than 40% of the aggregate ordinary
voting power represented by the issued and outstanding Capital Stock of the
Company or more than 40% of the aggregate issued and outstanding Common Stock of
the Company; or (iii) the replacement of a majority of the Board of Directors of
the Company over a two-year period from the directors who constituted the Board
of Directors of the Company at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority of the
Board of Directors of the Company then still in office who either were members
of such Board of Directors at the beginning of such period or whose election as
a member of such Board of Directors was previously so approved.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
indenture securities.
"Consolidated Net Earnings" means, with respect to any Person, for any
period, the aggregate net earnings (or loss) of such Person and its Subsidiaries
for such period on a consolidated basis (before preferred stock dividend
requirements), determined in accordance with GAAP; provided that there shall be
excluded therefrom (a) after-tax gains or losses from Asset Sales or
abandonments or reserves relating thereto, (b) after-tax items classified as
extraordinary or nonrecurring gains or losses, (c) the net earnings of any
Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Subsidiary of the referent Person or is merged or consolidated
with the referent Person or any Subsidiary of the referent Person, (d) the net
earnings (but not loss) of any Subsidiary of the referent Person to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is restricted by a contract, operation of law or otherwise, (e) the
net earnings of any Person, other than a Subsidiary of the referent Person,
except to the extent of cash dividends or distributions paid to the referent
Person or to a Wholly Owned Subsidiary of the referent Person by such Person,
(f) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Earnings
accrued at any time following the Issue Date, (g) income or loss attributable to
discontinued operations (including operations disposed of during such period
whether or not such operations were classified as discontinued), (h) in the case
of a successor to the referent Person by consolidation or merger or as a
transferee of the referent Person's assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets and (i)
all gains or losses from the cumulative effect of any change in accounting
principles.
"Credit Agreement" means the Credit Agreement among the Company, certain of
its Subsidiaries, the lenders party thereto in their capacities as lenders
thereunder and The First
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National Bank of Chicago, as administrative agent, together with the related
documents thereto (including any guarantee agreements and security documents),
in each case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under Section
4.03) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Custodian" means the custodian with respect to any Global Junior
Subordinated Note (as appointed by the Depository), or any successor entity
thereto as provided in Section 2.03.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository" means, with respect to the Junior Subordinated Notes issuable
or issued in whole or in part in global form, the person specified in Section
2.03 as the Depository with respect to the Junior Subordinated Notes, until a
successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depository" shall mean or include
such successor.
"Designated Senior Debt" means (i) Indebtedness under or in respect of the
Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness
constituting Senior Debt which, at the time of determination, has an aggregate
principal amount of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"Designated Guarantor Senior Debt" means (i) Indebtedness of a Guarantor
under or in respect of the Credit Agreement or the ESOP Credit Agreement and
(ii) any other Indebtedness constituting Senior Debt which, at the time of
determination, has an aggregate principal amount of at least $25.0 million and
is specifically designated in the instrument evidencing such Senior Debt as
"Designated Guarantor Senior Debt" by the Guarantor.
"Disqualified Capital Stock" means that portion of any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof on or prior to the final
maturity date of the Junior Subordinated Notes.
"ESOP Credit Agreement" means that certain credit agreement among the
Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, NA., and certain
other banks, together with the related documents thereto (including any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and
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restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under Section
4.03) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Escrow Agent" means Bankers Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arms'-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Junior Subordinated Note" means a Junior Subordinated Note that is
in the form of Exhibit A hereto that includes the Global Junior Subordinated
Notes Legend therein.
"Global Junior Subordinated Notes Legend" means the legend set forth in the
first paragraph of Exhibit A.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Indebtedness.
"Guarantor Senior Debt" means, the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other Obligations with respect to, any Indebtedness of the
Guarantors, whether outstanding on the Issue Date or thereafter created,
Incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Junior Subordinated Notes. Without limiting the
generality of the foregoing, "Guarantor Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the
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rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other monetary
obligations of the Guarantors owing in respect of, (v) the Senior Notes issued
on the Issue Date in the amount of $22.5 million (including any Refinacing
thereof, the "Senior Notes"), (w) the Senior Subordinated Securities, (x) the
Credit Agreement and the ESOP Credit Agreement, including obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency
Agreements, in each case whether outstanding on the Issue Date or thereafter
Incurred. Notwithstanding the foregoing, "Guarantor Senior Debt" shall not
include (i) any Indebtedness of a Guarantor to a Subsidiary of the Guarantor,
(ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director,
officer or employee of the Guarantor or any Subsidiary of the Guarantor
(including amounts owed for compensation), (iii) Indebtedness to trade creditors
and other amounts Incurred in connection with obtaining goods, materials or
services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any
liability for federal, state, local or other taxes owed or owing by the
Guarantors, (vi) Indebtedness Incurred in violation of the provisions of Section
4.03, (vii) Indebtedness which, when Incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code, is without
recourse to the Company and (viii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebtedness of the
Company, other than the Senior Notes.
"Holder" or "Junior Subordinated Noteholder" means the Person in whose name
a Junior Subordinated Note is registered on the Registrar's books.
"Indebtedness" means with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or
other obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business that are not
overdue by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) all indebtedness
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) guarantees and other contingent
obligations in respect of Indebtedness referred to in clauses (i) through (v)
above and clause (viii) below, (vii) all indebtedness of any other Person of the
type referred to in clauses (i) through (vi) which are secured by any lien on
any property or asset of such Person, the amount of such Obligation being deemed
to be the lesser of the fair market value of such property or asset or the
amount of the Obligation so secured, (viii) all indebtedness under Currency
Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any. For purposes hereof, the "maximum
fixed repurchase price" of any Disqualified Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be
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determined pursuant any provision hereof, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the Board of
Directors of the issuer of such Disqualified Capital Stock.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Financial Advisor" means a firm (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include interest rate swaps, caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect loan
or other extension of credit (including a guarantee) or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any other Person.
"Investment" shall exclude extensions of trade credit by the Company and its
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Subsidiary, as the case may be. For the
purposes of Section 4.04, the amount of any Investment shall be the original
cost of such Investment plus the cost of all additional Investments by the
Company or any of its Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment: provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Earnings.
"Issue Date" means the date of original issuance of the Junior Subordinated
Notes.
"Junior Subordinated Notes" means the Company's 12% Junior Subordinated
Notes due September 30, 2008 issued pursuant to the Securities Purchase
Agreement in partial payment of the Company's obligations under the Purchase
Agreement.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
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"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of
the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Investments" means: (i) Investments by the Company or any
Subsidiary of the Company in any Person that is or will become immediately after
such Investment a Wholly Owned Subsidiary of the Company or that will merge or
consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii)
Investments in the Company by any Subsidiary of the Company; provided that any
Indebtedness evidencing such Investment is unsecured and subordinated, pursuant
to a written agreement and to the same extent that the Junior Subordinated Notes
are subordinated to Senior Debt, to the Company's obligations under the Junior
Subordinated Notes and this Indenture; (iii) Investments in cash and Cash
Equivalents; (iv) loans and advances to employees and officers of the Company
and its Subsidiaries in the ordinary course of business for bona fide business
purposes; (v) Currency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or its Subsidiaries' businesses and
otherwise in compliance with this Indenture; (vi) Investments in securities of
trade creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or its Subsidiaries as a result
of consideration received in connection with an Asset Sale made in compliance
with the provisions of Section 4.06; (viii) Investments existing on the Issue
Date; (ix) Investments in an African Subsidiary in an aggregate amount not to
exceed $2.0 million for which the Company is committed on the Issue Date; and
(x) additional Investments in an aggregate amount not exceeding $5.0 million.
"Person" means an individual, partnership, corporation, unincorporated
organization. trust or joint venture, or a governmental agency or political
subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Purchase Agreement" means the Master Agreement for Purchase and Sale of
Shares, Assets and Liabilities, dated as of June 19, 1998, between the Company
and Schlumberger, as amended by the letter agreements dated July 21, 1998, July
31, 1998 and August 28, 1998 and by Amendment No. 1 thereto dated September 30,
1998.
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"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Subsidiary of the Company of Indebtedness Incurred in accordance with the
provisions of Section 4.03 (other than pursuant to clause (iv), (v), (vi),
(vii), (viii), (ix), (xi) or (xvi) of the definition of Permitted Indebtedness),
in each case that does not (1) result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium or penalty required to be paid under
the terms of the instrument governing such Indebtedness and plus the amount of
reasonable fees and expenses incurred by the Company in connection with such
Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (B) a final maturity earlier than the final
maturity of the Indebtedness being Refinanced; provided that (x) if such
Indebtedness being Refinanced is Indebtedness of the Company, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if
such Indebtedness being Refinanced is subordinate or junior to the Junior
Subordinated Notes, then such Refinancing Indebtedness shall be subordinate to
the Junior Subordinated Notes at least to the same extent and in the same manner
as the Indebtedness being Refinanced.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of September 30, 1998, among the Company, the Initial Guarantors and
Schlumberger, as such agreement may be amended, modified, or supplemented from
time to time in accordance with the terms thereof.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; provided that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"Restricted Securities Legend" means the legend set forth in Exhibit A.
"Roll-Over Notes" means any of the Company's Increasing Rate Senior
Subordinated Notes due 2007 issued upon the Stated Maturity of the Senior
Subordinated Notes pursuant to the provisions of the Securities Purchase
Agreement and this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
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<PAGE>
"Securities Purchase Agreement" means the Securities Purchase Agreement,
dated as of September 30, 1998 between the Company and Schlumberger providing
for the issuance by the Company of (i) the Senior Subordinated Securities, (ii)
the Junior Subordinated Notes and (iii) the Warrants.
"Senior Debt" means, the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other Obligations with respect to, any Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter created, Incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Junior Subordinated Notes. Without limiting the generality of the foregoing,
"Senior Debt" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other monetary obligations of the Company owing in respect of, (v) the
Senior Notes, (w) the Senior Subordinated Securities, (x) the Credit Agreement
and the ESOP Credit Agreement, including obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in
each case whether outstanding on the Issue Date or thereafter Incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include (i) any
Indebtedness of the Company to a Subsidiary of the Company, (ii) Indebtedness
to, or guaranteed on behalf of, any shareholder, director, officer or employee
of the Company or any Subsidiary of the Company (including, without limitation,
amounts owed for compensation), (iii) Indebtedness to trade creditors and other
amounts Incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock, (v) any liability for
federal, state, local or other taxes owed or owing by the Company, (vi)
Indebtedness Incurred in violation of the provisions of Section 4.03, (vii)
Indebtedness which, when Incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company and (viii) any Indebtedness which is, by its express terms, subordinated
in right of payment to any other Indebtedness of the Company, other than the
Senior Notes.
"Senior Subordinated Securities" means the Company's Senior Subordinated
Securities issued pursuant to the Securities Purchase Agreement in partial
payment of the Company's obligations under the Purchase Agreement.
"Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v)
of Regulation S-X under the Securities Act.
"Schlumberger" means Schlumberger Limited, a Netherlands Antilles
corporation.
"Stated Maturity" means, with respect to any installment of interest or
principal on any Junior Subordinated Notes, the date on which such payment of
interest or principal was scheduled to be paid pursuant hereto, and shall not
include any contingent obligations to repay,
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redeem or repurchase any such interest or principal prior to the date scheduled
for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Junior Subordinated Notes or
the applicable Subsidiary Guarantee pursuant to written agreement.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantee" shall mean any Guarantee of the Junior Subordinated
Notes by any Guarantor pursuant to Article XI.
"Subsidiary Guarantors" means any Subsidiary of the Company which
Guarantees the Junior Subordinated Notes pursuant to Article XI.
"TIA" means the Trust Indenture Act of 1939, as amended and as in effect on
the date of this Indenture.
"Traits" means accounts receivable sold without recourse.
"Transfer Restricted Securities" means Junior Subordinated Notes that bear
or are required to bear the Restricted Securities Legend.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Warrants" means the warrants to purchase shares of Common Stock of the
Company issued pursuant to the Warrant Agreement and the Securities Purchase
Agreement in partial payment of the purchase price under the Purchase Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of September 30,
1998 between the Company and Schlumberger.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying
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(i) the amount of each then remaining installment, sinking fund, serial maturity
or other required payment of principal, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the nearest one-
twelfth) which will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person
of which all the outstanding voting securities (other than in the case of a
foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
---------------------------------- ------------------------------------
<S> <C>
"Affiliate Transaction"...........................4.07
"Agent Members"...................................2.13(a)
"Bankruptcy Law"..................................6.01
"Blockage Period"................................10.03
"Change of Control Offer".........................4.06(c)
"Change of Control Payment Date"..................4.06(a)
"Covenant Defeasance".............................8.01(c)
"CUSIP"...........................................2.12
"Default Notice".................................10.03
"Event of Default"................................6.01
"Guaranteed Obligations".........................11.01
"Guarantor Blockage Period"......................12.03
"Guarantor Default Notice".......................12.03
"Incur"...........................................4.03
"Indemnified Party"...............................7.07
"Junior Subordinated Notes"...................Recitals
"Legal Defeasance"................................8.01(b)
"Legal Holiday"..................................13.08
"Notice of Default"...............................6.01
"outstanding".....................................8.01(b)
"Paying Agent"....................................2.03
"Reference Date"..................................4.04
"Registrar".......................................2.03
"Replacement Assets"..............................4.06(a)
"Restricted Payments".............................4.04(a)
"Securities Register".............................2.06
"Surviving Entity"................................5.01
"Trustee".........................................8.03
</TABLE>
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Junior Subordinated Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the Junior Subordinated Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular; and
(6) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE II
THE JUNIOR SUBORDINATED NOTES
-----------------------------
SECTION 2.01. Form and Dating; Issuance. (a) The Junior Subordinated
Notes and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture, and as otherwise provided in this
Article II. The Junior Subordinated Notes may have notations, legends or
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endorsements required by law, stock exchange rule, agreements to which the
Company or any Guarantor is subject, if any, or usage. Each Junior Subordinated
Note shall be dated the date of its authentication. The terms of the Junior
Subordinated Notes set forth in Exhibit A are part of the terms of this
Indenture. The Junior Subordinated Notes shall be issuable only in registered
form without coupons of $1,000 and integral multiples thereof, or, in the case
of Additional Junior Subordinated Notes, $100 or any integral multiple thereof
(or any lesser amount to the extent necessary).
(b) The Junior Subordinated Notes are being issued by the Company pursuant
to the Securities Purchase Agreement in partial satisfaction of its payment
obligations under to the Purchase Agreement. Upon initial issuance, the Junior
Subordinated Notes may be represented by certificates registered in the names of
the Holders or by one or more Global Junior Subordinated Notes. The aggregate
principal amount of any Global Junior Subordinated Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee as
Custodian.
(c) On the Issue Date, the Company will issue, and the Trustee will
authenticate in accordance with Section 2.02, the Junior Subordinated Notes in
an aggregate principal amount of $40,000,000.
SECTION 2.02. Execution and Authentication. One or more Officers of the
Company shall sign the Junior Subordinated Notes by manual or facsimile
signature.
If an Officer whose signature is on a Junior Subordinated Note no longer
holds that office at the time the Trustee authenticates the Junior Subordinated
Note, the Junior Subordinated Note shall be valid nevertheless.
A Junior Subordinated Note shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the Junior
Subordinated Note. The signature shall be conclusive evidence that the Junior
Subordinated Note has been authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery upon a
written order of the Company signed by two of its Officers Junior Subordinated
Notes for original issue on the date hereof in an aggregate principal amount of
$40,000,000. In the case of a written order of the Company relating to the
issuance of Additional Junior Subordinated Notes, such written order shall also
demonstrate the computation of the principal amount of Additional Junior
Subordinated Notes issuable to each Holder. The aggregate principal amount of
Junior Subordinated Notes at any time outstanding may not exceed the sum of (i)
$40,000,000 plus (ii) the aggregate principal amount of Additional Junior
Subordinated Notes issued by the Company pursuant to the terms hereof in respect
of interest accrued on outstanding Junior Subordinated Notes (including
outstanding Additional Junior Subordinated Notes).
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Junior Subordinated Notes. Any such appointment
shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a
copy of which shall be furnished to the
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Company. Unless limited by the terms of such appointment, an authenticating
agent may authenticate Junior Subordinated Notes whenever the Trustee may do so.
After any such appointment, each reference in this Indenture to authentication
by the Trustee includes authentication by such agent. An authenticating agent
has the same rights as any Registrar, Paying Agent or agent for service of
notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Junior Subordinated Notes may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Junior Subordinated Notes may be presented for payment (the "Paying
Agent"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.07.
The Company may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent in
connection with the Junior Subordinated Notes.
The Company initially appoints The Depository Trust Company to act as
Depository with respect to the Global Junior Subordinated Notes, and the Trustee
shall initially be the Junior Subordinated Notes Custodian with respect to the
Global Junior Subordinated Notes.
The Company may remove any Registrar or Paying Agent upon written notice to
such Registrar or Paying Agent and to the Trustee, provided that no such removal
shall become effective until (1) acceptance of an appointment by a successor as
evidenced by an appropriate agreement entered into by the Company and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (2) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time
upon not less than three Business Days' prior written notice to the Company;
provided, however, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Junior Subordinated Note, the Company
shall deposit with the Paying Agent (or if the Company is acting as Paying
Agent, segregate and hold in trust for the benefit of the Persons entitled
thereto) a sum sufficient to pay such principal and interest when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders of Junior Subordinated Notes or the Trustee all money held by the Paying
Agent for the payment of
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<PAGE>
principal of or interest on the Junior Subordinated Notes and shall notify the
Trustee in writing of any default by the Company in making any such payment
within one Business Day thereof. If the Company acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
Any money deposited with any Paying Agent, or then held by the Company in
trust for the payment of principal or interest on any Junior Subordinated Note
and remaining unclaimed for two years after such principal and interest has
become due and payable shall be paid to the Company at its request, or, if then
held by the Company, shall be discharged from such trust; and the Holders of
Junior Subordinated Notes shall thereafter, as general unsecured creditors, look
only to the Company for payment thereof, and all liability of the Paying Agent
with respect to such money, and all liability of the Company as trustee thereof,
shall thereupon cease.
SECTION 2.05. Junior Subordinated Noteholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders of Junior Subordinated
Notes. If the Trustee is not the Registrar, the Company shall furnish, or cause
the Registrar to furnish, to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Junior
Subordinated Notes.
SECTION 2.06. Registration of Transfer and Exchange. The Junior
Subordinated Notes shall be issued in registered form only. The Company shall
cause to be kept at the principal corporate trust office of the Trustee a
register (the "Securities Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Junior Subordinated Notes and the registration of transfer of Junior
Subordinated Notes entitled to be registered or transferred as herein provided.
To permit registration of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Junior Subordinated Notes at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
registration of transfer or exchange pursuant to this Section 2.06. The Company
shall not be required to make, and the Registrar need not register, transfers or
exchanges of Junior Subordinated Notes selected for redemption (except, in the
case of Junior Subordinated Notes to be redeemed in part, the portion thereof
not to be redeemed) or transfers or exchanges of any Junior Subordinated Notes
for a period of 15 days before a selection of Junior Subordinated Notes to be
redeemed.
Prior to the due presentation for registration of transfer of any Junior
Subordinated Note, the Company, the Guarantors, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the Person in whose name a
Junior Subordinated Note is registered as the absolute owner of such Junior
Subordinated Note for the purpose of receiving payment of principal of and
accrued and unpaid interest on such Junior Subordinated Note and for all other
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<PAGE>
purposes whatsoever, whether or not such Junior Subordinated Note is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-
registrar shall be affected by notice to the contrary.
Any Holder of a Global Junior Subordinated Note shall, by acceptance of
such Global Junior Subordinated Note, agree that transfers of beneficial
interests in such Global Junior Subordinated Note may be effected only through
the Depository, in accordance with the provisions of this Indenture and such
Depository's usual procedures.
All Junior Subordinated Notes issued upon any registration of transfer or
exchange pursuant to this Section 2.06 will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Junior Subordinated
Notes surrendered upon such registration of transfer or exchange.
SECTION 2.07. Replacement Junior Subordinated Notes. If a mutilated
Junior Subordinated Note is surrendered to the Registrar or if the Holder of a
Junior Subordinated Note claims that the Junior Subordinated Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Junior Subordinated Note if the Holder satisfies any
reasonable requirements of the Trustee and the Company including evidence of the
destruction, loss or theft of the Junior Subordinated Note. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss that any of them may
suffer if a Junior Subordinated Note is replaced. The Company and the Trustee
may charge the Holder for their expenses in replacing a Junior Subordinated
Note, including the payment of a sum sufficient to cover any tax or other
governmental charge that may be required. In the event any such mutilated,
lost, destroyed or wrongfully taken Junior Subordinated Note has become or is
about to become due and payable, the Company in its discretion may pay such
Junior Subordinated Note instead of issuing a new Junior Subordinated Note in
replacement thereof.
Every replacement Junior Subordinated Note is an additional obligation of
the Company.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, lost, destroyed or wrongfully taken Junior Subordinated
Notes.
SECTION 2.08. Outstanding Junior Subordinated Notes. The Junior
Subordinated Notes outstanding at any time are all Junior Subordinated Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation and those described in this Section 2.08 as not outstanding.
A Junior Subordinated Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Junior Subordinated Note.
If a Junior Subordinated Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Junior Subordinated Note is held by a
protected purchaser (as defined in Article 8 of the Uniform Commercial Code).
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If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Junior
Subordinated Notes (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Holders of Junior Subordinated Notes on that date pursuant to the terms of this
Indenture, then on and after that date such Junior Subordinated Notes (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Junior Subordinated Notes. Until definitive
Junior Subordinated Notes and Global Junior Subordinated Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Junior Subordinated Notes. Temporary Junior Subordinated Notes shall be
substantially in the form of definitive Junior Subordinated Notes but may have
variations that the Company considers appropriate for temporary Junior
Subordinated Notes. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Junior Subordinated Notes and deliver
them in exchange for temporary Junior Subordinated Notes upon surrender of such
temporary Junior Subordinated Notes at the office or agency of the Company,
without charge to the Holder.
SECTION 2.10. Cancellation. The Company at any time may deliver Junior
Subordinated Notes to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Junior Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Junior Subordinated Notes surrendered for registration
of transfer, exchange, payment or cancellation and deliver canceled Junior
Subordinated Notes to the Company pursuant to written direction by an Officer of
the Company. The Company may not issue new Junior Subordinated Notes to replace
Junior Subordinated Notes that have been redeemed, paid or delivered to the
Trustee for cancellation. The Trustee shall not authenticate Junior
Subordinated Notes in place of canceled Junior Subordinated Notes other than
pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Junior Subordinated Notes, the Company shall pay the
defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest to the
persons who are Holders of Junior Subordinated Notes on a subsequent special
record date. The Company shall fix or cause to be fixed any such special record
date and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail or cause to be mailed to each Holder of Junior Subordinated Notes
a notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
The Company may make payment of any defaulted interest in any other lawful
manner not inconsistent with the requirements (if applicable) of any securities
exchange on which the Junior Subordinated Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this paragraph, such
manner of payment shall be deemed practicable by the Trustee.
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SECTION 2.12. CUSIP Numbers. The Company in issuing the Junior
Subordinated Notes may use "CUSIP" numbers (if then generally in use) and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Junior Subordinated Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Junior Subordinated Notes, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.13. Book-Entry Provisions for Global Junior Subordinated Notes.
If the Junior Subordinated Notes are issued in the form of a Global Junior
Subordinated Note, the following provisions shall apply:
(a) Each Global Junior Subordinated Note initially shall (i) be registered
in the name of the Depository for such Global Junior Subordinated Note or the
nominee of such Depository and (ii) be delivered to the Trustee as the initial
Custodian for such Depository. Beneficial interests in Global Junior
Subordinated Notes may be held indirectly through members of or participants in
("Agent Members") the Depository).
Agent Members shall have no rights under this Indenture with respect to any
Global Junior Subordinated Note held on their behalf by the Depository, or the
Trustee as Custodian, or under such Global Junior Subordinated Note, and the
Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Junior Subordinated
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or shall impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Junior Subordinated Note.
(b) Transfers of a Global Junior Subordinated Note shall be limited to
transfers of such Global Junior Subordinated Note in whole, but not in part, to
the Depository, its successors or their respective nominees. Interests of
beneficial owners in a Global Junior Subordinated Note may be transferred in
accordance with the rules and procedures of the Depository (and Agent Member, if
applicable) and the provisions of Section 2.14. The Trustee shall register the
transfer of Junior Subordinated Notes to all beneficial owners in exchange for
their beneficial interests in a Global Junior Subordinated Note if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Junior Subordinated Note or the Depository ceases to
be a clearing agency registered under the Exchange Act, at a time when the
Depository is required to be so registered in order to act as Depository, and in
each case a successor Depository is not appointed by the Company within 90 days
of such notice or, (ii) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Junior Subordinated
Note shall be so exchangeable or (iii) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depository to
permit such transfers.
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SECTION 2.14. Special Transfer Provisions. Unless and until a Transfer
Restricted Security is transferred or exchanged under an effective registration
statement under the Securities Act, the following provisions shall apply:
(a) Upon the transfer, exchange or replacement of Junior Subordinated Notes
not bearing the Restricted Securities Legend, the Registrar shall deliver Junior
Subordinated Notes that do not bear the Restricted Securities Legend. Upon the
transfer, exchange or replacement of Junior Subordinated Notes bearing the
Restricted Securities Legend, the Registrar shall deliver only Junior
Subordinated Notes that bear the Restricted Securities Legend unless there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(b) By its acceptance of any Junior Subordinated Note bearing the
Restricted Securities Legend, each Holder of such a Junior Subordinated Note
acknowledges that transfer of such Junior Subordinated Note may be restricted
pursuant to the provisions of the Securities Act as set forth in the Restricted
Securities Legend and agrees that it shall transfer such Junior Subordinated
Note only in a transaction that is exempt from the registration requirements of
the Securities Act.
ARTICLE III
REDEMPTION
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem Junior
Subordinated Notes pursuant to Section 3.07, it shall notify the Trustee in
writing of the redemption date, the principal amount of Junior Subordinated
Notes to be redeemed and the paragraph of the Junior Subordinated Notes pursuant
to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section 3.01 at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the Junior
Subordinated Notes are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall be not fewer than 15 days after the date of notice to the
Trustee. Any such notice may be canceled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.02. Selection. If less than all of the Junior Subordinated
Notes are to be redeemed at any time, selection of Junior Subordinated Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Junior
Subordinated Notes are listed, or, if the Junior Subordinated Notes are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate; provided that no Junior Subordinated Note of $1,000 or
less shall be redeemed in part. If any Junior Subordinated Note is to be
redeemed in part only, the notice of redemption
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that relates to such Junior Subordinated Note shall state the portion of the
principal amount thereof to be redeemed. On and after the redemption date,
interest ceases to accrue on Junior Subordinated Notes or portions of them
called for redemption.
SECTION 3.03. Notice. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Junior Subordinated Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. The Trustee shall
notify the Company promptly of the Junior Subordinated Notes or portions of
Junior Subordinated Notes to be redeemed.
The notice shall identify the Junior Subordinated Notes to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Junior Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Junior Subordinated Notes
are to be redeemed, the certificate numbers and principal amounts of the
particular Junior Subordinated Notes to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Junior Subordinated Notes (or
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(7) the paragraph of the Junior Subordinated Notes pursuant to
which the Junior Subordinated Notes called for redemption are being
redeemed;
(8) the CUSIP number, if any, printed on the Junior Subordinated
Notes being redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Junior Subordinated Notes.
At the Company's request (which may be revoked at any time in writing prior
to the time at which the Trustee shall have given such notice to the Holders),
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. In such event, the Company shall provide the Trustee with
the information required by this Section 3.03.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Junior Subordinated Notes called for redemption become due and
payable on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such
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Junior Subordinated Notes shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date; provided that if the
redemption date is after a regular record date and on or prior to the interest
payment date, the accrued interest shall be payable to the Holder of the
redeemed Junior Subordinated Notes registered on the relevant record date. If
mailed in the manner herein, the notice shall be conclusively presumed to have
been given whether or not the Holder receives such notice. Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company is the Paying Agent, shall segregate and hold in trust) money sufficient
to pay the redemption price of and accrued interest on all Junior Subordinated
Notes to be redeemed on the redemption date other than Junior Subordinated Notes
or portions of Junior Subordinated Notes called for redemption that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Junior Subordinated Notes Redeemed in Part. Upon surrender
of a Junior Subordinated Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Junior Subordinated Note equal in principal amount to the
unredeemed portion of the Junior Subordinated Note surrendered.
SECTION 3.07. Optional Redemption. The Junior Subordinated Notes may be
redeemed at any time, in whole or in part, at the option of the Company at a
redemption price equal to the unpaid principal amount thereof plus accrued
interest thereon to the redemption date (subject to the right of Holders on the
relevant record date to receive interest due on the relevant interest payment
date).
ARTICLE IV
COVENANTS
---------
SECTION 4.01. Payment of Junior Subordinated Notes. The Company shall
promptly pay the principal of and interest on the Junior Subordinated Notes on
the dates and in the manner provided in the Junior Subordinated Notes and in
this Indenture (including the payment of interest on the Junior Subordinated
Notes by the delivery of Additional Junior Subordinated Notes as contemplated
herein and in the Junior Subordinated Notes). Principal and interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
(but only if other than the Company) holds by 10:00 a.m., New York City time, in
accordance with this Indenture available funds (or Additional Junior
Subordinated Notes in the case of interest) sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Holders of Junior Subordinated
Notes on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Junior Subordinated Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
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SECTION 4.02. Reports. The Company will deliver to the Trustee, within
15 day after the filing of the same with the Commission, copies of the quarterly
and annual reports and of the information, documents and other reports, if any,
which the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the Commission, to the extent permitted, and
provide the Trustee and Holders with such annual reports and such information,
documents and other reports specified in Sections 13 and 15(d) of the Exchange
Act. The Company will also comply with the other provisions of TIA (S) 3 14(a).
SECTION 4.03. Restricted Payments. The Company will not, and will not
cause or permit any of its Subsidiaries to, directly or indirectly, (a) declare
or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock of the Company) on or in
respect of shares of the Company's Capital Stock, (b) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock (other than any warrant issued by the Company in connection with
the Acquisition), (c) make any Investment other than Permitted Investments) or
(d) repurchase or redeem any Indebtedness junior in right of payment to the
Junior Subordinated Notes, or make any cash payments of interest thereon (other
than refinancing such junior Indebtedness with debt instruments having similar
payment-in-kind and subordination features) (each of the foregoing actions set
forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately after giving
effect thereto, (i) a Default or an Event of Default shall have occurred and be
continuing, or (ii) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than cash, being the Fair market value of
such property as determined reasonably and in good faith by the Board of
Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative
Consolidated Net Earnings (or, if cumulative Consolidated Net Earnings shall be
a loss, minus 100% of such loss) of the Company earned subsequent to the Issue
Date and on or prior to the date the Restricted Payment occurs (the "Reference
Date"), treating such period as a single accounting period); plus (x) 100% of
the aggregate net cash proceeds received by the Company from any Person (other
than a Subsidiary of the Company) from the issuance and sale subsequent to the
Issue Date and on or prior to the Reference Date of Qualified Capital Stock of
the Company plus (y) 100% of the net cash proceeds from the sale of Investments
by the Company (other than Permitted Investments) provided that such Investment
was made after the Issue Date; plus (z) without duplication of any amounts
included in clause (ii)(x) above, 100% of the aggregate net cash proceeds of any
equity contribution received by the Company from a holder of the Company's
Capital Stock (excluding, in the case of clauses (ii)(x) and (z), any net cash
proceeds from a sale of Capital Stock of the Company to the extent utilized as
provided in clause (2)(ii) of the next succeeding paragraph).
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do no prohibit: (1) the payment of any dividend within 60
days after the date of declaration of such dividend if such dividend would have
been permitted on the date of declaration; or (2) the acquisition of any shares
of Capital Stock of the Company, either (i) solely
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in exchange for shares of Qualified Capital Stock of the Company or (ii) through
the application of the net cash proceeds of a substantially concurrent sale for
cash (other than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company; or (3) dividends on, and redemptions of, the shares of the
Company's preferred stock held by the trust of the Company's retirement savings
plan in accordance with the terms thereof on the date of this Indenture; or (4)
payments to redeem or repurchase stock or similar rights from management of the
Company in connection with the repurchase provisions under employee stock option
or stock purchase agreements or other agreements to compensate management
employees upon the termination of employment, death or disability of any such
person; provided that such redemptions or repurchases shall not exceed $1.0
million. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (ii) of the immediately
preceding paragraph, amounts expended pursuant to clauses (1) and (4) shall be
included in such calculation.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment complies with the Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.04. Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to (a) pay dividends or make any other distributions
on or in respect of its Capital Stock; (b) make loans or advances or to pay or
guarantee any Indebtedness or other obligation owed to the Company or any other
Subsidiary of the Company, provided that the terms of the Credit Agreement may
restrict loans or advances from the Company and those of its Subsidiaries that
are borrowers under the Credit Agreement to any of the Company's Subsidiaries
that are not borrowers under the Credit Agreement or Guarantees by the Company
or Subsidiaries of the Company that are borrowers under the Credit Agreement of
any Indebtedness or other obligation owed by any of the Company's Subsidiaries
that are not borrowers under the Credit Agreement; or (c) transfer any of its
property or assets to the Company or any other Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary non-assignment provisions of
any contract or any lease governing a leasehold interest of any Subsidiary of
the Company; (4) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired; (5) agreements existing on the Issue Date to the extent and
in the manner such agreements are in effect on the Issue Date; (6) the Credit
Agreement or the ESOP Credit Agreement; or (7) an agreement governing
Indebtedness Incurred to Refinance the Indebtedness issued, assumed or Incurred
pursuant to an agreement referred to in clause (2), (4) or (5) above; provided,
however, that the provisions relating to such encumbrance or restriction
contained in any such Refinancing Indebtedness are no less favorable to the
Company in any material respect as determined by the Board of Directors of the
Company in their reasonable and good faith judgment than the
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provisions relating to such encumbrance or restriction contained in agreements
referred to in such clause (2), (4) or (5).
SECTION 4.05. Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under Section 4.05(b) and (y) Affiliate Transactions on
terms that are no less favorable to the Company or such Subsidiary than those
that could reasonably have been obtained in a comparable transaction at such
time on an arm's-length basis from a Person that is not an Affiliate of the
Company or such Subsidiary. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value in
excess of $1.0 million shall be approved by the Board of Directors of the
Company or such Subsidiary, as the case may be, such approval to be evidenced by
a Board Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Subsidiary of the Company enters into an Affiliate Transaction (or a series of
related Affiliate Transactions related to a common plan) that involves aggregate
payments or other property with a fair market value of more than $5.0 million,
the Company or such Subsidiary, as the case may be, shall, prior to the
consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in Section 4.05(a) shall not apply to (i)
reasonable fees and compensation paid to. and indemnity provided on behalf of,
officers, directors or employees of the Company or any Subsidiary of the Company
as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Wholly
Owned Subsidiaries or exclusively between or among such Wholly Owned
Subsidiaries, provided such transactions are not otherwise prohibited by the
Indenture; (iii) Restricted Payments permitted by the Indenture; (iv)
transactions permitted by, and complying with, the provisions of Article V; (v)
transactions with distributors or other purchases or sales of goods or services,
in each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture which are fair to the Company, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (vi) any management agreement
as in effect as of the Issue Date or any amendment thereto or any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date and any similar agreements entered into
after the Issue Date; and (vii) intercompany loans from the Company to any of
its Subsidiaries; provided such loans are otherwise in compliance with the terms
of the Indenture.
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SECTION 4.06. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have the
right to require that the Company purchase all or a portion of such Holder's
Junior Subordinated Notes pursuant to the offer described below (the "Change of
Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in any event
within 30 days following any Change of Control, the Company will (i) repay in
full all Indebtedness and terminate all commitments under the Credit Agreement
and all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Agreement and all other such Senior Debt and to
repay the Indebtedness owed to each lender which has accepted such offer or (ii)
obtain the requisite consents under the Credit Agreement and all other Senior
Debt to permit the repurchase of the Junior Subordinated Notes as provided
below.
(c) Within 30 days following the date upon which the Change of Control
occurred (the "Change of Control Date"), the Company will send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Junior Subordinated Notes pursuant to the Change of Control Offer. Such
notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.08 and that all Junior Subordinated Notes tendered and
not withdrawn will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed, other
than as may be required by law) (the "Change of Control Payment
Date"); provided that the Change of Control Payment Date for the
Junior Subordinated Notes shall be a date subsequent to any
payment dates for the purchase or other repayment of Senior Debt
having similar provisions;
(3) that any Junior Subordinated Notes not tendered will continue to
accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Junior Subordinated Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have a Junior Subordinated Note
purchased pursuant to a Change of Control Offer will be required
to surrender the Junior Subordinated Note, with the form entitled
"Option of Holder to
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Elect Purchase" on the reverse of the Junior Subordinated Note
completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day
prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Junior Subordinated Notes the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Junior Subordinated Notes
purchased;
(7) that Holders whose Junior Subordinated Notes are purchased only
in part will be issued new Junior Subordinated Notes in a
principal amount equal to the unpurchased portion of the Junior
Subordinated Notes surrendered; provided that each Junior
Subordinated Note purchased and each new Junior Subordinated Note
issued shall be in an original principal amount of $1,000 or
integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Junior Subordinated Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the purchase price plus accrued interest, if any,
of all Junior Subordinated Notes so tendered and (iii) deliver to the Trustee
Junior Subordinated Notes so accepted together with an Officers' Certificate
stating the Junior Subordinated Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Junior
Subordinated Notes so accepted payment in an amount equal to the purchase price
plus accrued interest, if any, and the Trustee shall promptly authenticate and
mail to such Holders new Junior Subordinated Notes equal in principal amount to
any unpurchased portion of the Junior Subordinated Notes surrendered. Any
Junior Subordinated Notes not so accepted shall be promptly mailed by the
Company to the Holder thereof. For purposes of this Section 4.08, the Trustee
shall act as the Paying Agent.
Any amounts remaining after the purchase of Junior Subordinated Notes
pursuant to a Change of Control Offer shall be returned by the Trustee to the
Company.
(d) Neither the Board of Directors of the Company nor the Trustee may waive
the provisions of this Section 4.06 relating to a Holder's right to redemption
upon a Change of Control. The Company will comply with the requirements of Rule
14e-l under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Junior Subordinated Notes pursuant to a Change of Control
Offer. To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Section 4.06, the Company shall comply with
the applicable
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securities laws and regulations and shall not be deemed to have breached its
obligations under the provisions of this Section 4.06 by virtue thereof.
SECTION 4.07. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do have such knowledge, the certificate
shall describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.
SECTION 4.08. Additional Subsidiary Guarantees. All current and future
Subsidiaries of the Company that Guarantee Indebtedness under the Credit
Agreement will be Subsidiary Guarantors in accordance with the terms of this
Indenture. Any future Subsidiary that Guarantees Indebtedness under the Credit
Agreement shall become a Subsidiary Guarantor and shall execute and deliver to
the Trustee a supplemental indenture substantially in the form of Exhibit E
pursuant to which such Subsidiary shall Guarantee payment of the Junior
Subordinated Notes pursuant to Article XI.
ARTICLE V
SUCCESSOR COMPANY
-----------------
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All
Assets of the Company.
(a) The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Company's Subsidiaries) whether as an
entirety or substantially as an entirety to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Company's Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of and interest on all of the Junior
Subordinated Notes and the performance of every covenant of the Junior
Subordinated Notes, the Indenture and the Registration Rights Agreement on the
part of the Company to be performed or observed; (ii) immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(2)(y)
above (including giving effect to any Indebtedness and Acquired Indebtedness
Incurred or anticipated to be Incurred in connection with or in respect of
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such transaction), the Company or such Surviving Entity, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction; (iii)
immediately before and immediately after giving effect to such transaction and
the assumption contemplated by clause (i)(2)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be
Incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and (iv) the Company or the Surviving Entity shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease, conveyance
or other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with the applicable
provisions of the Indenture and that all conditions precedent in the Indenture
relating to such transaction have been satisfied.
(b) Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the provisions
of Section 5.01(a), in which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under the Indenture and the Junior Subordinated Notes with the same effect as if
such surviving entity had been named as such.
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All
Assets of a Guarantor. No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person (other
than the Company or another Guarantor) unless:
(i) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the obligations of such
Guarantor under the Junior Subordinated Notes and this Indenture pursuant
to a supplemental indenture in form and substance reasonably satisfactory
to the Trustee;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iii) the Guarantor or such Surviving Entity, as the case may be,
shall have a Consolidated Net Worth equal to or greater than the
Guarantor's or such other Person's Consolidated Net Worth, as the case may
be, immediately prior to such transaction.
Notwithstanding the foregoing clauses (ii) and (iii) above, (a) any
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to any Subsidiary Guarantor and (b) any Guarantor may
merge with an Affiliate incorporated solely for the purpose of reincorporating
such Guarantor in another jurisdiction.
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ARTICLE VI
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01. Events of Default and Remedies.
The following events are "Events of Default":
(a) the failure to pay interest on any Junior Subordinated Notes
when the same becomes due and payable and such default continues for a
period of 30 days (whether or not such payment shall be prohibited by the
provisions of Article X);
(b) the failure to pay the principal on any Junior Subordinated
Notes when such principal becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to
purchase Junior Subordinated Notes tendered pursuant to a Change of Control
Offer or a Net Proceeds Offer), whether or not such payment shall be
prohibited by the provisions of Article X;
(c) a default in the observance or performance of any other
covenant or agreement contained in the Indenture which default continues
for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from
the Trustee or the Holders of least 25% of the outstanding principal amount
of the Junior Subordinated Notes (except in the case of a default with
respect to the provisions of Article V, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);
(d) there shall be a default under any Indebtedness of the Company
or any Subsidiary, whether such Indebtedness now exists or shall
hereinafter be created, if both (A) such default either (1) results from
the failure to pay any such Indebtedness at its stated final maturity or
(2) relates to an obligation other than the obligation to pay such
Indebtedness at its stated final maturity and results in the holder or
holders of such Indebtedness causing such Indebtedness to become due prior
to its stated final maturity and (B) the amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at stated final maturity or the
maturity of which has been so accelerated, aggregates $10.0 million or more
at any one time outstanding;
(e) one or more judgments in an aggregate amount in excess of $5.0
million (which are not covered by third party insurance as to which the
insurer has not disclaimed coverage) shall have been rendered against the
Company or any of its Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; or
(f) the Company or any Subsidiary that is a Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law: (A) commences a
voluntary case; (B) consents to the entry of an order for relief against
it in an involuntary case;
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(C) consents to the appointment of a custodian of it or for any substantial
part of its property; (D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws relating
to insolvency; or
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (A) is for relief against the Company or
any Subsidiary that is a Significant Subsidiary in an involuntary case; (B)
appoints a custodian of the Company or any Subsidiary that is a Significant
Subsidiary or for any substantial part of its property; or (C) orders the
winding up or liquidation of the Company or any Subsidiary that is a
Significant Subsidiary; or (D) any similar relief is granted under any
foreign laws and the order or decree relating thereto remains unstayed and
in effect for 60 days.
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors. For purposes of this
Section 6.01, the term "custodian" means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 6.01(f) or (g) with respect to the Company)
shall occur and be continuing, the Trustee or the Holders of at least 25% in
principal amount of outstanding Junior Subordinated Notes may declare the
principal of and accrued interest on all the Junior Subordinated Notes to be due
and payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement
or the ESOP Credit Agreement, shall become immediately due and payable upon the
first to occur of an acceleration under the Credit Agreement or the ESOP Credit
Agreement or five business days after receipt by the Company and the
Representative under the Credit Agreement or the ESOP Credit Agreement of such
Acceleration Notice. If an Event of Default specified in Section 6.01(f) or (g)
with respect to the Company occurs and is continuing, then all unpaid principal
of and accrued and unpaid interest on all of the outstanding Junior Subordinated
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the Junior
Subordinated Notes as described in the preceding paragraph, the Holders of a
majority in principal amount of Junior Subordinated Notes may rescind and cancel
such declaration and its consequences (i) if the rescission would not conflict
with any judgment or decree, (ii) if all existing Events of Default have been
cured or waived except nonpayment of principal or interest that has become due
solely because of the acceleration, (iii) to the extent the payment of such
interest is lawful,
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interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
Section 6.01(f) or (g), the Trustee shall have received an Officers' Certificate
and an Opinion of Counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Junior Subordinated Notes or to enforce the
performance of any provision of the Junior Subordinated Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Junior Subordinated Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder of Junior Subordinated Notes in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Junior Subordinated Notes then outstanding by
written notice to the Trustee may on behalf of the Holders of all of the Junior
Subordinated Notes waive any existing Default or Event of Default and its
consequences except (i) a continuing Default or Event of Default in the payment
of interest on, or the principal of, the Junior Subordinated Notes or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Junior Subordinated Noteholder affected. When a
Default is waived, it is deemed cured and ceases to exist and any Event of
Default arising therefrom shall be deemed to have been cured and waived for
every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the outstanding Junior Subordinated Notes may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee by this Indenture. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of other Holders
of Junior Subordinated Notes, it being understood that subject to Section 7.01
the Trustee shall have no duty or obligation to determine whether or not such
actions or forbearances are unduly prejudicial to such Holders, or would involve
the Trustee in personal liability; provided, however, that the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
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SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal or interest when due, a Holder of Junior
Subordinated Notes may not pursue any remedy with respect to this Indenture or
the Junior Subordinated Notes unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Junior Subordinated Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Junior Subordinated Notes do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on such Holder's Junior Subordinated Notes, on or
after the respective due dates expressed in the Junior Subordinated Notes, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, any Subsidiary or any
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
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SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent required by
Article X;
THIRD: to Holders for amounts due and unpaid on the Junior
Subordinated Notes for principal and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Junior Subordinated Notes for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Junior Subordinated Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor
any Guarantor (to the extent they may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE VII
THE TRUSTEE
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SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in
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their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this Section 7.01(c) does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise Incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01 and to the provisions of the TIA.
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SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Junior
Subordinated Notes at the time outstanding, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(f) The Trustee shall not be required to give any note, bond or surety in
respect of the execution of the trusts and powers under this Indenture.
(g) The permissive rights of the Trustee to take any action enumerated in
this Indenture shall not be construed as a duty to take such action.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Junior Subordinated
Notes and may otherwise deal with the Company or its Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-
registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Junior Subordinated Notes and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the issuance of the Junior Subordinated Notes or in the Junior
Subordinated Notes other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing
and if it is actually known to the Trustee, the Trustee shall mail to each
Holder of Junior Subordinated
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Notes at the expense of the Company notice of the Default within the earlier of
90 days after it occurs or 30 days after it is known to a Trust Officer or
written notice of it is received by the Trustee. Except in the case of a Default
in payment of principal of or interest on any Junior Subordinated Note, the
Trustee may withhold the notice if and so long as a committee of its trust
officers in good faith determines that withholding the notice is in the
interests of the Holders of the Junior Subordinated Notes. Notwithstanding
anything to the contrary expressed in this Indenture, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default hereunder, except in
the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is
acting as the Paying Agent, unless and until a Trust Officer receives written
notice thereof at its Corporate Trust Office specified in Section 13.02, from
the Company or a Holder that such Default or Event of Default has occurred.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit
to the Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the TIA at the times and in the manner
provided pursuant thereto. To the extent that any such report is required by
the TIA with respect to any 12-month period, such report shall cover the 12-
month period ending December 31 and shall be transmitted by the next succeeding
March 1.
A copy of each report at the time of its mailing to Holders of Junior
Subordinated Notes shall be filed with the SEC and each stock exchange (if any)
on which the Junior Subordinated Notes are listed. The Company agrees to notify
promptly the Trustee whenever the Junior Subordinated Notes become listed on any
stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as is agreed to in writing by the
Trustee and Company for the Trustee's services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket disbursements, advances and expenses Incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, jointly but not severally, shall
indemnify the Trustee and its officers, directors, shareholders, agents and
employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, liability or expense (including reasonable
attorneys' fees) Incurred by them without negligence or bad faith on their part
arising out of or in connection with the acceptance or administration of this
Indenture or the Junior Subordinated Notes and the performance of their duties
hereunder, including the cost and expense of enforcing this Indenture against
the Company (including this Section 7.07), and defending itself against any
claim (whether asserted by a Holder or any other person). The Trustee and its
officers, directors, shareholders, agents and employees in its capacity as
Paying Agent, Registrar, Custodian and agent for service of notice and demands
shall have the full benefit of the foregoing indemnity as well as all other
benefits, rights and privileges accorded to the Trustee in this Indenture when
acting in such other capacity. The Trustee shall notify the Company of any claim
for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided that any failure
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so to notify the Company shall not relieve the Company or any Subsidiary
Guarantor of its indemnity obligations hereunder. The Company shall defend the
claim and the Indemnified Party shall provide reasonable cooperation at the
Company's expense in the defense. Such Indemnified Parties may have separate
counsel and the Company shall pay the fees and expenses of such counsel;
provided that the Company shall not be required to pay such fees and expenses if
it assumes such Indemnified Parties' defense and, in such Indemnified Parties'
reasonable judgment, there is no conflict of interest between the Company and
such parties in connection with such defense. The Company need not reimburse any
expense or indemnify against any loss, liability or expense Incurred by an
Indemnified Party through such party's own willful misconduct, negligence or bad
faith. The Company need not pay any settlement made without its consent (which
consent shall not be unreasonably withheld).
To secure the Company's payment obligations in this Section 7.07 and all
other obligations to the Trustee pursuant to this Indenture, including all fees,
expenses and rights to indemnification, the Trustee shall have a lien on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest on particular Junior Subordinated
Notes. Such lien shall survive the satisfaction and discharge of this Indenture
and the resignation or removal of the Trustee. The Trustee's right to receive
payment of any amounts due under this Indenture shall not be subordinated to any
other indebtedness of the Company and the Junior Subordinated Notes shall be
subordinate to the Trustee's rights to receive such payment.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any Bankruptcy Law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(f) or (g) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time
by so notifying the Company in writing. The Holders of a majority in principal
amount of the Junior Subordinated Notes may remove the Trustee by so notifying
the Trustee and the Company in writing and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Junior Subordinated Notes and such Holders
do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the
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Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders of Junior
Subordinated Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in aggregate principal amount of the Junior Subordinated Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder of Junior
Subordinated Notes may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Junior Subordinated Notes shall have been authenticated but
not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Junior Subordinated
Notes so authenticated; and in case at that time any of the Junior Subordinated
Notes shall not have been authenticated, any successor to the Trustee may
authenticate such Junior Subordinated Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in all
such cases such certificates shall have the full force which it is anywhere in
the Junior Subordinated Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
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SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.01(b) or 8.01(c) be applied to all outstanding Junior
Subordinated Notes upon compliance with the conditions set forth below in this
Article VIII.
(b) Upon the Company's exercise under Section 8.01(a) of the option
applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
deemed to have been discharged from their obligations with respect to all
outstanding Junior Subordinated Notes and any Subsidiary Guarantee on the date
the conditions set forth below are satisfied ("Legal Defeasance"). For this
purpose, Legal Defeasance means that the Company and each Guarantor shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Junior Subordinated Notes and any Subsidiary Guarantee, which Junior
Subordinated Notes and Subsidiary Guarantees shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.03 and the other Sections of
this Indenture referred to in clauses (i) and (ii) below, and to have satisfied
all their other obligations under such Junior Subordinated Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Junior
Subordinated Notes to receive, solely from the trust fund described in Section
8.02, payments in respect of the principal of and interest on such Junior
Subordinated Notes when such payments are due, (ii) the Company's obligations
with respect to the Junior Subordinated Notes under Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.09, 7.07 and 7.08, which shall survive until the Junior
Subordinated Notes have been paid in full (thereafter, the Company's obligations
in Section 7.07 shall survive), and (iii) this Article VIII. Subject to
compliance with this Article VIII, the Company may exercise its option under
this Section 8.01(b) notwithstanding the prior exercise of its option under
Section 8.01(c).
(c) Upon the Company's exercise under Section 8.01(a) of the option
applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02, be
released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07 and 4.08 and Article V with respect to the outstanding Junior Subordinated
Notes on and after the date the conditions set forth below are satisfied
("Covenant Defeasance"), and the Junior Subordinated Notes shall thereafter be
deemed not "outstanding" for the purposes
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of any direction, waiver, consent or declaration of act of Holders (and the
consequences of any thereof) in connection with such Sections, but shall
continue to be deemed "outstanding" for all the other purposes hereunder. For
this purpose, Covenant Defeasance means that, with respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01, but, except as specified above, the
remainder of this Indenture and such Junior Subordinated Notes shall be
unaffected thereby.
SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.01(b) or 8.01(c)
to the outstanding Junior Subordinated Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders, cash in U.S. dollars, non-callable U.S. government obligations
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of and interest on the Junior Subordinated Notes on the stated date
for payment thereof or on the applicable redemption date, as the case may be;
(ii) in the case of Legal Defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred; (iii) in
the case of Covenant Defeasance, the Company shall have delivered to the Trustee
an Opinion of Counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be continuing on the
date of such deposit or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default under, the
Indenture or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others; and (vii) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the
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Covenant Defeasance have been complied with, except that the Opinion of Counsel
shall speak only to clauses (ii), (iii) and (v) of this Section 8.02.
SECTION 8.03. Deposited Money and Government Junior Subordinated Notes to
be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.04, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.03, the "Trustee") pursuant to Section 8.02 in respect of the
outstanding Junior Subordinated Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Junior Subordinated Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of the Junior Subordinated Notes of all sums due and to become due
thereon in respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by law.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or U.S. Government Obligations held by it as provided in
Section 8.02 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.02(a)), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of or interest on any Junior Subordinated Note and remaining
unclaimed for two years after such principal or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Junior
Subordinated Note shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company, cause to be published once, in The New York Times
(national edition) and The Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or U.S. Government Obligations in accordance
with this Article VIII by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Junior
Subordinated Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with this Article VIII;
provided, however, that, if the Company or
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any Guarantor makes any payment of principal of or interest on any Junior
Subordinated Note following the reinstatement of its obligations, the Company or
any Guarantor, as the case may be, shall be subrogated to the rights of the
Holders of such Junior Subordinated Notes to receive such payment from the money
held by the Trustee or Paying Agent.
SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request
of the Company, this Indenture will be discharged and will cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of the Junior Subordinated Notes, as expressly provided for herein or
pursuant hereto), the Company and the Guarantors will be discharged from their
obligations under the Junior Subordinated Notes and the Subsidiary Guarantees,
and the Trustee, at the expense of the Company, will execute proper instruments
acknowledging satisfaction and discharge of the Indenture when:
(a) either (i) all the Junior Subordinated Notes theretofore authenticated
and delivered (other than mutilated, destroyed, lost or stolen Junior
Subordinated Notes that have been replaced or paid and Junior Subordinated Notes
that have been subject to defeasance under this Article VIII) have been
delivered to the Trustee for cancellation or (ii) all Junior Subordinated Notes
not theretofore delivered to the Trustee for cancellation (A) have become due
and payable, (B) will become due and payable at maturity within one year or (C)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company, and the Company, in the case of (A),
(B) or (C) above, has irrevocably deposited or caused to be deposited with the
Trustee funds in trust for such purpose in an amount sufficient to pay and
discharge, without the need to reinvest any proceeds thereof, the entire
Indebtedness on such Junior Subordinated Notes not theretofore delivered to the
Trustee for cancellation, for principal and interest on the Junior Subordinated
Notes to the date of such deposit (in the case of Junior Subordinated Notes that
have become due and payable) or to the Stated Maturity or redemption date, as
the case may be;
(b) the Company has paid or caused to be paid all sums payable under the
Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided in
this Indenture relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section
8.06, the obligations of the Trustee under Section 8.06 and Section 2.04 shall
survive.
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ARTICLE IX
Amendments
----------
SECTION 9.01. Without Consent of Holders. From time to time, the Company,
the Guarantors and the Trustee, without the consent of the Holders, may amend
this Indenture or the Junior Subordinated Notes for the following purposes, so
long as such change does not, in the opinion of the Trustee, adversely affect
the rights of any of the Holders in any material respect. As to such matters,
the Trustee shall be entitled to rely, and shall be protected in relying, upon
an Opinion of Counsel:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Junior Subordinated Notes in
addition to or in place of certificated Junior Subordinated Notes (provided
that the uncertificated Junior Subordinated Notes are issued in registered
form for purposes of Section 163(f) of the Code, or in a manner such that
the uncertificated Junior Subordinated Notes are described in Section
163(f)(2)(B) of the Code);
(3) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Junior Subordinated Notes in the case of a
merger, consolidation or sale of assets;
(4) to release any Subsidiary Guarantee in accordance with the
provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional rights or
benefits to the Holders of Junior Subordinated Notes or that does not
adversely affect the legal rights under this Indenture of any such Holder;
or
(7) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section 9.01 becomes effective, the Company
shall mail to Holders of Junior Subordinated Notes a notice briefly describing
such amendment. The failure to give such notice to all Holders of Junior
Subordinated Notes, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.
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SECTION 9.02. With Consent of Holders. The Company, the Guarantors and
the Trustee may amend this Indenture or the Junior Subordinated Notes with the
written consent of the Holders of at least a majority in principal amount of the
Junior Subordinated Notes. However, without the consent of each affected Holder
of a Junior Subordinated Note, an amendment may not:
(i) reduce the principal amount of Junior Subordinated Notes whose
Holders must consent to an amendment;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including defaulted interest, on any
Junior Subordinated Notes;
(iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Junior Subordinated Notes, or change the
date on which any Junior Subordinated Notes may be subject to redemption or
repurchase, or reduce the redemption or repurchase price therefor;
(iv) make any Junior Subordinated Notes payable in money other than
that stated in the Junior Subordinated Notes;
(v) make any change in provisions of the Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Holder's Junior Subordinated Notes on or after the due date thereof or
to bring suit to enforce such payment, or permitting Holders of a majority
in principal amount of Junior Subordinated Notes to waive Defaults or
Events of Default;
(vi) modify or change any provision of the Indenture or the related
definitions affecting the subordination or ranking of the Junior
Subordinated Notes in a manner which adversely affects the Holders; or
(viii) make any change to the Subsidiary Guarantees in any manner
that adversely affects the rights of the Holders.
In addition, without the consent of Holders of not less than 66% in
aggregate principal amount of Junior Subordinated Notes then outstanding, no
such amendment, supplement or waiver may amend, change or modify in any material
respect the obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control or make and consummate a Net Proceeds
Offer with respect to any Asset Sale that has been consummated or modify any of
the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
No amendment under this Section 9.02 may make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such
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Senior Debt (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to Holders of Junior Subordinated Notes a notice briefly describing
such amendment. The failure to give such notice to all Holders of Junior
Subordinated Notes, or any defect therein, shall not impair or affect the
validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Junior Subordinated Notes shall comply with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to
an amendment or a waiver by a Holder of a Junior Subordinated Note shall bind
the Holder and every subsequent Holder of that Junior Subordinated Note or
portion of the Junior Subordinated Note that evidences the same debt as the
consenting Holder's Junior Subordinated Note, even if notation of the consent or
waiver is not made on the Junior Subordinated Note. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Junior
Subordinated Note or portion of the Junior Subordinated Note if the Trustee
receives written notice of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes effective, it shall bind
every Junior Subordinated Noteholder. Except if otherwise specified in such
amendment or waiver, an amendment or waiver becomes effective once the requisite
number of consents are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Junior Subordinated Notes entitled to give
their consent or take any other action described above or required or permitted
to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date.
SECTION 9.05. Notation on or Exchange of Junior Subordinated Notes. If
an amendment changes the terms of a Junior Subordinated Note, the Trustee may
require the Holder of the Junior Subordinated Note to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Junior Subordinated Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Junior
Subordinated Note shall issue and the Trustee shall authenticate a new Junior
Subordinated Note that reflects the changed terms. Failure to make the
appropriate notation or to issue a new Junior Subordinated Note shall not affect
the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel
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stating that such amendment is authorized or permitted by this Indenture that
such amendment is the legal, valid and binding obligation of the Company and the
Guarantors enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03).
SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate
of the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Junior Subordinated Notes unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE X
Subordination
-------------
SECTION 10.01. Agreement To Subordinate. The Company agrees, and each
Junior Subordinated Noteholder by accepting a Junior Subordinated Note agrees,
that the Indebtedness evidenced by the Junior Subordinated Notes is subordinated
in right of payment, to the extent and in the manner provided in this Article X,
to the prior payment in full in cash or Cash Equivalents of all Obligations on
Senior Debt, whether outstanding on the Issue Date or thereafter Incurred, and
that the subordination is for the benefit of and enforceable by the holders of
Senior Debt. All provisions of this Article X shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to creditors upon any liquidation, dissolution, winding-
up, reorganization, assignment for the benefit of creditors or marshaling of
assets of the Company or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to the Company or its
property, whether voluntary or involuntary, all Obligations due upon all Senior
Debt shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Senior Debt, by the
Company or any of its Subsidiaries before any payment or distribution of any
kind or character is made on account of any Obligations on the Junior
Subordinated Notes, or for the acquisition by the Company or any of its
Subsidiaries of any of the Junior Subordinated Notes for cash or property. If
any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Debt, no payment of any kind
or character (other than payments by a trust previously established pursuant to
the provisions of Article VIII) shall be made by the Company or any of its
Subsidiaries with respect to any Obligations on the Junior Subordinated Notes or
to acquire any of the Junior Subordinated Notes for cash or property.
SECTION 10.03. Default on Senior Debt. In addition, if any other event of
default occurs and is continuing with respect to any Designated Senior Debt, as
such event of default is
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defined in the instrument creating or evidencing such Designated Senior Debt,
permitting the holders of such Designated Senior Debt then outstanding to
accelerate the maturity thereof and if the Representative for the respective
issue of Designated Senior Debt gives written notice of the event of default to
the Trustee (a "Default Notice"), then, unless and until all events of default
have been cured or waived or have ceased to exist or the Trustee receives notice
from the Representative for the respective issue of Designated Senior Debt
terminating the Blockage Period (as defined below), during the 180 days after
the delivery of such Default Notice (the "Blockage Period"), neither the Company
nor any of its Subsidiaries shall (x) make any payment of any kind or character
(other than payments by a trust previously established pursuant to the
provisions of Article VIII) with respect to any Obligations on the Junior
Subordinated Notes or (y) acquire any of the Junior Subordinated Notes for cash
or property. Notwithstanding anything herein to the contrary, in no event will a
Blockage Period extend beyond 180 days from the date of the commencement of the
Blockage Period, and only one such Blockage Period may be commenced within any
365 consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Blockage Period with respect to the Designated
Senior Debt shall be, or be made, the basis for commencement of a second
Blockage Period by the Representative of such Designated Senior Debt whether or
not within a period of 365 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Blockage Period that, in either case, would give rise to an event of default
pursuant to any provisions under which an event of default previously existed or
was continuing shall constitute a new event of default for this purpose).
SECTION 10.04. Acceleration of Payment of Junior Subordinated Notes. If
payment of the Junior Subordinated Notes is accelerated because of an Event of
Default, the Company shall promptly notify the Representative of the lenders
under the Credit Agreement of the acceleration. If any Indebtedness under the
Credit Agreement is outstanding, the Company may not make any payment on account
of such accelerated Junior Subordinated Notes until five Business Days after
such holders of such Indebtedness receive notice of such acceleration and,
thereafter, may pay the Junior Subordinated Notes only if this Article X
otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a distribution is
made to Holders of Junior Subordinated Notes that because of this Article X
should not have been made to them, the Holders who receive such distribution
shall hold it in trust for holders of Senior Debt and pay it over to them as
their interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is paid
in full and until the Junior Subordinated Notes are paid in full, Holders of
Junior Subordinated Notes shall be subrogated to the rights of holders of Senior
Debt of the Company to receive distributions applicable to Senior Debt of the
Company. A distribution made under this Article X to holders of Senior Debt of
the Company which otherwise would have been made to Holders of Junior
Subordinated Notes is not, as between the Company and Holders of Junior
Subordinated Notes, a payment by the Company on Senior Debt of the Company.
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SECTION 10.07. Relative Rights. This Article X defines the relative
rights of Holders of Junior Subordinated Notes and holders of Senior Debt of the
Company. Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders of Junior
Subordinated Notes the obligations of the Company, which is absolute and
unconditional, to pay principal of and interest on the Junior Subordinated
Notes in accordance with their terms; or
(2) prevent the Trustee or any Holder of Junior Subordinated Notes
from exercising its available remedies upon a Default, subject to the
rights of holders of Senior Debt of the Company to receive distributions
otherwise payable to Holders of Junior Subordinated Notes.
SECTION 10.08. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Debt of the Company to enforce the subordination of the
Indebtedness evidenced by the Junior Subordinated Notes shall be impaired by any
act or failure to act by the Company or by its failure to comply with this
Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Junior Subordinated Notes and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article X. The Company, the Registrar or co-
registrar, the Paying Agent, a Representative or a holder of Senior Debt of the
Company may give the notice; provided, however, that, if an issue of Senior Debt
of the Company has a Representative, only the Representative may give the
notice. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Debt of the Company (or a Representative of such holder) to establish that such
notice has been given by a holder of such Senior Debt of the Company or
Representative thereof.
The Trustee in its individual or any other capacity may hold Senior Debt of
the Company with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of Senior Debt of the
Company; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment pursuant to the Junior
Subordinated Notes by reason of
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any provision in this Article X shall not be construed as preventing the
occurrence of a Default. Nothing in this Article X shall have any effect on the
right of the Holders of Junior Subordinated Notes or the Trustee to accelerate
the maturity of the Junior Subordinated Notes.
SECTION 10.12. Trust Funds Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article VIII by the Trustee for the
payment of principal of and interest on the Junior Subordinated Notes shall not
be subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article X, and no Holder of the Junior
Subordinated Notes shall be obligated to pay over any such amount to the Company
or any holder of Senior Debt of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article X, the Trustee and the Holders of Junior Subordinated
Notes shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders of Junior Subordinated Notes or (iii) upon the Representative for
the holders of Senior Debt of the Company for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Debt of the Company and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article X. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Debt of the Company to participate
in any payment or distribution pursuant to this Article X, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt of the Company held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article X, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each Holder of a
Junior Subordinated Note by accepting such Junior Subordinated Note authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
and the holders of Senior Debt of the Company as provided in this Article X and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With
respect to the holders of Senior Debt of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article X. The Trustee shall not be deemed to owe
any fiduciary or other duty to the holders of Senior Debt of the Company and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders of Junior Subordinated Notes or the Company or any other
Person, money or assets to
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which any holders of Senior Debt of the Company shall be entitled by virtue of
this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions. Each Holder by accepting a Junior Subordinated Note acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration to each holder of any Senior Debt of the
Company, whether such Senior Debt was created or acquired before or after the
issuance of the Junior Subordinated Notes, to acquire and continue to hold, or
to continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Debt.
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this
Article X shall apply to amounts due to the Trustee pursuant to other sections
of this Indenture.
ARTICLE XI
SUBSIDIARY GUARANTEES
---------------------
SECTION 11.01. Subsidiary Guarantees. Each Guarantor hereby jointly and
severally unconditionally and irrevocably guarantees as a primary obligor and
not merely as a surety, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of and interest on the
Junior Subordinated Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture (including obligations to the Trustee) and the Junior
Subordinated Notes and (b) the full and punctual performance of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Junior Subordinated Notes (all of the foregoing
being collectively called the "Guaranteed Obligations"). Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Guarantor, and that
each such Guarantor shall remain bound under this Article XI notwithstanding any
extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of payment from and protest
to the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Junior Subordinated Notes or the Guaranteed Obligations. The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Junior
Subordinated Notes or any other agreement or otherwise; (b) any extension or
renewal of any Guaranteed Obligations; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Junior
Subordinated Notes or any other agreement; (d) the release of any security held
by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e)
the failure of any Holder or Trustee to exercise any right or remedy against
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any other guarantor of the Guaranteed Obligations; or (f) any change in the
ownership of such Guarantor.
Each Guarantor further agrees that its Subsidiary Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Junior Subordinated Notes or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of any Guarantor or would otherwise operate as a
discharge of any Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Subsidiary Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, each Guarantor hereby promises
to and shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii)
accrued and unpaid interest, premium, if any, on such Guaranteed Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Guaranteed Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Subsidiary Guarantee herein, notwithstanding any stay,
injunction or other prohibition
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preventing such acceleration in respect of the Guaranteed Obligations guaranteed
hereby, and (y) in the event of any declaration of acceleration of such
Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Guarantor for the purposes of this Section 11.01.
Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder
in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that can be guaranteed (after giving effect to all its Guarantees of
Indebtedness under the Credit Agreement) without rendering this Indenture, as it
relates to any Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 11.03. Successors and Assigns. This Article XI shall be binding
upon each Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Junior Subordinated Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of any
provision of this Article XI, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
or further notice or demand in the same, similar or other circumstances.
ARTICLE XII
SUBORDINATION OF THE SUBSIDIARY GUARANTEES
------------------------------------------
SECTION 12.01. Agreement To Subordinate. The Guarantor agrees, and each
Junior Subordinated Noteholder by accepting a Junior Subordinated Note agrees,
that such Guarantor's obligations under its Subsidiary Guarantee are
subordinated in right in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment in full in cash or Cash
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Equivalents of all Obligations on Guarantor Senior Debt, whether outstanding on
the Issue Date or thereafter Incurred, and that the subordination is for the
benefit of and enforceable by the holders of Guarantor Senior Debt. All
provisions of this Article XII shall be subject to Section 10.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of any Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding relating to any Guarantor
or its property, whether voluntary or involuntary, all Obligations due upon all
Guarantor Senior Debt shall first be paid in full in cash or Cash Equivalents,
or such payment duly provided for to the satisfaction of the holders of
Guarantor Senior Debt, by the Company or any of its Subsidiaries before any
payment or distribution of any kind or character is made on account of any
Guaranteed Obligations by such Guarantor, or for the acquisition by such
Guarantor of any of the Junior Subordinated Notes for cash or property. If any
default occurs and is continuing in the payment when due, whether at maturity,
upon any redemption, by declaration or otherwise, of any principal of, interest
on, unpaid drawings for letters of credit issued in respect of, or regularly
accruing fees with respect to, any Guarantor Senior Debt, no payment of any kind
or character (other than payments by a trust previously established pursuant to
the provisions of Article VIII) shall be made by such Guarantor with respect to
any Guaranteed Obligations or to acquire any of the Junior Subordinated Notes
for cash or property.
SECTION 12.03. Default on Guarantor Senior Debt. In addition, if any
other event of default occurs and is continuing with respect to any Designated
Guarantor Senior Debt, as such event of default is defined in the instrument
creating or evidencing such Designated Guarantor Senior Debt, permitting the
holders of such Designated Guarantor Senior Debt then outstanding to accelerate
the maturity thereof and if the Representative for the respective issue of
Designated Senior Debt gives written notice of the event of default to the
Trustee (a "Guarantor Default Notice"), then, unless and until all events of
default have been cured or waived or have ceased to exist or the Trustee
receives notice from the Representative for the respective issue of Designated
Senior Debt terminating the Guarantor Blockage Period (as defined below), during
the 180 days after the delivery of such Guarantor Default Notice (the "Guarantor
Blockage Period"), such Guarantor shall not (x) make any payment of any kind or
character (other than payments by a trust previously established pursuant to the
provisions of Article VIII) with respect to any Guaranteed Obligations or (y)
acquire any of the Junior Subordinated Notes for cash or property.
Notwithstanding anything herein to the contrary, in no event will a Guarantor
Blockage Period extend beyond 180 days from the date of the commencement of the
Guarantor Blockage Period, and only one such Guarantor Blockage Period may be
commenced within any 365 consecutive days. No event of default which existed or
was continuing on the date of the commencement of any Guarantor Blockage Period
with respect to the Designated Senior Debt of such Guarantor shall be, or be
made, the basis for commencement of a second Guarantor Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
365 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach
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of any financial covenants for a period commencing after the date of
commencement of such Guarantor Blockage Period that, in either case, would give
rise to an event of default pursuant to any provisions under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose).
SECTION 12.04. Demand for Payment. If payment of the Junior Subordinated
Notes is accelerated because of an Event of Default and a demand for payment is
made on a Guarantor pursuant to Article XI, the Trustee shall promptly notify
the Company, and the Company shall promptly (and in no event more than five
Business Days after receipt of such notice) notify the Representative of the
lenders under the Credit Agreement of the acceleration. If any Indebtedness
under the Credit Agreement is outstanding, such Guarantor may not pay its
Guaranteed Obligations under its Subsidiary Guarantee until five Business Days
after the holders of such Indebtedness receive notice of such demand and,
thereafter, may pay its Guaranteed Obligations under its Subsidiary Guarantee
only if this Article XII otherwise permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a distribution is
made to holders of Junior Subordinated Notes that because of this Article XII
should not have been made to them, the Holders who receive the distribution
shall hold it in trust for holders of Guarantor Senior Debt of the relevant
Guarantor and pay it over to them as their interests may appear.
SECTION 12.06. Subrogation. After all Guarantor Senior Debt of a
Guarantor is paid in full and until the Holders of Junior Subordinated Notes are
paid in full, Holders of Junior Subordinated Notes shall be subrogated to the
rights of holders of Guarantor Senior Debt of such Guarantor to receive
distributions applicable to Senior Debt of such Guarantor. A distribution made
under this Article XII to holders of Guarantor Senior Debt of such Guarantor
which otherwise would have been made to Holders is not, as between such
Guarantor and Holders of Junior Subordinated Notes, a payment by such Guarantor
on Guarantor Senior Debt of such Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the relative
rights of Holders of Junior Subordinated Notes and holders of Guarantor Senior
Debt. Nothing in this Indenture shall:
(1) impair, as between a Guarantor and Holders of Junior Subordinated
Notes, the obligation of a Guarantor which is absolute and unconditional,
to pay its Obligations under its Subsidiary Guarantee to the extent set
forth in Article XI; or
(2) prevent the Trustee or any Holder of Junior Subordinated Notes
from exercising its available remedies upon a default by a Guarantor under
its Obligations under its Subsidiary Guarantee, subject to the rights of
holders of Senior Debt of such Guarantor to receive distributions otherwise
payable to Holders of Junior Subordinated Notes.
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No right
of any holder of Senior Debt of a Guarantor to enforce the subordination of the
Obligations under the
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Subsidiary Guarantee of such Guarantor shall be impaired by any act or failure
to act by such Guarantor or by its failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Junior Subordinated Notes and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article XII. A Guarantor, the Registrar or co-registrar, the
Paying Agent, a Representative or a holder of Senior Debt of a Guarantor may
give the notice; provided, however, that, if an issue of Guarantor Senior Debt
has a Representative, only the Representative may give the notice. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Guarantor Senior Debt (or a
Representative of such holder) to establish that such notice has been given by a
holder of such Senior Debt or Representative thereof.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Debt with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Guarantor Senior Debt which may at any time be
held by it, to the same extent as any other holder of Guarantor Senior Debt; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article XII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Debt, the distribution may be made and the notice given to their Representative
(if any).
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right
To Accelerate. The failure of a Guarantor to make a payment on any of its
Obligations under its Subsidiary Guarantee by reason of any provision in this
Article XII shall not be construed as preventing the occurrence of a default by
such Guarantor under its Subsidiary Guarantee. Nothing in this Article XII shall
have any effect on the right of the Holders of Junior Subordinated Notes or the
Trustee to make a demand for payment on a Guarantor pursuant to Article XII.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article XII, the Trustee and the Holders of Junior Subordinated
Notes shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Holders of Junior Subordinated Notes or (iii) upon the Representatives for
the holders of Guarantor Senior Debt for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Debt of a Guarantor and other Indebtedness of a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed
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thereon and all other facts pertinent thereto or to this Article XII. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Guarantor Senior Debt to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Debt of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article XI.
SECTION 12.13. Trustee To Effectuate Subordination. Each Holder of Junior
Subordinated Notes by accepting a Junior Subordinated Note authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
of Junior Subordinated Notes and the holders of Guarantor Senior Debt of each of
the Guarantors as provided in this Article XII and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Guarantor Senior
Debt. The Trustee shall not be deemed to owe any fiduciary or other duty to the
holders of Guarantor Senior Debt and shall not be liable to any such holders if
it shall mistakenly pay over or distribute to Holders of Junior Subordinated
Notes or the relevant Guarantor or any other Person, money or assets to which
any holders of Guarantor Senior Debt of such Guarantor shall be entitled by
virtue of this Article XII or otherwise.
SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on
Subordination Provisions. Each holder of a Junior Subordinated Note by
accepting such Junior Subordinated Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Debt, whether such
Guarantor Senior Debt was created or acquired before or after the issuance of
the Junior Subordinated Notes, to acquire and continue to hold, or to continue
to hold, such Guarantor Senior Debt and such holder of Guarantor Senior Debt
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Guarantor
Senior Debt.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
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if to the Company:
Tokheim Corporation
1600 Wabash Avenue
Fort Wayne, IN 46801-0360
Attention of: Douglas K. Pinner
if to the Trustee:
Harris Trust and Savings Bank
311 W. Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trustee
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications. Any notice or
communication to the Company or the Trustee shall be deemed to have been given
or made as of the date so delivered if personally delivered; and five calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that a change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Holder of Junior Subordinated Notes
shall be made in compliance with Section 313(c) of the TIA and mailed to such
Holder at such Holder's address as it appears on the Security Register and shall
be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder of Junior
Subordinated Notes or any defect in it shall not affect its sufficiency with
respect to other Holders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders. Holders of
Junior Subordinated Notes may communicate pursuant to TIA (S) 312(b) with other
Holders with respect to their rights under this Indenture or the Junior
Subordinated Notes. The Company, the Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
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(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05) stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
To the extent applicable, the Company shall comply with the provisions of
TIA (S) 314(c)(3).
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Junior Subordinated Notes Disregarded. In determining
whether the Holders of the required principal amount of Junior Subordinated
Notes have concurred in any direction, waiver or consent, Junior Subordinated
Notes owned by the Company or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company
shall be disregarded and deemed not to be outstanding, except that, for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Junior Subordinated Notes which the
Trustee actually knows are so owned shall be so disregarded.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee
may make reasonable rules for action by or a meeting of Holders of Junior
Subordinated Notes. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in the State
of New York. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SENIOR SUBORDINATED
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Junior Subordinated Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Junior Subordinated Note, each Holder waives and releases all such
liability. The waiver and release shall be part of the consideration for the
issue of the Junior Subordinated Notes.
SECTION 13.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Junior Subordinated Notes shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents, cross-
reference sheet and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or
provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
TOKHEIM CORPORATION
By:
-------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
-------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:
-------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
-------------------------------
Name:
Title:
ENVIRONTRONIC SYSTEMS, INC.
By:
-------------------------------
Name:
Title:
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SUNBELT HOSE & PETROLEUM EQUIPMENT INC.,
By:
-------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
-------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
-------------------------------
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as Trustee,
By:
-------------------------------
Name:
Title:
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EXHIBIT (c)(8)
Dated September , 1998
WARRANT
-------
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"), AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED IN CONNECTION WITH SUCH DISPOSITION.
WARRANT TO PURCHASE
UP TO 19.9% OF THE SHARES OF COMMON STOCK OF
TOKHEIM CORPORATION
(Subject to Adjustment)
NO. 1
THIS CERTIFIES THAT, in consideration of the satisfaction of a portion of
the purchase price payable by Tokheim Corporation, an Indiana corporation (the
"Company"), to Schlumberger Limited, a Netherlands Antilles Corporation
("Schlumberger"), pursuant to the Master Agreement for Purchase and Sale of
Shares, Assets and Liabilities dated as of June 19, 1998 between the Company and
Schlumberger, as amended by letter agreements dated July 21, 1998, July 31, 1998
and August 28, 1998 and Amendment No. 1 thereto dated September 30, 1998 (as so
amended, the "Purchase Agreement"), Schlumberger or its permitted registered
assigns (the "Holder"), is entitled, subject to the terms and conditions of this
Warrant, at any time or from time to time beginning 120 days after the date
hereof (the "Effective Date"), and before 5:00 p.m. Eastern Time on the fifth
anniversary of the date hereof (the "Expiration Date"), to purchase from the
Company, up to 19.9% of the outstanding shares (the "Warrant Shares") of common
stock of the Company (the "Common Stock"), at a price per share of US$0.01 (the
"Purchase Price"), subject to the vesting and earlier termination provisions set
forth herein. The actual number of Warrant Shares issuable upon exercise of the
Warrants will be determined by dividing (i) $20,000,000 by (ii) the weighted
average closing price of the Common Stock on the NYSE-Composite Tape for a two-
month period beginning one month prior to and ending one month after the date of
issuance of this Warrant (the "Issuance Date"). If the number of Warrant Shares
so obtained represents less than 19.9% of the number of shares of Common Stock
outstanding on the Issuance Date, the Warrants will be exercisable for such
number of Warrant Shares. If the number of Warrant Shares so obtained exceeds
19.9% of the number of shares of Common Stock outstanding on the Issuance Date,
the actual number of Warrant Shares for which the Warrants may be exercised will
be 19.9% of the number of shares of Common Stock outstanding on the
<PAGE>
Issuance Date. Both the number of Warrant Shares purchasable upon exercise of
this Warrant and the Purchase Price are subject to adjustment and change as
provided herein.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have
the following respective meanings:
"Fair Market Value" of a share of Common Stock as of a particular date
means:
(a) If traded on a securities exchange or the Nasdaq National
Market, the Fair Market Value shall be deemed to be the weighted average of
the closing prices of the Common Stock on such exchange or market over the
five business days ending two business days prior to the applicable date of
valuation;
(b) If actively traded over-the-counter, the Fair Market Value
shall be deemed to be the average of the closing bid and asked prices over
the 30-day period ending immediately prior to the applicable date of
valuation; and
(c) If there is no active public market, the Fair Market Value
shall be the value as determined in good faith by the Company's Board of
Directors.
"Registered Holder" means any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.
"SEC" means the Securities and Exchange Commission.
"Warrant" includes this Warrant and any warrant delivered in substitution
or exchange therefor as provided herein.
2. EXERCISE OF WARRANT
2.1. Payment. Subject to compliance with the terms and conditions of this
Warrant and applicable securities laws, this Warrant may be exercised, in whole
or in part at any time or from time to time on or before the Expiration Date, by
surrendering this Warrant at the principal office of the Company together with:
(a) the form of Notice of Exercise attached hereto as Exhibit 1 (the
"Notice of Exercise") duly executed by the Registered Holder, and
(b) payment by: (i) wire transfer in same day funds of an amount equal
to the product obtained by multiplying the number of shares of Common Stock
being purchased upon such exercise by the then effective Purchase Price (the
"Exercise Amount"); (ii) by tendering back to the Company the right to exercise
the Warrants represented hereby with respect to the number of shares of Common
Stock having an aggregate Fair Market Value, net of the aggregate Purchase Price
for such shares, equal to the Exercise Amount; or (iii) with any combination of
the foregoing.
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2.2. Stock Certificates; Fractional Shares. As soon as practicable on or
after the exercise date, the Company shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of whole shares of Common Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share equal to such fraction of the
current Fair Market Value of one whole share of Common Stock as of such exercise
date. No fractional shares or scrip representing fractional shares shall be
issued upon an exercise of this Warrant.
2.3. Partial Exercise; Effective Date of Exercise. In case of any partial
exercise of this Warrant, the Company shall cancel this Warrant upon surrender
hereof and shall execute and deliver a new Warrant of like tenor and date for
the balance of the shares of Common Stock purchasable hereunder. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. The
person entitled to receive the shares of Common Stock issuable upon exercise of
this Warrant shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is deemed to have
exercised this Warrant.
2.4. Hart Scott Rodino. If any filing by the Company under the Hart-
Scott-Rodino Antitrust Improvements Act should be required at the time of any
exercise of this Warrant by a Holder, in the reasonable opinion of counsel for
the Holder, the Company promptly will make any such filing with the appropriate
government agency.
3. VALID ISSUANCE: TAXES. All Warrant Shares issued upon the exercise of this
Warrant shall be validly issued, fully paid and non-assessable shares of Common
Stock, and the Company shall pay all taxes and other governmental charges that
may be imposed in respect of the issue or delivery thereof. The Company shall
not be required to pay any tax or other charge imposed in connection with any
transfer involved in the issuance of any certificate for Warrant Shares in any
name other than that of the Holder of this Warrant, and in such case the Company
shall not be required to issue or deliver any stock certificate or security
until such tax or other charge has been paid, or it has been established to the
Company's reasonable satisfaction that no tax or other charge is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of Warrant
Shares issuable upon exercise of this Warrant (or any shares of stock or other
securities or property receivable or issuable upon exercise of this Warrant) and
the Purchase Price are subject to adjustment upon occurrence of the following
events:
4.1. Adjustment for Stock Splits, Stock Subdivisions or Combinations of
Shares. The Purchase Price of this Warrant shall be proportionally decreased
and the number of Warrant Shares issuable upon exercise of this Warrant (or any
shares of stock or other securities at the time issuable upon exercise of this
Warrant) shall be proportionally increased to reflect any stock split or
subdivision (whether effected by a split or stock dividend) of the Common Stock.
The Purchase Price of this Warrant shall be proportionally increased and the
number of Warrant Shares issuable upon exercise of this Warrant (or any shares
of stock or other securities at the
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time issuable upon exercise of this Warrant) shall be proportionally decreased
to reflect any combination of the Common Stock.
4.2. No Adjustment for Dividends or Distributions of Stock or Other
Securities or Property. No adjustment on account of any cash dividend or other
distribution with respect to the Common Stock shall be made to the Purchase
Price or the number of Warrant Shares issuable upon exercise of this Warrant.
4.3. Reclassification. If the Company, by reclassification of securities
or otherwise, shall change any of the securities as to which purchase rights
under this Warrant exist into the same or a different number of securities of
any other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Purchase Price therefore shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 4.
4.4. Adjustment for Capital Reorganization, Merger or Consolidation. In
case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, and in each such case, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4.4 shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant with respect to the rights and interests of
the Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
4.5. Adjustment upon Issuance of Common Stock. If at any time after the
date hereof, the Company shall issue or sell any shares of Common Stock (except
on exercise of this Warrant) or issue or sell any Convertible Securities, as
defined below, for a consideration per
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share less that its Fair Market Value immediately prior to the time of such sale
or issue, then, forthwith upon said issue or sale, the number of Warrant Shares
issuable upon exercise of this Warrant shall be increased to such number of
Warrant Shares as is determined by multiplying the number of Warrant Shares
issuable upon exercise of this Warrant immediately prior to the time of such
issue or sale by a fraction, the numerator of which shall be (x) the total
number of shares of Common Stock outstanding immediately after such issue or
sale, multiplied by (y) the Fair Market Value of a share of Common Stock
immediately prior to such issue or sale, and the denominator of which shall be
the sum of (A) the number of shares of Common Stock outstanding immediately
prior to such issue or sale multiplied by the Fair Market Value of a share of
Common Stock immediately prior to such issue or sale plus (B) the consideration
received by the Company upon such issue or sale.
4.6. Issuance of Convertible Securities. In case the Company shall issue
(whether directly or by assumption in a merger or otherwise) or sell any rights,
options or warrants to purchase shares of Common Stock, or securities
convertible into shares of Common Stock (all such rights, options, warrants and
securities hereinafter referred to as "Convertible Securities"), whether or not
the rights to exchange or convert thereunder are immediately exercisable, and
the price per share for which Common Stock is issuable upon the conversion or
exchange of Convertible Securities (determined as provided below) shall be less
than the Fair Market Value determined as of the date of such issue or sale of
such Convertible Securities, then the total maximum number of shares of Common
Stock issuable upon conversion or exchange of all such Convertible Securities
shall (as of the date of the issue or sale of such Convertible Securities) be
deemed to be outstanding and to have been issued for such price per share,
provided that (A) no further adjustments of the number of Warrant Shares
issuable upon exercise of this Warrant shall be made upon the actual issue of
such Common Stock upon conversion or exchange of such Convertible Securities,
and (B) if any such issue or sale of such Convertible Securities is made upon
exercise of any rights or warrants to subscribe for or purchase or any option to
purchase any such Convertible Securities for which adjustments of the number of
Warrant Shares issuable upon exercise of this Warrant have been or are to be
made, no further adjustment of the number of Warrant Shares issuable upon
exercise of this Warrant shall be made by reason of such issue or sale. The
price per share for which Common Stock is issuable upon conversion or exchange
of Convertible Securities shall be determined by dividing (1) the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (2) the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities.
5. OPTIONAL REDEMPTION. This Warrant may be redeemed, in whole or in part,
at any time within the 120-day term of the Senior Subordinated Notes (as defined
in the Purchase Agreement) by the Company upon payment of $20,000,000 (or if the
Warrant is redeemed in part, $20,000,000 multiplied by a fraction, the numerator
of which is the number of Warrant Shares for which the portion of the Warrant
being redeemed would have been exercisable at such time (without giving effect
to any adjustment pursuant to Section 4) and the denominator of which is the
original number of Warrant Shares issuable upon exercise of the Warrant) to
Schlumberger, provided that as of such date (i) the Senior Subordinated Notes
have been paid in
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full and (ii) a portion of the Junior Subordinated Notes (determined by
multiplying the then-outstanding principal amount of Junior Subordinated Notes
by a fraction, the numerator of which is the number of Warrant Shares for which
the portion of the Warrant being redeemed would have been exercisable at such
time (without giving effect to any adjustment pursuant to Section 4) and the
denominator of which is the original number of Warrant Shares issuable upon
exercise of the Warrant) simultaneously is redeemed.
6. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of Warrant Shares issuable upon exercise of
this Warrant, the Chief Financial Officer, Controller or such other officer of
the Company designated by the Chief Executive Officer shall compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
7. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to it, and (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
execute and deliver in lieu thereof a new Warrant of like tenor as the lost,
stolen, destroyed or mutilated Warrant.
8. RESERVATION OF COMMON STOCK. The Company hereby covenants that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of shares of Common Stock or other shares of capital stock of the
Company as are from time to time issuable upon exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon exercise of this Warrant (and shares of its Common Stock for issuance on
conversion of such Common Stock). All such shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and non-
assessable, free and clear of all liens, security interests, charges and other
encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions (a) arising under federal or state
securities laws or (b) created by or suffered by the Holder. Issuance of this
Warrant shall constitute full authority to the Company's officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for Warrant Shares upon the exercise of this Warrant.
9. TRANSFER AND EXCHANGE. Subject to compliance with all applicable securities
laws, this Warrant and any rights hereunder may be transferred to the parent,
subsidiary or affiliate of the Holder, in whole or in part, on the books of the
Company maintained for such purpose at the principal office of the Company
referred to above, by the Holder hereof in person, or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Holder a new Warrant or Warrants with respect to the Warrants not
so transferred. Each taker and holder of
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this Warrant, by taking or holding the same, consents and agrees that when this
Warrant shall have been so endorsed, the person in possession of this Warrant
may be treated by the Company, and all other persons dealing with this Warrant,
as the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however, that until a transfer of this Warrant is
duly registered on the books of the Company, the Company may treat the Holder
hereof as the owner for all purposes.
10. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that
absent an effective registration statement filed with the SEC under the
Securities Act of 1933, as amended (the "1933 Act"), covering the disposition or
sale of this Warrant or the Warrant Shares issued or issuable upon exercise
hereof, and registration or qualification under applicable state securities
laws, such Holder will not sell, transfer, pledge, or hypothecate all or any
portion of this Warrant, or the Warrant Shares issued or issuable upon exercise
hereof, unless the Company has received an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
registration or qualification is not required in connection with such
disposition to make such disposition consistent with the legend in Section 11.
11. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder
hereby represents, warrants and covenants that any Warrant Shares purchased upon
exercise of this Warrant or acquired upon conversion thereof shall be acquired
for investment only and not with a view to, or for sale in connection with, any
distribution thereof; that the Holder has had such opportunity as such Holder
has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Holder to evaluate the merits and
risks of its investment in the Company; that the Holder is able to bear the
economic risk of holding such shares as may be acquired pursuant to the exercise
of this Warrant for an indefinite period; that the Holder understands that the
Warrant Shares acquired pursuant to the exercise of this Warrant will not be
registered under the 1933 Act (unless otherwise required pursuant to exercise by
the Holder of the registration rights, previously granted to the Holder) and
will be "restricted securities" within the meaning of Rule 144 under the 1933
Act and that the exemption from registration under Rule 144 will not be
available for at least one year from the date of exercise of this Warrant,
subject to any SEC amendment to Rule 144 and even then will not be available
unless a public market then exists for the stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and that all stock certificates
representing Warrant Shares issued to the Holder upon exercise of this Warrant
or upon conversion of such Warrant Shares may have affixed thereto a legend
substantially in the following form (which legend the Company agrees to remove
when such restrictions are no longer applicable):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
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AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
12. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.
In the absence of affirmative action by such Holder to purchase Warrant Shares
by exercise of this Warrant or upon conversion thereof, no provisions of this
Warrant, and no enumeration herein of the rights or privileges of the Holder
hereof shall cause such Holder hereof to be a stockholder of the Company for any
purpose.
13. HEADINGS. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
14. GOVERNING LAW. This Warrant shall be construed and enforced in accordance
with, and governed by, the laws of the State of New York.
15. NOTICES OF RECORD DATE. In case:
(a) the Company shall take a record of the holders of Common Stock
(or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend or
other distribution, or any right to subscribe for or purchase any shares of
stock of any class or any other securities or to receive any other right;
or
(b) of any consolidation or merger of the Company with or into
another corporation, any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any conveyance of
all or substantially all of the assets of the Company to another
corporation in which holders of the Common Stock are to receive stock,
securities or property of another corporation; or
(c) of any voluntary dissolution, liquidation or winding-up of the
Company; or
(d) of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock or (such stock or securities
as at the time are receivable upon the exercise of this Warrant), shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities), for securities or other property deliverable upon such
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reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
five days prior to the date therein specified.
16. SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
17. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each such
executed counterpart shall be, and shall be deemed to be, an original
instrument.
18. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. Eastern Time the next business day.
19. OBTAINING STOCK EXCHANGE LISTINGS. The Company will from time to time take
all commercially reasonable action which may be necessary so that the Warrant
Shares issuable upon exercise of the Warrant, immediately upon their issuance
upon the exercise of the Warrant, will be listed on the principal securities
exchanges and markets within the United States of America, if any, on which
other shares of Common Stock are then listed.
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
Effective Date.
TOKHEIM CORPORATION SCHLUMBERGER LIMITED
By: ________________________________ By: ________________________________
____________________________________ ____________________________________
Printed Name Printed Name
____________________________________ ____________________________________
Title Title
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EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
TOKHEIM CORPORATION
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of Tokheim Corporation, as provided for therein, and tenders
herewith payment of the exercise price in full in the form of cash or a
certified or official bank check in same-day funds in the amount of
$____________ for _________ such securities.
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name: _____________________________________
Address: _____________________________________
Signature: _____________________________________
Note: The above signature should correspond exactly with the name on the first
page of this Warrant or with the name of the assignee appearing in the
assignment form below.
If said number of shares shall not be all the shares purchasable under this
Warrant, a new Warrant Certificate is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable hereunder
rounded to the next whole number of shares.
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EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of this Warrant)
For value received, the undersigned hereby sells, assigns and transfers unto
________________________ the within Warrant, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
____________________________ attorney, to transfer this Warrant Certificate on
the books of the within-named Company with respect to the number of shares of
Common Stock (or other securities) issuable upon exercise hereof set forth
below, with full power of substitution in the premises:
- --------------------------------------------------------------------------------
Name(s) of Assignee(s) Address # of Warrants
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
And if said number of shares shall not be all the shares issuable upon exercise
of this Warrant, a new Warrant Certificate is to be issued in the name of said
undersigned for the balance subject to this Warrant.
Dated: _______________________________
Signature: _______________________________
Notice: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this security in every particular, without
alteration or any change whatsoever; signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange
Act of 1934, as amended.
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EXHIBIT (c)(9)
(Exhibit B to Senior
Subordinated Note Indenture)
[FORM OF FACE OF ROLL-OVER NOTE]
[RESTRICTED SECURITIES LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
TOKHEIM CORPORATION
INCREASING RATE ROLL-OVER NOTE DUE 2007
No. ___ CUSIP No.
$_________
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay to _______________,or registered assigns, the principal sum of ___________
on January 31, 2007.
Interest Payment Dates: January 31, April 30, July 31 and October 31
Record Dates: January 15, April 15, July 15 and October 15
Additional provisions of this security are set forth on the other side of
this security.
Dated:
TOKHEIM CORPORATION,
By_________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
HARRIS TRUST AND SAVINGS BANK, as Trustee
as Trustee, certifies that this is one of the securities
referred to in the Senior Indenture
By ____________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF ROLL-OVER NOTE]
Increasing Rate Roll-Over Note due 2007
1. Interest
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay interest on the principal amount of this security at the following rates per
annum: (i) 12% (the "Base Rate") for the three months ending April 30, 1999;
(ii) 12.5% for the three months ending July 31, 1999; (iii) 13.0% for the three
months ending October 31, 1999; (iv) 13.5% for the three months ending January
31, 2000; (v) 14.0% for the three months ending April 30, 2000; and (vi) 14.5%
thereafter. The Base Rate will be payable in cash, and interest in excess of
the Base Rate will be payable by the issuance of Additional Roll-Over Notes
having a principal amount equal to the amount of interest not paid in cash on
such Interest Payment Date.
The Company will pay interest quarterly in arrears, in cash with respect to
the Base Rate and in kind with respect to interest in excess of the Base Rate,
on January 31, April 30, July 31 and October 31 of each year. Interest on the
Roll-Over Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the Issue Date with respect to the
Roll-Over Note; provided, however, that if no interest has been paid on the
Company's 12% Senior Subordinated Notes due January 28, 1999, from the date of
issuance of the 12% Senior Subordinated Notes due January 28, 1999. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by the Roll-
Over Notes, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
2. Method of Payment
The Company will pay interest (except defaulted interest) in respect of the
Roll-Over Notes to the Persons who are registered holders of the Roll-Over Notes
at the close of business on the January 15, April 15, July 15 and October 15
next preceding the interest payment date even if such securities are canceled
after the record date and on or before the interest payment date. Holders must
surrender Roll-Over Notes to a Paying Agent to collect principal payments. The
Company will pay principal and, with respect to the Base Rate, interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal and interest
by check payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
Initially, Harris Trust and Savings Bank (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to the Holders. The Company or
any domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
<PAGE>
4. Indenture
The Company issued the Roll-Over Notes under an Indenture dated as of
September 30, 1998 (the "Senior Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. The terms of the Roll-Over Notes include those
stated in the Senior Indenture and those made part of the Senior Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as
in effect on the date of the Senior Indenture (the "Act"). Terms defined in the
Senior Indenture and not defined herein have the meanings ascribed thereto in
the Senior Indenture. The Roll-Over Notes are subject to all such terms, and
securityholders are referred to the Senior Indenture and the Act for a statement
of those terms.
The Roll-Over Notes are unsecured senior subordinated obligations of the
Company. The aggregate principal amount of Roll-Over Notes at any time
outstanding may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate
principal amount of Additional Roll-Over Notes issued by the Company pursuant to
the terms of the Senior Indenture in respect of interest accrued on outstanding
Roll-Over Notes (including outstanding Additional Roll-Over Notes). This
security is one of the Roll-Over Notes referred to in the Senior Indenture. The
Senior Subordinated Securities include the Senior Subordinated Notes, the Roll-
Over Notes and any Exchange Notes issued in exchange for the Roll-Over Notes
pursuant to the Senior Indenture. The Senior Subordinated Notes, the Roll-Over
Notes and the Exchange Notes are treated as a single class of securities under
the Senior Indenture. The Senior Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Company and its subsidiaries; the payment of
dividends and other payments by the Company and its subsidiaries; Investments;
sales of assets of the Company and its subsidiaries; certain transactions with
Affiliates; Liens; and consolidations, mergers and transfers of all or
substantially all of the Company's or its subsidiaries' assets. In addition,
the Senior Indenture prohibits certain restrictions on distributions from
subsidiaries.
5. Optional Redemption
Subject to the terms of the Senior Indenture, the Roll-Over Notes may be
redeemed at any time, in whole or in part, at the option of the Company at a
redemption price equal to the unpaid principal amount thereof plus accrued
interest thereon to the redemption date (subject to the right of holders of the
Roll-Over Notes on the relevant record date to receive interest due on the
relevant interest payment date).
6. Mandatory Redemption
If after the Issue Date the Company or any of its Subsidiaries shall Incur
any Indebtedness, other than Indebtedness Incurred under the Credit Agreement,
or shall issue any Capital Stock, the Company shall redeem Senior Subordinated
Securities in an aggregate principal amount equal to the principal amount of the
Indebtedness so Incurred or the total price at which such Capital Stock was
sold. The redemption price of the Senior Subordinated Securities so redeemed
shall be equal to the unpaid principal amount thereof plus accrued interest
thereon to the redemption date.
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7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of Roll-Over
Notes to be redeemed at its registered address all in accordance with the Senior
Indenture. If less than all of the Roll-Over Notes are to be redeemed at any
time, selection of Roll-Over Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Roll-Over Notes are listed, or, if the Roll-Over Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided that no Roll-Over Notes of $1,000 or
less shall be redeemed in part.
8. Repurchase at the Option of the Holder
Upon a Change of Control, any Holder of Roll-Over Notes will have the
right, subject to certain conditions set forth in the Senior Indenture, to cause
the Company to repurchase all or any part of the Roll-Over Notes of such Holder
at a purchase price equal to 101% of the principal amount of the Roll-Over Notes
to be repurchased plus accrued and unpaid interest thereon, (if any) to the date
of repurchase as provided in, and subject to the terms of, the Senior Indenture.
9. Subordination
The Roll-Over Notes are subordinated to Senior Debt of the Company, as
defined in the Senior Indenture. To the extent provided in the Senior
Indenture, Senior Debt of the Company must be paid before the Roll-Over Notes
may be paid. The Company agrees, and each securityholder by accepting a Roll-
Over Note agrees, to the subordination provisions contained in the Senior
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Roll-Over Notes are in registered form without coupons. A Holder may
transfer or exchange Roll-Over Notes in accordance with the Senior Indenture.
Upon any transfer or exchange, the Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Senior
Indenture. The Registrar need not register the transfer of or exchange any
Roll-Over Notes selected for redemption (except, in the case of a Roll-Over Note
to be redeemed in part, the portion of the Roll-Over Note not to be redeemed) or
to transfer or exchange any Roll-Over Notes for a period of 15 days prior to a
selection of Roll-Over Notes to be redeemed or 15 days before an interest
payment date.
11. Persons Deemed Owners
The registered Holder of this Roll-Over Note may be treated as the owner of
it for all purposes.
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12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Senior Indenture, the
Company at any time may terminate some or all of its obligations under the Roll-
Over Notes and the Senior Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Roll-Over Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Senior Indenture, from time
to time, the Company, the Subsidiary Guarantors and the Trustee, without the
consent of the Holders, may amend the Senior Indenture or the Roll-Over Notes
for the following purposes, so long as such change does not, in the opinion of
the Trustee, adversely affect the rights of any of the Holders in any material
respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for
uncertificated Roll-Over Notes in addition to or in place of certificated Roll-
Over Notes (provided that the uncertificated Roll-Over Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Roll-Over Notes are described in Section 163(f)(2)(B) of
the Code); (iii) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Roll-Over Notes in the case of a merger,
consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in
accordance with the provisions of the Senior Indenture; (v) to provide for
additional Guarantors; (vi) to make any change that would provide any additional
rights or benefits to the Holders of Roll-Over Notes or that does not adversely
affect the legal rights under the Senior Indenture of any such Holder; or (vii)
to comply with requirements of the SEC in order to effect or maintain the
qualification of the Senior Indenture under the TIA.
The Company, the Guarantors and the Trustee may amend the Senior Indenture
or the Roll-Over Notes with the written consent of the Holders of at least a
majority in principal amount of the Senior Subordinated Securities. However,
without the consent of each affected Holder of a Roll-Over Notes, an amendment
may not: (i) reduce the principal amount of Roll-Over Notes whose Holders must
consent to an amendment; (ii) reduce the rate of or change or have the effect of
changing the time for payment of interest, including defaulted interest, on any
Roll-Over Note; (iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Roll-Over Note, or change the date on which
any Roll-Over Note may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor; (iv) make any Roll-Over Notes payable
in money other than that stated in the Roll-Over Notes; (v) make any change in
provisions of the Senior Indenture protecting the right of each Holder to
receive payment of principal of and interest on such Holder's Roll-Over Notes on
or after the due date
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<PAGE>
thereof or to bring suit to enforce such payment, or permitting Holders of a
majority in principal amount of Roll-Over Notes to waive Defaults or Events of
Default; (vi) modify or change any provision of the Senior Indenture or the
related definitions affecting the subordination or ranking of the Roll-Over
Notes in a manner which adversely affects the Holders; provided, however, that
it is understood that any amendment, the purpose of which is to permit the
Incurrence of additional Indebtedness under the Indenture shall not be construed
as adversely affecting the ranking of the Roll-Over Notes; or (viii) make any
change to the Subsidiary Guarantees in any manner that adversely affects the
rights of the Holders.
15. Defaults and Remedies
Under the Senior Indenture, the following events are "Events of Default":
(a) the failure to pay interest on any Roll-Over Note when the same becomes due
and payable and such default continues for a period of 30 days (whether or not
such payment shall be prohibited by the provisions of Article X); (b) the
failure to pay the principal on any Roll-Over Note when such principal becomes
due and payable, at maturity, upon redemption or otherwise, whether or not such
payment shall be prohibited by the provisions of Article X of the Senior
Indenture; (c) a default in the observance or performance of any other covenant
or agreement contained in the Senior Indenture, subject to applicable grace
periods; (d) there shall be a default under any Indebtedness of the Company or
any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0
million or more at any one time outstanding; (e) certain judgments in an
aggregate amount in excess of $5.0 million; or (f) certain events of voluntary
or involuntary bankruptcy.
If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Roll-Over Notes may declare the principal of and accrued
interest on all the Roll-Over Notes to be due and payable by notice in writing
to the Company and the Trustee, and the same (i) shall become immediately due
and payable or (ii) if there are any amounts outstanding under the Credit
Agreement or the ESOP Credit Agreement, shall become immediately due and payable
upon the first to occur of an acceleration under the Credit Agreement or the
ESOP Credit Agreement or five business days after receipt by the Company and the
Representative under the Credit Agreement or the ESOP Credit Agreement of such
notice of acceleration. If an Event of Default specified in Section 6.01(f) or
(g) with respect to the Company occurs and is continuing, then all unpaid
principal of and accrued and unpaid interest on all of the outstanding Roll-Over
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Senior Indenture, in its individual or any other capacity, may become the owner
or pledgee of securities and may otherwise deal with and collect obligations
owed to it by the Company and may otherwise deal with the Company with the same
rights it would have if it were not Trustee.
5
<PAGE>
17. No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder of the Company,
as such, will have any liability for any obligations of the Company under the
Roll-Over Notes, the Senior Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation.
18. Governing Law
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
19. Authentication
This security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this security.
20. Abbreviations
Customary abbreviations may be used in the name of a securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Roll-Over Notes and have directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any securityholder upon written request and
without charge to the securityholder a copy of the Senior Indenture which has in
it the text of this security in larger type. Requests may be made to:
TOKHEIM CORPORATION
1600 Wabash Avenue
Fort Wayne, IN 46801-0360
Attention: Douglas Pinner
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<PAGE>
ASSIGNMENT FORM
To assign this security, fill in the form below:
I or we assign and transfer this security to
________________________________________________________
(Print or type assignee's name, address and zip code)
________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________________ ,as agent, to transfer
this security on the books of the Company. The agent may substitute another to
act for him.
Date: ________________ Your Signature: ___________________________
Signature Guarantee:______________________________________________
(Signature must be guaranteed by a participant
in a recognized signature guarantee medallion
program)
___________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box:
[_] 4.06 Asset Sale [_] 4.08 Change of Control
If you want to elect to have only part of this security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the
amount: $__________.
Date: __________________ Your Signature: _______________________________________
(Sign exactly as your name appears on
the other side of the Security)
__________________
Tax I.D. number
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
8
<PAGE>
(Exhibit C to Senior
Subordinated Note Indenture)
[FORM OF FACE OF EXCHANGE NOTE]
TOKHEIM CORPORATION
INCREASING RATE ROLL-OVER NOTE DUE 2007
No. ___ CUSIP No.
$_________ ______
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay to _______________,or registered assigns, the principal sum of ___________
on January 31, 2007.
Interest Payment Dates: January 31, April 30, July 31 and October 31
Record Dates: January 15, April 15, July 15 and October 15
Additional provisions of this security are set forth on the other side of
this security.
Dated:
TOKHEIM CORPORATION,
By _______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
___________________________
as Trustee, certifies that
this is one of the securities
referred to in the Senior Indenture,
By ___________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
Increasing Rate Roll-Over Note due 2007
1. Interest
TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to
pay interest on the principal amount of this security at the following rates per
annum: (i) 12% (the "Base Rate") for the three months ending April 30, 1999;
(ii) 12.5% for the three months ending July 31, 1999; (iii) 13.0% for the three
months ending October 31, 1999; (iv) 13.5% for the three months ending January
31, 2000; (v) 14.0% for the three months ending April 30, 2000; and (vi) 14.5%
thereafter. The Base Rate will be payable in cash, and interest in excess of
the Base Rate will be payable by the issuance of Additional Exchange Notes
having a principal amount equal to the amount of interest not paid in cash on
such Interest Payment Date.
The Company will pay interest quarterly in arrears, in cash with respect to
the Base Rate and in kind with respect to interest in excess of the Base Rate,
on January 31, April 30, July 31 and October 31 of each year. Interest on the
Exchange Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the Issue Date with respect to the
Exchange Note; provided, however, that if interest was not timely paid on the
Roll-Over Note exchanged for this Exchange Note, interest will accrue from the
latest date to which interest has been paid on such Roll-Over Note or Junior
subordinated Note, as the case may be. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. The Company shall pay interest on
overdue principal at the rate borne by the Exchange Notes, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
The Company will pay interest (except defaulted interest) on and in respect
of the Exchange Notes to the Persons who are registered holders of the Exchange
Notes at the close of business on the January 15, April 15, July 15 and October
15 next preceding the interest payment date even if such securities are canceled
after the record date and on or before the interest payment date. Holders must
surrender Exchange Notes to a Paying Agent to collect principal payments. The
Company will pay principal and, with respect to the Base Rate, interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal and interest
by check payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
Initially, Harris Trust and Savings Bank (the "Trustee") will act as
Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to the Holders. The Company or
any domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
<PAGE>
4. Indenture
The Company issued the Exchange Notes under an Indenture dated as of
September 30, 1998 (the "Senior Indenture"), among the Company, the Initial
Guarantors and the Trustee. The terms of the Exchange Notes include those
stated in the Senior Indenture and those made part of the Senior Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as
in effect on the date of the Senior Indenture (the "Act"). Terms defined in the
Senior Indenture and not defined herein have the meanings ascribed thereto in
the Senior Indenture. The Exchange Notes are subject to all such terms, and
securityholders are referred to the Senior Indenture and the Act for a statement
of those terms.
The Exchange Notes are unsecured senior subordinated obligations of the
Company. The Exchange Notes are unsecured senior subordinated obligations of
the Company. The aggregate principal amount of Exchange Notes at any time
outstanding may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate
principal amount of Additional Exchange Notes issued by the Company pursuant to
the terms of the Senior Indenture in respect of interest accrued on outstanding
Exchange Notes (including outstanding Additional Exchange Notes). This security
is one of the Exchange Notes referred to in the Senior Indenture. The Senior
Subordinated Securities include the Senior Subordinated Notes, the Roll-Over
Notes and any Exchange Notes issued in exchange for the Roll-Over Notes pursuant
to the Senior Indenture. The Senior Subordinated Notes, the Roll-Over Notes and
the Exchange Notes are treated as a single class of securities under the Senior
Indenture. The Senior Indenture imposes certain limitations on the Incurrence
of Indebtedness by the Company and its subsidiaries; the payment of dividends
and other payments by the Company and its subsidiaries; Investments; sales of
assets of the Company and its subsidiaries; certain transactions with
Affiliates; Liens; and consolidations, mergers and transfers of all or
substantially all of the Company's or its subsidiaries' assets. In addition,
the Senior Indenture prohibits certain restrictions on distributions from
subsidiaries.
5. Optional Redemption
Subject to the terms of the Senior Indenture, the Exchange Notes may be redeemed
at any time, in whole or in part, at the option of the Company at a redemption
price equal to the unpaid principal amount thereof plus accrued interest thereon
to the redemption date (subject to the right of holders of the Exchange Notes on
the relevant record date to receive interest due on the relevant interest
payment date).
6. Mandatory Redemption
If after the Issue Date the Company or any of its Subsidiaries shall Incur
any Indebtedness, other than Indebtedness Incurred under the Credit Agreement,
or shall issue any Capital Stock, the Company shall redeem Senior Subordinated
Securities in an aggregate principal amount equal to the principal amount of the
Indebtedness so Incurred or the total price at which such Capital Stock was
sold. The redemption price of the Senior Subordinated Securities so redeemed
shall be equal to the unpaid principal amount thereof plus accrued interest
thereon to the redemption date.
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<PAGE>
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of Exchange
Notes to be redeemed at its registered address all in accordance with the Senior
Indenture. If less than all of the Exchange Notes are to be redeemed at any
time, selection of Exchange Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Exchange Notes are listed, or, if the Exchange Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided that no Exchange Notes of $1,000 or
less shall be redeemed in part.
8. Repurchase at the Option of the Holder
Upon a Change of Control, any Holder of Exchange Notes will have the right,
subject to certain conditions set forth in the Senior Indenture, to cause the
Company to repurchase all or any part of the Exchange Notes of such Holder at a
purchase price equal to 101% of the principal amount of the Exchange Notes to be
repurchased plus accrued and unpaid interest thereon, (if any) to the date of
repurchase as provided in, and subject to the terms of, the Senior Indenture.
9. Subordination
The Exchange Notes are subordinated to Senior Debt of the Company, as
defined in the Senior Indenture. To the extent provided in the Senior
Indenture, Senior Debt of the Company must be paid before the Exchange Notes may
be paid. The Company agrees, and each securityholder by accepting a Exchange
Note agrees, to the subordination provisions contained in the Senior Indenture
and authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
10. Denominations; Transfer; Exchange
The Exchange Notes are in registered form without coupons. A Holder may
transfer or exchange Exchange Notes in accordance with the Senior Indenture.
Upon any transfer or exchange, the Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Senior
Indenture. The Registrar need not register the transfer of or exchange any
Exchange Notes selected for redemption (except, in the case of a Exchange Note
to be redeemed in part, the portion of the Exchange Note not to be redeemed) or
to transfer or exchange any Exchange Notes for a period of 15 days prior to a
selection of Exchange Notes to be redeemed or 15 days before an interest payment
date.
11. Persons Deemed Owners
The registered Holder of this Exchange Note may be treated as the owner of
it for all purposes.
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<PAGE>
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company at
its written request. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Senior Indenture, the
Company at any time may terminate some or all of its obligations under the
Exchange Notes and the Senior Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest
on the Exchange Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Senior Indenture, from time
to time, the Company, the Subsidiary Guarantors and the Trustee, without the
consent of the Holders, may amend the Senior Indenture or the Exchange Notes for
the following purposes, so long as such change does not, in the opinion of the
Trustee, adversely affect the rights of any of the Holders in any material
respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for
uncertificated Exchange Notes in addition to or in place of certificated
Exchange Notes (provided that the uncertificated Exchange Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Exchange Notes are described in Section 163(f)(2)(B) of
the Code); (iii) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Exchange Notes in the case of a merger,
consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in
accordance with the provisions of the Senior Indenture; (v) to provide for
additional Subsidiary Guarantors; (vi) to make any change that would provide any
additional rights or benefits to the Holders of Exchange Notes or that does not
adversely affect the legal rights under the Senior Indenture of any such Holder;
or (vii) to comply with requirements of the SEC in order to effect or maintain
the qualification of the Senior Indenture under the TIA.
The Company, the Guarantors and the Trustee may amend the Senior Indenture
or the Exchange Notes with the written consent of the Holders of at least a
majority in principal amount of the Senior Subordinated Securities. However,
without the consent of each affected Holder of a Exchange Notes, an amendment
may not: (i) reduce the principal amount of Exchange Notes whose Holders must
consent to an amendment; (ii) reduce the rate of or change or have the effect of
changing the time for payment of interest, including defaulted interest, on any
Exchange Note; (iii) reduce the principal of or change or have the effect of
changing the fixed maturity of any Exchange Note, or change the date on which
any Exchange Note may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor; (iv) make any Exchange Notes payable in
money other than that stated in the Exchange Notes; (v) make any change in
provisions of the Senior Indenture protecting the right of each Holder to
receive payment of principal of and interest on such Holder's Exchange Notes on
or after the due date thereof or to
4
<PAGE>
bring suit to enforce such payment, or permitting Holders of a majority in
principal amount of Exchange Notes to waive Defaults or Events of Default; (vi)
modify or change any provision of the Senior Indenture or the related
definitions affecting the subordination or ranking of the Exchange Notes in a
manner which adversely affects the Holders; provided, however, that it is
understood that any amendment, the purpose of which is to permit the Incurrence
of additional Indebtedness under the Indenture shall not be construed as
adversely affecting the ranking of the Exchange Notes; or (viii) make any change
to the Subsidiary Guarantees in any manner that adversely affects the rights of
the Holders.
15. Defaults and Remedies
Under the Senior Indenture, the following events are "Events of Default":
(a) the failure to pay interest on any Exchange Note when the same becomes due
and payable and such default continues for a period of 30 days (whether or not
such payment shall be prohibited by the provisions of Article X); (b) the
failure to pay the principal on any Exchange Note when such principal becomes
due and payable, at maturity, upon redemption or otherwise, whether or not such
payment shall be prohibited by the provisions of Article X of the Senior
Indenture; (c) a default in the observance or performance of any other covenant
or agreement contained in the Senior Indenture, subject to applicable grace
periods; (d) there shall be a default under any Indebtedness of the Company or
any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0
million or more at any one time outstanding; (e) certain judgments in an
aggregate amount in excess of $5.0 million; or (f) certain events of voluntary
or involuntary bankruptcy.
If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Exchange Notes may declare the principal of and accrued
interest on all the Exchange Notes to be due and payable by notice in writing to
the Company and the Trustee, and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement
or the ESOP Credit Agreement, shall become immediately due and payable upon the
first to occur of an acceleration under the Credit Agreement or the ESOP Credit
Agreement or five business days after receipt by the Company and the
Representative under the Credit Agreement or the ESOP Credit Agreement of such
notice of acceleration. If an Event of Default specified in Section 6.01(f) or
(g) with respect to the Company occurs and is continuing, then all unpaid
principal of and accrued and unpaid interest on all of the outstanding Exchange
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Senior Indenture, in its individual or any other capacity, may become the owner
or pledgee of securities and may otherwise deal with and collect obligations
owed to it by the Company and may otherwise deal with the Company with the same
rights it would have if it were not Trustee.
5
<PAGE>
17. No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, stockholder of the Company,
as such, will have any liability for any obligations of the Company under the
Exchange Notes, the Senior Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation.
18. Governing Law
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
19. Authentication
This security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this security.
20. Abbreviations
Customary abbreviations may be used in the name of a securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Exchange Notes and have directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to securityholders. No representation
is made as to the accuracy of such numbers either as printed on the securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company will furnish to any securityholder upon written request and
without charge to the securityholder a copy of the Senior Indenture which has in
it the text of this security in larger type. Requests may be made to:
TOKHEIM CORPORATION
1600 Wabash Avenue
Fort Wayne, IN 46801-0360
Attention: Douglas Pinner
6
<PAGE>
ASSIGNMENT FORM
To assign this security, fill in the form below:
I or we assign and transfer this security to
_________________________________________________________
(Print or type assignee's name, address and zip code)
_________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________________ , as agent, to transfer
this security on the books of the Company. The agent may substitute another to
act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee: _______________________________________________
(Signature must be guaranteed by a participant
in a recognized signature guarantee medallion
program)
_____________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box:
[_] 4.06 Asset Sale [_] 4.08 Change of Control
If you want to elect to have only part of this security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the
amount: $__________.
Date: __________________ Your Signature: _______________________________________
(Sign exactly as your name appears on
the other side of the Security)
__________________
Tax I.D. number
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
8
<PAGE>
EXHIBIT (c)(10)
TOKHEIM CORPORATION
REGISTRATION RIGHTS AGREEMENT
-----------------------------
September 30, 1998
SCHLUMBERGER LIMITED
277 Park Avenue
New York, New York 10172-0266
Ladies and Gentlemen:
Tokheim Corporation, an Indiana corporation (the "Company"), proposes to
issue and sell to you ("Schlumberger"), upon the terms set forth in a purchase
agreement of even date herewith (the "Purchase Agreement"), (i) US$40,000,000
aggregate principal amount of its 12% Junior Subordinated Notes due 2008 (the
"Junior Subordinated Notes"), (ii) US$170,000,000 aggregate principal amount of
its 12% Senior Subordinated Notes due January 28, 1999 (the "Senior Subordinated
Notes") and (iii) warrants exercisable for shares (the "Warrant Shares")
representing up to 19.9% of the outstanding common stock (the "Common Stock") of
the Company. In the event that the Company is unable to repay the Senior
Subordinated Notes at their stated maturity, the Senior Subordinated Notes will
be exchanged , subject to certain conditions, for Increasing Rate Senior
Subordinated Notes due 2007 (the "Roll-Over Notes", and together with the Junior
Subordinated Notes and the Senior Subordinated Notes, the "Notes"). The Senior
Subordinated Notes and the Roll-Over Notes will be issued pursuant to an
Indenture to be dated as of September 30, 1998 (the "Senior Indenture") between
the Company and Harris Trust and Savings Bank, as trustee (the "Senior
Trustee"). The Junior Subordinated Notes will be issued pursuant to an
Indenture to be dated as of September 30, 1998 (the "Junior Indenture") between
the Company and Harris Trust and Savings Bank, as trustee (the "Junior
Trustee"). Capitalized terms used but not specifically defined herein are
defined in the Purchase Agreement. As an inducement to Schlumberger to enter
into the Purchase Agreement, the Company agrees with Schlumberger, for the
benefit of the holders of the Notes and the Common Stock, including Schlumberger
(the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall prepare and, not later
than 90 days after the exchange of any Senior Subordinated Notes for Roll-Over
Notes (the "Conversion Date"), shall file with the Commission a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act with respect to a proposed offer (the "Exchange Offer")
to the Holders of Roll-Over Notes to issue and deliver to such Holders, in
exchange for the Roll-Over Notes, a like aggregate principal amount of debt
securities of the Company (the "Exchange Notes") identical in all material
respects to the Roll-Over Notes, except for the transfer restrictions relating
to the Roll-Over Notes. The Company shall use its best efforts to cause the
Exchange Offer Registration Statement to become effective under the Securities
Act within 150 days after the Conversion Date and shall keep the Exchange Offer
Registration Statement effective for not less than 20 days (or longer, if
required by applicable
<PAGE>
law) after the date on which notice of the Exchange Offer is mailed to the
Holders of Roll-Over Notes (such period being called the "Exchange Offer
Registration Period"). The Company shall use its best efforts to consummate the
Exchange Offer within 195 days after the Conversion Date. The Exchange Notes
will be issued under the Senior Indenture.
Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Exchange Offer, it being the objective of
such Exchange Offer to enable each Holder of Roll-Over Notes electing to
exchange Roll-Over Notes for Exchange Notes (assuming that such Holder is not an
affiliate of the Company within the meaning of the Securities Act, that such
Holder acquires the Exchange Notes in the ordinary course of such Holder's
business and that such Holder has no arrangements with any person to participate
in the distribution of the Exchange Notes) to trade such Exchange Notes from and
after their receipt without any limitations or restrictions under the Securities
Act and without material restrictions under the securities laws of the several
states of the United States. The Company acknowledges that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act,
(i) each Holder of Roll-Over Notes that is a broker-dealer electing to exchange
Roll-Over Notes, acquired for its own account as a result of market-making
activities or other trading activities, for Exchange Notes (an "Exchanging
Dealer"), is required to deliver a prospectus containing the information set
forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section, and in
Annex C hereto in the "Plan of Distribution" section of such prospectus in
connection with a sale of any such Exchange Notes received by such Exchanging
Dealer pursuant to the Exchange Offer.
In connection with the Exchange Offer, the Company shall:
(a) mail to each Holder of Roll-Over Notes a copy of the prospectus
forming part of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for not less than 20 days after the
date notice thereof is mailed to the Holders of the Roll-Over Notes (or
longer if required by applicable law);
(c) utilize the services of a Depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York;
(d) permit Holders of Roll-Over Notes to withdraw tendered Roll-Over
Notes at any time prior to the close of business, New York time, on the
last business day on which the Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all applicable laws.
As soon as practicable after the close of the Exchange Offer, the Company
shall:
2
<PAGE>
(a) accept for exchange all Roll-Over Notes tendered and not validly
withdrawn pursuant to the Exchange Offer;
(b) deliver to the Senior Trustee for cancellation all Roll-Over Notes
so accepted for exchange; and
(c) cause the Senior Trustee or the Exchange Notes Trustee, as the
case may be, promptly to authenticate and deliver to each Holder of Roll-
Over Notes, Exchange Notes equal in principal amount to the Roll-Over Notes
of such Holder so accepted for exchange.
Interest on each Exchange Notes issued pursuant to the Exchange Offer will
accrue from the last interest payment date on which interest was paid on the
Roll-Over Notes surrendered in exchange therefor or, if no interest has been
paid on the Roll-Over Notes, from the date of original issue of the Roll-Over
Notes.
The Company will require each Holder of Roll-Over Notes participating in
the Exchange Offer to represent to the Company that at the time of the
consummation of the Exchange Offer (i) any Exchange Notes received by such
Holder will be acquired in the ordinary course of business, (ii) such Holder
will have no arrangements or understandings with any person to participate in
the distribution of the Roll-Over Notes or the Exchange Notes within the meaning
of the Securities Act and (iii) such Holder is not an affiliate of the Company
within the meaning of the Securities Act.
Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto comply in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading.
2. Shelf Registration. If, because of any change in law or applicable
interpretations thereof by the Commission's staff, the Company determines that
it is not permitted to effect the Exchange Offer as contemplated by Section 1,
or if for any other reason the Exchange Offer is not consummated within 195 days
after the Conversion Date, or Holders of Roll-Over Notes so request with respect
to Roll-Over Notes not eligible to be exchanged for Exchange Notes in an
Exchange Offer and held by them following consummation of the Exchange Offer or
if any Holder of Roll-Over Notes (other than an Exchanging Dealer) is not
eligible to participate in the Exchange Offer or, in the case of any Holder of
Roll-Over Notes that participates in the Exchange Offer (other than an
Exchanging Dealer), does not receive freely tradable Exchange Notes in exchange
for tendered Roll-Over Notes or if the Company so elects, the following
provisions shall apply:
3
<PAGE>
(a) The Company shall as promptly as practicable file with the
Commission and thereafter shall use its best efforts to cause to be
declared effective a registration statement on an appropriate form under
the Securities Act relating to the offer and sale of the Roll-Over Notes by
the Holders of Roll-Over Notes from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such
registration statement (hereafter, a "Shelf Registration Statement" and,
together with any Exchange Offer Registration Statement, a "Registration
Statement").
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by Holders of Roll-Over Notes
for a period of three years from the date the Shelf Registration Statement
is declared effective by the Commission or such shorter period that will
terminate when all the Roll-Over Notes covered by the Shelf Registration
Statement have been sold pursuant to the Registration Statement (in any
such case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Roll-Over
Notes covered thereby not being able to offer and sell such Roll-Over Notes
during that period, unless (i) such action is required by applicable law,
or (ii) such action is taken by the Company in good faith and for valid
business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, so long as
the Company promptly thereafter complies with the requirements of Section
6(i) hereof, if applicable.
(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto
and any prospectus forming part thereof and any supplement thereto complies
in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus, does not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Registration on Request. (a) For the period beginning 121 days after
thedate hereof and ending onthe second anniversary hereof, upon the written
request of the Holders of a majority of the Warrants or the Holders of a
majority of the Junior Subordinated Notes or the Warrant Shares (collectively,
the "Demand Registrable Securities", and together with the Roll-Over Notes, the
"Securities") requesting that the Company effect the registration under the
Securities Act of all or part of such Holders' respective Demand Registrable
Securities, the Company shall promptly give written notice of such requested
registration to all Holders of such Demand Registrable Securities, and thereupon
the Company shall promptly use commercially reasonable efforts to effect the
registration under the Securities Act of
4
<PAGE>
(i) the Demand Registrable Securities which the Company has been so
requested to register by such Holders, and
(ii) all other Demand Registrable Securities which the Company has been
requested to register by the Holders thereof by written request given to
the Company within 30 days after the giving of such written notice by the
Company,
all to the extent requisite to permit the disposition of the Demand Registrable
Securities so to be registered. All registrations requested pursuant to this
Section 3(a) are referred to herein as "Demand Registrations." Notwithstanding
the foregoing, if the Company shall be engaged in non-public discussions
regarding a material transaction that, in the judgment of the Company is not
ripe for disclosure but that would be required to be disclosed in any such
registration, the Company may defer complying with the provisions hereof for a
period of 90 days following receipt of any written request hereunder.
(b) The holders of Demand Registrable Securities will be entitled to
request one registration in which the Company will pay all Registration
Expenses. Such registration shall be underwritten.
(c) Whenever the Company shall effect a registration pursuant to this
Section 3 in connection with an offering by one or more Holders of Demand
Registrable Securities, subject to the provisions of Section 3(f), securities
other than Demand Registrable Securities may be included among the securities
covered by such registration.
(d) A Demand Registration pursuant to this Section 3 shall not be deemed to
have been effected (i) unless a registration statement with respect thereto has
become effective, (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason, or (iii) if
the conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than by reason of some act or omission by the Holders requesting such
registration. A requested Demand Registration under this Section 3 may be
rescinded by written notice to the Company by the Holders requesting such
registration prior to filing of the registration statement and such rescinded
registration shall not count as a registration statement initiated pursuant to
this Section 3.
(e) With respect to any registration pursuant to this Section 3, the
Company may include in such registration any other securities; provided,
however, that in the event the registration is for a registered public offering
involving an underwriting, if the underwriter (or the managing underwriter on
behalf of the underwriters) advises the Company that the inclusion of all Demand
Registrable Securities and other securities proposed to be included in such
registration would interfere with the successful marketing (including pricing)
of all such securities, then the number of Demand Registrable Securities shall
be given first priority with respect to the marketing of such securities.
5
<PAGE>
(f) Notwithstanding any other provision of this Section 3, at any time or
from time to time, if the Company effects the registration of less than 90% of
all of the Demand Registrable Securities requested to be registered pursuant to
Section 3(a) and Section 3(b), the Holders of a majority of the Demand
Registrable Securities shall be entitled to request an additional registration
pursuant to Section 3(a) and Section 3(b), as the case may be. Any such
registration shall be requested, effected and in all other respects in
accordance with the terms of Section 3(a), and the Company will pay all
Registration Expenses in connection with any such registration.
4. Piggyback Registration. (a) If, during the period beginning 121 days
after the date hereof and ending on the second anniversary of the date hereof,
the Company at any time proposes to register any of its securities under the
Securities Act (other than registrations (i) on Form S-4, Form S-8, or any
successor forms thereto, or (ii) pursuant to Section 3), whether or not for sale
for its own account, and the registration form to be used may be used for the
registration of Demand Registrable Securities (a "Piggyback Registration"), the
Company will at each such time give prompt written notice to all Holders of
Demand Registrable Securities of its intention to do so and of such Holders'
rights under this Section 4. Upon the written request of any such Holder made
within 30 days after the receipt of any such notice (which request shall specify
the Demand Registrable Securities intended to be disposed of by such Holder),
the Company will use its commercially reasonable efforts to effect the
registration under the Securities Act of all Demand Registrable Securities which
the Company has been so requested to register by the Holders thereof on the same
terms and conditions as the securities otherwise being sold in such
registration, to the extent requisite to permit the disposition of the Demand
Registrable Securities so to be registered. The Holders of the Demand
Registrable Securities will pay all Registration Expenses in connection with
each registration of Demand Registrable Securities requested pursuant to this
Section 4.
(b) If (i) a registration pursuant to this Section 4 involves an
underwritten offering of the securities so being registered, whether or not for
sale for the account of the Company, to be distributed (on a firm commitment
basis) by or through one or more underwriters of recognized standing under
underwriting terms appropriate for such a transaction, (ii) the Holders of
Demand Registrable Securities request any Demand Registrable Securities to be
included in such underwritten offering pursuant to this Section 4 and (iii) the
managing underwriter of such underwritten offering shall inform the Company in
writing of its belief that the number of securities requested to be included in
such registration exceeds the number which can be sold in (or during the time
of) such offering without adversely affecting the price to be received thereon,
then the Company will include in such registration, to the extent of the number
which the Company is so advised can be sold in (or during the time of) such
offering, (x) first, all securities proposed by the Company to be sold for its
own account or all securities (other than Demand Registrable Securities)
proposed by the Company to be sold for the account of the holders thereof, as
the case may be, (y) second, such Demand Registrable Securities requested to be
included in such registration pro rata on the basis of the number of shares of
such Demand Registrable Securities so proposed to be sold and so requested to be
included, and (z) third, other securities requested to be included in such
registration.
6
<PAGE>
(c) If the Company has previously filed a registration statement with
respect to Demand Registrable Securities pursuant to Section 3 or this Section
4, and if such previous registration has not been withdrawn or abandoned, the
Company will not file or cause to be effected any other registration of any of
its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Securities Act (except on Form
S-8 or any successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least three months
has elapsed from the effective date of such previous registration.
5. Registration Procedures. To the extent applicable, in connection with
any Registration Statement, the following provisions shall apply:
(a) The Company shall advise the Holders of Securities, and, if requested
by any such Holder, confirm such advice in writing (which advice pursuant to
clauses (ii) through (v) hereof shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been made):
(i) when such Registration Statement and any amendment thereto has
been filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements
to such Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of any of the Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the making of any
changes in such Registration Statement or the prospectus so that, as of
such date, the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(b) The Company will make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of any Registration Statement at the
earliest possible time.
(c) The Company will furnish to each Holder of Securities included within
the coverage of any Registration Statement, without charge, at least one copy of
such Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits (including those incorporated by reference).
7
<PAGE>
(d) The Company will deliver to each Holder of Securities included within
the coverage of any Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of the prospectus,
or any amendment or supplement thereto by each of the selling Holders of
Securities in connection with the offering and sale of any Securities covered by
the prospectus or any amendment or supplement thereto.
(e) The Company will furnish to each Exchanging Dealer that so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules, and, if such Exchanging Dealer so requests in writing, all exhibits
(including those incorporated by reference).
(f) The Company will, during any Registration Period, as applicable,
promptly deliver to each Exchanging Dealer or underwriter, as applicable,
without charge, as many copies of the prospectus included in such Registration
Statement and any amendment or supplement thereto as such Exchanging Dealer or
underwriter, as applicable, may reasonably request; and the Company consents to
the use of the prospectus or any amendment or supplement thereto by any such
Exchanging Dealer or underwriter, as applicable, as aforesaid.
(g) Prior to any public offering of Securities pursuant to any Registration
Statement, the Company will use its reasonable best efforts to register or
qualify or cooperate with the Holders of Securities included therein and their
respective counsel in connection with the registration or qualification of such
securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holder reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by such Registration Statement;
provided, however, that the Company will not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(h) The Company will cooperate with the Holders of Securities to facilitate
the timely preparation and delivery of certificates representing Securities to
be sold pursuant to any Registration Statement free of any restrictive legends
and in such denominations and registered in such names as Holders may request
prior to sales of Securities pursuant to such Registration Statement.
(i) Upon the occurrence of any event contemplated by clauses (a)(ii)
through (v) above during the period for which the Company is required to
maintain an effective Registration Statement, the Company will promptly prepare
a post-effective amendment to the Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to purchasers of the Securities, the prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
8
<PAGE>
(j) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for such Securities, and
provide the applicable trustee with printed certificates for such Securities, in
a form eligible for deposit with The Depository Trust Company.
(k) The Company will comply with all applicable rules and regulations of
the Commission and will make generally available to its security holders as soon
as practicable after the effective date of the applicable Registration Statement
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act.
(l) The Company will cause any Indenture, as the case may be, to be
qualified under the Trust Indenture Act as required by applicable law in a
timely manner.
(m) The Company may require each Holder of Securities to be sold pursuant
to any Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such Securities as the Company may
from time to time reasonably require for inclusion in such Registration
Statement, and the Company may exclude from such registration the Securities of
any Holder that unreasonably fails to furnish such information within a
reasonable time after receiving such request.
(n) The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
action, if any, as Holders of a majority in aggregate principal amount of such
Securities being sold or the managing underwriters (if any) shall reasonably
request in order to facilitate the disposition of Securities pursuant to any
Registration Statement.
(o) In the case of any Registration Statement, the Company shall (i) make
reasonably available for inspection by a representative of, and Special Counsel
(as defined in Section 7) acting for, the Holders, and any underwriter
participating in any disposition pursuant to any Registration Statement, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by such
representative, counsel or any such underwriter (an "Inspector") in connection
with any such Registration Statement, subject to executing a confidentiality
undertaking in customary form with respect to confidential and/or proprietary
information of the Company.
(p) In the case of any Registration Statement, the Company, if requested by
Holders of a majority in aggregate principal amount, their Special Counsel, or
the managing underwriters (if any) in connection with any Registration
Statement, shall use its best efforts to cause (w) its counsel to deliver an
opinion relating to such Registration Statement and such Securities, in
customary form, (x) its officers to execute and deliver all customary documents
and certificates requested by Holders of a majority in aggregate principal
amount, their Special Counsel, or the managing underwriters (if any) and (y) its
independent public accountants to provide a comfort letter in customary form,
subject to receipt of appropriate documentation as contemplated, and only if
permitted by Statement of Auditing Standards No. 72.
9
<PAGE>
(q) The Company will use its best efforts to cause any Securities covered
by a Registration Statement, as applicable, to be rated with the appropriate
rating agencies, if so requested by Holders of a majority in aggregate principal
amount of the Securities covered by such Registration Statement or the managing
underwriters, if any.
(r) The Company will use its best efforts to cause the Securities relating
to such Registration Statement to be listed on each securities exchange, if any,
on which securities issued by the Company are then listed, if so requested by
Holders of a majority in aggregate principal amount of the Securities covered by
such Registration Statement or the managing underwriters, if any.
(s) In the case of any Registration Statement, each Holder of Securities
agrees by acquisition of such Securities that, upon receipt of any notice of the
Company pursuant to Section 6(a)(ii) through (v), such Holder will discontinue
disposition of such Securities covered by such Registration Statement until such
Holder's receipt of copies of the supplemental or amended Prospectus
contemplated by Section 6(i), or until advised in writing (the "Advice") by the
Company that the use of the applicable prospectus may be resumed. If the
Company shall give any notice under Section 6(a)(ii) through (v) during the
period that the Company is required to maintain an effective Shelf Registration
Statement (the "Effectiveness Period"), such Effectiveness Period shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 6(i)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
6. Registration Expenses. The Company will bear all expenses incurred in
connection with the performance of its obligations under Sections l, 2, 3
(provided however, that, subject to the terms of Section 3, the Company shall
only bear the expenses for one Demand Registration initiated pursuant to Section
3) and 5 and will reimburse the Holders for the reasonable fees and
disbursements of one firm of attorneys (in addition to local counsel) chosen by
the Holders of a majority in aggregate principal amount of the Securities (the
"Special Counsel") acting for the Holders in connection therewith. The Holders'
of Securities shall be required to bear all expenses incurred as a result of
their exercise of Piggyback Rights pursuant to Section 4.
7. Indemnification. (a) In connection with any Registration Statement or
any prospectus delivery, the Company shall indemnify and hold harmless each
Holder and each person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or the omission or alleged
omission therefrom of a material fact necessary in order to make
10
<PAGE>
the statements therein, in the light of the circumstances under which they
were made, not misleading; and
(ii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the indemnified party),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental or
regulatory agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission.
provided, however, that the foregoing indemnity shall not apply to any loss,
liability, claim, damage and expense arising from any untrue statement or
alleged untrue statement of a material fact relating to the Holder and furnished
by the Holder to the Company in connection with such Registration Statement.
(b) In connection with any Registration Statement, each Holder agrees to
indemnify and hold harmless the Company, its directors, officers, agents and
employees and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act and the
directors, officers, agents and employees of such controlling persons against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 8(a), as incurred, arising out of or based upon
any untrue statements or omissions, or alleged untrue statements or omissions,
made in such Registration Statement (or any amendment or supplement thereto) in
reliance on and in conformity with written information furnished to the Company
by such Holder expressly for use in the Registration Statement (or in such
amendment or supplement); provided, however, that no such Holder shall be liable
for any indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Securities pursuant to such
Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claim or action commenced against
it in respect of which indemnity may be sought hereunder, provided, that failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any obligation that it may have pursuant to this Section except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure and, provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than on account of this
indemnity agreement. If any such claim or action shall be brought against an
indemnified party, the indemnified party shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof (other than
reasonable costs of investigation); provided, however, that an
11
<PAGE>
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm of attorneys (in addition to any local counsel) at any one time for all
such indemnified party or parties. Each indemnified party, as a condition of
the indemnity agreements contained in Sections 8(a) and 8(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment, of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
(d) If a claim by an indemnified party for indemnification under this
Section 8 is found unenforceable in a final judgment by a court of competent
jurisdiction (not subject to further appeal or review) even though the express
provisions hereof provide for indemnification in such case, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified party in connection with the
actions, statements or omissions that resulted in such losses as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any losses shall be deemed to include, subject to the limitations set
forth in Section 8(c), any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that
12
<PAGE>
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8, an indemnifying party that is a Holder of Securities shall not be required to
contribute any amount in excess of the amount by which the total price at which
the securities sold by such indemnifying party and distributed to the public
were offered to the public exceeds the amount of any damages that such
indemnifying party has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to any contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Rules 144 and 144A. The Company shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Securities, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder of Securities may reasonably request, all
to the extent required from time to time to enable such Holder to sell
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). Upon the request of any Holder of Securities, the Company
shall deliver to such Holder a written statement as to whether it has complied
with such requirements. Notwithstanding the foregoing, nothing in this Section
9 shall be deemed to require the Company to register any of its securities
pursuant to the Exchange Act.
9. Underwritten Registrations. If any of the Securities covered by any
registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount of
such Securities included in such offering, subject to the consent of the Company
(which shall not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of the Holders of Securities whose Securities are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of a
majority in aggregate principal amount of the Securities being sold by such
Holders pursuant to such Registration Statement.
13
<PAGE>
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 11(b),
which address initially is Schlumberger Limited, 277 Park Avenue, New York,
New York 10172-0266; and
(2) if to the Company, initially at Tokheim Corporation, 10501
Corporation Drive, Ft. Wayne, Indiana 46845, USA.
All such notices and communications shall be deemed to have been duly given
when delivered by hand, if personally delivered; one business day after being
delivered to a next-day air courier; five business days after being deposited in
the mail; when answered back, if faxed; and when receipt is acknowledged by the
recipient's telecopier machine, if telecopied.
(c) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT
14
<PAGE>
THE RIGHT OF ANY HOLDER OF A TRANSFER RESTRICTED SECURITY TO SERVE PROCESS IN
ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
(g) Remedies. In the event of a breach by the Company, or by a Holder of
Securities, of any of their obligations under this Agreement, each Holder of
Securities or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company and each Holder of Securities Notes agree that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agree that, in the
event of any action for specific performance in respect of such breach, such
seeker of specific performance shall waive the defense that a remedy at law
would be adequate.
(h) No Inconsistent Agreements. The Company has not, nor shall the Company
on or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders of Securities in this
Agreement or otherwise conflicts with the provisions hereof. The Company has
not previously entered into any agreement granting any registration rights with
respect to any of its debt securities to any person which has not been
fulfilled. Without limiting the generality of the foregoing, without the
written consent of the Holders of a majority in aggregate principal amount of
the then outstanding Securities, the Company shall not grant to any person the
right to request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights of the Holders of Securities set forth herein, and are not
otherwise in conflict or inconsistent with the provisions of this Agreement.
(i) No Piggyback on Registrations. None of the Company nor any of their
respective security holders (other than the Holders of Securities in such
capacity) shall have the right to include any securities of the Company in any
registration which is initiated to comply with Section 1 or 2 of this Agreement.
(j) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
15
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and Schlumberger.
Very truly yours,
TOKHEIM CORPORATION
By:
--------------------------------
Name:
Title:
Agreed to and Accepted by:
SCHLUMBERGER LIMITED
By:
--------------------------------
Name:
Title:
<PAGE>
ANNEX A
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Roll-Over Notes where
such Roll-Over Notes were acquired by such broker-dealer as a result of market-
making activities or other trading activities. The Company has agreed that, for
a period of 90 days after the Expiration Date (as defined herein), it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
<PAGE>
ANNEX B
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Roll-Over Notes, where such Roll-Over Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Roll-Over Notes where such Roll-Over Notes were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 90 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until ,
199 , all dealers effecting transactions in the Exchange Notes may be required
to deliver a prospectus./1/
The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any broker-
dealer that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Roll-Over Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit on any such resale of Exchange
Notes and any commission or concessions received by any such persons may be
deemed to be underwriting compensation under the Securities Act. The Letter of
Transmittal states that, by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Company has agreed to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for the Holders of the
Roll-Over Notes) other than commissions or concessions of any brokers or dealers
and will indemnify the Holders of the Roll-Over Notes (including any broker-
dealers) against certain liabilities, including liabilities under the Securities
Act.
- ------------------
/1/ In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
<PAGE>
ANNEX D
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name: ______________________________________
Address: ______________________________________
______________________________________
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Roll-Over Notes that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT (c)(11)
SENIOR NOTES
NOTE PURCHASE AGREEMENT
dated as of September 30, 1998
among
TOKHEIM CORPORATION,
THE SUBSIDIARIES
and
THE PURCHASERS LISTED HEREIN
<PAGE>
<TABLE>
<S> <C>
Annex I - Commitments
Annex II - Addresses
Exhibit A - Form of Note
Exhibit B - RESERVED
Exhibit C-1 - Opinion of Norman L. Roelke,
General Counsel of the Company
Exhibit C-2 - Opinion of Skadden, Arps, Slate, Meagher & Flom, LLP,
Special Counsel to the Company and the Subsidiaries
Exhibit D - Company Certificate
Exhibit E - Assignment Agreement
</TABLE>
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
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ARTICLE I
DEFINITIONS...................................................................................... 1
SECTION 1.1. Definitions................................................................... 1
ARTICLE II
PURCHASE AND SALE OF NOTES....................................................................... 19
SECTION 2.1. Authorization of Notes........................................................ 19
SECTION 2.2. Commitments to Purchase....................................................... 19
SECTION 2.3. Purchases..................................................................... 19
SECTION 2.4. Interest...................................................................... 19
SECTION 2.5. Change of Office; Replacement of Purchasers................................... 20
SECTION 2.6. Fees.......................................................................... 20
SECTION 2.7. Method and Place of Payment................................................... 20
SECTION 2.8. Net Payments.................................................................. 21
ARTICLE III
CONDITIONS PRECEDENT............................................................................. 22
SECTION 3.1. Effective Date................................................................ 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................................... 24
ARTICLE V
COVENANTS........................................................................................ 24
SECTION 5.1. Furnishing of Information; Compliance Certificates............................ 24
SECTION 5.2. Insurance..................................................................... 25
SECTION 5.3. Compliance with Statutes, etc................................................. 25
SECTION 5.4. Limitation on Asset Sales..................................................... 25
SECTION 5.5. Limitation on Incurrence of Additional Indebtedness........................... 27
SECTION 5.6. Limitation on Restricted Payments............................................. 27
SECTION 5.7 Limitation on Liens........................................................... 28
SECTION 5.8. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.. 28
Subsidiaries................................................................. 28
</TABLE>
(i)
<PAGE>
<TABLE>
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SECTION 5.9. Limitation on Transactions with Affiliates................................... 29
SECTION 5.10. Limitation Preferred Stock of Subsidiaries................................... 30
SECTION 5.11. Change of Control............................................................ 30
SECTION 5.12. Prohibition on Incurrence of Senior Subordinated Debt........................ 31
SECTION 5.13. Merger, Consolidation and Sale of Assets..................................... 31
SECTION 5.14. Ratings...................................................................... 32
ARTICLE VI
EVENTS OF DEFAULT................................................................................ 32
SECTION 6.1. Payments...................................................................... 32
SECTION 6.2. Representations, etc.......................................................... 33
SECTION 6.3. Covenants..................................................................... 33
SECTION 6.4. Default Under Other Agreements................................................ 33
SECTION 6.5. Bankruptcy or Insolvency...................................................... 33
SECTION 6.6. Judgments..................................................................... 34
ARTICLE VII
THE PAYING AGENT................................................................................. 34
SECTION 7.1. Appointment................................................................... 34
SECTION 7.2. Nature of Duties.............................................................. 34
SECTION 7.3. Lack of Reliance on the Paying Agent.......................................... 35
SECTION 7.4. Certain Rights of the Paying Agent............................................ 35
SECTION 7.5. Reliance...................................................................... 35
SECTION 7.6. Indemnification............................................................... 35
SECTION 7.7. The Paying Agent in Its Individual Capacities................................. 37
SECTION 7.8. Holders....................................................................... 37
SECTION 7.9. Resignation by the Paying Agent............................................... 37
ARTICLE VIII
DISCHARGE OF OBLIGATIONS UNDER NOTES............................................................. 38
SECTION 8.1. Discharge Of Liability On Notes; Defeasance................................... 38
SECTION 8.2. Conditions To Defeasance...................................................... 38
SECTION 8.3. Application of Trust Money.................................................... 40
SECTION 8.4. Repayment to the Company...................................................... 40
SECTION 8.5. Indemnity For Government Obligations.......................................... 40
SECTION 8.6. Reinstatement................................................................. 40
ARTICLE IX
REGISTRATION RIGHTS.............................................................................. 41
SECTION 9.1. Piggy-Back Registration....................................................... 41
SECTION 9.2. Reduction of Offering......................................................... 42
</TABLE>
(ii)
<PAGE>
<TABLE>
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SECTION 9.3. Demand Registration........................................................... 43
ARTICLE X
SUBSIDIARY GUARANTEE OF NOTES.................................................................... 44
SECTION 10.1. Subsidiary Guarantee......................................................... 44
SECTION 10.2. Execution and Delivery of Subsidiary Guarantee............................... 45
SECTION 10.3. Subsidiary Guarantee Unconditional, etc...................................... 45
SECTION 10.4. Limitation of Subsidiary's Liability......................................... 46
SECTION 10.5. Contribution................................................................. 46
SECTION 10.6. Release...................................................................... 46
SECTION 10.7. Additional Subsidiaries...................................................... 47
SECTION 10.8. Successors and Assigns....................................................... 47
SECTION 10.9. Waiver of Stay, Extension or Usury Laws...................................... 47
ARTICLE XI
SUBORDINATION.................................................................................... 48
SECTION 11.1. Notes Subordinated to Senior Debt............................................ 48
SECTION 11.2. No Payment on Notes in Certain Circumstances................................. 48
SECTION 11.3. Notes Subordinated to Prior Payment of All Senior Debt on Dissolution,
Liquidation or Reorganization of Company................................. 49
SECTION 11.4. Holders To Be Subrogated to Rights of Holders of Senior Debt................. 50
SECTION 11.5. Obligations of the Company Unconditional..................................... 51
SECTION 11.6. Paying Agent Entitled To Assume Payments Not Prohibited in Absence of
Notice................................................................... 51
SECTION 11.7. Application by Paying Agent of Monies Deposited With It...................... 51
SECTION 11.8. Subordination Rights Not Impaired by Acts or Omissions of Company or
Holders of Senior Debt................................................... 52
SECTION 11.9. Holders Authorize Paying Agent To Effectuate Subordination of Notes.......... 52
SECTION 11.10. Right of Paying Agent To Hold Senior Debt.................................... 52
SECTION 11.11. Article XI Not To Prevent Events of Default.................................. 52
SECTION 11.12. No Fiduciary Duty Created to Holders of Senior Debt.......................... 53
SECTION 11.13. Subordination of Subsidiary Guarantees....................................... 53
ARTICLE XII
REDEMPTION....................................................................................... 53
SECTION 12.1. Notices to Paying Agent...................................................... 53
SECTION 12.2. Selection of Notes to be Redeemed............................................ 53
SECTION 12.3. Notice of Redemption......................................................... 54
SECTION 12.4. Effect of Notice of Redemption............................................... 55
SECTION 12.5 Deposit of Redemption Price.................................................. 55
SECTION 12.6. Notes Redeemed in Part....................................................... 55
</TABLE>
(iii)
<PAGE>
<TABLE>
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SECTION 12.7. Optional Redemption.......................................................... 55
SECTION 12.8. Mandatory Redemption......................................................... 56
ARTICLE XIII
MISCELLANEOUS.................................................................................... 56
SECTION 13.1. Payment of Expenses, etc..................................................... 56
SECTION 13.2. Right of Setoff.............................................................. 56
SECTION 13.3. Notices...................................................................... 57
SECTION 13.4. Benefit of Agreement......................................................... 57
SECTION 13.5. No Waiver; Remedies Cumulative............................................... 58
SECTION 13.6. Payments Pro Rata............................................................ 58
SECTION 13.7. Calculations; Computations................................................... 59
SECTION 13.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial....... 59
SECTION 13.9 Counterparts................................................................. 60
SECTION 13.10. Effectiveness................................................................ 60
SECTION 13.11. Headings Descriptive......................................................... 60
SECTION 13.12. Amendment or Waiver.......................................................... 60
SECTION 13.13. Survival..................................................................... 61
SECTION 13.14. Confidentiality.............................................................. 61
SECTION 13.15. Register..................................................................... 61
SECTION 13.16. Consolidation of Notes....................................................... 61
SECTION 13.17. Replacement of Notes......................................................... 61
</TABLE>
(iv)
<PAGE>
NOTE PURCHASE AGREEMENT
-----------------------
This NOTE PURCHASE AGREEMENT (the "Agreement") dated as of September 30,
1998, is made by and among Tokheim Corporation, a corporation organized under
the laws of the State of Indiana (the "Company"), the Subsidiaries party hereto,
and the Purchasers party hereto (in the event that there is only one Purchaser
party hereto, references to Purchasers in the plural shall be deemed to be in
the singular).
In consideration of the mutual covenants and agreements set forth herein
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. Definitions. As used in this Agreement, and unless the
-----------
context requires a different meaning, the following terms have the meanings
indicated:
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of the
Company or such acquisition, merger or consolidation.
"Acquisition" means the acquisition by the Company of the fuel
dispenser, systems and services business of Schlumberger.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting Notes, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"Applicable Call Premium" means, as of a particular date, the number
set forth opposite such date in the table below.
<TABLE>
<CAPTION>
REDEMPTION DATE PREMIUM
<S> <C>
10/01/98 - 12/31/98 1.00000
01/01/99 - 03/31/99 1.02000
04/01/99 - 06/30/99 1.04000
07/01/99 - 09/30/99 1.06000
</TABLE>
<PAGE>
<TABLE>
<S> <C>
10/01/99 - 09/30/03 1.07250
10/01/03 - 09/30/04 1.03625
10/01/04 - Maturity 1.00000
</TABLE>
"Applicable Interest Rate" means as of a particular date, the rate set
forth opposite such date below:
<TABLE>
<CAPTION>
DATE RATE
<S> <C>
through 11/30/98 12.50%
12/01/98 - 02/28/99 13.00%
03/01/99 - 05/31/99 13.50%
06/01/99 - 08/31/99 14.00%
09/01/99 - Maturity 14.50%
</TABLE>
"Asset Acquisition" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or any, Subsidiary of the Company, or
shall be merged with or into the Company or any Subsidiary of the Company, or
(b) the acquisition by the Company or any Subsidiary of the Company of the
assets of any Person (other than a Subsidiary of the Company) which constitute
all or substantially all of the assets of such Person or comprises any division
or line of business of such Person.
"Adjusted Net Assets" of a Subsidiary at any date shall mean the
lesser of (x) the amount by which the fair value of the property of such
Subsidiary exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Subsidiary with respect to its
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guarantees, of such Subsidiary at such date and (y) the amount by
which the present fair salable value of the assets of such Subsidiary at such
date exceeds the amount that will be required to pay the probable liability of
such Subsidiary on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any Subsidiary by such Subsidiary in respect of the
obligations of such Subsidiary under the Subsidiary Guarantees), excluding debt
in respect of the Subsidiary Guarantees, as they become absolute and matured.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Subsidiaries (including any Sale and Leaseback Transaction) to any Person
other than the Company or Wholly Owned Subsidiary of the Company of (a) any
Capital Stock of any Subsidiary of the Company or (b) any other property or
assets of the Company or any Subsidiary of the Company other than in the
ordinary course of business; provided, however, that Asset Sales shall not
include (i) a transaction or series of related transactions for which the
Company or its Subsidiaries receive aggregate consideration of less than
$500,000 (ii) sales of accounts receivable that the Company has classified as
uncollectable; (iii) sales or other dispositions of Cash Equivalents; (iv) the
sale of the stock of the Subsidiary of Tokheim Sofitam Applications, S.A. to
which Tokheim Sofitam Applications S.A. has contributed its bulk meter business;
and (v) the sale, lease, conveyance, disposition or other transfer (w) of all or
substantially all of the assets of the Company as permitted under Section 5.13,
(x) pursuant to any foreclosure of assets or other remedy provided by applicable
law to a creditor of the Company or
2
<PAGE>
any Subsidiary of the Company with a Lien on such assets, which Lien is
otherwise permitted under this Agreement; provided that such foreclosure or
other remedy is conducted in a commercially reasonable manner or in accordance
with any bankruptcy law, (y) involving only Cash Equivalents or inventory in the
ordinary course of business or obsolete equipment in the ordinary course of
business consistent with past practices of the Company or (z) involving only the
lease or sublease of any real or personal property in the ordinary course of
business.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Paying Agent.
"Bridge Notes" means the $170,000,000 of senior subordinated notes
issued by the Company to Schlumberger (or an Affiliate thereof) as part of the
consideration for the Acquisition, as well as any refinancing thereof and any
pay-in-kind notes paid thereon.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P) or Moody's Investors
Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one year
from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates
of deposit or bankers' acceptances maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the
3
<PAGE>
District of Columbia or any U.S. branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250.0
million; (v) repurchase obligations with a term of not more than seven days for
underlying Notes of the types described in clause (i) above entered into with
any bank meeting the qualifications specified in clause (iv) above; and (vi)
investments in money market funds which invest substantially all their assets in
Notes of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of the
Company (whether or not otherwise in compliance with the provisions of this
Agreement); (ii) any Person or group of related Persons for purposes of Section
13(d) of the Exchange Act shall become the owner, directly or indirectly,
beneficially or of record, of shares representing either more than 40% of the
aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company or more than 40% of the aggregate issued and
outstanding Common Stock of the Company; or (iii) the replacement of a majority
of the Board of Directors of the Company over a two-year period from the
directors who constituted the Board of Directors of the Company at the beginning
of such period, and such replacement shall not have been approved by a vote of
at least a majority of the Board of Directors of the Company then still in
office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved.
"Common Stock" of any Person means any and all shares, interests or
other participations in and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Earnings and (ii)
to the extent Consolidated Net Earnings has been reduced thereby, (A) all income
taxes of such Person and its Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business or other transactions the
effect of which has been excluded from Consolidated Net Earnings), (B)
Consolidated Interest Expense and (C) Consolidated Non-cash Charges less any
non-cash items increasing Consolidated Net Earnings for such period, all as
determined on a consolidated basis for such Person and its Subsidiaries in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four most
recent full fiscal quarters for which financial information is available (the
"Four Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the
"Transaction Date") to Consolidated Fixed Charges of such Person for the Four
Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBlTDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis for the
period of such calculation to (i) the incurrence or
4
<PAGE>
repayment of any Indebtedness of such Person or any of its Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital purposes
pursuant to working capital or revolving credit facilities, occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such incurrence or
repayment, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Subsidiaries (including any Person who becomes a Subsidiary as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA (provided that
such Consolidated EBITDA shall be included only to the extent includable
pursuant to the definition of "Consolidated Net Earnings") attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale during the
Four Quarter Period) occurring, during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Acquired Indebtedness) occurred
on the first day of the Four Quarter Period. If such Person or any of its
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Subsidiary of such Person had directly
incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in
calculating, "Consolidated Fixed Charges" for purposes of determining the
denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage
Ratio," (1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on the Transaction Date; (2)
if interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Transaction Date will be deemed to have been in
effect during the Four Quarter Period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Swap Obligations, shall
be deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense, plus
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Stock of such Person and its Subsidiaries (other than dividends paid
in Qualified Capital Stock of the Company or dividends to the extent payable to
the Company or its Subsidiaries) paid, accrued or scheduled to be paid or
accrued during such period times (other than in the case of Preferred Stock of
such Person and its Subsidiaries for which the dividends are tax deductible for
federal income tax purposes) (y) a fraction, the numerator of which is one and
the denominator of which is one minus the then current effective consolidated
federal, state and local tax rate of such Person, expressed as a decimal.
5
<PAGE>
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including without limitation, (a)
any amortization of debt discount (but excluding the amortization of debt
issuance costs), (b) the net costs under Interest Swap Obligations, (c) all
capitalized interest and (d) the interest portion of any deferred payment
obligation: and (ii) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Earnings" means, with respect to any Person, for any
period, the aggregate net earnings (or loss) of such Person and its Subsidiaries
for such period on a consolidated basis (before preferred stock dividend
requirements), determined in accordance with GAAP; provided that there shall be
excluded therefrom (a) after-tax gains or losses from Asset Sales or
abandonments or reserves relating thereto, (b) after-tax items classified as
extraordinary or nonrecurring gains or losses, (c) the net earnings of any
Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Subsidiary of the referent Person or is merged or consolidated
with the referent Person or any Subsidiary of the referent Person, (d) the net
earnings (but not loss) of any Subsidiary of the referent Person to the extent
that the declaration of dividends or similar distributions by that Subsidiary of
that income is restricted by a contract, operation of law or otherwise, (e) the
net earnings of any Person, other than a Subsidiary of the referent Person,
except to the extent of cash dividends or distributions paid to the referent
Person or to a Wholly Owned Subsidiary of the referent Person by such Person,
(f) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of Consolidated Net Earnings
accrued at any time following the Issue Date, (g) income or loss attributable to
discontinued operations (including without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued), (h) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets and (i) all gains or losses from the cumulative effect of any
change in accounting principles.
"Consolidated Net Worth" of any Person means the consolidated
shareholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash expenses
of such Person and its Subsidiaries reducing Consolidated Net Earnings of such
Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such charges constituting an
extraordinary item or loss or any such charge which requires an accrual of or a
reserve relating to possible cash charges or expenditures for any future or past
period).
"Credit Agreement" means the Credit Agreement among the Company,
certain of its Subsidiaries, the lenders party thereto in their capacities as
lenders thereunder and NBD Bank, N.A., as administrative agent, together with
the related documents thereto (including, without
6
<PAGE>
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under Section
5.5)) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Credit Documents" means this Agreement and the Notes.
"Credit Parties" means the Company and each U.S. Subsidiary of the
Company.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Designated Senior Debt" means (i) Indebtedness under or in respect of
the Credit Agreement or the ESOP Credit Agreement and (ii) any other
Indebtedness constituting Senior Debt which, at the time of determination, has
an aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Senior Debt as "Designated Senior
Debt" by the Company.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes.
"ESOP Credit Agreement" means that certain credit agreement among the
Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, N.A., and certain
other banks, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under Section
5.5)) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
7
<PAGE>
"Fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Paying Agent.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Holder" means the Person in whose name a Note is registered.
"Indebtedness" means with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or
other obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business that are not
overdue by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) all indebtedness
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) guarantees and other contingent
obligations in respect of Indebtedness referred to in clauses (i) through (v)
above and clause (viii) below, (vii) all indebtedness of any other Person of the
type referred to in clauses (i) through (vi) which are secured by any lien on
any property or asset of such Person, the amount of such Obligation being deemed
to be the lesser of the fair market value of such property or asset or the
amount of the Obligation so secured, (viii) all indebtedness under Currency
Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any. For purposes hereof, the "maximum
fixed repurchase price" of any Disqualified Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
8
<PAGE>
"Interest Payment Date" has the meaning ascribed to it in Section
2.4(c).
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other Person. "Investment" shall exclude extensions of trade credit by
the Company and its Subsidiaries on commercially reasonable terms in accordance
with normal trade practices of the Company or such Subsidiary, as the case may
be. For the purposes of Section 5.6, the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Earnings.
"Issue Date" means the date of original issuance of the Notes.
"Junior Subordinated Seller PIK Notes" means the $40,000,000 (initial
face amount) of junior subordinated notes issued by the Company to Schlumberger
(or an Affiliate thereof) as part of the consideration for the Acquisition, as
well as any Refinancing thereof.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Material Adverse Effect" means a material adverse effect on (i) the
business, property, condition (financial or otherwise) or results of operations
or prospects of (a) the Company, (b) the Company and its domestic Subsidiaries
taken as a whole, or (c) the non-domestic Subsidiaries including those
Subsidiaries acquired pursuant to the Acquisition, taken as a whole, (ii) the
ability of any of the Credit Parties to perform their obligations under the
Credit Documents, or (iii) the validity or enforceability of any of the Credit
Documents or the rights or remedies of the Paying Agent or the Purchasers.
"Maturity" means October 1, 2005.
9
<PAGE>
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting, brokerage and,
investment banking fees and sales commissions), (b) taxes paid or payable after
taking into account any reduction in consolidated tax liability due to available
tax credits or deductions and any tax sharing arrangements, (c) repayment of
Indebtedness that is required to be repaid in connection with such Asset Sale
and (d) appropriate amounts to be provided by the Company or any Subsidiary, as
the case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Subsidiary,
as the case may be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Office" means the office of the Paying Agent at 175 Water Street, New
York, NY 10038 or such other office as the Paying Agent may designate in
writing.
"Officer" means, with respect to a particular Person, the Chairman of
the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the Chief Financial Officer, the President, any Vice
President, the Treasurer or the Secretary of such Person.
"Officers' Certificate" means a certificate signed by two Officers of
the Person delivering such certificate at least one of whom shall be the
pruincipal executive, accounting or financial officer of such Person.
"Opinion of Counsel" means a written opinion, in form and substance
reasonably satisfactory to the Paying Agent, from legal counsel who is
reasonably acceptable to the Paying Agent.
"Paying Agent" means the Paying Agent named in Section 7.1 hereof or
any successor in such capacity.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes and this Agreement;
(ii) Indebtedness incurred pursuant to the Credit Agreement and the
ESOP Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed (A) $7.62 million with respect to the
Indebtedness under the ESOP Credit Agreement, less the amount of all
mandatory principal payments, if any (excluding any such payments to the
10
<PAGE>
extent refinanced at the time of payment under a replaced ESOP Credit
Agreement) and (B) $250,000,000 in the aggregate with respect to
Indebtedness under the Credit Agreement, reduced by any required permanent
repayments, if any (which are accompanied by a corresponding permanent
commitment reduction), thereunder;
(iii) Other Indebtedness of the Company and its Subsidiaries
outstanding on or about the Issue Date (after giving effect to the
Acquisition and related refinancing), including, without limitation, bank
overdraft facilities and any indebtedness with respect to the 11- 1/2%
Notes not repurchased, reduced by the amount of any scheduled amortization
payments or mandatory prepayments when actually paid or permanent
reductions thereon;
(iv) Interest Swap Obligations of the Company covering Indebtedness
of the Company or any of its Subsidiaries and Interest Swap Obligations of
any Subsidiary of the Company covering Indebtedness of such Subsidiary;
provided, however, that (x) such Interest Swap Obligations are designed to
protect the Company and its Subsidiaries from fluctuations in interest
rates on Indebtedness incurred in accordance with this Agreement (and are
used for bona fide hedging, and not speculative, purposes); and (y) the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates at the time entered into; or (z) are required under the
terms of the Credit Agreement;
(v) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements (i) are designed to protect against fluctuations in currency
value (and are used for bona fide hedging, and not speculative, purposes)
and (ii) do not increase the Indebtedness of the Company and its
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder; or (iii) are required under the terms of the Credit
Agreement;
(vi) Indebtedness of a Wholly Owned Subsidiary of the Company to the
Company or to a Wholly Owned Subsidiary of the Company for so long as such
Indebtedness is held by the Company or a Wholly Owned Subsidiary of the
Company, in each case subject to no Lien held by a Person other than the
Company or a Wholly Owned Subsidiary of the Company other than a Lien
required under the Credit Agreement; provided that if as of any date any
Person other than the Company or a Wholly Owned Subsidiary of the Company
owns or holds any such Indebtedness or holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Permitted Indebtedness by the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Subsidiary of the
Company for so long as such Indebtedness is held by a Wholly Owned
Subsidiary of the Company, in each case subject to no Lien other than a
Lien required under the Credit Agreement; provided that (a) any
Indebtedness of the Company to any Wholly Owned Subsidiary of the Company
is unsecured and subordinated, pursuant to a written agreement, to the
Company's obligations under this Agreement and the Notes and (b) if as of
any date any Person other than a Wholly Owned Subsidiary of the Company
owns or holds any such
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Indebtedness or any Person holds a Lien in respect of such Indebtedness,
such date shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness by the Company;
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within ten business days of incurrence;
(ix) Indebtedness of the Company or any of its Subsidiaries
represented by letters of credit for the account of the Company or such
Subsidiary, as the case may be, in order to provide security for workers'
compensation claims, payment obligations in connection with self-insurance
or similar requirements in the ordinary course of business;
(x) Refinancing Indebtedness;
(xi) Indebtedness incurred by the Company or any Subsidiary of the
Company in connection with the purchase or improvement of property (real or
personal) or equipment or other capital expenditures in the ordinary course
of business or consisting of Capitalized Lease Obligations, provided that
(i) at the time of the incurrence thereof, such Indebtedness, together with
any other Indebtedness incurred during the most recently completed four
fiscal quarter period in reliance upon this clause (xi) does not exceed, in
the aggregate, 3% of the net sales of the Company and the Subsidiaries
during the most recently completed four fiscal quarter period on a
consolidated basis (calculated on a pro forma basis if the date of
incurrence is prior to the end of the fourth fiscal quarter following the
Issue Date) and (ii) such Indebtedness, together with all then outstanding
Indebtedness incurred in reliance upon this clause (xi) does not exceed, in
the aggregate, 3% of the aggregate net sales of the Company and its
Subsidiaries during the most recently completed twelve fiscal quarter
period on a consolidated basis (calculated on a pro forma basis if the date
of incurrence is prior to the end of the twelfth fiscal quarter following
the Issue Date);
(xii) Indebtedness arising from agreements of the Company or a
Subsidiary of the Company providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred in connection
with the disposition of any business, assets or Subsidiary, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Subsidiary for the purpose of financing
such acquisition; provided that the maximum aggregate liability in respect
of all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and the Subsidiary in connection with such
disposition;
(xiii) Obligations in respect of performance bonds and completion
guarantees provided by the Company or any Subsidiary of the Company in the
ordinary course of business;
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(xiv) Guarantees by the Company or a Subsidiary of the Company of
Indebtedness incurred by the Company or a Subsidiary of the Company so long
as the incurrence of such Indebtedness by the Company or any such
Subsidiary of the Company is otherwise permitted by the terms of this
Agreement;
(xv) Junior Subordinated Seller PIK Notes;
(xvi) Indebtedness incurred by the Company or any Subsidiary of the
Company in exchange for the use of Traits as collateral made in the
ordinary course of business to financial institutions which Indebtedness
has a value of no less than 90% of face value of such Traits;
(xvii) Indebtedness of the Company or a Subsidiary of the Company to
a Subsidiary of the Company that is not a Wholly Owned Subsidiary in the
aggregate principal amount not to exceed at any one time $10.0 million;
provided that if as of any date any Person other than a Subsidiary of the
Company that is not a Wholly Owned Subsidiary owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(xviii) Bridge Notes;
(xix) Indebtedness from bank overdraft facilities not to exceed
$15,000,000 at any time; and
(xx) $10.0 million of other indebtedness of the Company or any of its
Subsidiaries (which amount may, but need not, be incurred in whole or in
part under the Credit Agreement).
"Permitted Investments" means (i) Investments by the Company or any
Subsidiary of the Company in any Person that is or will become immediately after
such Investment a Wholly Owned Subsidiary of the Company or that will merge or
consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii)
Investments in the Company by any Subsidiary of the Company; provided that any
Indebtedness evidencing such Investment is unsecured and subordinated, pursuant
to a written agreement and to the same extent that the Notes are subordinated to
Senior Debt, to the Company's obligations under the Notes and this Agreement;
(iii) Investments in cash and Cash Equivalents; (iv) loans and advances to
employees and officers of the Company and its Subsidiaries in the ordinary
course of business for bona fide business purposes or to purchase shares of the
Company's Capital Stock; (v) Currency Agreements and Interest Swap Obligations
entered into in the ordinary course of the Company's or its Subsidiaries'
businesses and otherwise in compliance with this Agreement or as required under
the terms of the Credit Agreement; (vi) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vii) Investments made by the Company or its Subsidiaries as a result
of consideration received in connection with an Asset Sale made in compliance
with the "Limitation on Asset Sales" covenant; (viii) Investments existing on or
about the Issue Date; (ix) Investments in an African Subsidiary in an aggregate
amount not to exceed $2.0 million for which the Company is committed on the
Issue Date; and (x) additional Investments in an aggregate amount not exceeding
$5.0 million.
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"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not yet
delinquent for a period of more than 60 days or being contested in good
faith, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(iv) Liens securing letters of credit issued in the ordinary course
of business consistent with past practice in connection with the items
referred to in clause (iii), or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(v) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(vi) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Subsidiaries;
(vii) any interest or title of a lessor under any Capitalized Lease
Obligation, provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(viii) purchase money Liens to finance property or assets of the
Company or any Subsidiary of the Company acquired in the ordinary course of
business; provided, however, that (A) the related purchase money
Indebtedness shall not exceed the cost of such property or assets and shall
not be secured by any property or assets of the Company or any Subsidiary
of the Company other than the property and assets so acquired and (B) the
Lien securing such Indebtedness shall be created within 90 days of such
acquisition;
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
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(x) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(xi) Liens encumbering deposits made to secure obligations arising
from statutory. regulatory, contractual, or warranty requirements of the
Company or any of its Subsidiaries, including rights of offset and set-off;
(xii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Agreement;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) Liens securing Acquired Indebtedness incurred in accordance
with Section 5.5; provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Subsidiary of the Company and were not
granted in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Company or a Subsidiary of the Company and (B)
such Liens do not extend to or cover any property or assets of the Company
or of any of its Subsidiaries other than the property or assets that
secured the Acquired Indebtedness prior to the time such Indebtedness
became Acquired Indebtedness of the Company or a Subsidiary of the Company
and are no more favorable to the lienholders than those securing the
Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness
by the Company or a Subsidiary of the Company;
(xv) Leases or subleases granted to others not interfering in any
material respect with the business of the Company or any of its
Subsidiaries;
(xvi) Any interest or title of a lessor in the property subject to
any lease, whether characterized as capitalized or operating other than any
such interest or title resulting from or arising out of a default by the
Company or any of its Subsidiaries of its obligations under such lease;
(xvii) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of personal property
that are otherwise permitted under this Agreement and under which the
Company or any of its Subsidiaries is lessee;
(xviii) Liens placed on Traits used as collateral in exchange for
loans provided to the Company or its Subsidiaries; and
(xix) Liens in favor of the Paying Agent and any substantially
equivalent Lien granted to any trustee or similar institution under any
indenture governing Indebtedness permitted to be Incurred or outstanding
under this Agreement.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
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<PAGE>
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Subsidiary of the Company of Indebtedness incurred in accordance with Section
5.5 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi) or
(xvi) of the definition of Permitted Indebtedness), in each case that does not
(1) result in an increase in the aggregate principal amount of Indebtedness of
such Person as of the date of such proposed Refinancing (plus the amount of any
premium or penalty required to be paid under the terms of the instrument
governing such Indebtedness and plus the amount of reasonable fees and expenses
incurred by the Company in connection with such Refinancing) or (2) create
Indebtedness with (A) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a
final maturity earlier than the final maturity of the Indebtedness being
Refinanced; provided that (x) if such Indebtedness being Refinanced is
Indebtedness of the Company, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced
is subordinate or junior to the Notes, then such Refinancing Indebtedness shall
be subordinate to the Notes at least to the same extent and in the same manner
as the Indebtedness being Refinanced.
"Registrable Securities" means the Notes. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of pursuant to such registration statement, (ii) such securities
have been sold to the public pursuant to Rule 144 (or any similar provision then
in force, but not Rule 144A) under the Securities Act, (iii) such securities
shall have been otherwise transferred by such holder and new certificates for
such securities not bearing a legend restricting further transfer shall have
been delivered by the Company or its transfer agent and subsequent disposition
of such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (iv) such securities
shall have ceased to be outstanding.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; provided that if,
and for so long as. any Designated Senior Debt lacks such a representative, then
the Representative for such Designated Senior Debt shall at all times constitute
the holders of a majority in outstanding principal amount of such Designated
Senior Debt in respect of any Designated Senior Debt.
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"Required Holders" means Holders of a majority in aggregate principal
amount of the Notes outstanding at a given time.
"Revolving Credit Facility" means one or more revolving credit
facilities under the Credit Agreement.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of any property, whether owned by
the Company or any Subsidiary at the Issue Date or later acquired, which has
been or is to be sold or transferred by the Company or such Subsidiary to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such Property.
"Schlumberger" means Schlumberger Limited, a corporation organized
under the laws of Netherlands Antilles.
"Senior Debt" means the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other monetary obligations of the Company owing in respect of, (x) the
Credit Agreement (up to a maximum aggregate principal amount of $250,000,000)
and the ESOP Credit Agreement, including, without limitation, obligations to pay
principal and interest reimbursement obligations under letters of credit, fees,
expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency
Agreements, in each case whether outstanding on the Issue Date or thereafter
incurred. Notwithstanding the foregoing, "Senior Debt" shall not include (i)
any Indebtedness of the Company to a Subsidiary of the Company, (ii)
Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer
or employee of the Company or any Subsidiary of the Company (including, without
limitation, amounts owed for compensation), (iii) Indebtedness to trade
creditors and other amounts incurred in connection with obtaining goods.
materials or services, (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other taxes owed or owing
by the Company, (vi) Indebtedness incurred in violation of Section 5.5, (vii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
the Company, (viii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Company, (ix)
the Bridge Notes, and (x) the Junior Subordinated Seller PIK Notes. With
respect to a Subsidiary, Senior Debt shall include such Subsidiary's Obligations
in respect of any guarantee of the Company's Obligations under the Credit
Agreement.
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(v) of Regulation S-X under the Securities Act.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by
17
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such Person or (ii) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or indirectly,
owned by such Person.
"Subsidiary Guarantee" means the Guarantee of the Notes by a U.S.
Subsidiary.
"Total Commitment" means the sum of the Commitments.
"Traits" means "traites" (within the meaning of French law), accounts
receivable sold without recourse or invoices.
"U.S. Subsidiary" means Management Solutions, Inc., a Colorado
corporation, Tokheim Equipment Corporation, a Delaware corporation, Tokheim RPS,
LLC, a Delaware limited liability company, Sunbelt Hose & Petroleum Equipment,
Inc., a Georgia corporation, Envirotronic Systems, Inc., an Indiana corporation,
Gasboy International, Inc., a Pennsylvania corporation, Tokheim Automation
Corporation, a Texas corporation, and Tokheim Investment Corp., a Texas
corporation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than in the case of
a foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly Owned Subsidiary of such Person.
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ARTICLE II
PURCHASE AND SALE OF NOTES
--------------------------
SECTION 2.1. Authorization of Notes. The Company will authorize the
----------------------
issue and sale of US$22,500,000 aggregate principal amount of its Senior Notes
due October 1, 2005 (the "Notes") in substantially the form of Exhibit A with
blanks appropriately completed in conformity therewith. Each U.S. Subsidiary of
the Company shall guarantee the Company's obligations under the Notes.
SECTION 2.2. Commitments to Purchase. The Company agrees to sell and
-----------------------
subject to the terms and conditions set forth herein, each of the Purchasers
agrees, severally but not jointly, to purchase, on the Effective Date (the
"Drawdown Date") for a purchase price equal to 100% of the principal amount of
the Notes so purchased Notes in a principal amount equal to its commitment as
set forth on Annex I hereto (each, a "Commitment").
SECTION 2.3. Purchases. (a) Each Purchaser shall, not later than 12:00
---------
Noon (New York time) on the Drawdown Date, deliver by wire transfer to the
Paying Agent at its Office in US Dollars and in immediately available funds an
amount equal to the purchase price of the Notes being purchased by such
Purchaser from the Company, and the Paying Agent will promptly make available to
the Company, by depositing to its account at the Office, the aggregate of the
amounts so made available by all Purchasers in the type of funds received, net
of any Placement Fee or Funding Fee payable by the Company under Section 2.6.
It is understood that no Purchaser shall be responsible for any default by any
other Purchaser in its obligation to purchase Notes hereunder and that each
Purchaser shall be obligated to purchase Notes provided to be purchased by it
hereunder, regardless of the failure of any other Purchaser to fulfill its
commitments hereunder.
(b) On the Drawdown Date, the Company shall deliver to the Paying Agent for
each Purchaser, against payment of the purchase price therefor as provided in
Section 2.3(a), the Notes purchased by such Purchaser on such date.
SECTION 2.4. Interest. (a) The unpaid principal amount of each Note
--------
shall bear interest on each day until Maturity (whether by acceleration or
otherwise) at a rate per annum equal to the Applicable Interest Rate.
(b) All overdue principal and, to the extent permitted by law, overdue
interest in respect of each Note and any other overdue amount payable hereunder
shall bear interest at a rate per annum equal to the Applicable Interest Rate
plus 2.0%.
(c) Interest shall be payable quarterly in arrears on each January 1, April
1, July 1 and October 1, commencing January 1, 1999 and on any prepayment or
conversion of such Note (on the amount prepaid or converted), at Maturity
(whether by acceleration or otherwise) (each, an "Interest Payment Date") and,
after such Maturity, on demand.
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SECTION 2.5. Change of Office; Replacement of Purchasers. (a) Each
-------------------------------------------
Purchaser agrees that, upon the occurrence of any event giving rise to the
operation of Section 2.8 with respect to such Purchaser, it will, if requested
by the Company, use reasonable efforts (subject to overall policy considerations
of such Purchaser) to designate another lending office for any Notes affected by
such event, provided that such designation is made on such terms that such
Purchaser and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section. Nothing in this Section 2.5 shall
affect or postpone any of the obligations of the Company or the right of any
Purchaser provided in Section 2.8.
(b) (x) Upon the occurrence of any event giving rise to the operation of
Section 2.8 with respect to any Purchaser which results in such Purchaser
charging to the Company increased costs in excess of those being charged
generally by the Purchasers and/or (y) if a Purchaser is in default of its
obligations hereunder to purchase any Note, the Company shall have the right, if
no Event of Default then exists, to replace such Purchaser (the "Replaced
Purchaser") with one or more other Eligible Transferee or Transferees
(collectively, the "Replacement Purchaser") reasonably acceptable to the Paying
Agent, provided that (i) at the time of any replacement pursuant to this Section
2.5(b), the Replacement Purchaser shall enter into one or more Assignment
Agreements pursuant to Section 13.4(b) (and with all fees payable pursuant to
said Section 13.4(b) to be paid by the Replacement Purchaser) pursuant to which
the Replacement Purchaser shall acquire all of the outstanding Notes of the
Replaced Purchaser and, in connection therewith, shall pay to the Replaced
Purchaser in respect thereof an amount equal to the principal of, and all
accrued interest on, all outstanding Notes of the Replaced Purchaser, and (ii)
all obligations of the Company owing to the Replaced Purchaser (other than those
specifically described in clause (i) above (x) in respect of which the
assignment purchase price has been, or is concurrently being, paid or expressly
omitted or (y) with respect to which a Purchaser is in default as described in
clause (y) above) shall be paid in full to such Replaced Purchaser concurrently
with such replacement. Upon the execution of the respective Assignment
Agreements, the payment of amounts referred to in clauses (i) and (ii) above and
delivery to the Replacement Purchaser of the appropriate Note or Notes executed
by the Company, the Replacement Purchaser shall become a Purchaser hereunder and
the Replaced Purchaser shall cease to constitute a Purchaser hereunder, except
with respect to indemnification provisions applicable to the Replaced Purchaser
under this Agreement, which shall survive as to such Replaced Purchaser.
SECTION 2.6. Fees. The Company agrees to pay to Gleacher NatWest Inc. a fee
----
(the "Placement Fee") on the Effective Date equal to $500,000. The Company
agrees to pay to the Purchasers a fee (the "Funding Fee") on the Effective Date
equal to $2,250,000.
SECTION 2.7. Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the Paying
Agent for the ratable (based on its pro rata share) account of the Purchasers
--- ----
entitled thereto, not later than 1:00 P.M. (New York time) on the date when due
and shall be made in immediately available funds and in US dollars at the
Office, it being understood that written notice by the Company to the Paying
Agent to make a payment from the funds in the Company's account at the Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under the Notes or this Agreement which are made
later than 1:00 P.M. (New York time) shall be
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<PAGE>
deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.
SECTION 2.8. Net Payments. (a) All payments made by a Credit Party
------------
hereunder or under any Note will be made without setoff, counterclaim or other
defense. All such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, duties, fees,
assessments or other governmental charges of whatever nature imposed, levied,
collected or assessed ("Taxes") by or on behalf of taxing authority in any
jurisdiction in which the Company or any Subsidiary is organized or engaged in
business for tax purposes ("Relevant Jurisdictions"), unless the respective
Credit Party is required to withhold or deduct Taxes by law or by the
interpretation or administration thereof. If a Credit Party is required to
withhold or deduct or is otherwise required to pay any amount for or on account
of Taxes imposed by a taxing authority in any Relevant Jurisdiction, from or in
respect of any payment made under or with respect to this Agreement or the
Notes, such Credit Party will pay such additional amounts ("Additional Amounts")
as may be necessary so that the net amount received by each Purchaser (including
Additional Amounts) after such withholding or deduction or other payment of
Taxes will not be less than the amount such Purchaser would have received if
such Taxes has not been withheld or deducted or paid; provided that no
Additional Amounts will be payable with respect to a payment made to a Purchaser
with respect to any Tax: (i) which would not have been imposed, payable or due
but for the existence of any present or former connection between the Purchaser
and Relevant Jurisdictions, as the case may be, other than the mere holding of
the Notes; (ii) that is an estate, inheritance, gift, sales or similar tax,
assessment or governmental charge (iii) that is imposed or withheld by reason of
the failure of the Purchaser to comply with a reasonable request of the Company,
addressed to the Purchaser to provide reasonable information concerning the
nationality, residence or identity of the Purchaser, which is required or
imposed by a statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or part of such tax,
assessment or governmental charge; or (iv) if the beneficial owner of, or person
ultimately entitled to obtain an interest in, such Notes had been the holder of
the Notes and would not be entitled to the payment of Additional Amounts.
(b) The respective Credit Party will also (i) make such withholding or
deduction and (ii) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law. The respective Credit Party will
make reasonable efforts to obtain certified copies of tax receipts evidencing
the payment of any Taxes so deducted or withheld from each taxing authority
imposing such Taxes. The respective Credit Party will furnish to the Purchasers,
within 60 days after the date the payment of Taxes so deducted or withheld is
due pursuant to applicable law, either certified copies of tax receipts
evidencing such payment by the respective Credit Party or, if such receipts are
not obtainable, other evidence of such payments by the respective Credit Party
reasonably satisfactory to the respective Purchasers.
(c) In addition, the respective Credit Party will indemnify and hold
harmless each Purchaser (subject to the exclusions set forth in Section 2.8(a)
(i), (ii) (iii) or (iv) and will, upon
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<PAGE>
written request of each Purchaser (subject to the exclusions set forth in
Section 2.8(a) (i), (ii), (iii) or (iv)), and provided that reasonable
supporting documentation is provided, reimburse each Purchaser for the amount of
any taxes levied or imposed by any Relevant Jurisdiction and paid by such
Purchaser as a result of payments made under or with respect to this Agreement
and/or the Notes. Any payment pursuant to this Section 2.8(c) shall be an
Additional Amount.
(d) At least 30 days prior to each date on which any payment under or with
respect to this Agreement or the Notes is due and payable, if the Company will
be obligated to pay Additional Amounts with respect to such payment, the Company
will deliver to the Paying Agent a certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Paying Agent to pay such
Additional Amounts to the Purchaser on the payment date.
ARTICLE III
CONDITIONS PRECEDENT
--------------------
SECTION 3.1. Effective Date. This Agreement shall become effective on the
--------------
date (the "Effective Date") on which all of the following conditions have first
been satisfied:
(A) Execution. This Agreement shall have been executed by the Credit
---------
Parties and the Purchasers as provided in Section 13.10.
(B) Opinions of Counsel. The Paying Agent shall have received opinions,
-------------------
addressed to the Paying Agent and each of the Purchasers and dated the Effective
Date, from (i) Norman L. Roelke, general counsel to the Credit Parties, covering
the matters set forth in Exhibit C-1 and (ii) Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel to the Credit Parties, covering the matters set forth
in Exhibit C-2, each of which opinions shall be in form and substance
satisfactory to the Paying Agent.
(C) Proceedings. The Paying Agent shall have received from each Credit
-----------
Party a certificate, dated the Effective Date, signed by a Director or Board
Secretary of such Credit Party substantially in the form of Exhibit D with
appropriate insertions and deletions, together with (x) copies of the
Certificate of Incorporation and By-laws (or analogous organizational documents)
of such Credit Party, (y) the resolutions of such Credit Party referred to in
such certificate and all of the foregoing (including such Certificate of
Incorporation and By-laws) shall be reasonably satisfactory to the Paying Agent
and (z) a statement that all of the applicable conditions set forth in Sections
3.1 and 3.2(b) have been satisfied as of such date.
(D) Documentation. All company and legal proceedings and all instruments
-------------
and agreements delivered in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Paying Agent , and the Paying Agent shall have
received all information and copies of all certificates, documents and papers,
including any records of company proceedings and governmental approvals, if any,
which the Paying Agent may have reasonably requested in connection therewith,
22
<PAGE>
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
(E) No Adverse Change. Since May 31, 1998, nothing shall have occurred with
-----------------
respect to the Credit Parties which would reasonably be expected to have a
material adverse effect on the rights or remedies of the Purchasers or on the
ability of the Credit Parties to perform their obligations to the Purchasers or
which would reasonably be expected to have a Material Adverse Effect.
(F) Approvals. All governmental and third party approvals necessary to
---------
complete the transactions contemplated by this Agreement shall have been
obtained and remain in effect, without any action being taken by any competent
authority which restrains or prevents the transactions contemplated herein or in
the other Documents or imposes, in the reasonable judgment of the Required
Holders, materially adverse conditions upon the consummation of such
transactions.
(G) Consummation of Acquisition. The Acquisition shall have been
---------------------------
consummated. Each of the Acquisition Documents shall have been duly authorized,
executed and delivered by each of the parties thereto and shall be in full force
and effect, and the Company shall have delivered to the Paying Agent and each
Purchaser copies of each of the Acquisition Documents, certified as being true
and correct as of the Effective Date.
(H) Funding. The financings under the Credit Agreement, the ESOP Credit
-------
Agreement, the Bridge Notes and the Junior Subordinated Seller PIK Notes shall
each have consummated on terms reasonably satisfactory to the Paying Agent.
(I) Consent Letter. The Paying Agent shall have received a letter from CT
--------------
Corporation System, reasonably satisfactory to the Paying Agent and dated the
Effective Date, indicating its consent to its appointment by the Credit Parties
as their agent to receive service of process.
(J) Placement Fee. The Placement Fee shall have been received by Gleacher
-------------
NatWest Inc.
(K) Funding Fee. The Funding Fee shall have been received by the
-----------
Purchasers.
All of the certificates, legal opinions and other documents and papers
referred to in Section 3.1, unless otherwise specified, shall be delivered to
the Paying Agent at the office of its counsel for the account of each of the
Purchasers and, in sufficient counterparts for each of the Purchasers and shall
be reasonably satisfactory in form and substance to the Paying Agent.
23
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Reference is hereby made to the Credit Agreement. Each and every
representation and warranty made therein for the benefit of the lenders
thereunder is hereby incorporated by reference into this Agreement for all
purposes, and the Company and each U.S. Subsidiary hereby jointly and severally
make each such representation and warranty for the express benefit of the
Purchasers and any subsequent Holders of the Notes; provided, that references in
such representations and warranties in the Credit Agreement to the Loan
Documents, as defined therein, shall be deemed for purposes of this Article IV
to be references to the Credit Documents.
ARTICLE V
COVENANTS
---------
So long as this Agreement is in effect until all Notes, together with
interest, and all other Obligations (other than those not then owed) incurred
hereunder are paid in full:
SECTION 5.1. Furnishing of Information; Compliance Certificates. (a)(i)
--------------------------------------------------
So long as any Person owns Notes having an aggregate principal amount of at
least US$1,000,000 (each a "Designated Purchaser"), the Company (at its own
expense) shall furnish to each such Designated Purchaser within 15 days after it
files them with the Commission copies of the quarterly and annual reports and of
the information, documents, and other reports (or copies of such portions of any
of the foregoing as the Commission may by rules and regulations prescribe) to be
filed pursuant to Section 13 or 15(d) of the Exchange Act (without regard to
whether the Company is subject to the requirements of such Section 13 or 15(d)
of the Exchange Act), and the Company hereby covenants to make all such filings
with the Commission to the extent required by law.
(ii) At their own expense, the Company and each Subsidiary, as
applicable, shall cause an annual report if furnished by it to stockholders
generally and each quarterly or other financial report if furnished by it to
stockholders generally to be mailed to each Designated Purchaser.
(b)(i) Each of the Company and the Subsidiaries shall deliver to each
Designated Purchaser, within 90 days after the end of each fiscal year, an
officers' certificate signed by its principal executive officer, principal
financial officer or principal accounting officer stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing officers with a view to
determining whether each has kept, observed, performed and fulfilled its
Obligations under this Agreement and further stating, as to each such officer
signing such certificate, that to the best of his or her knowledge each has
kept, observed, performed and fulfilled each and every covenant contained in
this Agreement and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Agreement (or, if a Default or
Event of Default shall have occurred,
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<PAGE>
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action each is taking or proposes to take with respect
thereto).
(ii) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to this Section 5.1 shall be accompanied by a
written statement of (x) the Company's independent public accountants (who shall
be a firm of established international reputation) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company has
violated any provisions of Article V or that a Default or Event of Default has
occurred pursuant to Article VI insofar as they relate to accounting matters or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation and (y) if any Subsidiary's financial statements are not prepared
on a consolidated basis with the Company's, such Subsidiary's independent public
accountants (who shall be a firm of established international reputation) that
in making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to believe
that any of the Subsidiaries is in Default under this Agreement or, if any such
Default has occurred, specifying the nature and period of existence thereof, it
being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(iii) The Company shall, so long as any of the Notes are outstanding,
deliver to each Designated Purchaser, forthwith upon any officer becoming aware
of (i) any Default or Event of Default or (ii) any event of default under any
other Indebtedness, an officers' certificate specifying such Default, Event of
Default or event of default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 5.2. Insurance. Each Credit Party will at all times maintain in
---------
full force and effect insurance in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice.
SECTION 5.3. Compliance with Statutes, etc. Each Credit Party will comply
------------------------------
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies in respect of the conduct of
its business and the ownership of its property other than those the non-
compliance with which would not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.4. Limitation on Asset Sales. (a) The Company will not, and
-------------------------
will not permit any of its Subsidiaries to, consummate an Asset Sale unless (i)
the Company or the applicable Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Company's Board of Directors), (ii) with respect to Asset Sales by the
Company or any Wholly Owned Subsidiary of the Company, at least 80% of the
consideration received by the Company or such Subsidiary, as the case may be,
from such Asset Sale shall be in the form of cash or Cash Equivalents and is
received at the time of such disposition and (iii) upon the consummation of an
Asset Sale, the Company shall apply, or cause such Subsidiary to apply, the
25
<PAGE>
Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof
(A) to prepay any Senior Debt or Indebtedness of any Subsidiary of the Company,
(B) to make an investment in properties and assets that replace the properties
and assets that were the subject of such Asset Sale or in properties or assets
that will be used in the business of the Company and its Subsidiaries as
existing on the Issue Date or in businesses reasonably related thereto
("Replacement Assets") or (C) a combination of prepayment and investment
permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 366th day after
an Asset Sale or such earlier date, if any, as the Board of Directors of the
Company or of such Subsidiary determines not to apply the Net Cash Proceeds
relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and
(iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger
Date"), such aggregate amount of Net Cash Proceeds which have not been applied
on or before such Net Proceeds Offer Trigger Date as permitted in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a "Net
Proceeds Offer Amount") shall be applied by the Company or such Subsidiary to
make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net
Proceeds Offer Payment Date") not less than 30 nor more than 45 days following
the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata
basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price
equal to 100% of the principal amount of the Notes to be purchased, plus accrued
and unpaid interest thereon, if any, to the date of purchase. The Company may
defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds
Offer Amount equal to or in excess of $5.0 million resulting from one or more
Asset Sales (at which time. the entire unutilized Net Proceeds Offer Amount, and
not just the amount in excess of $5.0 million, shall be applied as required
pursuant to Section 5.4(a)).
(b) Notwithstanding Section 5.4(a), the Company and its Subsidiaries
will be permitted to consummate an Asset Sale without complying with Section
5.4(a) to the extent (i) at least 80% of the consideration for such Asset Sale
constitutes Replacement Assets and the remainder is in cash or Cash Equivalents
and (ii) such Asset Sale is for fair market value; provided that any
consideration not constituting Replacement Assets received by the Company or any
of its Subsidiaries in connection with any Asset Sale permitted to be
consummated under this Section 5.4(b) shall constitute Net Cash Proceeds subject
to the provisions of Section 5.4(a).
(c) Each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Paying Agent, and shall comply with the
procedures set forth in this Agreement. Upon receiving notice of the Net
Proceeds Offer, Holders may elect to tender their Notes in whole or in part in
integral multiples of $1,000 in exchange for cash. To the extent Holders
properly tender Notes in an amount exceeding the Net Proceeds Offer Amount,
Notes of tendering Holders will be purchased on a pro rata basis (based on
amounts tendered). A Net Proceeds Offer shall remain open for a period of 20
business days or such longer period as may be required by law.
(d) The Company will comply with the requirements of Rule l4e-1 under
the Exchange Act and any other Securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any Securities laws or regulations conflict with this Section 5.4,
the Company shall comply with the applicable Securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 5.4.
26
<PAGE>
SECTION 5.5. Limitation on Incurrence of Additional Indebtedness. The
---------------------------------------------------
Company will not and will not permit any of its Subsidiaries to, directly or
indirectly create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
payment of (collectively incur) any Indebtedness (other than Permitted
Indebtedness); provided, however, that if no Default or Event of Default shall
have occurred and be continuing at the time of or as a consequence of the
incurrence of any such Indebtedness the Company may incur Indebtedness
(including, without limitation, Acquired Indebtedness) and Subsidiaries of the
Company may incur Acquired Indebtedness, in each case if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.00
to 1.00 if incurred on or prior to the second anniversary of the Issue Date or
greater than 2.25 to 1.00 if incurred thereafter.
SECTION 5.6. Limitation on Restricted Payments. (a) The Company will not,
---------------------------------
and will not cause or permit any of its Subsidiaries to, directly or indirectly,
(i) declare or pay any dividend or make any distribution (other than dividends
or distributions payable in Qualified Capital Stock of the Company) on or in
respect of shares of the Company's Capital Stock (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock (other than any warrant issued by the Company in connection with
the Acquisition), (iii) make any Investment (other than Permitted Investments)
or (iv) repurchase or redeem the Junior Subordinated Seller PIK Notes, or make
any cash payments of interest thereon (other than refinancing the Junior
Subordinated Seller PIK Notes with debt instruments having similar payment-in-
kind and subordination features) (each of the foregoing actions set forth in
clauses (i), (ii), (iii) and (iv) being referred to as a "Restricted Payment"),
if at the time of such Restricted Payment or immediately after giving effect
thereto, (A) a Default or an Event of Default shall have occurred and be
continuing or (B) the Company is not able to incur at least $1.00 of additional
Indebtedness under Section 5.5 or (C) the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to the
Issue Date (the amount expended for such purposes, if other than in cash, being
the fair market value of such property as determined reasonably and in good
faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50%
of the cumulative Consolidated Net Earnings (or if cumulative Consolidated Net
Earnings shall be a loss, minus 100% of such loss) of the Company earned
subsequent to the Issue Date and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to the Issue Date and on or prior to the Reference
Date of Qualified Capital Stock of the Company plus (y) 100% of the net cash
proceeds from the sale of Investments by the Company (other than Permitted
Investments) provided that such Investment was made after the Issue Date; plus
(z) without duplication of any amounts included in clause (C)(x) above, 100% of
the aggregate net cash proceeds of any equity contribution received by the
Company from a holder of the Company's Capital Stock (excluding, in the case of
clauses (C)(x) and (z), any net cash proceeds from a Public Equity Offering to
the extent used to redeem the Notes or utilized as provided in Section
5.6(b)(2)(ii).
(b) Notwithstanding the foregoing, the provisions set forth in Section
5.6(a) do not prohibit: (1) the payment of any dividend within 60 days after the
date of declaration of such
27
<PAGE>
dividend if the dividend would have been permitted on the date of declaration;
or (2) the acquisition of any shares of Capital Stock of the Company, either (i)
solely in exchange for shares of Qualified Capital Stock of the Company or (ii)
through the application of the net cash proceeds of a substantially concurrent
sale for cash (other than to a Subsidiary of the Company) of shares of Qualified
Capital Stock of the Company (excluding, in the case of Section 5.6(b)(2)(ii),
any net cash proceeds from a Public Equity Offering to the extent used to redeem
the Notes), or (3) dividends on, and redemptions of, the shares of the Company's
preferred stock held by the trust of the Company's retirement savings plan in
accordance with the terms thereof on the date of this Agreement; or (4) payments
to redeem or repurchase stock or similar rights from management of the Company
in connection with the repurchase provisions under employee stock option or
stock purchase agreements or other agreements to compensate management employees
upon the termination of employment, death or disability of any such person;
provided that such redemptions or repurchases shall not exceed $1.0 million. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date in accordance with Section 5.6(a)(iii), amounts expended pursuant to
Section 5.6(b)(1) and (4) shall be included in such calculation.
(c) Not later than the date of making any Restricted Payment, the
Company shall deliver to the Paying Agent an officers' certificate stating that
such Restricted Payment complies with this Agreement and setting forth in
reasonable detail the basis upon which the required calculations were computed,
which calculations may be based upon the Company's latest available internal
quarterly financial statements.
SECTION 5.7 Limitation on Liens. The Company will not, and will not cause
-------------------
or permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Subsidiaries whether owned on
the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes, the Notes are secured by
a Lien on such property, assets or proceeds that is senior in priority to such
Liens and (ii) in all other cases, the Notes are equally and ratably secured,
except for (A) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date; (B) Liens securing Senior
Debt; (C) Liens securing the Notes; (D) Liens of the Company or a Wholly Owned
Subsidiary of the Company on assets of any Subsidiary of the Company; (E) Liens
securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness which has been secured by a Lien permitted under this Agreement and
which has been incurred in accordance with the provisions of this Agreement;
provided. however, that such Liens (x) are no less favorable to the Holders and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (y) do not extend to
or cover any property or assets of the Company or any of its Subsidiaries not
securing the Indebtedness so Refinanced; and (F) Permitted Liens.
SECTION 5.8. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Subsidiaries. The Company will not, and will not cause or permit any
- ----------------------
of its Subsidiaries to, directly or indirectly. create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Company to (i) pay dividends or make any other
distributions on or in respect of its Capital Stock; (ii) make loans or advances
or
28
<PAGE>
to pay or guarantee any Indebtedness or other obligation owed to the Company
or any other Subsidiary of the Company, provided that the terms of the Credit
Agreement may restrict (a) loans or advances from the Company and those of its
Subsidiaries that are borrowers thereunder to any of the Company's Subsidiaries
that are not borrowers thereunder or (b) guarantees by the Company or
Subsidiaries of the Company that are borrowers thereunder of any Indebtedness or
other Obligation owed by any of the Company's Subsidiaries that are not
borrowers thereunder; or (iii) transfer any of its property or assets to the
Company or any other Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of (1) applicable law; (2) this
Agreement; (3) customary non-assignment provisions of any contract or any lease
governing a leasehold interest of any Subsidiary of the Company; (4) any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person or the properties or assets of the Person so acquired; (5)
agreements existing on the Issue Date to the extent and in the manner such
agreements are in effect on the Issue Date; (6) the Credit Agreement or the ESOP
Credit Agreement; or (7) an agreement governing Indebtedness incurred to
Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (2), (4) or (5) above; provided, however, that the
provisions relating to such encumbrance or restriction contained in any such
Refinancing Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4) or (5).
SECTION 5.9. Limitation on Transactions with Affiliates. (a) The
------------------------------------------
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than
(x) Affiliate Transactions permitted under Section 5.9(b) and (y) Affiliate
Transactions on terms that are no less favorable to the Company or such
Subsidiary than those that could reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Subsidiary. All Affiliate Transactions (and
each series of related Affiliate Transactions which are similar or part of a
common plan) involving aggregate payments or other property with a fair market
value in excess of $1.0 million shall be approved by the Board of Directors of
the Company or such Subsidiary, as the case may be, such approval to be
evidenced by a Board Resolution stating that such Board of Directors has
determined that such transaction complies with the foregoing provisions. If the
Company or any Subsidiary of the Company enters into an Affiliate Transaction
(or a series of related Affiliate Transactions related to a common plan) after
the Issue Date that involves aggregate payments or other property with a fair
market value of more than $5.0 million, the Company or such Subsidiary, as the
case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related transactions
to the Company or the relevant Subsidiary, as the case may be, from a financial
point of view, from an Independent Financial Advisor and file the same with the
Paying Agent.
(b) The restrictions set forth in Section 5.9(a) shall not apply to:
(i) reasonable fees and compensation paid to, and indemnity provided on behalf
of, officers, directors or
29
<PAGE>
employees of the Company or any Subsidiary of the Company as determined in good
faith by the Company's Board of Directors; (ii) transactions exclusively between
or among the Company and any of its Wholly Owned Subsidiaries or exclusively
between or among such Wholly Owned Subsidiaries, provided such transactions are
not otherwise prohibited by this Agreement; (iii) Restricted Payments permitted
by this Agreement; (iv) transactions permitted by, and complying with, the
provisions of Section 5.13; (v) transactions with distributors or other
purchases or sales of goods or services, in each case in the ordinary course of
business and otherwise in compliance with the terms of this Agreement which are
fair to the Company, in the reasonable determination of the Board of Directors
of the Company or the senior management thereof, or are on terms at least as
favorable as might reasonably have been obtained at such time from an
unaffiliated party; (vi) any management agreement as in effect as of the Issue
Date or any amendment thereto or any replacement agreement thereto so long as
any such amendment or replacement agreement is not more disadvantageous to the
Holders in any material respect than the original agreement as in effect on the
Issue Date and any similar agreements entered into after the Issue Date; and
(vii) intercompany loans or capital contributions from the Company or any
Subsidiary to any of the Company's Subsidiaries; provided such loans are
otherwise in compliance with the terms of this Agreement.
SECTION 5.10. Limitation Preferred Stock of Subsidiaries. The
------------------------------------------
Company shall not permit any of its Subsidiaries to issue any Preferred Stock
(other than to the Company or to a Wholly Owned Subsidiary of the Company) or
permit any Person (other than the Company or a Wholly Owned Subsidiary of the
Company) to own any Preferred Stock of any Subsidiary.
SECTION 5.11. Change of Control. (a) Upon the occurrence of any of
-----------------
a Change of Control, each Holder will have the right to require the Company to
repurchase all or any part of such Holder's Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of repurchase (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date) (such applicable purchase price being thereafter referred to as
the "Change of Control Purchase Price"):
(b) Within 30 days following any Change of Control, unless the Company
has mailed a redemption notice with respect to all the outstanding Notes in
connection with such Change of Control, the Company shall mail a notice to each
Holder with a copy to the Paying Agent stating:
(i) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes at a
purchase price in cash equal to the Change of Control Purchase Price
(subject to the right of Holders of record on a Record Date to receive
interest on the relevant Interest Payment Date);
(ii) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the "Change of
Control Payment Date"); and
(iii) the procedures determined by the Company, consistent with this
Agreement, that a Holder must follow in order to have its Notes purchased.
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<PAGE>
(c) Holders electing to have a Note repurchased will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Company at the address specified in
the notice at least 10 Business Days prior to the Change of Control Payment
Date. Holders will be entitled to withdraw their election if the Paying Agent
or the Company receives not later than three Business Days prior to the Change
of Control Payment Date a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note which was
delivered for repurchase by the Holder and a statement that such Holder is
withdrawing his election to have such Note purchased.
(d) On the Change of Control Payment Date, the Company will, to the
extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Paying Agent the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each Holder so
tendered the Change of Control Payment for such Notes, and the Paying Agent will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Unless the Company
defaults in the payment for any Notes properly tendered pursuant to the Change
of Control Offer, any Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control Payment
Date.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 5.11. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Agreement, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Agreement by virtue thereof.
SECTION 5.12. Prohibition on Incurrence of Senior Subordinated Debt.
-----------------------------------------------------
The Company shall not incur or suffer to exist any indebtedness that is senior
in right of payment to the Notes and subordinate in right of payment to any
other Indebtedness of the Company.
SECTION 5.13. Merger, Consolidation and Sale of Assets. (a) The
----------------------------------------
Company will not, in a single transaction or series of related transactions,
consolidate or merge with or into any Person, or sell, assign, transfer, lease,
convey or otherwise dispose of (or cause or permit any Subsidiary of the Company
to sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the Company's assets (determined on a consolidated basis
for the Company and the Company's Subsidiaries) whether as an entirety or
substantially as an entirety to any Person unless: (i) either (1) the Company
shall be the surviving or continuing corporation or (2) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment, transfer, lease,
conveyance or other disposition the properties and assets of the Company and of
the Company's Subsidiaries substantially as an entirety (the "Surviving Entity")
(x) shall be a corporation organized and
31
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validly existing under the laws of the United States or any State thereof or the
District of Columbia and (y) shall expressly assume, by a supplement hereto (in
form and substance satisfactory to the Paying Agent), executed and delivered to
the Paying Agent, the due and punctual payment of the principal of, and premium,
if any, and interest on all of the Notes and the performance of every covenant
of the Notes and this Agreement on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption contemplated by Section 5.13(i)(2)(y) (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction), the Company or such
Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal
to or greater than the Consolidated Net Worth of the Company immediately prior
to such transaction; (iii) immediately before and immediately after giving
effect to such transaction and the assumption contemplated by Section
5.13(i)(2)(y) (including, without limitation, giving effect to any Indebtedness
and Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction), no Default or
Event of Default shall have occurred or be continuing; and (iv) the Company or
the Surviving Entity shall have delivered to the Paying Agent an Officers'
Certificate and an opinion of counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other disposition and,
if a supplement to this Agreement is required in connection with such
transaction, such supplement complies with the applicable provisions of this
Agreement and that all conditions precedent in this Agreement relating to such
transaction have been satisfied.
(b) The Surviving Entity will succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Agreement, but, in
the case of a lease of all or substantially all its assets, the Company will not
be released from the obligation to pay the principal of and interest on the
Notes.
(c) Notwithstanding any other provision of this Agreement, any
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company or any other Wholly Owned Subsidiary.
SECTION 5.14. Ratings. The Company agrees to use its best efforts to
-------
obtain a rating of the Notes from both Moody's and S&P not later than the date
that is six months after the date of this Agreement.
ARTICLE VI
EVENTS OF DEFAULT
-----------------
Upon the occurrence of any of the following specified events (each, an
"Event of Default"):
SECTION 6.1. Payments. The Company shall (i) default in the payment
--------
when due of any principal of the Notes or (ii) default, and such default shall
continue for 30 or more days, in the payment when due of any interest
(including any Additional Amount) on the Notes or any other amounts owing
hereunder or under any other Credit Document; or
32
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SECTION 6.2. Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
SECTION 6.3. Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any covenant contained in Article V and such
default shall continue for a period of at least 30 days after notice to the
defaulting party by the Paying Agent or Purchasers holding at least 25% of the
outstanding principal of the Notes or (b) default in the due performance or
observance by it of any other term, covenant or agreement (other than those
referred to in Section 6.1 or 6.2 or clauses (a) and (b) of this Section 6.3)
contained in this Agreement and such default shall continue unremedied for a
period of at least 60 days after notice to the defaulting party by the Paying
Agent or Purchasers holding at least 25% of the outstanding principal of the
Notes; or
SECTION 6.4. Default Under Other Agreements. There shall be a default
------------------------------
under the Credit Agreement which either (1) results from the failure to pay
Obligations due under the Credit Agreement at its final stated maturity, or (2)
relates to an Obligation other than an Obligation described in the previous
clause (1) as a result of which, the lenders under the Credit Agreement cause
the Obligations under the Credit Agreement to be due prior to its final stated
maturity; or there shall be a default or event of default (not waived or cured
within any applicable grace period) under any Indebtedness of the Company
(including specifically, without limitation, the Bridge Notes and the Junior
Subordinated Seller PIK Notes) or any other Credit Party, whether such
Indebtedness now exists or shall hereafter be created, if the aggregate amount
of such Indebtedness exceeds US$10,000,000 (or its equivalent) at any one time;
or
SECTION 6.5. Bankruptcy or Insolvency. (a) The Company or any of
------------------------
its Subsidiaries pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
(E) consents to or acquiesces in the institution of a bankruptcy or
an insolvency proceeding against it, or
(F) takes any corporate action to authorize or effect any of the
foregoing;
(b) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
33
<PAGE>
(A) is for relief against the Company or any of its Subsidiaries in an
involuntary case,
(B) appoints a Custodian of the Company or any of its Subsidiaries or
for all or substantially all of the property of the Company or any of its
Subsidiaries, or
(C) orders the liquidation of the Company or any of its Subsidiaries,
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
SECTION 6.6. Judgments. Any judgment or decree for the payment of
---------
money in excess of US$5,000,000 (to the extent not covered by insurance) is
rendered against any Credit Party and such judgment or decree shall remain
undischarged or unstayed for a period of at least 60 days after such judgment
becomes final and non- appealable;
then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Paying Agent shall, upon the written
request of the Required Holders, by written notice to the Credit Parties, take
any or all of the following actions, without prejudice to the rights of any
Purchaser to enforce its claims against any Credit Party (provided that, if an
Event of Default specified in Section 6.5 shall occur with respect to the
Company, the result which would occur upon the giving of written notice by the
Paying Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Purchaser shall
forthwith terminate immediately without any other notice of any kind; and (ii)
declare the principal of and any accrued interest in respect of Notes and all
obligations owing hereunder to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company.
ARTICLE VII
THE PAYING AGENT
----------------
SECTION 7.1. Appointment. The Purchasers hereby designate National
-----------
Westminster Bank Plc as Paying Agent to act as specified herein. Each Purchaser
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, the Paying Agent to take
such action on its behalf under the provisions of this Agreement, and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Paying Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Paying Agent may
perform any of its duties hereunder by or through its officers, directors,
agents, employees or affiliates.
SECTION 7.2. Nature of Duties. The Paying Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement.
Neither the Paying Agent nor any of its respective officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by their gross negligence or willful misconduct. The
duties
34
<PAGE>
of the Paying Agent shall be mechanical and administrative in nature; the Paying
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Purchaser or the holder of any Note;
and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Paying
Agent any obligations in respect of this Agreement or any other Credit Document
except as expressly set forth herein or therein.
SECTION 7.3. Lack of Reliance on the Paying Agent. Independently and
------------------------------------
without reliance upon the Paying Agent, each Purchaser and the holder of each
Note, to the extent it deems appropriate, has made and shall continue to make
(i) its own independent investigation of the Project and of the financial
condition and affairs of the Credit Parties in connection with the acquisition
of Notes and the taking or not taking of any action in connection herewith and
(ii) its own appraisal of the creditworthiness of the Project and of the Credit
Parties and, except as expressly provided in this Agreement, the Paying Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Purchaser or the holder of any Note with any credit or
other information with respect thereto, whether coming into its possession
before the acquisition of Notes or at any time or times thereafter. The Paying
Agent shall not be responsible to any Purchaser or the holder of any Note for
any recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of any Credit Party or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Project and/or any Credit Party or
the existence or possible existence of any Default or Event of Default.
SECTION 7.4. Certain Rights of the Paying Agent. If the Paying Agent
----------------------------------
shall request instructions from the Required Holders with respect to any act or
action (including failure to act) in connection with this Agreement or any other
Credit Document, the Paying Agent shall be entitled to refrain from such act or
taking such action unless and until the Paying Agent shall have received
instructions from the Required Holders; and the Paying Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, neither any Purchaser nor the holder of any Note shall have any right
of action whatsoever against the Paying Agent as a result of the Paying Agent
acting or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Holders.
SECTION 7.5. Reliance. The Paying Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype, facsimile or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Paying Agent believed to be the
proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Paying Agent.
SECTION 7.6. Indemnification. (a) The Company and the each of the
---------------
Subsidiaries, jointly and severally, shall pay to the Paying Agent from time to
time reasonable
35
<PAGE>
compensation for its acceptance of this Agreement, including extraordinary
services such as default administration. The Paying Agent's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company and each of the Subsidiaries, jointly and severally, shall reimburse the
Paying Agent upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Paying Agent's agents and counsel.
(b) The Company and each of the Subsidiaries, jointly and severally,
shall indemnify the Paying Agent against any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Agreement, including the costs and
expenses of enforcing this Agreements against the Company (including this
Section 7.6) and defending itself against any claim (whether asserted by the
Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except as set
forth below in subparagraph (d). The Paying Agent shall notify the Company and
each of the Subsidiaries promptly of any claim for which it may seek indemnity.
Failure by the Paying Agent to so notify the Company or any Subsidiary shall not
relieve the Company or any of the Subsidiaries of their Obligations hereunder.
The Paying Agent may have separate counsel and the Company and each of the
Subsidiaries, jointly and severally, shall pay the reasonable fees and expenses
of such counsel. Neither the Company nor any Subsidiary need pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
(c) The obligations of the Company and each of the Subsidiaries under
this Section 7.6 shall survive the resignation or removal of the Paying Agent
and the satisfaction and discharge or termination of this Agreement.
(d) Notwithstanding subparagraphs (a) or (b) above, neither the
Company nor any Subsidiary need reimburse any expense or indemnify against any
loss or liability incurred by the Paying Agent through its own gross negligence,
bad faith or willful misconduct.
(e) To secure the Company's and each Subsidiary's payment obligations
in this Section, the Paying Agent shall have a Lien on all money or property
held or collected by the Paying Agent, except that held in trust to pay
principal, premium, if any, and interest on particular Notes. This Section 7.6
and such Lien shall survive the resignation or removal of the Paying Agent and
the satisfaction and discharge of this Agreement.
(f) When the Paying Agent incurs expenses or renders services after an
Event of Default specified in Section 6.6 occurs, the expenses and the
compensation for such services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(g) To the extent the Paying Agent is not reimbursed and indemnified
by the Company pursuant to this Section 7.6, each Purchaser will reimburse and
indemnify the Paying Agent, in proportion to its respective Notes, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of
36
<PAGE>
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Paying Agent in performing its duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any other
Credit Document provided that no Purchaser shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Paying Agent.
SECTION 7.7. The Paying Agent in Its Individual Capacities. With
---------------------------------------------
respect to its obligation, if any, to purchase or hold Notes under this
Agreement, the Paying Agent shall have the rights and powers specified herein
for a "Purchaser" and may exercise the same rights and powers as though it were
not performing the duties specified herein; and the term "Purchasers", "Required
Holders", "holders of Notes" or any similar term shall, unless the context
clearly otherwise indicates, include the Paying Agent in its individual
capacity. The Paying Agent and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with the Company or any Affiliate thereof as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Purchasers.
SECTION 7.8. Holders. The Paying Agent shall deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Paying Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or any Note or Notes issued in exchange therefor.
SECTION 7.9. Resignation by the Paying Agent. (a) The Paying Agent
-------------------------------
may resign from the performance of all its functions and duties hereunder at any
time by giving 15 Business Days' prior written notice to the Credit Parties and
the Purchasers. Such resignation shall take effect upon the appointment of a
successor Paying Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Purchasers shall appoint
a successor Paying Agent hereunder.
(c) If a successor Paying Agent shall not have been so appointed
within such 15 Business Day period, the Paying Agent, with the consent of the
Company, shall then appoint a successor Paying Agent who shall serve as Paying
Agent hereunder or thereunder until such time, if any, as the Purchasers appoint
a successor Paying Agent as provided above.
(d) If no successor Paying Agent has been appointed pursuant to clause
(b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Paying Agent, the Paying Agent's resignation shall
become effective and the Required Holders shall thereafter perform all the
duties of the Paying Agent hereunder until such time, if any, as the Purchasers
appoint a successor Paying Agent as provided above.
37
<PAGE>
ARTICLE VIII
DISCHARGE OF OBLIGATIONS UNDER NOTES
------------------------------------
SECTION 8.1. Discharge Of Liability On Notes; Defeasance.
-------------------------------------------
(a) When (i) the Company delivers to the Paying Agent all outstanding
Notes (other than Notes replaced pursuant to Section 13.17 hereof) canceled or
for cancellation or (ii) all outstanding Notes have become due and payable and
the Company irrevocably deposits with the Paying Agent funds sufficient to pay
at maturity all outstanding Notes, including interest thereon (other than Notes
replaced pursuant to Section 13.17 hereof), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Agreement shall,
subject to Sections 8.1(e) and 8.6 hereof, cease to be of further effect. The
Paying Agent shall acknowledge satisfaction and discharge of this Agreement on
demand of the Company accompanied by an Officers' Certificate and an Opinion of
Counsel reasonably acceptable to the Paying Agent and at the cost and expense of
the Company.
(b) Subject to Sections 8.1(e), 8.2 and 8.6 hereof, the Company at any
time may terminate (i) all its obligations under the Notes and this Agreement
("legal defeasance option") or (ii) all obligations under Sections 5.1, 5.5,
5.6, 5.7, 5.8, 5.9, 5.10 and 5.13(a)(iii), ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding their prior
exercise of its covenant defeasance option.
(c) If the Company exercises its legal defeasance option, payment of
the Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Section 6.2 or 6.3 as
well as 6.5 (but only with respect to Subsidiaries) or because of the failure of
the Company or the Subsidiaries to comply with Sections 5.13(iii).
(d) Upon satisfaction of the conditions set forth herein and Section
8.2 and upon request of the Company, the Paying Agent shall acknowledge in
writing the discharge of those obligations that the Company terminate.
(e) Notwithstanding Section 8.1(a) and (b), the Company's obligations
in Sections 7.6, 8.1(d), 8.4, 8.5 and 8.6 and Article XIII hereof shall survive
until the Notes have been paid in full. Thereafter, the Company's obligations in
Sections 7.6, 8.4 and 8.5 hereof shall survive.
SECTION 8.2. Conditions To Defeasance.
------------------------
(a) The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the Paying Agent
money or U.S. Government Obligations in amounts (including interest, but
without consideration of any reinvestment of such interest) and maturities
sufficient, but in the case of the legal
38
<PAGE>
defeasance option only, not more than such amounts (in each case as
certified by a nationally recognized firm of independent public
accountants), to pay and discharge at their Maturity (or such earlier
redemption date as the Company shall have specified to the Paying Agent) the
principal of, premium, if any, interest on all outstanding Notes to maturity
or redemption, as the case may be, and to pay all of the sums payable by it
hereunder; provided, that the Paying Agent shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of said principal, premium, if any, and interest
with respect to the Notes;
(ii) in the case of the legal defeasance option only, 123 days pass after
the deposit is made and during the 123 day period no Default or Event of
Default specified in Section 6.5 hereof with respect to the Company or any
Subsidiary occurs which is continuing at the end of the period;
(iii) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(iv) the deposit does not constitute a default constitute a default
under any ohter agreement binding on the Company ;
(v) the Company delivers to the Paying Agent an Opinion of Counsel to
the effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment Company
Act of 1940, as amended;
(vi) in the case of the legal defeasance option, the Company shall have
delivered to the Paying Agent an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date of this Agreement there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for U.S. Federal
income tax purposes as a result of such defeasance and will be subject to
U.S. Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the Company shall
have delivered to the Paying Agent an Opinion of Counsel to the effect that
the Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(viii) the Company delivers to the Paying Agent an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article 8 have
been complied with, except that such Opinion of Counsel shall only be
required to cover the matters set forth in clauses (iv) and (v) and either
(vi) or (vii) as applicable.
39
<PAGE>
(b) In order to have money available on a payment date to pay
principal, premium, if any, or interest on the Notes, the U.S. Government
Obligations deposited pursuant to preceding clause (a) shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as shall provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
(c) Before or after a deposit, the Company may make arrangements
satisfactory to the Paying Agent for the redemption of Notes at a future date in
accordance with Article XII hereof.
SECTION 8.3. Application of Trust Money.
---------------------------
The Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article VIII. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with this Agreement to the payment of principal, premium, if
any, and interest on the Notes.
SECTION 8.4. Repayment to the Company.
-------------------------
(a) The Paying Agent shall promptly pay to the Company upon written
request any excess money or Notes held by them at any time; provided, however,
that the Paying Agent shall not pay any such excess to the Company unless the
amount remaining on deposit with the Paying Agent, after giving effect to such
transfer are sufficient to pay principal, premium, if any, and interest on the
outstanding Notes, which amount shall be certified to the Paying Agent by
independent public accountants.
(b) The Paying Agent shall pay to the Company upon written request any
money held by them for the payment of principal, premium, if any, or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided, however, that the Company shall have either
caused notice of such payment to be mailed to each Holder entitled thereto no
less than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread circulation
published in the City of New York. After payment to the Company, Holders
entitled to the money must look to the Company and the Subsidiaries for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Paying Agent with respect to such money
shall cease.
SECTION 8.5. Indemnity For Government Obligations.
-------------------------------------
The Company and the Subsidiaries, jointly and severally, shall pay and
shall indemnify the Paying Agent against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement.
--------------
40
<PAGE>
If the Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with this Article VIII by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and each of the Subsidiary's Obligations under this Agreement and the
Notes and the Subsidiary Guarantees shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article VIII; provided, however, that if the Company or any
Subsidiary has made any payment of principal of, premium, if any, or interest on
any Notes because of the reinstatement of its Obligations, the Company or any of
the Subsidiaries, as the case may be, shall be subrogated to the rights of the
Holders to receive such payment from the money or U.S. Government Obligations
held by the Paying Agent.
ARTICLE IX
REGISTRATION RIGHTS
-------------------
SECTION 9.1. Piggy-Back Registration.
-----------------------
If at any time the Company proposes to file a Registration Statement
under the Securities Act with respect to an offering by the Company for the
account of any of the respective Holders of any class of its securities (other
than a Registration Statement on Form S-8 (or any substitute form that may be
adopted by the SEC), then the Company shall give written notice of such proposed
filing to the Holders of Registrable Securities as soon as practicable (but in
no event less than 20 Business Days before the anticipated filing date), and
such notice shall offer such holders the opportunity to register such amount of
Registrable Securities as each such holder may request (which request shall
specify the Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof) (a "Piggy-Back Registration"). In
the case of any underwritten offering, the Company shall use its best efforts to
cause the managing underwriter or underwriters of such proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of any other Holder included therein and to permit the sale
or other disposition of such Registrable Securities in accordance with the
intended method of distribution thereof. Any Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section by giving written notice to the
Company of its request to withdraw prior to the time such Registration Statement
is declared or becomes effective. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it is declared or becomes effective;
provided that the Company shall give prompt notice thereof to participating
holders. The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section, and
each participating holder shall pay all underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such
participating holder's Registrable Securities pursuant to a registration
statement effected pursuant to this Section.
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No failure to effect a registration under this Section and to complete
the sale of Notes in connection therewith shall relieve the Company of any other
obligation under this Agreement.
SECTION 9.2. Reduction of Offering.
---------------------
(a) (i) If the managing underwriter or underwriters of any
underwritten offering described in Section 9.1 have informed, in writing, the
Company or holders of the Registrable Securities requesting inclusion in such
offering that it is their opinion that the total number of shares which the
Company, the participating holders and any other Persons desiring to participate
in such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, including the price at which
such Notes can be sold, then the number of shares to be offered for the account
of the participating holders and all such other Persons (other than the Company)
participating in such registration shall be reduced or limited pro rata in
proportion to the respective number of shares requested to be registered to the
extent necessary to reduce the total number of shares requested to be included
in such offering to the number of shares, if any, recommended by such managing
underwriters; provided, however, that if such offering is effected for the
account of any Holder or the Company other than the participating holders,
pursuant to the demand registration rights of any such Holder, then the number
of shares to be offered for the account of the Company (if any) and the
participating holders (but not such Holders who have exercised their demand
registration rights) shall be reduced or limited pro rata in proportion to the
respective number of shares requested to be registered to the extent necessary
to reduce the total number of shares requested to be included in such offering
to the number of sh ares, if any, recommended by such managing underwriters.
(ii) If the managing underwriter or underwriters of any underwritten
offering described in Section 9.1 notify the participating Holders requesting
inclusion of Registrable Securities in such offering, that the kind of Notes
that the participating Holders, the Company and any other Persons desiring to
participate in such registration intend to include in such offering is such as
to materially and adversely affect the success of such offering, (x) the
Registrable Securities to be included in such offering shall be reduced as
described in clause (i) above or (y) if a reduction in the Registrable
Securities pursuant to clause (i) above would, in the judgment of the managing
underwriter or underwriters, be insufficient to substantially eliminate the
adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering.
(b) If, as a result of the proration provisions of this Section 9.2,
any participating holder shall not be entitled to include all Registrable
Securities in a Piggy-Back Registration that such participating holder has
requested to be included, such Selling Holder may elect to withdraw his request
to include Registrable Securities in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
-------- -------
and, after making a Withdrawal Election, a participating holder shall no longer
have any right to include Registrable Securities in the registration as to which
such Withdrawal Election was made.
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SECTION 9.3. Demand Registration.
-------------------
(a) From and after the date that is six months after the date of this
Agreement, a majority of the Holders of Registrable Securities (the "Majority
Noteholders") may request in writing that the Company effect the registration
under the Securities Act of all or part of the Registrable Securities owned by
the Majority Noteholders. Upon receipt of such written request, and subject to
the limitations set forth herein, the Company will file with the U.S. Securities
and Exchange Commission as promptly as practicable, and use its reasonable best
efforts to cause to become effective, a registration statement on Form S-1, S-2
or S-3 under the Securities Act registering the offering and sale of the
Registrable Securities which the Company has been so requested to register, all
to the extent necessary to permit the disposition (in accordance with the
intended method thereof as set forth in such written request) of the Registrable
Securities so to be registered; provided, that the Company shall not be
--------
obligated to file a registration statement relating to any registration request
under this Section 9.3 with respect to more than one registration under this
Section 9.3(a).
(b) The Company shall be entitled to postpone for a reasonable period
of time (not to exceed 60 days (or, in the case of clause (A) below, 60 days
after effectiveness of the proposed registration statement), which may not
thereafter be extended) the filing of any registration statement otherwise
required to be prepared and filed by it pursuant to this Section 9.3(b) if, at
the time it receives a request for such registration, (A) the Company is
conducting or has taken definitive steps to conduct an offering of any class of
its securities and the Company is advised in writing by the investment banker,
managing underwriter or financial advisor engaged by the Company to advise the
Company thereon that such offering would be affected materially and adversely by
the registration so demanded, (B) the Company is in possession of material
information that has not been disclosed to the public and the Board of Directors
of the Company, in the reasonable exercise of its discretion, has determined
that it is advisable not to disclose such information in the registration
statement, or (C) the Board of Directors of the Company shall determine in good
faith that such offering will materially interfere with a pending or
contemplated merger, sale of assets, recapitalization or other similar corporate
action of the Company, and in each such case the Company shall have furnished to
Majority Noteholders an Officers' Certificate confirming the applicability of
clause (A), (B), or (C), as the case may be. After such period of postponement
the Company shall effect such registration as promptly as practicable without
further request from the Holders of Notes, unless such request has been
withdrawn by the Majority Noteholders.
(c) It is agreed and understood that the right conferred by this
Section 9.3 may be exercised only once.
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ARTICLE X
SUBSIDIARY GUARANTEE OF NOTES
-----------------------------
SECTION 10.1. Subsidiary Guarantee.
--------------------
(a) Each U.S. Subsidiary, by its execution and delivery of this
Agreement, and each Subsidiary organized under the laws of the United States or
a State thereof created or acquired after the date hereof (which shall
thereafter be deemed to be a U.S. Subsidiary for all purposes hereunder), by its
execution and delivery of a supplement to this agreement agreeing to be bound by
the terms hereof, jointly and severally irrevocably and unconditionally
guarantees, as a primary obligor and not a surety, to each Holder of a Note and
its successors and assigns, irrespective of the validity and enforceability of
this Agreement, the Notes or the Obligations of the Company hereunder or
thereunder, (i) the due and punctual payment of the principal, premium, if any,
interest (including post-petition interest in any proceeding under any
Bankruptcy Law whether or not an allowed claim in such proceeding) on overdue
principal, premium, if any, and interest, if lawful on such Note, and (ii) all
other monetary Obligations payable by the Company under this Agreement
(including under Section 7.6 hereof) and the Notes (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and as the
same shall become due and payable, whether by acceleration thereof, call for
redemption or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code), in
accordance with the terms of any such Note and of this Agreement, subject,
however, in the case of (i) and (ii) above, to the limitations set forth in
Section 10.4 hereof. Each Subsidiary hereby agrees that its Obligations
hereunder shall be absolute and unconditional, irrespective of, and shall be
unaffected by, any failure to enforce the provisions of any such Note or this
Agreement, any waiver, modification or indulgence granted to the Company with
respect thereto, the recovery of any judgment against the Company, any action to
enforce the same, by the Holders or the Paying Agent, the recovery of any
judgment against the Company, any action to enforce the same, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. Each U.S Subsidiary hereby waives diligence, presentment,
filing of claims with a court in the event of a merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
Indebtedness evidenced thereby and all demands whatsoever, and covenants that
its Subsidiary Guarantee shall not be discharged as to any such Note except by
payment in full of the principal thereof, premium, if any, and all accrued
interest thereon.
(b) Each U.S. Subsidiary further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Paying Agent to any Note held for payment of
the Guaranteed Obligations.
(c) Each U.S. Subsidiary agrees that it shall not be entitled to, and
hereby irrevocably waives, any right of subrogation in relation to the Holders
or the Paying Agent in respect of any Guaranteed Obligations. Each Subsidiary
further agrees that, as between such Subsidiary, on the one hand, and the
Holders and the Paying Agent, on the other hand, (x) the
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maturity of the Guaranteed Obligations may be accelerated as provided in Article
VI for the purposes of such Subsidiary's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations, and (y) in the event of
any Declaration of Acceleration of such Guaranteed Obligations as provided in
Article VI hereof, such Guaranteed Obligations (whether or not due and payable)
shall forthwith become due and payable by such Subsidiary for the purpose of
this Article X.
(d) Each Subsidiary also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Paying Agent or any
Holder in enforcing any rights under this Article X.
SECTION 10.2. Execution and Delivery of Subsidiary Guarantee.
----------------------------------------------
(a) [Reserved]
(b) This Agreement shall be executed on behalf of each U.S.
Subsidiary, by manual or facsimile signature, and such execution by a Subsidiary
shall fully evidence such Subsidiary's Subsidiary Guarantee.
(c) The delivery of any Note by the Paying Agent, shall constitute due
delivery of the Subsidiary Guarantee set forth in this Agreement on behalf of
each Subsidiary.
SECTION 10.3. Subsidiary Guarantee Unconditional, etc.
---------------------------------------
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each U.S. Subsidiary will be obligated to pay the same
immediately. Each Subsidiary hereby agrees that its obligations hereunder shall
be continuing, absolute and unconditional, irrespective of: the recovery of any
judgment against the Company or any Subsidiary; any extension, renewal,
settlement, compromise, waiver or release in respect of any obligation of the
Company under this Agreement or any Note, by operation of law or otherwise; any
modification or amendment of or supplement to this Agreement or any Note; any
change in the corporate existence, structure or ownership of the Company, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Company or any of their assets or any resulting release or discharge of any
obligation of the Company contained in this Agreement or any Note; the existence
of any claim, set-off or other rights which any Subsidiary may have at any time
against the Company, the Paying Agent, any Holder or any other Person, whether
in connection herewith or any unrelated transactions; provided, that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim; any invalidity or unenforceability relating to or
against the Company for any reason of this Agreement or any Note, or any
provision of applicable law or regulation purporting to prohibit the payment by
the Company of the principal, premium, if any, or interest on any Note or any
other Guaranteed Obligation; or any other act or omission to act or delay of any
kind by the Company, the Paying Agent, any Holder or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
Section 10.3, constitute a legal or equitable discharge of the Subsidiaries'
obligations hereunder. Each U.S. Subsidiary hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against
45
<PAGE>
the Company, protest, notice and all demand whatsoever and covenants that this
Subsidiary Guarantee will not be discharged except by the complete performance
of the obligations contained in the Notes, this Agreement and in this Article X.
Each U.S. Subsidiary's obligations hereunder shall remain in full force and
effect until this Agreement shall have terminated and the principal of and
interest on the Notes and all other Guaranteed Obligations shall have been paid
in full. If at any time any payment of the principal of or interest on any Note
or any other payment in respect of any Guaranteed Obligation is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, each Subsidiary's obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time, and this Article X, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making any payment hereunder to
be subrogated to the rights of the payee against the Company with respect to
such payment or otherwise to be reimbursed, indemnified or exonerated by the
Company in respect thereof.
SECTION 10.4. Limitation of Subsidiary's Liability.
------------------------------------
Each U.S. Subsidiary, and by its acceptance of a Note each Holder,
hereby confirms that it is the intention of all such parties that the guarantee
by such Subsidiary pursuant to its Subsidiary Guarantee not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, Federal and
state fraudulent conveyance laws or other legal principles. To effectuate the
foregoing intention, the Holders and each Subsidiary hereby irrevocably agree
that the obligations of such Subsidiary under the Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary in
respect of the obligations of such other Subsidiary under its Subsidiary
Guarantee or pursuant to Section 10.5 hereof, result in the obligations of such
Subsidiary under the Subsidiary Guarantee not constituting such fraudulent
transfer or conveyance under federal or state law.
` SECTION 10.5. Contribution.
------------
In order to provide for just and equitable contribution among the U.S.
Subsidiaries, the U.S. Subsidiaries agree, inter se, that in the event any
payment or distribution is made by any U.S. Subsidiary (a "Funding Subsidiary")
under the Subsidiary Guarantee, such Funding Subsidiary shall be entitled to a
contribution from all other Subsidiaries in a pro rata amount based on the
Adjusted Net Assets of each U.S. Subsidiary (including the Funding Subsidiary)
for all payments, damages and expenses incurred by that Funding Subsidiary in
discharging the Company's obligations with respect to the Notes or any other
Subsidiary's obligations with respect to the Subsidiary Guarantee.
SECTION 10.6. Release.
-------
Upon the sale or disposition of all of the Equity Interests of a U.S.
Subsidiary to a Person which is not the Company or a U.S. Subsidiary of the
Company, which is otherwise in compliance with this Agreement, such Subsidiary
shall be deemed released from all its obligations under this Agreement without
any further action required on the part of the Paying Agent or any
46
<PAGE>
Holder; provided, however, that any such termination shall occur if and only to
the extent that all Obligations of each U.S. Subsidiary under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, Indebtedness of the Company and the other Subsidiaries
shall also terminate upon such release, sale or transfer; provided further, that
without limiting the foregoing, any proceeds received by the Company or any
Subsidiary of the Company from such transaction shall be applied as provided in
Section 5.4. The Paying Agent shall execute an appropriate instrument prepared
by the Company evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 10.6. Any U.S. Subsidiary not so released remains liable for the
full amount of principal, premium, if any, and interest on the Notes as provided
in this Article X.
SECTION 10.7. Additional Subsidiaries.
-----------------------
Any Person that was not a U.S. Subsidiary on the date of this
Agreement may become a Subsidiary by executing and delivering to the Paying
Agent (a) a supplement hereto in form and substance satisfactory to the Paying
Agent, which subjects such Person to the provisions of this Agreement as a
Subsidiary guarantor and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning creditors' rights and equitable
principles as may be acceptable to the Paying Agent in its discretion). The
Subsidiary Guarantee of each Person described in this Section 10.7 shall apply
to all Notes theretofore executed and delivered, notwithstanding any failure of
such Notes to contain a notation of such Subsidiary Guarantee thereon.
SECTION 10.8. Successors and Assigns.
----------------------
This Article X shall be binding upon each U.S. Subsidiary and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Paying Agent and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Paying Agent, the rights and
privileges conferred upon that party in this Agreement and in the Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Agreement.
SECTION 10.9. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each U.S. Subsidiary covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Subsidiary from
performing its Subsidiary Guarantee as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Agreement; and (to the extent that it may lawfully do so)
each such Subsidiary hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Paying Agent, but will suffer and permit the
execution of every such power as though no such law had been enacted.
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ARTICLE XI
SUBORDINATION
-------------
SECTION 11.1. Notes Subordinated to Senior Debt. The Company and the
---------------------------------
Subsidiaries, each for itself and its successors, and each Holder, by its
acceptance of Notes, agrees that, notwithstanding anything to the contrary in
Sections 6.1 and 6.2 hereof, the payment of the principal of, interest on or any
other amounts due on the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article XI, to the prior payment in
full of all Senior Debt of the Company. Each Holder by its acceptance of the
Notes authorizes and directs the Paying Agent on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Senior Debt and such Holder, the subordination provided in this Article XI.
The expressions "prior payment in full," "payment in full" and "paid in
full" and any other similar term or phrase when used in this Article XI with
respect to Senior Debt shall mean the payment in full of such Senior Debt in
cash or provision for such payment in cash or otherwise in a manner satisfactory
to the holders of the Senior Debt.
This Article XI shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Debt, and such provisions are made for the benefit of the holders of Senior
Debt, and such holders are made obligees hereunder and they and/or each of them
may enforce such provisions to the extent and in the manner provided herein.
SECTION 11.2. No Payment on Notes in Certain Circumstances. (a) No direct
--------------------------------------------
or indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made on account of the principal of, premium (if
any) or interest on the Notes, or in respect of any redemption, retirement,
defeasance, purchase or other acquisition of any of the Notes, or in respect of
any Subsidiary Guarantee, and no Holder of any Note shall be entitled to receive
any such payment (any of the foregoing payments or actions being referred to in
this Section 11.2 as a "Payment"), on or after the occurrence of any default in
the payment of principal or interest then due and payable in respect of any
Senior Debt (either at maturity, upon redemption, by acceleration or otherwise),
unless and until such default has been waived or cured or all amounts then due
and payable for principal of and interest on all Senior Debt shall have been
paid in full or provision therefor in cash, in cash equivalents, or in
accordance with the terms of such Senior Debt and the agreements, if any, under
which such Senior Debt was issued or created, shall have been made.
(b) The Company may not make any Payment if:
(i) a default or event of default under any agreement governing Senior
Debt (other than a default or event of default relating to payment of
principal or interest, either at maturity, upon redemption, by declaration
or otherwise) has occurred and is continuing that
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permits the holders of such Senior Debt to accelerate its maturity (whether or
not such acceleration has occurred); and
(ii) the Company or the Paying Agent receives a notice of such default or
event of default from (A) the holders of a majority of the outstanding
principal amount of such Senior Debt or (B) the trustee or agent, if any,
representing the holders in respect of such Senior Debt; provided, however,
that only one such notice shall be given effect within any period of 360
consecutive days; provided, further, that no more than one notice may be given
with respect to any continuing default or event of default.
Notwithstanding the provisions of this Section 11.2(b), the Company may
make Payments on the Notes when:
(1) all defaults and events of default referred to in such notice are
cured or waived; or
(2) 179 days pass after such notice is given, with respect to such
defaults and/or events of default
so long as this Article XI (including, without limitation, Section 11.2(a))
otherwise permits a Payment at that time.
(c) In the event that notwithstanding the provisions of this Section 11.2
the Company shall make any Payment to the Paying Agent or any Holder of the
Notes on account of the principal of or interest on the Notes after receiving
notice (as aforesaid) of the happening of a default or event of default on
Senior Debt, then, unless and until such default or event of default shall have
been cured or waived or shall have ceased to exist either due to the passage of
time as aforesaid in Section 11.2(b)(ii)(2) or otherwise, such payment (subject
to the provisions of Sections 11.6 and 11.7) shall be held by the Paying Agent
or such Holder, in trust for the benefit of, and subject to Sections 11.6 and
11.7, shall be paid forthwith over and delivered to, the holders of Senior Debt
(pro rata as to each of such holders on the basis of the respective amounts of
Senior Debt then in default held by them), as their respective interests may
appear, for application to the payment of all Senior Debt remaining unpaid to
the extent necessary to pay all Senior Debt in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
The Company shall give prompt written notice to the Paying Agent of any
default in the payment of principal of or interest on any Senior Debt or a
default which results in the acceleration of such Senior Debt under the Credit
Facility or under any agreement pursuant to which Senior Debt has been issued.
SECTION 11.3. Notes Subordinated to Prior Payment of All Senior Debt on
---------------------------------------------------------
Dissolution, Liquidation or Reorganization of Company. Upon any distribution or
- -----------------------------------------------------
payment of assets or securities of the Company upon any dissolution, winding up,
liquidation or reorganization of the Company of any kind or character (whether
voluntary or involuntary, in
49
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bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise):
(a) the holders of all Senior Debt shall first be entitled to receive
payment in full (or to have such payment duly provided for) of the principal
thereof and interest due thereon and other amounts due in connection therewith
before the Holders are entitled to receive any payment or distribution of any
assets (other than Capital Stock of the Company) on account of the principal of
or interest on the Notes;
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or Notes, to which the Holders or the
Paying Agent on behalf of the Holders would be entitled except for the
provisions of this Article XI, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other Indebtedness
of the Company being subordinated to the payment of the Notes, shall be paid by
the liquidating trustee or agent or other person making such payment or
distribution directly to the holders of Senior Debt, (pro rata as to each such
holder or trustee on the basis of the respective amounts of unpaid Senior Debt
held or represented by each), to the extent necessary to make payment in full of
all Senior Debt remaining unpaid except that Holders of the Notes shall be
entitled to receive Notes that are subordinated to Senior Debt to at least the
same degree as the Notes; and
(c) in the event that notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or Notes, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of the
Company being subordinated to the payment of the Notes, shall be received by the
Paying Agent or the Holders or any Paying Agent (or, if the Company is acting as
its own Paying Agent, money for any such payment or distribution shall be
segregated or held in trust) on account of principal of or interest on the Notes
before all Senior Debt is paid in full, such payment or distribution (subject to
the provisions of Sections 11.6 and 11.7) shall be received and held in trust
for and shall be paid forthwith over and delivered to the holders of the Senior
Debt remaining unpaid or unprovided for (pro rata as to each of such holders on
the basis of the respective amounts of Senior Debt held by them), for
application to the payment of such Senior Debt until all such Senior Debt shall
have been paid in full, after giving effect to any concurrent payment or
distribution or provision thereof or to or for the holders of such Senior Debt,
except that Holders of the Notes shall be entitled to receive Notes that are
subordinated to Senior Debt to at least the same extent as the Notes.
The Company shall give prompt written notice to the Paying Agent of any
dissolution, winding up, liquidation or reorganization of the Company or any
assignment for the benefit of the Company's creditors.
SECTION 11.4. Holders To Be Subrogated to Rights of Holders of Senior Debt.
------------------------------------------------------------
Subject to the payment in full of all Senior Debt pursuant to this Article XI,
the Holders of Notes shall be subrogated equally and ratably to the rights of
the holders of Senior Debt to receive payments or distributions of assets of the
Company applicable to the Senior Debt until all amounts owing on the Notes shall
be paid in full, and for the purpose of such subrogation no such
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payments or distributions to the holders of Senior Debt by or on behalf of the
Company or by or on behalf of the Holders by virtue of this Article XI which
otherwise would have been made to the Holders shall, as among the Company, its
creditors other than holders of the Senior Debt and the Holders, be deemed to be
payment by the Company to or on account of the Senior Debt, it being understood
that the provisions of this Article XI are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Debt, on the other hand.
SECTION 11.5. Obligations of the Company Unconditional. Nothing contained
----------------------------------------
in this Article XI or elsewhere in this Agreement or in any Note is intended to
or shall impair, as among the Company, its creditors other than holders of the
Senior Debt and the Holders, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders the principal amount of and other
interest (including, to the extent lawful, any interest on overdue installments
of interest) on the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the holders of
Senior Debt, nor shall anything herein or therein prevent the Paying Agent or
any Holders from exercising, all remedies otherwise permitted by applicable law
upon Default under this Agreement, subject to the rights, if any, under this
Article XI of the holders of Senior Debt in respect of cash, property or Notes
of the Company received upon the exercise of any such remedy. Upon any
distribution of assets of the Company referred to in this Article XI, the Paying
Agent, subject to the provisions of Sections 7.1 and 7.2, and the Holders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation, reorganization
or similar proceedings are pending, or a certificate of the liquidating trustee
or agent or other person making any distribution to the Paying Agent or to the
Holders, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article XI.
SECTION 11.6. Paying Agent Entitled To Assume Payments Not Prohibited in
----------------------------------------------------------
Absence of Notice. The Paying Agent shall not at any time be charged with
- -----------------
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Paying Agent or the taking of any other action under this
Article XI by the Paying Agent unless and until the Paying Agent shall have
received written notice thereof from the Company or from one or more holders of
Senior Debt or from the trustee or agent, if any, under the Senior Debt and,
prior to the receipt of any such written notice, the Paying Agent, subject to
the provisions of Sections 7.1 and 7.2, shall be entitled in all respects
conclusively to assume that no such facts exist.
SECTION 11.7. Application by Paying Agent of Monies Deposited With It.
-------------------------------------------------------
Subject to Article 8, any deposit of monies by the Company with the Paying Agent
(whether or not in trust) for the payment of the principal of or interest on any
Notes shall be subject to the provisions of Sections 11.1, 11.2, 11.3 and 11.4,
except that, prior to the date on which by the terms of this Agreement any such
monies may become payable for any purpose (including, without limitation, the
payment of either the principal of or the other interest on any Note), the
Paying Agent shall not have received with respect to such monies the notice
provided for in Section 11.6, then the Paying Agent shall have full power and
authority to receive such monies and to apply the same to
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the purpose for which they were received. This Section shall be construed solely
for the benefit of the Paying Agent and nothing herein shall be construed to
relieve any Holders from the duties imposed upon them under Section 11.3(c) with
respect to monies received in violation of the provisions of this Article XI.
SECTION 11.8. Subordination Rights Not Impaired by Acts or Omissions of
---------------------------------------------------------
Company or Holders of Senior Debt. No right of any present or future holders of
- ---------------------------------
any Senior Debt to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Agreement,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Debt may extend, renew, modify or
amend the terms of the Senior Debt or any Note therefor and release, sell or
exchange such Note and otherwise deal freely with the Company, all without
affecting the liabilities and obligations of the parties to this Agreement or
the Holders. No provision in any supplemental indenture which modifies this
Article XI or otherwise affects the superior position of the holders of the
Senior Debt shall be effective against the holders of the Senior Debt who have
not consented thereto.
SECTION 11.9. Holders Authorize Paying Agent To Effectuate Subordination of
-------------------------------------------------------------
Notes. Each Holder by its acceptance of Notes authorizes and expressly directs
- -----
the Paying Agent on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XI and to
protect the rights of the Holders pursuant to this Agreement and appoints the
Paying Agent its attorney-in-fact for such purpose, including, in the event of
any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or any other
similar remedy or otherwise) tending towards liquidation of the business and
assets of the Company, the immediate filing of a claim for the unpaid balance of
its Notes in the form required in said proceedings and causing said claim to be
approved. If the Paying Agent does not file a proper claim or proof of debt in
the form required in such proceeding prior to 30 days before the expiration of
the time to file such claim or claims, then the holders of Senior Debt are
hereby authorized to file an appropriate claim for and on behalf of the Holders.
In the event of any such proceeding, until the Senior Debt is paid in full in
accordance with Section 11.3 (or adequate provision made for such payment),
without the consent of the holders of a majority in aggregate principal amount
outstanding of Senior Debt, no Holder shall waive, settle or compromise any such
claim or claims relating to the Notes that such Holder now or hereafter may have
against the Company.
SECTION 11.10. Right of Paying Agent To Hold Senior Debt. The Paying
-----------------------------------------
Agent, in its individual capacity, shall be entitled to all of the rights set
forth in this Article XI in respect of any Senior Debt at any time held by
either of them to the same extent as any other holder of Senior Debt, and
nothing in this Agreement shall be construed to deprive the Paying Agent of any
of its rights as such holder.
SECTION 11.11. Article XI Not To Prevent Events of Default. The failure to
-------------------------------------------
make a payment on account of principal of or other interest (including any
interest on overdue installments of interest and defaulted interest) on the
Notes by reason of any provision of this
52
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Article XI shall not be construed as preventing the occurrence of an Event of
Default under Section 6.1. Nothing contained in this Article XI shall limited
the right of the Paying Agent or the Holders to take any action to accelerate
the maturity of the Notes pursuant to Section 6.2 or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article XI of the holders, from time to time, of Senior Debt.
SECTION 11.12. No Fiduciary Duty Created to Holders of Senior Debt. The
---------------------------------------------------
Paying Agent shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt by virtue of the provisions of this Article XI, and shall not be
liable to any such holders (other than for its willful misconduct or gross
negligence) if it shall pay over to deliver to the Holders or the Company or any
other person, money or assets in compliance with the terms of this Agreement.
SECTION 11.13. Subordination of Subsidiary Guarantees. The Obligations of
--------------------------------------
the Subsidiaries under their respective Subsidiary Guarantees shall be
subordinated in the same manner and to the same extent, mutatis mutandis, as the
----------------
Obligations of the Company under the Notes as provided in this Article XI;
provided, however, that with respect to a Subsidiary, "Senior Debt" shall be
deemed to include only such Subsidiary's Obligations under that Subsidiary's
guarantees of the Company's Obligations under the Credit Agreement.
ARTICLE XII
REDEMPTION
----------
SECTION 12.1. Notices to Paying Agent.
-----------------------
(a) If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 12.7 hereof, they shall furnish to the Paying
Agent, at least 45 days (unless a shorter period is acceptable to the Paying
Agent) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the Section of this Agreement pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed, (iv) the redemption price and accrued and unpaid
interest and (v) whether they request the Paying Agent to give notice of such
redemption.
(b) If the Company is required to make an offer to purchase Notes pursuant
to the provisions of Section 5.11 hereof, they shall each furnish to the Paying
Agent at least 30 days but not more than 60 days before a purchase date, an
Officers' Certificate setting forth (i) the Section of this Agreement pursuant
to which the offer to purchase shall occur, (ii) the proposed purchase date,
(iii) the maximum principal amount of Notes to be purchased, (iv) the purchase
price and accrued and unpaid interest, and (v) further setting forth a statement
to the effect that (a) the Company or one of its Subsidiaries has effected an
Asset Disposition and the conditions set forth in Section 5.4 have been
satisfied or (b) a Change of Control has occurred and the conditions set forth
in Section 5.11 have been satisfied, as applicable.
SECTION 12.2. Selection of Notes to be Redeemed.
---------------------------------
(a) If less than all of the Notes are to be redeemed, the Paying Agent shall
select the Notes to be redeemed among the Noteholders on a pro rata basis or in
accordance with any other
53
<PAGE>
method the Paying Agent considers fair and appropriate (and in such manner as
complies with applicable legal and stock exchange requirements, if any), unless
such method is otherwise prohibited. In the event of partial redemption, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Paying Agent from the outstanding Notes not previously called for
redemption.
(b) The Paying Agent shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes may be redeemed
in part in multiples of $1,000 principal amount only. Except as provided in the
preceding sentence, provisions of this Agreement that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
SECTION 12.3. Notice of Redemption.
--------------------
(a) At least 30 days before a redemption date, the Company shall mail or
cause to be mailed a notice of redemption by first class mail, postage prepaid
to each Holder whose Notes are to be redeemed at the last address for such
Holder then shown on the Note Register.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part only, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(vii) the paragraph of the Notes and/or Section of this Agreement pursuant
to which the Notes called for redemption are being redeemed; and
(viii) if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Notes to be outstanding after such partial redemption.
54
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(b) At the Company's request, the Paying Agent shall give the notice of
redemption in the Company's names and at the Company's expense; provided,
however, that the Company shall have delivered to the Paying Agent at least 45
days (unless a shorter period is acceptable to the Paying Agent) prior to the
proposed redemption date an Officers' Certificate requesting that the Paying
Agent give such notice and setting forth the information to be stated in such
notice as provided in the preceding Section 12.3(a).
SECTION 12.4. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 12.3 hereof,
Notes called for redemption become due and payable on the redemption date at the
redemption price plus accrued and unpaid interest, if any.
SECTION 12.5 Deposit of Redemption Price.
---------------------------
(a) Prior to 10:00 a.m., New York City time, on the redemption date, the
Company shall deposit with the Paying Agent (other than the Company or any of
its Subsidiaries) money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Paying Agent shall
promptly return to the Company any money deposited with the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
(b) If the Company complies with the provisions of Section 12.5(a), on and
after the redemption date, interest ceases to accrue on the Notes or the
portions of Notes called for redemption whether or not such Notes are presented
for payment, and the only remaining right of the Holders of such Notes shall be
to receive payment of the redemption price upon surrender to Paying Agent if the
Notes are redeemed. If a Note is redeemed on or after a Record Date but on or
prior to the related Interest Payment Date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close
of business on such Record Date. If any Note called for redemption shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with Section 12.5(a), interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid and, to the extent lawful,
on any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Article II hereof.
SECTION 12.6. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company shall issue a
new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 12.7. Optional Redemption.
-------------------
The Notes will be redeemable, at the Company's option, in whole or in part,
at any time upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's registered address, a price equal to the
principal amount of the Notes to be redeemed multiplied by the Applicable Call
Premium, plus accrued and unpaid interest to the redemption
55
<PAGE>
date (subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date)(such amount (the
"Applicable Redemption Price").
SECTION 12.8. Mandatory Redemption.
--------------------
In the event that at any time after the date hereof (i) the amount of
Indebtedness that may be incurred under the Credit Agreement or any Refinancing
thereof at any time exceeds US$250,000,000, (ii) the Company or any of its
Subsidiaries issue any debt securities, or (iii) the Company or any of its
Subsidiaries issue any equity securities, whether publicly or privately, part or
all of the consideration for which is cash or Cash Equivalents, the Company must
promptly redeem all of the outstanding Notes at the then Applicable Redemption
Price.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.1. Payment of Expenses, etc. The Company agrees to: (i)
-------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Paying Agent in connection
with the negotiation, preparation, execution and delivery of this Agreement and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) and of
the Paying Agent and each of the Purchasers in connection with the enforcement
of the Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of counsel
for the Paying Agent and for each of the Purchasers; (ii) pay and hold each of
the Purchasers harmless from and against any and all present and future stamp,
documentary, registration, issuance, sales and use and other similar taxes with
respect to the foregoing matters or any other Credit Documents and save each of
the Purchasers harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent attributable
to such Purchaser) to pay such taxes; and (iii) indemnify each Purchaser, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not a party thereto) related to the entering into and/or
performance of any Credit Document or the use of the proceeds of any Note or the
consummation of any transactions contemplated in any Credit Document and in each
case including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred (A) by reason of the gross negligence or willful
misconduct of the Person to be indemnified and (B) in connection with any
investigation, litigation or other proceeding between or solely among the Paying
Agent and the Purchasers).
SECTION 13.2. Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Purchaser is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to a Credit Party or to any other Person,
56
<PAGE>
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Purchaser (including, without limitation, by
branches and agencies of such Purchaser wherever located) to or for the credit
or the account of a Credit Party against and on account of the obligations and
liabilities of a Credit Party to such Purchaser under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Purchaser pursuant to Section 13.6(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Purchaser shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
SECTION 13.3. Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, faxed, cabled or delivered, if to a
Credit Party, at the address specified opposite its signature below; if to any
Purchaser, at its address specified for such Purchaser on Annex II hereto; or,
at such other address as shall be designated by any party in a written notice to
the other parties hereto. All such notices and communications shall be mailed,
telecopied, or sent by overnight courier, and shall be effective when received.
SECTION 13.4. Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto provided that none of the Credit Parties may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Purchasers. Each Purchaser may at any time grant
participations in any of its rights hereunder or under any of the Notes to
another financial institution provided that in the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such
Purchaser in respect of such participation to be those set forth in the
agreement executed by such Purchaser in favor of the participant relating
thereto) and all amounts payable by the Company hereunder shall be determined as
if such Purchaser had not sold such participation, except that the participant
shall be entitled to the benefits of Section 2.8 of this Agreement to the extent
that such Purchaser would be entitled to such benefits if the participation had
not been entered into or sold, and, provided further; that no Purchaser shall
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Note in which such participant is
participating (it being understood that any waiver of any prepayment shall not
constitute an extension of such final scheduled maturity), or reduce the rate or
extend the time of payment of interest thereon (except in connection with a
waiver of the applicability of any post-default increase in interest rates), or
reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment, or a mandatory prepayment, shall
not constitute a change in the terms of any Commitment), (ii) release all or
substantially all of the Collateral or (iii) consent to the assignment or
transfer by any Credit Party of any of its rights and obligations under this
Agreement or any other Credit Document.
57
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(b) Notwithstanding the foregoing, any Purchaser may assign all or a portion
of its outstanding Notes and its rights and obligations hereunder to one or more
Persons who shall, from and after the effective date of such assignment be
deemed to be "Purchasers" hereunder. No assignment pursuant to the immediately
preceding sentence shall, to the extent such assignment represents an assignment
to an institution other than one or more Purchasers hereunder, be in an
aggregate amount less than US$5,000,000 unless all of Notes of the assigning
Purchaser are so assigned. If any Purchaser so sells or assigns all or a part
of its rights hereunder or under the Notes, any reference in this Agreement or
the Notes to such assigning Purchaser shall thereafter refer to such Purchaser
and to the respective assignee to the extent of their respective interests and
the respective assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same obligations, rights and benefits as it
would if it were such assigning Purchaser. Each assignment pursuant to this
Section 13.4(b) shall be effected by the assigning Purchaser and the assignee
Purchaser executing an Assignment Agreement. At the time of any such
assignment, the Company will issue new Notes to the respective assignee and to
the assigning Purchaser. Neither of the Credit Parties shall be responsible for
the payment of any expense in connection with any such assignment.
(c) Notwithstanding any other provisions of this Section 13.4, no transfer
or assignment of the interests or obligations of any Purchaser hereunder or any
grant of participation therein shall be permitted if such transfer, assignment
or grant would require the Company to file a registration statement with the
Commission.
(d) Each Purchaser initially party to this Agreement hereby represents, and
each Person that became a Purchaser pursuant to an assignment permitted by this
Section 13.4 will, upon its becoming party to this Agreement, represent that it
is an Eligible Transferee which makes loans, and/or acquire promissory notes, in
the ordinary course of its business and that it will acquire Notes for its own
account in the ordinary course of such business provided that subject to the
preceding clauses (a) and (b), the disposition of any promissory notes or other
evidences of or interests in Indebtedness held by such Purchaser shall at all
times be within its exclusive control.
SECTION 13.5. No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of any Purchaser in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between any Credit
Party and any Purchaser shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which any Purchaser would otherwise have. No notice
to or demand on any Credit Party in any case shall entitle any Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Purchasers to any other or further
action in any circumstances without notice or demand.
SECTION 13.6. Payments Pro Rata. (a) The Paying Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any of their obligations hereunder, it shall distribute such
payment to the Purchasers (other than any Purchaser
58
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that has expressly waived its right to receive its pro rata share thereof) pro
--- ---- ---
rata based upon their respective shares, if any, of the obligations with respect
- ----
to which such payment was received.
(b) Each of the Purchasers agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon Note, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of any of the Obligations, of a
sum which with respect to the related sum or sums received by other Purchasers
is in a greater proportion than the total of such Obligation then owed and due
to such Purchaser bears to the total of such Obligation then owed and due to all
of the Purchasers immediately prior to such receipt, then such Purchaser
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Purchasers an interest in the respective Obligations in
such amount as shall result in a proportional participation by all of the
Purchasers in such amount provided that if all or any portion of such excess
amount is thereafter recovered from such Purchaser, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
SECTION 13.7. Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Purchasers pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Company to the Purchasers).
(b) All computations of interest hereunder shall be made on the basis of a
360-day year composed of twelve 30-day months.
SECTION 13.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of
-----------------------------------------------------------
Jury Trial. (a) This Agreement and the rights and obligations of the parties
- ----------
hereunder shall be construed in accordance with and be governed by the law of
the State of New York. Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York sitting in the
Borough of Manhattan or of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Credit Party
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Credit Party,
at its address for notices pursuant to Section 13.3, such service to become
effective 30 days after such mailing. Each Credit Party hereby irrevocably
designates, appoints and empowers CT Corporation System, with offices on the
date hereof located at 1633 Broadway, New York, New York 10019, as its agent for
service of process in respect of any such action or proceeding. Nothing herein
shall affect the right of the Paying Agent or any Purchaser to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement, the Notes or
any other Credit Document brought in the
59
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courts referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
SECTION 13.9. Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the Company
and the Paying Agent.
SECTION 13.10. Effectiveness. This Agreement shall become fully executed
-------------
when each Credit Party and each of the Purchasers shall have signed a copy
hereof (whether the same or different copies) and shall have delivered the same
to the Paying Agent at its Office or, in the case of the Purchasers, shall have
given to the Paying Agent telephonic (confirmed in writing), written, telex or
facsimile transmission notice (actually received) at such Office that the same
has been signed and mailed to it.
SECTION 13.11. Headings Descriptive. The headings of the several sections
--------------------
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 13.12. Amendment or Waiver. (a) Neither this Agreement nor any
-------------------
Note nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Credit Parties and the Required Holders, provided that no such
change, waiver, discharge or termination shall, without the consent of each
Purchaser directly affected thereby, (i) extend the Maturity (it being
understood that any waiver of any prepayment shall not constitute any such
extension), or reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase in
interest rates) thereon, or reduce the principal amount thereof, or increase the
Commitment of any Purchaser over the amount thereof then in effect , (ii) amend,
modify or waive any provision of this Section 13.12, (iii) reduce the percentage
specified in, or otherwise modify, the definition of Required Holders, or (iv)
consent to the assignment or transfer by either Credit Party of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall, without the consent of the
Paying Agent amend any provision of Article 7 affecting the Paying Agent.
(b) Notwithstanding Section 13.12(a) of this Agreement, the Company, the
Guarantor and the Paying Agent may amend or supplement this Agreement without
the consent of any Purchaser to cure any ambiguity, omission, defect or
inconsistency; provided, that such amendment or supplement does not adversely
affect the rights of any Purchaser in any respect.
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SECTION 13.13. Survival. All indemnities set forth herein shall survive
--------
the execution and delivery of this Agreement and the making and repayment of the
Notes.
SECTION 13.14. Confidentiality. Subject to Section 13.4, the Purchasers
---------------
shall hold all non-public information obtained pursuant to the requirements of
this Agreement which has been identified as such by the Company in accordance
with its customary procedure for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure to its affiliates, employees, auditors, advisors, or counsel
or as reasonably required by any bona fide transferee or participant in
---- ----
connection with the contemplated transfer of any Notes or participation therein
(so long as such transferee or participant agrees to be bound by the provisions
of this Section 13.14) or as required or requested by any governmental agency or
representative thereof or pursuant to legal process, provided that, unless
specifically prohibited by applicable law or court order, each Purchaser shall
notify the Company of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Purchaser by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information, and provided further, that in no event shall any Purchaser be
obligated or required to return any materials furnished by the Company.
SECTION 13.15. Register. The Company hereby designates the Paying Agent to
--------
serve as its agent, solely for purposes of this Section 13.15, to maintain a
register (the "Register") on which it will record the Commitment from time to
time of each of the Purchasers, the Notes acquired by each of the Purchasers and
each repayment in respect of the principal amount of the Notes of each
Purchaser. Failure to make any such recordation, or any error in such
recordation, shall not affect the Company's obligations in respect of such
Notes. With respect to any Purchaser, the transfer of the Commitment of such
Purchaser and the rights to the principal of, and interest on, any Note shall
not be effective until such transfer is recorded on the Register maintained and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Notes shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Notes shall be recorded by the Paying Agent on the Register only upon the
acceptance by the Paying Agent of a properly executed and delivered Assignment
Agreement pursuant to Section 13.4(b). The Company agrees to indemnify the
Paying Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Paying Agent in performing its duties under this Section 13.15
other than those resulting from the Paying Agent's willful misconduct or gross
negligence. The Paying Agent will provide a duplicate original copy of the
Register, as updated from time to time, to the Company for use by the Company at
its principal office.
SECTION 13.16. Consolidation of Notes. After the Drawdown Date, any
----------------------
Purchaser can request that the Company issue to it, and the Company will so
issue, upon surrender of all Notes held by such Purchaser, a replacement Note in
the aggregate principal of the Notes so surrendered.
SECTION 13.17. Replacement of Notes. (a) If any mutilated Note is
--------------------
surrendered to the Company, or the Company receives evidence to its satisfaction
of the
61
<PAGE>
destruction, loss or theft of any Note, the Company shall issue a replacement
Note. If required by the Company, an indemnity bond must be supplied by the
Holder that is sufficient in the judgment of the Company to protect the Company
and the Subsidiaries Guarantors from any loss which any of them may suffer if a
Note is replaced. The Company may charge a Holder for reasonable out-of-pocket
expenses in replacing a Note.
(b) Every replacement Note is an obligation of the Company and each of
the Subsidiaries.
62
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.
NATIONAL WESTMINSTER BANK PLC
By:_____________________________
Name:
Title:
TOKHEIM CORPORATION
By:_____________________________
Name:
Title:
<PAGE>
SUBSIDIARY GUARANTORS
TOKHEIM EQUIPMENT CORPORATION
By:_____________________________
Name:
Title:
TOKHEIM RPS, LLC
By:_____________________________
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:_____________________________
Name:
Title:
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
By:_____________________________
Name:
Title:
ENVIROTRONIC SYSTEMS, INC.
By:_____________________________
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:_____________________________
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:_____________________________
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:_____________________________
Name:
Title:
<PAGE>
ANNEX I
-------
COMMITMENTS
-----------
PURCHASER COMMITMENT
National Westminster Bank plc $22,500,000
<PAGE>
ANNEX II
--------
<PAGE>
EXHIBIT (c)(12)
EXECUTION COPY
________________________________________________________________________________
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of September 30, 1998
among
TOKHEIM CORPORATION,
THE BORROWING SUBSIDIARIES,
THE LENDERS
and
NBD BANK, N.A.,
as Administrative Agent
and
CREDIT LYONNAIS
as Documentation and Collateral Agent
GLEACHER NATWEST INC.
and
BANKERS TRUST COMPANY
as Co-Syndication Agents
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
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ARTICLE I: DEFINITIONS...........................................................................................1
1.1. Definitions.....................................................................................1
1.2. Accounting Terms and Determinations............................................................28
1.3. References to Subsidiaries.....................................................................28
1.4. Rounding and Other Consequential Changes.......................................................29
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES.........................................................29
2.1. The Revolving Loan, Swing Loan and Term Loan Facilities........................................29
2.1.1. Revolving Loans........................................................................29
2.1.2 Swing Loans.............................................................................30
2.1.3. Term Loans..............................................................................32
2.1.4. Alternate Currency Loans.......................................................................34
2.2. Types and Interest Periods.....................................................................36
2.2.1. Types of Advances.....................................................................36
2.2.2. Method of Selecting Types and Interest Periods for New Advances.......................37
2.2.3. Conversion and Continuation of Outstanding Advances...................................37
2.3. Applicable Margin..............................................................................38
2.4. Fees...........................................................................................40
2.4.1. Commitment Fee.........................................................................40
2.4.2. Agent Fees.............................................................................40
2.4.3. Prepayment Fee.........................................................................41
2.5. General Facility Terms.........................................................................41
2.5.1. Method of Borrowing...................................................................41
2.5.2. Minimum Amount of Each Advance........................................................42
2.5.3. Prepayments...........................................................................42
2.5.4. Interest Rates; Interest Periods......................................................45
2.5.5. Default Rate..........................................................................46
2.5.6. Interest Payment Dates; Interest Basis................................................46
2.5.7. Method of Payment.....................................................................46
2.5.8. Notes; Telephonic Notices.............................................................47
2.5.9. Notification of Advances, Interest Rates and Prepayments..............................48
2.5.10. Non-Receipt of Funds by the Agent.....................................................48
2.5.11. Termination or Reduction in the Aggregate Revolving Loan Commitment..................48
2.5.12. Market Disruption.....................................................................49
2.5.13. Lending Installations.................................................................49
2.5.14. Borrowing Subsidiaries................................................................49
2.5.15. Withholding Tax Exemption.............................................................50
2.5.16. Judgment Currency.....................................................................51
2.5.17 Overall Effective Rate; Limitation on German Borrowing Subsidiaries' Obligations.......52
2.6. Letter of Credit Facility..........................................................................52
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2.6.1. Letters of Credit.....................................................................52
2.6.2. Letter of Credit Participation........................................................53
2.6.3. Reimbursement Obligation...............................................................53
2.6.4. Cash Collateral........................................................................54
2.6.5. Letter of Credit Fees.................................................................54
2.6.6. Indemnification; Exoneration...........................................................55
2.7. Termination Date..................................................................................56
ARTICLE III: CHANGE IN CIRCUMSTANCES............................................................................56
3.1. Taxes.............................................................................................56
3.1.1. Payments to be Free and Clear..........................................................56
3.1.2. Grossing-up of Payments................................................................57
3.1.3. Certification of Withholding Tax Exemption.............................................57
3.2. Increased Costs................................................................................58
3.3. Changes in Capital Adequacy Regulations........................................................59
3.4. Availability of Types of Advances..............................................................60
3.5. Funding Indemnification........................................................................60
3.6. Mitigation of Additional Costs or Adverse Circumstances........................................60
3.7. Lender Statements; Survival of Indemnity.......................................................61
ARTICLE IV: CONDITIONS PRECEDENT................................................................................61
4.1. Initial Advance................................................................................61
4.2. Initial Advance to Each New Borrowing Subsidiary...............................................65
4.3. Each Advance and Letter of Credit..............................................................67
ARTICLE V: REPRESENTATIONS AND WARRANTIES.......................................................................67
5.1. Corporate Existence and Standing...............................................................67
5.2. Authorization and Validity. ...................................................................68
5.3. No Conflict; Government Consent................................................................68
5.4. Financial Statements...........................................................................68
5.5. Material Adverse Change........................................................................68
5.6. Taxes..........................................................................................69
5.7. Litigation.....................................................................................69
5.8. Subsidiaries...................................................................................69
5.9. ERISA..........................................................................................69
5.10. Full Disclosure................................................................................70
5.11. Assets and Properties..........................................................................71
5.12. Patents and Trademarks.........................................................................71
5.13. No Defaults....................................................................................71
5.14. Investment Company Act. .......................................................................71
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5.15. Compliance with Environmental Laws. ...........................................................71
5.16. Regulations T, U and X.........................................................................72
5.17. Filing.........................................................................................72
5.18. No Immunity....................................................................................72
5.19. Contingent Obligations.........................................................................72
5.20. Foreign Employee Benefit Matters...............................................................72
5.21. French Withholding.............................................................................73
5.22 Year 2000 Issues...............................................................................73
ARTICLE V-A: REPRESENTATIONS AND WARRANTIES OF ADDITIONAL FRENCH BORROWING SUBSIDIARIES.........................73
5A.1. Corporate Existence and Standing...............................................................74
5A.2. Authorization and Validity.....................................................................74
5A.3. No Conflict; Government Consent................................................................74
5A.4. Filing.........................................................................................74
5A.5. No Immunity....................................................................................75
ARTICLE V-B: REPRESENTATIONS AND WARRANTIES OFEACH DUTCH BORROWING SUBSIDIARY...................................75
5B.1. Corporate Existence and Standing...............................................................75
5B.2. Authorization and Validity.....................................................................75
5B.3. No Conflict; Government Consent................................................................75
5B.4. Filing.........................................................................................76
5B.5. No Immunity....................................................................................76
ARTICLE V-C: REPRESENTATIONS AND WARRANTIES OF EACH GERMAN BORROWING SUBSIDIARY.................................77
5C.1. Corporate Existence and Standing...............................................................77
5C.2. Authorization and Validity.....................................................................77
5C.3. No Conflict; Government Consent................................................................77
5C.4. Filing.........................................................................................77
5C.5. No Immunity....................................................................................78
ARTICLE V-D: REPRESENTATIONS AND WARRANTIES OFEACH UK BORROWING SUBSIDIARY......................................78
5D.1. Corporate Existence and Standing...............................................................78
5D.2. Authorization and Validity.....................................................................78
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5D.3. No Conflict; Government Consent................................................................79
5D.4. Filing.........................................................................................79
5D.5. No Immunity....................................................................................79
ARTICLE VI: COVENANTS...........................................................................................80
6.1. Financial Reporting............................................................................80
6.2. Use of Proceeds................................................................................81
6.3. Notice of Default..............................................................................81
6.4. Corporate Existence............................................................................81
6.5. Taxes..........................................................................................82
6.6. Insurance......................................................................................82
6.7. Compliance with Laws...........................................................................82
6.8. Inspection.....................................................................................82
6.9. Sale of Assets.................................................................................82
6.10. Liens. ........................................................................................83
6.11. Rentals........................................................................................85
6.12. Consolidated Net Worth.........................................................................85
6.13. Dividends......................................................................................85
6.14 Additional Guarantors/Pledge of Capital Stock..................................................85
6.15 Sale and Leaseback Transactions or other Off Balance Sheet Liabilities.........................87
6.16 Merger and Consolidation.......................................................................87
6.17 Investments and Acquisitions...................................................................87
6.18 Indebtedness...................................................................................88
6.19 ERISA..........................................................................................89
6.20 Affiliates.....................................................................................90
6.21 Conduct of Business............................................................................91
6.22 Rate Hedging Obligations.......................................................................91
6.23 Leverage Ratio.................................................................................91
6.24 Interest Expense Coverage Ratio................................................................92
6.25 Fixed Charge Coverage Ratio....................................................................92
6.26 Foreign Employee Benefit Compliance............................................................92
6.27 Subordinated Indebtedness......................................................................93
6.28 Payments and Prepayments.......................................................................93
6.29 ERISA..........................................................................................93
6.30 Year 2000 Issues...............................................................................94
6.31 FIRREA.........................................................................................94
6.32 Environmental Reports..........................................................................94
6.33 Interest Rate Agreements.......................................................................94
6.34. Minimum EBITDA.................................................................................95
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ARTICLE VII: DEFAULTS...........................................................................................95
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................................................97
8.1. Acceleration...................................................................................97
8.2. Amendments.....................................................................................98
8.3. Preservation of Rights.........................................................................99
ARTICLE IX: GUARANTY............................................................................................99
9.1. Guaranty.......................................................................................99
9.2. Waivers.......................................................................................100
9.3. Guaranty Absolute.............................................................................100
9.4. Acceleration..................................................................................101
9.5. Marshaling; Reinstatement.....................................................................101
9.6. Termination Date..............................................................................101
ARTICLE X: GENERAL PROVISIONS..................................................................................102
10.1. Governmental Regulation.......................................................................102
10.2. Taxes. .......................................................................................102
10.3. Headings......................................................................................102
10.4. Entire Agreement..............................................................................102
10.5. Several Obligations...........................................................................102
10.6. Expenses; Indemnification.....................................................................102
10.7. Numbers of Documents..........................................................................103
10.8. Severability of Provisions....................................................................103
10.9. Nonliability of Lenders. .....................................................................103
10.10. CHOICE OF LAW.................................................................................103
10.11 CONSENT TO JURISDICTION. ....................................................................104
10.12. Confidentiality...............................................................................104
10.13. Performance of Obligations....................................................................104
10.14. English Language..............................................................................105
10.15 Alternate Currency Addenda Binding on Each Lender; Provisions Regarding
Alternate Currency Agents....................................................................105
ARTICLE XI: THE AGENT..........................................................................................105
11.1. Appointment...................................................................................105
11.2. Powers........................................................................................106
11.3. General Immunity..............................................................................106
11.4. No Responsibility for Loans, Collateral, Recitals, etc........................................106
11.5. Action on Instructions of Lenders.............................................................106
11.6. Employment of Agents and Counsel..............................................................107
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11.7. Reliance on Documents; Counsel................................................................107
11.8. Agent's Reimbursement and Indemnification.....................................................107
11.9. Rights as a Lender and Issuing Lender.........................................................107
11.10. Lender Credit Decision........................................................................108
11.11. Successor Agent...............................................................................108
11.12 Collateral Documents..........................................................................108
11.13 Agent as Joint Creditor.......................................................................108
ARTICLE XII: SETOFF; RATABLE PAYMENTS..........................................................................109
12.1. Setoff........................................................................................109
12.2. Ratable Payments..............................................................................109
12.3 Application of Payments.......................................................................109
ARTICLE XIII: BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS................................................111
13.1. Successors and Assigns........................................................................111
13.2. Participations................................................................................111
13.2.1. Permitted Participants; Effect. .....................................................111
13.2.2. Voting Rights. ......................................................................111
13.2.3. Benefit of Setoff....................................................................112
13.3. Assignments...................................................................................112
13.3.1. Permitted Assignments................................................................112
13.3.2. Effect; Effective Date...............................................................112
13.4. Dissemination of Information..................................................................113
13.5. Tax Treatment. ...............................................................................113
ARTICLE XIV: NOTICES...........................................................................................113
14.1. Giving Notice. ...............................................................................113
14.2. Change of Address. ...........................................................................113
ARTICLE XV: COUNTERPARTS.......................................................................................113
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<PAGE>
SCHEDULES AND EXHIBITS
----------------------
EXHIBITS
- --------
Exhibit A -- Form of Assumption Letter
Exhibit B -- Form of Assignment Agreement
Exhibit C -- Form of Borrowing Base Certificate
Exhibit D -- [Reserved]
Exhibit E -- Opinion (U.S. law)
Exhibit F-1 -- Opinion (French law)
Exhibit F-2 -- Opinion (Dutch law)
Exhibit F-3 -- Opinion (German law)
Exhibit F-4 -- Opinion (Scottish law)
Exhibit G -- List of Closing Documents
Exhibit H -- Opinion for New Borrowing Subsidiaries
Exhibit I -- Compliance Certificate
Exhibit J-1 -- Form of Alternate Currency Addendum for Deutsche Marks
Exhibit K -- Notice of Disbursement of Alternate Currency Loan
Exhibit L -- Notice of Receipt of Alternate Currency Loan Payment
SCHEDULES
- ---------
Schedule I -- Lenders, Eurocurrency Payment Offices, Commitments,
Maximum Swing Loan Obligations
Schedule II -- Lending Installations
Schedule 1.1.1 -- Existing Letters of Credit
Schedule 1.1.2 -- Borrowing Subsidiaries
Schedule 5.4 -- Financial Statements
Schedule 5.8 -- Subsidiaries
Schedule 5.9 -- ERISA Matters
Schedule 5.11 -- Assets and Properties
Schedule 6.10 -- Liens
Schedule 6.17 -- Existing Investments
Schedule 6.19 -- Existing Indebtedness
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (this "AGREEMENT"), dated as of
September 30, 1998, is among Tokheim Corporation, an Indiana Corporation, (the
"COMPANY"), any Borrowing Subsidiaries which are now or may hereafter become a
party hereto from time to time, the Lenders, and NBD Bank, N.A., as
Administrative Agent, to amend and restate the Original Credit Agreement which
is hereby amended and restated in its entirety.
The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
-----------
1.1. DEFINITIONS.
-----------
As used in this Agreement:
"ACQUIRED SUBSIDIARIES" means each of the Subsidiaries of the Company
acquired in connection with the Schlumberger Acquisition.
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Company or any
Subsidiary (a) acquires any going business or all or substantially all of the
assets of any firm, corporation or division thereof, whether through purchase of
assets, merger or otherwise, or (b) directly or indirectly acquires (in one
transaction or in a series of transactions) at least 25% (in number of votes) of
the Capital Stock of a corporation, partnership, or limited liability company
which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency).
"ACQUISITION AGREEMENT" means that certain Master Agreement For Purchase
And Sale Of Shares, Assets And Liabilities, dated as of June 19, 1998, by and
among the Company, for itself and on behalf of all of its subsidiaries, and
Schlumberger, as amended, restated, or otherwise modified from time to time.
"ADDITIONAL JUNIOR SECURITY" shall have the meaning set forth in Section
-------
4.1(b)(xii).
- -----------
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
the several Loans (other than Swing Loans) made by some or all of the Lenders to
the Borrowers of the same Type and, in the case of Eurocurrency Advances,
denominated in the same currency and for the same Interest Period.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control
<PAGE>
another Person if the controlling Person owns 10% or more of any class of voting
securities (or other ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"AGENT" means NBD Bank, N.A. in its capacity as contractual representative
for the Lenders, the Issuing Lenders and the Swing Loan Lenders pursuant to
Article XI, and not in its individual capacity as a Lender, Swing Loan Lender or
- ----------
Issuing Lender, and any successor Agent appointed pursuant to Article XI.
----------
"AGENTS" means each of the Agent, the Collateral Agent and the Co-
Syndication Agents.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving
Loan Commitments of all the Lenders, as may be reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
One Hundred Twenty Million and 00/100 Dollars ($120,000,000).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan
Commitments of all the Lenders. The Aggregate Term Loan Commitment is One
Hundred Twenty Million and 00/100 Dollars ($120,000,000.00).
"AGREED CURRENCY" shall mean (i) Dollars, (ii) only so long as such
currencies remain Eligible Currencies, French Francs, Dutch Guilders and
Sterling, (iii) upon and after the Euro Implementation date, the Euro only for
so long as the Euro is and remains an Eligible Currency, and (iv) and any other
currency which is freely available and convertible into Dollars in which
deposits are customarily offered to banks in the London interbank market, which
the applicable Borrower requests the Agent to include as an Agreed Currency
hereunder and which is acceptable to each Lender; provided that the Agent shall
promptly notify each Lender of each such request and each Lender shall be deemed
to have agreed to each such request if its objection thereto has not been
received by the Agent within five Business Days from the date of such
notification by the Agent to such Lender.
"AGREEMENT" means this Amended and Restated Credit Agreement, as it may be
amended, modified, supplemented or restated and in effect from time to time.
"ALTERNATE BASE RATE" means the sum of (a) the greater of (x) the Prime
Rate or (y) the Federal Funds Effective Rate plus .50% per annum plus (b) the
---- ----
percentage indicated as the Applicable Margin in connection with Alternate Base
Rate Loans.
"ALTERNATE BASE RATE ADVANCE" means an Advance which bears interest at the
Alternate Base Rate.
"ALTERNATE BASE RATE LOAN" means a Loan which bears interest at the
Alternate Base Rate.
2
<PAGE>
"ALTERNATE CURRENCY" shall mean (i) only so long as such currency remains
an Eligible Currency, Deutsche Marks, French Francs and (ii) any other Eligible
Currency, which the applicable Borrower requests the Agent to include as an
Alternate Currency hereunder and which is acceptable to one hundred percent
(100%) of the applicable Alternate Currency Banks and with respect to which an
Alternate Currency Addendum has been executed among one of the Borrowers, one or
more Alternate Currency Banks and, if applicable, an Alternate Currency Agent in
connection therewith.
"ALTERNATE CURRENCY ADDENDUM" means an addendum (i) substantially in the
form of Exhibit J-1 and Exhibit J-2, (ii) or, in the case of any addendum
----------- -----------
relating to a currency other than Deutsche Marks or French Francs, in such form
as shall be approved by the Agent, in each case entered into among one of the
Borrowers, one or more Alternate Currency Banks and, if applicable, an Alternate
Currency Agent.
"ALTERNATE CURRENCY AGENT" means one or more entities (which may be the
Agent or its local affiliates), satisfactory to the Agent, as specified in the
applicable Alternate Currency Addendum.
"ALTERNATE CURRENCY BANK" means any Lender (or any Affiliate, branch or
agency thereof) party to an Alternate Currency Addendum. If any agency or
Affiliate of a Lender shall be a party to an Alternate Currency Addendum, such
agency or Affiliate shall, to the extent of any commitment extended and any
Loans made by it, have all the rights of such Lender hereunder; provided,
--------
however, that such Lender shall to the exclusion of such agency or Affiliate,
- -------
continue to have all the voting rights vested in it by the terms hereof.
"ALTERNATE CURRENCY BORROWING" means any borrowing consisting of a Loan
made in an Alternate Currency.
"ALTERNATE CURRENCY COMMITMENT" means, for each Alternate Currency Bank for
each Alternate Currency, the obligation of such Alternate Currency Bank to make
Alternate Currency Loans not exceeding the Dollar Amount set forth in the
applicable Alternate Currency Addendum, as such amount may be modified from time
to time pursuant to the terms of this Agreement and the applicable Alternate
Currency Addendum.
"ALTERNATE CURRENCY INTEREST PERIOD" means, with respect to any Alternate
Currency Loan, the Interest Period as set forth on the applicable Alternate
Currency Addendum.
"ALTERNATE CURRENCY LOAN" means any Loan denominated in an Alternate
Currency made by one or more of the Alternate Currency Banks to a Borrower
pursuant to Section 2.1.4 and an Alternate Currency Addendum.
-------------
"ALTERNATE CURRENCY NOTE" means a promissory note of any Borrower, in favor
of the applicable Alternate Currency Lenders evidencing the obligation of such
Borrower to repay
3
<PAGE>
Alternate Currency Loans, as amended or modified from time to time and together
with any promissory note or notes issued in exchange or replacement therefor.
"ALTERNATE CURRENCY PERCENTAGE" means, with respect to any Alternate
Currency Bank for any particular Alternate Currency, the percentage obtained by
dividing (A) such Alternate Currency Bank's Alternate Currency Commitment at
such time as set forth in the applicable Alternate Currency Addendum by (B) the
aggregate of the Alternate Currency Commitments at such time of all Alternate
Currency Banks with respect to such Alternate Currency as set forth in the
applicable Alternate Currency Addendum.
"APPLICABLE LETTER OF CREDIT FEE RATE" means a per annum rate equal to the
Applicable Margin in respect of Revolving Loans that are Eurocurrency Loans, as
determined from time to time pursuant to Section 2.3.
-----------
"APPLICABLE MARGIN" means, at any date of determination thereof with
respect to any Advance, the commitment fees payable pursuant to Section 2.4 and
-----------
Letter of Credit fees, the respective rates per annum for such Advance,
commitment fees and Letter of Credit fees calculated in accordance with the
terms of Section 2.3, or, in the case of any Alternate Currency Loan, as set
-----------
forth on the applicable Alternate Currency Addendum.
"APPLICABLE PERCENTAGE" means, for any Lender, such Lender's Revolving Loan
Percentage or Term Loan Percentage, as applicable.
"APPROXIMATE EQUIVALENT AMOUNT" of any currency with respect to any amount
of Dollars shall mean the Equivalent Amount of such currency with respect to
such amount of Dollars at such date (i) if such currency is Deutsche Marks,
French Francs, Dutch Guilders or Sterling, rounded up to the nearest 100,000 of
such currency and (ii) if such currency is any other Agreed Currency, rounded up
to the nearest amount of such currency as determined by the Agent from time to
time.
"ARRANGER" means First Chicago Capital Markets, Inc.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person)
other than (i) the sale of Inventory in the ordinary course of business and (ii)
the sale or other disposition of any obsolete or worn-out property disposed of
in the ordinary course of business.
4
<PAGE>
"ASSUMPTION LETTER" means a letter of a Subsidiary of the Company addressed
to the Lenders in substantially the form of Exhibit A hereto pursuant to which
---------
such Subsidiary agrees to become a "BORROWING SUBSIDIARY" and agrees to be bound
by the terms and conditions hereof.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) subject to Title IV of ERISA in respect
of which the Company or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA or with respect to which the Company or any ERISA
Affiliate has any potential liability.
"BORROWER" means, as applicable, the Company, the Subsidiaries listed on
Schedule 1.1.2 and any other Borrowing Subsidiary, together with their
- --------------
respective successors and assigns.
"BORROWING BASE" means, as of any date of calculation, an amount, as set
forth on the most current Borrowing Base Certificate delivered to the Agent, for
the Company and its Consolidated Subsidiaries equal to: (i) seventy-five
percent (75%) of the Gross Amount of Receivables; plus (ii) fifty percent (50%)
----
of the Gross Amount of Inventory owned by the Company and its Consolidated
Subsidiaries, minus (iii) the aggregate amount of trade payables owed to
-----
creditors of the Subsidiaries of the Company that have not granted Liens on such
Subsidiaries' Receivables.
"BORROWING BASE CERTIFICATE" means a certificate, in substantially the form
of Exhibit C attached hereto and made a part hereof, setting forth the Borrowing
---------
Base and the component calculations thereof.
"BORROWING DATE" means a date on which an Advance or a Swing Loan is made
hereunder.
"BORROWING NOTICE" means a notice as provided in Section 2.1.1(ii), Section
----------------- -------
2.1.2(ii), or Section 2.1.3(ii).
- --------- -----------------
"BORROWING SUBSIDIARY" means each of the Subsidiaries listed on Schedule
--------
1.1.2 and any other domestic Subsidiary, Dutch Borrowing Subsidiary, French
- -----
Borrowing Subsidiary, German Borrowing Subsidiary, or UK Borrowing Subsidiary
duly designated by the Company pursuant to Section 2.5.14 hereof to request
--------------
Advances hereunder, which Subsidiary shall have delivered to the Agent an
Assumption Letter in accordance with Section 2.5.14 and such other documents,
--------------
instruments and agreements as may be required pursuant to the terms of this
Agreement.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of or any currency conversion with respect to Eurocurrency Advances, a
day other than Saturday or Sunday on which banks are open for business in
Indianapolis, Indiana and New York, New York, on which dealings in Dollars are
carried on in the London interbank market and, where funds are to be paid or
made available in a currency other than Dollars (other than in Euro), on which
commercial banks are open for domestic and international business (including
dealings in deposits in such currency) in both London and the place where such
funds are to be paid or made available, (ii) with respect to any borrowing,
payment, or rate selection of Revolving Loans denominated in
5
<PAGE>
Euro, a day (other than a Saturday or Sunday) on which a suitable clearing
system for the Euro is open for business as determined by the Agent, and (iii)
for all other purposes, a day other than Saturday or Sunday on which banks are
open for business in Indianapolis, Indiana and New York, New York.
"CAPITAL EXPENDITURES" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with U. S. GAAP, excluding (i) expenditures
of insurance proceeds to rebuild or replace any asset after a casualty loss,
(ii) leasehold improvement expenditures for which the Company or a Subsidiary is
reimbursed within a reasonable period of time by the lessor and (iii)
expenditures of proceeds received in connection with any condemnation or eminent
domain proceeding to replace any asset taken from the Company or a Subsidiary in
such proceeding.
"CAPITAL STOCK" means the equity securities of a corporation or societe
anonyme, the voting partnership interests of a partnership and the voting
membership interests of a limited liability company.
"CAPITALIZED LEASE" means any lease the obligation for Rentals with respect
to which is required to be capitalized on a balance sheet of the lessee in
accordance with U.S. GAAP.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the governments of the United States, France,
England, Germany or The Netherlands and backed by the full faith and credit of
such government; (ii) domestic, Deutsche Marks, French Francs, Dutch Guilders
and Sterling and Eurocurrency certificates of deposit and time deposits,
bankers' acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States of America, any
state thereof or the District of Columbia, Germany, France, The Netherlands or
England, or its branches or agencies; (iii) shares of money market, mutual or
similar funds having assets in excess of $100,000,000 or the equivalent amount
in Deutsche Marks, French Francs, Dutch Guilders or Sterling and the investments
of which are limited to investment grade securities (i.e., securities rated at
least Baa by Moody's or at least BBB by S&P); (iv) commercial paper of United
States of America, German, French, Dutch, or English banks and bank holding
companies and their subsidiaries and United States of America, German, French,
Dutch and English finance, commercial, industrial or utility companies which, at
the time of acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by
Moody's; and (v) at the reasonable discretion of the Agent or the Required
Lenders, short term obligations, deposits, certificates, bankers' acceptances,
shares or commercial paper denominated in currency other than Dollars, Deutsche
Marks, French Francs, Dutch Guilders or Sterling which are easily transferrable
into cash; provided that the maturities of all such Cash Equivalents shall not
--------
exceed 365 days.
"CHANGE IN CONTROL" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and
6
<PAGE>
Exchange Commission under the Securities Exchange Act of 1934) of 25% or more of
the outstanding shares of voting stock of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL" means all property and interests in property now owned or
hereafter acquired by the Company or any of its Subsidiaries upon which a
security interest, lien or mortgage is granted to the Agent, for the benefit of
the Holders of Secured Obligations, or to the Agent, for the benefit of the
Lenders, whether under the Security Agreement, under the Collateral Documents or
under any of the other Loan Documents.
"COLLATERAL AGENT" means Credit Lyonnais, in its capacity as contractual
representative of the Lenders, the Issuing Lenders, and the Swing Loan Lenders
pursuant to Article XI, and not in its individual capacity as a Lender, Swing
----------
Loan Lender or Issuing Lender, and any successor Collateral Agent appointed
pursuant to Article XI.
----------
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement, including, without limitation the
Security Agreement, Trademark Security Agreement, Patent Security Agreement,
Subsidiary Guaranty, the Subsidiary Security Agreement, the Pledge Agreements,
the Mortgages, the Tokheim Sofitam Charge, the Tokheim Sofitam Receivables
Assignment, Tokheim Sofitam Pledge Agreement and the Contribution Agreement,
together with all agreements and documents referred to therein or contemplated
thereby for the purpose of securing or guaranteeing the Obligations.
"COMMITMENT" means, for each Lender, collectively, such Lender's Revolving
Loan Commitment and/or Term Loan Commitment.
"COMPANY" means Tokheim Corporation, an Indiana corporation, and its
successors and assigns, including a debtor-in-possession on behalf of the
Company.
"COMPANY PLEDGE AGREEMENTS" means each of (i) that certain Amended and
Restated Pledge Agreement dated as of September 30, 1998 executed by the Company
in favor of the Agent for the benefit of the Holders of Secured Obligations and
(ii) that certain Share Pledge Agreement dated as of September 30, 1998 executed
by the Company in favor of the Agent for the benefit of the Holders of Secured
Obligations, in each case, as amended, restated or otherwise modified from time
to time.
"COMPANY'S STATUS" is defined in Section 2.3.
-----------
"CONSOLIDATED NET INCOME" means for any period the amount of net income (or
deficit) of the Company and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with U.S. GAAP, excluding any
net income (or net loss) of a Consolidated
7
<PAGE>
Subsidiary for any period during which it was not a Consolidated Subsidiary, or
any net income (or net loss) of any business, properties or assets acquired (by
way of merger, consolidation, purchase or otherwise) by the Company or any
Consolidated Subsidiary for any period prior to the date of acquisition thereof.
"CONSOLIDATED NET WORTH" means, at any date as of which the same is to be
determined, the consolidated stockholders' equity of the Company and its
Consolidated Subsidiaries, determined in accordance with U.S. GAAP (excluding
the Company's minimum funding liability under ERISA with respect to Plans
maintained by the Company and excluding foreign currency translation
adjustments).
"CONSOLIDATED SUBSIDIARY" means, at any date as of which the same is to be
determined, any Subsidiary or other entity the accounts of which would be
consolidated with those of the Company in its consolidated financial statements
if such statements were prepared as of such date in accordance with U.S. GAAP.
"CONTRIBUTION AGREEMENT" means the Amended and Restated Contribution
Agreement dated as of September 30, 1998 by and among the Company and the
Guarantor Subsidiaries, as amended, restated, supplemented or otherwise modified
from time to time.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.2.3.
-------------
"DEFAULT" means an event described in Article VII.
-----------
"DEUTSCHE MARKS" means the lawful currency of the Federal Republic of
Germany.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the later of (i) the Revolving Loan Termination Date and
(ii) the Term Loan Termination Date.
"DOL" means the United States Department of Labor and any successor
department or agency.
"DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the Equivalent Amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of
8
<PAGE>
exchange of the Agent for such currency on the London market at 11:00 a.m.,
London time, two Business Days prior to the date on which such amount is to be
determined.
"DOLLARS" and "$" shall mean lawful money of the United States of America.
"DUTCH BORROWING SUBSIDIARIES" means (i) each of the Subsidiaries listed on
Schedule 1.1.2 and identified as "Dutch Borrowing Subsidiaries" thereon and (ii)
- --------------
each other Wholly-Owned Subsidiary of the Company organized under the laws of
The Netherlands and added as a Borrowing Subsidiary pursuant to the terms of
Section 2.5.14 of this Agreement, and, in each case, their permitted successors
- --------------
and assigns, including a debtor-in-possession on behalf of such Dutch Borrowing
Subsidiary.
"EBITDA" means, for any period, on a consolidated basis for the Company and
its Consolidated Subsidiaries, the sum of: (i) Consolidated Net Income; plus
----
(ii) the portion of consolidated net income attributable to minority interests
in the Company's Consolidated Subsidiaries not included in the calculation of
Consolidated Net Income; plus (iii) to the extent deducted in determining
----
Consolidated Net Income, income taxes paid or accrued; minus (iv) extraordinary
-----
gains; plus (v) extraordinary losses; plus (vi) Interest Expense; plus (vii)
---- ---- ----
depreciation; plus (viii) non-cash amortization expense, including, without
----
limitation, amortization of goodwill and other intangible assets; minus (ix)
-----
interest income; plus (x) any non-recurring expenses related to the
----
reorganization, restructuring and rationalization of the Company and its
Subsidiaries (including the businesses purchased pursuant to the Sofitam
Acquisition and the Schlumberger Acquisition, and Management Solutions, Inc.)
which are charged to operating expenses when and as charged during the first
four fiscal quarters following the Effective Date up to an aggregate amount not
to exceed $25,000,000 as confirmed by independent certified public accountants
in accordance with the terms of Section 6.1(i).
--------------
"EFFECTIVE DATE" means the date of this Agreement.
"ELIGIBLE CURRENCY" means any currency other than Dollars with respect to
which the Agent has not given notice in accordance with Section 2.5.12 and that
--------------
is readily available, freely traded, in which deposits are customarily offered
to banks in the London interbank market, convertible into Dollars in the
international interbank market and as to which an Equivalent Amount may be
readily calculated.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock); provided, however, that
-------- -------
Equity Interests will not include any Incentive Arrangements or obligations or
payments thereunder.
"EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the
9
<PAGE>
arithmetical mean of the buy and sell spot rates of exchange of the Agent for
such other currency at 11:00 a.m., London time, two Business Days prior to the
date on which such amount is to be determined (i) if such currency is Sterling,
Deutsche Marks, Dutch Guilders, or French Francs, rounded up to the nearest
100,000 of such currency and (ii) if such currency is any other Agreed Currency
or Alternate Currency, rounded up to the nearest amount of such currency as
determined by the Agent from time to time or agreed to by the applicable
Alternate Currency Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA AFFILIATE" means any (i) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Company, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Company, and (iii)
member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as the Company, any corporation described
in clause (i) above or any partnership or trade or business described in clause
---------- ------
(ii) above.
- ----
"ESOP AGREEMENTS" means (a) the Assignment Agreements dated as of September
30, 1998 among Credit Lyonnais, Chicago Branch, Harris Trust and Savings Bank
and Bank of America National Trust and Savings Association, as assignors and NBD
Bank, N.A. as Agent for the ESOP Lenders, (b) Fourth Amendment to Loan and
Guarantee Agreement dated as of September 30, 1998 among Tokheim, Fort Wayne
National Bank as successor to Summit Bank as trustee for Retirement Savings Plan
for Employees of Tokheim Corporation and Subsidiaries and NBD Bank, N.A. as
Agent for the ESOP Lenders and (c) Fourth Amendment to Loan and Guarantee
Agreement among Tokheim, Fort Wayne National Bank as successor to Norwest Bank
Fort Wayne, N.A. f/k/a Lincoln National Bank & Trust Company as trustee for
Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries
and NBD Bank, N.A. as Agent for the ESOP Lenders.
"ESOP GUARANTY OBLIGATIONS" means the obligations of the Company as
guarantor pursuant to the ESOP Loan Agreements.
"ESOP LENDERS" means, upon consummation of the ESOP Agreements, the lenders
under the ESOP Loan Agreements in the amounts set forth opposite such lenders'
names under the heading "ESOP Lenders" on Schedule I hereof.
----------
"ESOP LOAN AGREEMENTS" means the Loan and Guarantee Agreements pursuant to
which the ESOP Loans were made.
"ESOP LOANS" means those loans made pursuant to loan agreements amended
pursuant to the ESOP Agreements.
"EURO" means the euro referred to in the Council Regulation (EC) No.
1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if
different, the then lawful currency
10
<PAGE>
of the member states of the European Union that participate in the third stage
of the Economic and Monetary Union.
"EURO IMPLEMENTATION DATE" means the first date (currently expected to be
January 1, 1999) on which the Euro becomes the currency of some or all of the
member states of the European Union.
"EUROCURRENCY ADVANCE" means an Advance which bears interest at a
Eurocurrency Rate requested by the applicable Borrower pursuant to Section 2.2.
-----------
"EUROCURRENCY LOAN" means a Loan which bears interest at a Eurocurrency
Rate requested by the applicable Borrower pursuant to Section 2.2.
-----------
"EUROCURRENCY PAYMENT OFFICE" of the Agent or any Swing Loan Lender, as
applicable, shall mean, for each of the Agreed Currencies, the office, branch or
affiliate of the Agent or such Swing Loan Lender, as applicable, specified as
the "EUROCURRENCY PAYMENT OFFICE" for such currency in Schedule I hereto or such
----------
other office, branch, affiliate or correspondent bank of the Agent or such Swing
Loan Lender as it may from time to time specify to the Company and each Lender
as its Eurocurrency Payment Office.
"EUROCURRENCY RATE" means, with respect to a Eurocurrency Advance for the
relevant Interest Period, the sum of (a) the Eurocurrency Base Rate plus (b) the
----
percentage indicated as the Applicable Margin in connection with Eurocurrency
Loans.
"EUROCURRENCY BASE RATE" means, with respect to any Eurocurrency Advance
for any specified Interest Period, either (i) the rate of interest per annum
equal to the rate for deposits in the applicable Agreed Currency of such
Eurocurrency Advance with a maturity approximately equal to such Interest Period
which appears on Telerate Page 3740 or Telerate Page 3750, as applicable, or, if
there is more than one such rate, the average of such rates rounded to the
nearest 1/100 of 1%, as of 11 a.m. (London time) two Business Days prior to the
first day of such Interest Period or (ii) if no such rate of interest appears on
Telerate Page 3740 or Telerate Page 3750, as applicable, for any specified
Interest Period, the rate at which deposits in the applicable Agreed Currency
are offered by the Agent to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days prior to the first day of
such Interest Period, in the approximate amount of the Applicable Percentage of
the Agent (in its capacity as a Lender) of such Eurocurrency Advance and having
a maturity approximately equal to such Interest Period. The terms "Telerate
Page 3740" and "Telerate Page 3750" mean the display designated as "Page 3740"
and "Page 3750", as applicable, on the Associated Press-Dow Jones Telerate
Service (or such other page as may replace Page 3740 or Page 3750, as
applicable, on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest rate settlement rates for the relevant Agreed Currency). Any
Eurocurrency Base Rate determined on the basis of the rate displayed on Telerate
Page 3740 or Telerate Page 3750 in accordance with the foregoing provisions
11
<PAGE>
of this subparagraph shall be subject to corrections, if any, made in such rate
and displayed by the Associated Press-Dow Jones Telerate Service within one hour
of the time when such rate is first displayed by such service.
"EXCESS CASH FLOW" means an amount equal to the Company's and its
Subsidiaries' consolidated (i) EBITDA for such period, minus (ii) income taxes
-----
paid in cash for such period, minus (iii) Capital Expenditures paid in cash
-----
during such period, minus (iv) Interest Expense for such period, minus (v) any
----- -----
payments of the principal portion of the Term Loans and of the principal portion
of all other Indebtedness of the Company and its Subsidiaries during such
period, minus (vi) the increase (or plus the decrease) in working capital during
----- ----
such period, in each case as calculated in accordance with U.S. GAAP, minus
-----
(vii) the decrease during such period in the reserve account created in
connection with each of the Schlumberger Acquisition and the Sofitam
Acquisition, minus, without duplication of any of the foregoing, (viii) any non-
-----
recurring cash expenses related to the reorganization, restructuring and
rationalization of the Company and its Subsidiaries (including the businesses
purchased pursuant to the Schlumberger Acquisition) which are charged to
operating expenses when and as charged, minus (ix) any non-recurring cash
-----
charges related to the acquisition, reorganization, restructuring and
rationalization of Management Solutions, Inc. when and as charged, minus (x)
-----
extraordinary losses other than non-cash extraordinary losses.
"EXISTING LETTERS OF CREDIT" means those letters of credit issued for the
account of the Company and listed on Schedule 1.1.1.
--------------
"FAIR MARKET VALUE" means, with respect to any asset, the value of the
consideration obtainable in a sale of such asset in the open market, assuming a
sale by a willing seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of time, each having
reasonable knowledge of the nature and characteristics of such asset, neither
being under any compulsion to act, determined (i) in good faith by the board of
directors of the Company or (ii) in an appraisal of such asset, provided that
--------
such appraisal was performed relatively contemporaneously with such sale by an
independent third party appraiser and the basic assumptions underlying such
appraisal have not materially changed since the date thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York; or (ii) if such rate is
not so published for any day which is a Business Day, the average of the
quotations at approximately 10:00 a.m. (Indianapolis time) for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"FEE LETTERS" is defined in Section 2.4.2.
-------------
12
<PAGE>
"FINANCIAL OFFICER" means the Executive Vice President and Chief Financial
Officer, the Corporate Treasurer or such other officer of the Company as may be
designated by the Company from time to time.
"FINANCING" means, with respect to any Person, the issuance or sale by such
Person of any Equity Interests of such Person (other than any such issuances or
sales to the Company or a Subsidiary of the Company by a Subsidiary of the
Company) or any Indebtedness consisting of debt securities of such Person (other
than issuances of Indebtedness permitted pursuant to Section 6.18).
------------
"FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement
Act of 1983, as amended, modified or supplemented from time to time.
"FIXED CHARGE COVERAGE RATIO" means the ratio of: (i) the sum, without
duplication, of the amounts of (a) EBITDA, minus (b) Capital Expenditures to
-----
(ii) the sum, without duplication of the amounts of (a) Interest Expense, plus
----
(b) scheduled amortization of the principal portion of all Indebtedness of the
Company and its Subsidiaries during such period, plus (c) any cash payments with
----
respect to income taxes of the Company and its Consolidated Subsidiaries, plus
----
(d) all payments consisting of dividends, redemptions, repurchases, acquisitions
or other retirements of the Company's Capital Stock (excluding (to avoid
duplication) dividends used to fund payments included in clauses (ii)(a) and (b)
--------------- ---
above required to be paid on the Capital Stock owned by the Company's Employee
Stock Ownership Plan and, after the ESOP Loans are repaid, excluding dividends
used to fund the Company's obligations to the Company's Employee Stock Ownership
Plan, to the extent previously deducted in determining Consolidated Net Income),
plus (e) any minimum funding requirement for any Plan that provides for defined
- ----
benefits. In each case, the Fixed Charge Coverage Ratio shall be determined as
of the last day of each fiscal quarter for the four-quarter period ending such
day (provided, however, for the first four of such calculations made after the
date of this Agreement, such calculations shall be done based upon the period
commencing with the Effective Date and ending with the quarterly period then
ended).
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined
in Section 3(3) of ERISA which is maintained or contributed to for the benefit
of the employees of the Company, any of its Subsidiaries or any members of its
Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit
of employees of the Company, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (iii) under applicable local law, is required to be funded through a trust
or other funding vehicle.
"FRENCH BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on
Schedule 1.1.2 and identified as "French Borrowing Subsidiaries" thereon and
- --------------
(ii) each other Wholly-Owned
13
<PAGE>
Subsidiary of the Company organized under the laws of the Republic of France and
added as a Borrowing Subsidiary pursuant to the terms of Section 2.5.14 of this
--------------
Agreement, and, in each case, their permitted successors and assigns, including
a debtor-in-possession on behalf of such French Borrowing Subsidiary.
"FRENCH FRANCS" means the lawful currency of the Republic of France.
"FRENCH LENDING INSTALLATIONS" shall mean the Lending Installations
identified as the French Lending Installations on Schedule II and which are
-----------
acting as Lenders with respect to Loans to the French Borrowing Subsidiaries.
"FRENCH LOAN DOCUMENTS" means the Notes executed by Tokheim Sofitam, the
Tokheim Sofitam Charge, the Tokheim Sofitam Receivables Assignment and the
Tokheim Sofitam Pledge Agreement.
"GASBOY" means Gasboy International, Inc., a Pennsylvania corporation,
together with its successors and assigns.
"GASBOY PLEDGE AGREEMENT" means that certain Amended and Restated Pledge
Agreement dated as of September 30, 1998 executed by Gasboy International, Inc.
in favor of the Agent for the benefit of the Holders of Secured Obligations, as
amended, restated or otherwise modified from time to time.
"GERMAN BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on
Schedule 1.1.2 and identified as "German Borrowing Subsidiaries" thereon and
- --------------
(ii) each other Wholly-Owned Subsidiary of the Company organized under the laws
of Germany and added as a Borrowing Subsidiary pursuant to the terms of Section
-------
2.5.14 of this Agreement, and, in each case, their permitted successors and
- ------
assigns, including a debtor-in-possession on behalf of such German Borrowing
Subsidiary.
"GROSS AMOUNT OF INVENTORY" means Inventory of the Borrowers and their
Consolidated Subsidiaries, valued at the lower of cost determined on a first-in-
first-out basis (determined in accordance with U.S. GAAP, consistently applied)
or market value less such reserves as the Agent elects to establish in
accordance with its reasonable credit judgment (which credit judgment shall be
exercised in a manner that is not arbitrary or capricious).
"GROSS AMOUNT OF RECEIVABLES" means the outstanding face amount of
Receivables of the Borrowers and their Consolidated Subsidiaries, determined in
accordance with U.S. GAAP, consistently applied, less such reserves as the Agent
elects to establish in accordance with its reasonable credit judgment (which
credit judgment shall be exercised in a manner that is not arbitrary or
capricious).
14
<PAGE>
"GROSS NEGLIGENCE" means either recklessness or actions taken or omitted
with conscious indifference to or the complete disregard of consequences. Gross
Negligence does not mean the absence of ordinary care or diligence, or an
inadvertent act or inadvertent failure to act. If the term "gross negligence"
is used with respect to the Agent or any Lender, Issuing Lender or Swing Loan
Lender or any indemnitee in any of the other Loan Documents, it shall have the
meaning set forth herein.
"GUARANTEED OBLIGATIONS" is defined in Section 9.1.
-----------
"GUARANTOR SUBSIDIARY" means a domestic Subsidiary of the Company party to
the Subsidiary Security Agreement.
"GUARANTY" of any Person means any agreement by which such person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes liable upon, the obligation of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, and shall include, without limitation, the
contingent liability of such Person under or in relation to any Letter of Credit
and disclosed support agreements, but shall exclude endorsements for collection
or deposit in the ordinary course of business.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"INCENTIVE ARRANGEMENTS" means any stock appreciation rights, "phantom"
stock plans, employment agreements, non-competition agreements, subscription and
stockholders agreements and other incentive and bonus plans and similar
arrangements made in connection with the retention of executives, directors,
officers or employees of the Company and its Subsidiaries.
"INDEBTEDNESS" means, with respect to any Person, without duplication, such
Person's (i) obligations for borrowed money calculated in accordance with U.S.
GAAP with overdraft liabilities netted against cash and Cash Equivalents, (ii)
obligations representing the deferred purchase price of Property or services
(other than accounts payable arising in the ordinary course of such Person's
business payable on terms customary in the trade), (iii) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (iv) obligations
which are evidenced by notes, acceptances, or other instruments, (v) the
principal component of obligations pursuant to Capitalized Leases, and (vi)
obligations for which such person is obligated pursuant to a Guaranty of
obligations of the type described in clauses (i) through (v) above. The amount
----------- ---
of any such Guaranty shall be deemed to be an amount equal to the determinable
amount of the primary obligation in respect of which such Guaranty is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
15
<PAGE>
"INTEREST EXPENSE" means, for any period, the total gross interest expense
of the Company and its Consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases), but excluding interest
expense not payable in cash (including amortization of discount), all as
determined in conformity with U.S. GAAP.
"INTEREST EXPENSE COVERAGE RATIO" means the ratio of (i) EBITDA to (ii)
Interest Expense. In each case, the Interest Expense Coverage Ratio shall be
determined as of the last day of each fiscal quarter for the four-quarter period
ending such day (provided, however, for the first four of such calculations made
after the date of this Agreement, such calculations shall be done based upon the
period commencing with the Effective Date and ending with the quarterly period
then ended).
"INTEREST PERIOD" means, (i) any Alternate Currency Interest Period or (ii)
with respect to a Eurocurrency Advance or a Eurocurrency Loan, a period of one,
two, three or six months commencing on a Business Day selected by the applicable
Borrower pursuant to this Agreement; provided, however, notwithstanding anything
-------- -------
in this Agreement to the contrary and only at the Agent's sole option, for the
period from the Effective Date to the earlier of (y) the date that is 90 days
after the Effective Date and (z) the date upon which the Arranger confirms that
the loan syndication process has been complete (the "SYNDICATION PERIOD"),
"Interest Period" means, with respect to a Eurocurrency Loan, a period of seven
(7) days, provided that during such period all Interest Periods shall end on the
same day. Other than during the Syndication Period, such Interest Period shall
end on (but exclude) the day which corresponds numerically to such date of
commencement one, two, three or six months thereafter, provided, however, that
if there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new month, such Interest Period shall
end on the immediately preceding Business Day.
"INTEREST RATE AGREEMENTS" is defined in Section 6.22.
------------
"INVENTORY" shall mean any and all goods, including, without limitation,
goods in transit, wheresoever located, whether now owned or hereafter acquired
by the Company or any of its Subsidiaries, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the business of the
Company or any of its Subsidiaries, and shall include all right, title and
interest of the Company or any of its Subsidiaries in any property the sale or
other disposition of which has given rise to Receivables and which has been
returned to or repossessed or stopped in transit by the Company or any of its
Subsidiaries.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of stock, partnership interest, limited liability
company membership interest, notes,
16
<PAGE>
debentures or other securities, or of a beneficial interest in stock,
partnership interest, limited liability company membership interest, notes,
debentures or other securities, issued by any other Person, (ii) any purchase by
that Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING LENDER" is defined in Section 2.6.1.
-------------
"L/C DRAFT" means a draft drawn on any Issuing Lender pursuant to any of
the Letters of Credit.
"L/C INTEREST" has the meaning specified in Section 2.6.2.
-------------
"L/C OBLIGATIONS" means an amount equal to the sum (without duplication) of
(i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amounts of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Lender and (iii) the aggregate outstanding amount of
Reimbursement Obligations at such time.
"LENDERS" means the financial institutions listed on the signature pages of
this Agreement and their respective successors and assigns including, without
limitation, any Lender which becomes party to this Agreement pursuant to Section
-------
13.3.
- ----
"LENDING INSTALLATION" means any office, branch, subsidiary or affiliate of
any Lender or the Agent.
"LETTER OF CREDIT" means any of the Existing Letters of Credit or any
standby letter of credit issued pursuant to Section 2.6 hereof.
-----------
"LETTER OF CREDIT FEE" is defined in Section 2.6.5.
-------------
"LEVEL I STATUS" is defined in Section 2.3.
-----------
"LEVEL II STATUS" is defined in Section 2.3.
-----------
"LEVEL III STATUS" is defined in Section 2.3.
-----------
17
<PAGE>
"LEVEL IV STATUS" is defined in Section 2.3.
-----------
"LEVEL V STATUS" is defined in Section 2.3.
-----------
"LEVEL VI STATUS" is defined in Section 2.3.
-----------
"LEVERAGE RATIO" means the ratio of (i) the sum of (w) Indebtedness of the
Company and its Consolidated Subsidiaries (including letters of credit and
guaranties) on a consolidated basis, minus (x) the aggregate outstanding
-----
principal amount of the Seller Junior Subordinated Note, minus (y) the portion
-----
of any notes issued by the Company or any of its Subsidiaries in lieu of the
cash payment of interest, in each case as of the date of determination to (ii)
EBITDA. The Leverage Ratio shall be calculated, in each case, determined as of
the last day of each fiscal quarter beginning with the fiscal quarter ending
February 28, 1999 based upon (A) for Indebtedness, as of the last day of each
such fiscal quarter; and (B) for EBITDA, the actual amount for the four-quarter
period ending on such day; provided, however, that for the first three of such
-------- -------
fiscal quarters, the computation of EBITDA will be calculated on an annualized
year-to-date basis for the period commencing with the Effective Date through the
end of such fiscal quarter using the following formula: (x) for the first such
fiscal quarter, EBITDA shall be multiplied by a factor of four (4); (y) for the
second such fiscal quarter, EBITDA for two quarters shall be multiplied by a
factor of two (2); and (z) for the third such fiscal quarter, EBITDA for the
three quarters shall be multiplied by a factor of one and one-third (1.333).
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"LOAN" means, (i) with respect to a Lender, such Lender's portion, if any,
of any Advance, (ii) with respect to a Swing Loan Lender, such Swing Loan
Lender's Swing Loans, (iii) with respect to any Alternate Currency Lender, such
Alternate Currency Lender's Alternate Currency Loan, and (iv) collectively, with
respect to all Lenders, all Term Loans, Revolving Loans, Swing Loans and
Alternate Currency Loans.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral Documents,
the French Loan Documents, the Assumption Letters, all Alternate Currency
Addenda, the applications, reimbursement agreements, the other instruments and
agreements related to the Letters of Credit and L/C Interests, and the
Collateral Documents.
"MATERIAL ADVERSE CHANGE" means any change in the business, Property,
condition (financial or otherwise) or results of operations or prospects of (i)
the Company , (ii) the Company and its domestic Subsidiaries taken as a whole or
(iii) the non-domestic Subsidiaries including those Subsidiaries acquired
pursuant to the Schlumberger Acquisition taken as a whole, in each case, which
could reasonably be expected to have a Material Adverse Effect.
18
<PAGE>
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise) or results of operations
or prospects of (a) the Company, (b) the Company and its domestic Subsidiaries
taken as a whole, or (c) the non-domestic Subsidiaries including those
Subsidiaries acquired pursuant to the Schlumberger Acquisition, taken as a whole
(ii) the ability of any of the Borrowers to perform their obligations under the
Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent, the Lenders, the Issuing
Lenders or the Swing Loan Lenders thereunder.
"MATERIAL SUBSIDIARY" means, at any time, any Subsidiary which as of such
time has assets in excess of $10,000,000.
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, the lesser
of (A) the Aggregate Revolving Loan Commitment at such time minus $25,000,000
until the Tokheim Sofitam Charge, the Tokheim Sofitam Pledge Agreement and the
Tokheim Sofitam Receivable Assignment have been duly executed and delivered to
the Agent, and registered in accordance with French law, together with opinions
of French counsel acceptable to the Agent, and (B) the Borrowing Base at such
time minus $25,000,000 until the Tokheim Sofitam Charge, the Tokheim Sofitam
Pledge Agreement and the Tokheim Sofitam Receivable Assignment have been duly
executed and delivered to the Agent, and registered in accordance with French
law, together with opinions of French counsel acceptable to the Agent.
"MOODY'S" means Moody's Investors Service, Inc. or any rating agency which
is generally recognized as a successor thereto.
"MORTGAGES" means those amended and restated mortgages dated as of
September 30, 1998 executed by the Company with respect to its owned real estate
in Allen County, Steuben County and Daviess County, Indiana Montgomery County,
Pennsylvania, and Bonham, Texas, each as amended, restated or otherwise modified
from time to time.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA subject to Title IV of ERISA and which is contributed to by
either the Company or any ERISA Affiliate or with respect to which the Company
or any ERISA Affiliate has potential liability.
"NATIONAL CURRENCY UNIT" means the unit of currency (other than a Euro
unit) of each member state of the European Union that participates in the third
stage of Economic and Monetary Union.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing by
any Person, (a) cash (freely convertible into Dollars) received by such Person
or any Subsidiary of such Person from such Asset Sale (including cash received
as consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such Asset Sale) or Financing, after (i)
provision for all income or other taxes measured by or resulting from such Asset
Sale or Financing,
19
<PAGE>
(ii) payment of all brokerage commissions and other fees and expenses related to
such Asset Sale or Financing, (iii) all amounts used to repay Indebtedness
secured by a Lien on any asset disposed of in such Asset Sale or which is or may
be required (by the express terms of the instrument governing such Indebtedness)
to be repaid in connection with such Asset Sale (including payments made to
obtain or avoid the need for the consent of any holder of such Indebtedness),
and (iv) deduction of appropriate amounts to be provided by such Person or a
Subsidiary of such Person as a reserve, in accordance with U.S. GAAP, against
any liabilities associated with the assets sold or disposed of in such Asset
Sale and retained by such Person or a Subsidiary of such Person after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with the assets sold or disposed of in
such Asset Sale; and (b) cash payments in respect of any other consideration
received by such Person or any Subsidiary of such Person from such Asset Sale or
Financing upon receipt of such cash payments by such Person or such Subsidiary.
"NEW CURRENCY" is defined in Section 2.5.7.
-------------
"NON-DOMESTIC BORROWING SUBSIDIARIES" means all Borrowing Subsidiaries of
the Company other than domestic Borrowing Subsidiaries.
"NOTE" means any Revolving Note, Swing Loan Note, Term Note or any Note
issued to evidence the Alternate Currency Loans.
"NOTE PLEDGE AGREEMENTS" means each of (i) that certain Amended and
Restated Note Pledge Agreement dated as of September 30, 1998 executed by the
Company in favor of the Agent for the benefit of the Holders of Secured
Obligations and (ii) that certain Note Pledge Agreement dated as of September
30, 1998 executed by Tokheim RPS, LLC in favor of the Agent for the benefit of
the Holders of Secured Obligations, as amended, restated or otherwise modified
from time to time.
"NOTICE OF ASSIGNMENT" is defined in Section 13.3.2.
--------------
"OBLIGATIONS" means all Loans, Advances, debts, liabilities, obligations,
covenants and duties owing by the Company or any of its Subsidiaries to the
Agent, any Lender, any Issuing Lender, any Swing Loan Lender, any Affiliate of
the Agent, any Lender, any Issuing Lender or any Swing Loan Lender, or any
indemnitee, of any kind or nature, present or future, arising under this
Agreement, the Notes, the Letters of Credit, the ESOP Guaranty Obligations, the
Collateral Documents, any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees, and any other sum chargeable to the Company or
any of its Subsidiaries under this Agreement or any other Loan Document.
20
<PAGE>
"OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any Sale and Leaseback Transactions which do not create
a liability on the consolidated balance sheet of such Person (c) any liability
under any financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries excluding leases that are not Capitalized Leases.
"OPTION AGREEMENT" means the Option Agreement dated as of May 7, 1996 by
and between the Company and Sofitam.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit Agreement, dated
September 3, 1996, by and among the Borrowers, the financial institutions
parties thereto as lenders and the Agent, as amended to but not including the
date hereof.
"ORIGINAL CURRENCY" is defined in Section 2.5.7.
-------------
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the function thereof.
"PAYMENT DATE" means the last Business Day of each calendar quarter.
"PERCENTAGE" means, with respect to any Lender, (i) at any time prior to
the Effective Date, the percentage obtained by dividing (A) such Lender's
Commitments at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at
such time and (ii) at any time after the Effective Date, the percentage obtained
by dividing (A) the sum of such Lender's Term Loans and Revolving Loan
Commitment (excluding, to avoid duplication, the Revolving Loan Commitment of
any French Lending Installation that is an affiliate of such Lender) at such
time (in each case, as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the sum of the aggregate amount of all of
the Term Loans and the Aggregate Revolving Loan Commitment at such time;
provided, however, if all of the Commitments are terminated pursuant to the
- -------- -------
terms of this Agreement, then "Percentage" means the percentage obtained by
dividing (i) the sum of (a) such Lender's Term Loans and Revolving Loans, plus
----
(b) such Lender's share of the obligation to purchase participations in Swing
Line Loans and Alternate Currency Loans, plus (c) such Lender's share of the
----
obligation to purchase participations in Letters of Credit by (ii) the sum of
(a) the aggregate amount of all Term Loans, Revolving Loans plus (b) the
----
aggregate Dollar Amount of all Swing Line Loans and Alternate Currency Loans,
plus (c) the aggregate outstanding amount of all Letters of Credit.
- ----
"PERMITTED INDEBTEDNESS" means the ESOP Loans and the Permitted
Subordinated Debt.
21
<PAGE>
"PERMITTED LIEN" means a Lien permitted pursuant to Section 6.10.
------------
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
exchange, refinancing or extension of any Indebtedness permitted by this
Agreement that (i) does not exceed the aggregate principal amount (plus accrued
interest and any applicable premium and associated fees and expenses) of the
Indebtedness being replaced, renewed, refinanced or extended, (ii) does not have
a Weighted Average Life to Maturity at the time of such replacement, renewal,
refinancing or extension that is less than the Weighted Average Life to Maturity
of the Indebtedness being replaced, renewed, refinanced or extended, and (iii)
does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, subordination, blockage,
standstills, covenants, event of default and remedies) less favorable in any
case to the Company, any Borrowing Subsidiary, the Agent, the Lenders or the
ESOP Lenders than those applicable to the Indebtedness being replaced, renewed,
refinanced or extended.
"PERMITTED SUBORDINATED DEBT" means Indebtedness evidenced by the Seller
Subordinated Notes and Permitted Refinancing Indebtedness in respect thereof.
"PERSON" means any corporation, limited liability company, natural person,
firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"PLAN" means any employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Company or any ERISA Affiliate is an "employer" as defined
in Section 3(5) of ERISA or with respect to which the Company or any ERISA
Affiliate has any potential liability.
"PLEDGE AGREEMENTS" means the Company Pledge Agreements, the Note Pledge
Agreements, the TIC Pledge Agreements, the Gasboy Pledge Agreement, and the
Tokheim Sofitam Pledge Agreement.
"PRIME RATE" means, on any day, the highest "prime rate" of interest quoted
by The Wall Street Journal as the "base rate on corporate loans at large U.S.
-----------------------
money center commercial banks" on such day or, if The Wall Street Journal is not
-----------------------
published on such day, the then most recent day of publication); provided,
--------
however, that in the event that The Wall Street Journal ceases quoting a "prime
- ------- -----------------------
rate" of the type described, "Prime Rate" means, on any day, the highest per
annum rate of interest then most recently quoted as the "Bank Prime Loan" rate
for "This week" in Statistical Release H.15 (519) published from time to time by
the Federal Reserve Board or any successor publication of the Board of Governors
of the Federal Reserve System.
"PROPERTY" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"PURCHASERS" is defined in Section 13.3.1.
--------------
22
<PAGE>
"QUALIFYING BANK" means:
(a) in the case of a Lender which is not a Purchaser, a "bank" as defined
in section 840A of the Income and Corporation Taxes Act 1988 of the
United Kingdom which, at the time when the interest is paid, is within
the charge to United Kingdom corporation tax as respects interest
receivable by it under or pursuant to this Agreement; and
(b) in the case of a Purchaser, a person who, at the time when the
interest is paid, is within the charge to United Kingdom corporation
tax as respects interest receivable by it under or pursuant to this
Agreement.
"RATE HEDGING OBLIGATIONS" of a Person means any and all net obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, or any similar derivative
transactions and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"RECEIVABLE(S)" means and includes all of the Company's and its
Subsidiaries' presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Company and its
Subsidiaries to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not they
have been earned by performance, and all rights in any merchandise or goods
which any of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to reserve requirements applicable to member banks of the Federal Reserve
System.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of Securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATIONS U AND X" means Regulations U and X of the Board of Governors
of the Federal Reserve System from time to time in effect and shall include any
successor or other
23
<PAGE>
regulations or official interpretations of said Board of Governors relating to
the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"REIMBURSEMENT OBLIGATION" is defined in Section 2.6.3.
-------------
"RENTALS" means and includes all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property) payable by the Company or a Subsidiary,
as lessee or sublessee under a lease of real or personal property which is not a
Capitalized Lease, but shall be exclusive of any amounts required to be paid by
the Company or a Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar charges.
Fixed rents under any so-called, "percentage leases" shall be computed solely on
the basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"REPORTABLE EVENT" means any of the events described in Section 4043 of
ERISA for which the 30-day notice requirement has been waived by regulation
(other than events described in ERISA (S)4043(c)(1) or (5)).
"REQUEST FOR A NEW ALTERNATE CURRENCY FACILITY" shall have the meaning
ascribed thereto in Section 2.1.4(ii).
-----------------
"REQUIRED LENDERS" means Lenders having, in the aggregate, Percentages
greater than fifty percent (50%); provided, however, that in the event any of
-------- -------
the Lenders shall have failed to fund its Revolving Loan Percentage of any
Revolving Loan requested by any Borrower, any participation in any Letter of
Credit, any participation in any Alternate Currency Loan pursuant to Section
-------
2.1.4(v), or any refunding of or participation in any Swing Loan which such
- --------
Lenders are obligated to fund under the terms of this Agreement and any such
failure has not been cured, then for so long as such failure continues,
"REQUIRED LENDERS" means Lenders (excluding all Lenders whose failure to fund
their respective Revolving Loan Percentages of such Revolving Loans or purchase
such participation has not been cured) whose Percentages exceed fifty percent
(50%) of the aggregate Percentages of such non-defaulting Lenders; provided,
--------
further, however, that, if the Commitments have been terminated pursuant to the
- ------- -------
terms of this Agreement, "REQUIRED LENDERS" means Lenders (without regard to
such Lenders' performance of their respective obligations hereunder) whose
aggregate ratable shares (stated as a percentage) of the aggregate outstanding
principal balance of all Loans and L/C Obligations are greater than fifty
percent (50%).
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Maximum Revolving Credit Amount at such time exceeds the Revolving
Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the Dollar Amount of the aggregate unpaid principal balance of the Revolving
Loans at such time, plus (ii) the
----
24
<PAGE>
Dollar Amount of the outstanding principal amount of the Swing Loan Obligations
at such time, plus (iii) the Dollar Amount of the L/C Obligations at such time
----
plus (iv) the Dollar Amount of the outstanding principal amount of the Alternate
Currency Loans at such time.
"REVOLVING LOAN" is defined in Section 2.1.1.
-------------
"REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of the
Lender to make Revolving Loans to the Borrowers, to purchase participations in
Letters of Credit and to participate in Swing Loans and Alternate Currency Loans
pursuant to Section 2.1.4 not exceeding the amount set forth opposite the name
-------------
of such Lender under the heading "Revolving Loan Commitment" on Schedule I
----------
hereof or as set forth in an applicable Assignment Agreement in the form of
Exhibit B hereto received by the Agent under the terms of Section 13.3, as such
- --------- ------------
amount may be modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable assignment and acceptance.
"REVOLVING LOAN PERCENTAGE" means, with respect to any Lender, the
percentage obtained by dividing (A) the then aggregate amount of such Lender's
Revolving Loan Commitment (as adjusted from time to time in accordance with the
provisions of this Agreement) by (B) the Aggregate Revolving Loan Commitment at
such time; provided, however, if all of the Commitments are terminated pursuant
-------- -------
to the terms of this Agreement, then "Revolving Loan Percentage" means the
percentage obtained by dividing (i) the sum of (a) the Dollar Amount of such
Lender's Revolving Loans, plus (b) such Lender's share of the obligation to
----
purchase participations in Swing Line Loans and Alternate Currency Loans, plus
----
(c) such Lender's share of the obligation to purchase participations in Letters
of Credit by (ii) the sum of (a) the aggregate Dollar Amount of all Revolving
Loans, plus (b) the aggregate Dollar Amount of all Swing Loans and Alternate
----
Currency Loans, plus (c) the aggregate outstanding Dollar Amount of all Letters
----
of Credit.
"REVOLVING LOAN TERMINATION DATE" means September 30, 2004.
"REVOLVING NOTES" means the Amended and Restated Revolving Notes executed
by the Company, the Subsidiaries listed on Schedule 1.1.2, and any other
--------------
Borrowing Subsidiaries, in favor of the Lenders evidencing the Revolving Loans
and the Revolving Loan Commitment, including any amendment, restatement,
modification, renewal or replacement of such Revolving Note.
"S&P" means Standard and Poor's Ratings Group, a division of The McGraw-
Hill Companies, Inc., or any rating agency which is generally recognized as a
successor thereto.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with intent to lease such Property as lessee pursuant to
a Capitalized Lease .
"SCHLUMBERGER" means Schlumberger Limited, a corporation organized under
the laws of the Netherlands Antilles.
25
<PAGE>
"SCHLUMBERGER ACQUISITION" means the Acquisition of the fuel dispenser,
manufacturing, sales and service business units of Schlumberger by the Company
or its Subsidiaries pursuant to the Acquisition Agreement.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Rate Hedging Obligations, if any, payable by the Company or any of its
Subsidiaries to one or more of the Lenders or an Affiliate of a Lender.
"SECURITY" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated as of September 30, 1998 by and between the Company and the Agent.
"SELLER EQUITY INTERESTS" means the Warrants exercisable for shares of the
common stock of Tokheim issued by Tokheim to Schlumberger Limited in payment of
a portion not less than $20,000,000 of the purchase price for the Schlumberger
Acquisition and any other Equity Interests issued to Schlumberger Limited or any
other Person by Tokheim in payment of, or to finance payment of, a portion of
the purchase price for the Schlumberger Acquisition.
"SELLER JUNIOR SUBORDINATED NOTE" means that certain Junior Subordinated
Note in the original principal amount of not less than $40,000,000 and any
additional principal amount accruing from the payment of interest, originally
issued to Schlumberger Limited by Tokheim in payment of a portion of not less
than $40,000,000 of the purchase price for the Schlumberger Acquisition as
amended, restated or otherwise modified from time to time to time in accordance
with Section 6.27.
------------
"SELLER SENIOR SUBORDINATED NOTE" means that certain Senior Subordinated
Note in the original principal amount of not less than $170,000,000 and any
additional principal amount accruing from the payment of interest, originally
issued to Schlumberger Limited by Tokheim in payment of a portion of not less
than $170,000,000 of the purchase price for the Schlumberger Acquisition as
amended, restated or otherwise modified from time to time to time in accordance
with Section 6.27.
------------
"SELLER SUBORDINATED NOTES" means the Seller Senior Subordinated Note, the
Seller Junior Subordinated Note and any other subordinated note issued to
Schlumberger Limited or any other Person by Tokheim in payment of, or to finance
payment of, a portion of the purchase price for the Schlumberger Acquisition in
each case as amended, restated or otherwise modified from time to time in
accordance with Section 6.27 and shall include the Roll-Over Notes (as defined
------------
in the Seller Senior Subordinated Notes).
26
<PAGE>
"SENIOR LEVERAGE RATIO" means the ratio of (i) the sum of (w) Indebtedness
of the Company and its Consolidated Subsidiaries (including letters of credit
and guaranties) on a consolidated basis, minus (x) the aggregate outstanding
-----
principal amount of the Seller Subordinated Notes and any subordinated notes
issued as Permitted Refinancing Indebtedness, minus (y) the portion of any notes
-----
issued by the Company or any of its Subsidiaries in lieu of the cash payment of
interest, in each case as of the date of determination to (ii) EBITDA. The
Senior Leverage Ratio shall be calculated, in each case, determined as of the
last day of each fiscal quarter beginning with the fiscal quarter ending
February 28, 1999 based upon (A) for Indebtedness, as of the last day of each
such fiscal quarter; and (B) for EBITDA, the actual amount for the four-quarter
period ending on such day; provided, however, that for the first three of such
-------- -------
fiscal quarters, the computation of EBITDA will be calculated on an annualized
year-to-date basis for the period commencing with the Effective Date through the
end of such fiscal quarter using the following formula: (x) for the first such
fiscal quarter, EBITDA shall be multiplied by a factor of four (4); (y) for the
second such fiscal quarter, EBITDA for two quarters shall be multiplied by a
factor of two (2); and (z) for the third such fiscal quarter, EBITDA for the
three quarters shall be multiplied by a factor of one and one-third (1.333).
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any member
of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"SOFITAM" means Sofitam S.A., a societe anonyme organized under the laws of
the Republic of France and its successors and permitted assigns.
"SOFITAM ACQUISITION" means the Acquisition of certain subsidiaries of
Sofitam by the Company or its Subsidiaries pursuant to the Option Agreement.
"STERLING" means the lawful currency of England.
"SUBJECT COUNTRY" is defined in Section 5.17.
------------
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "SUBSIDIARY"
shall mean a Subsidiary of the Company.
"SUBSIDIARY GUARANTY" means the Amended and Restated Guaranty executed by
each of the direct and indirect Wholly-Owned domestic Subsidiaries of the
Company in favor of the Agent for the benefit of the Lenders and the Holders of
Secured Obligations dated as of September 30, 1998, as amended, restated or
otherwise modified from time to time.
27
<PAGE>
"SUBSIDIARY SECURITY AGREEMENT" means the Amended and Restated Subsidiary
Security Agreement executed by each of the direct and indirect Wholly-Owned
domestic Subsidiaries of the Company in favor of the Agent for the benefit of
the Lenders and the Holders of Secured Obligations dated as of September 30,
1998, as amended, restated or otherwise modified from time to time.
"SUBSTANTIAL PORTION" means, with respect to the Property of the Company
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made.
"SWING LOAN" is defined in Section 2.1.2(i).
----------------
"SWING LOAN LENDER" means, with respect to Swing Loans made in Dollars, NBD
Bank, N.A., or one of its affiliates and with respect to Swing Loans made in
specified Agreed Currencies, a bank to be agreed upon by the Company, the Agent
and the Swing Loan Lender.
"SWING LOAN NOTES" means promissory notes duly executed by each of the
Borrowers, and payable to the order of each of the Swing Loan Lenders in the
amount set forth opposite the name of such Swing Loan Lender under the heading
"Maximum Swing Loan Obligation" on Schedule I, including any amendment,
----------
restatement, modification, renewal or replacement of such Swing Loan Note.
"SWING LOAN OBLIGATIONS" means, at any time, the outstanding Obligations in
connection with the Swing Loans.
"TERMINATION DATE" means the earlier of (i) the Revolving Loan Termination
Date and (ii) the date the Loans are accelerated in accordance with this
Agreement.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Company or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Company or such ERISA Affiliate was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of 20% of
Benefit Plan participants who are employees of the Company or any ERISA
Affiliate; (iii) the imposition of an obligation on the Company or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC or any similar
foreign governmental authority of proceedings to terminate a Benefit Plan or a
Foreign Pension Plan; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan; (vi) a foreign governmental authority
shall appoint or institute proceedings to appoint a trustee to administer any
28
<PAGE>
Foreign Pension Plan; or (vii) the partial or complete withdrawal of the Company
or any ERISA Affiliate from a Multiemployer Plan or a Foreign Pension Plan.
"TERM LOAN" is defined in Section 2.1.3(i) hereof.
----------------
"TERM LOAN COMMITMENT" means, for each Lender, the obligation of such
Lender to make its Term Loan pursuant to the terms and conditions of this
Agreement, and which shall not exceed the principal amount set forth on Exhibit
-------
A to this Agreement opposite its name thereon under the heading "Term Loan
- -
Commitment", as such amount may be modified from time to time pursuant to the
terms hereof.
"TERM LOAN LENDER" means any Lender with a Term Loan Commitment.
"TERM LOAN PERCENTAGE" means, with respect to any Lender, (i) at any time
prior to the Effective Date, the percentage obtained by dividing (A) such
Lender's Term Loan Commitment by (B) the aggregate Term Loan Commitment for all
Lenders at such time and (ii) at any time after the Effective Date, the
percentage obtained by dividing (A) the sum of such Lender's Term Loans at such
time by (B) the sum of the aggregate amount of all of the Term Loans at such
time.
"TERM LOAN TERMINATION DATE" means September 30, 2004.
"TERM NOTE" means a promissory note duly executed by the Company and
payable to the order of a Lender in the amount of its Term Loan Commitment,
including any amendment, restatement, modification, renewal or replacement of
such Term Note.
"TIC" means Tokheim Investment Corp., a Texas corporation, and its
successors and assigns.
"TIC PLEDGE AGREEMENTS" means each of (i) that certain Amended and Restated
Pledge Agreement dated as of September 30, 1998 executed by TIC in favor of the
Agent for the benefit of the Holders of Secured Obligations, (ii) that certain
Shares Account Pledge Agreement dated as of September 30, 1998 executed by TIC
in favor of the Agent for the benefit of the Holders of Secured Obligations, and
(iii) that certain Deed of Pledge of Registered Shares In A Private Company with
Limited Liability dated as of September 30, 1998 executed by TIC in favor of the
Agent for the benefit of the Holders of Secured Obligations, and (iv) that
certain Deed of Pledge dated as of September 30, 1998 executed by TIC in favor
of the Agent for the benefit of the Holders of Secured Obligations, in each
case, as amended, restated or otherwise modified from time to time.
"TOKHEIM BV" means Beroc Investments, a corporation organized under the
laws of The Kingdom of the Netherlands.
29
<PAGE>
"TOKHEIM LIMITED" means Tokheim Sofitam UK Limited, a corporation organized
under Scottish law.
"TOKHEIM SOFITAM" means Tokheim Sofitam Applications S.A., a societe
anonyme organized pursuant to the laws of the Republic of France.
"TOKHEIM SOFITAM CHARGE" means that certain Agreement for Charge over the
going concern of Tokheim Sofitam executed by Tokheim Sofitam in favor of the
Agent for the benefit of the Holders of Secured Obligations, as amended,
restated or otherwise modified from time to time.
"TOKHEIM SOFITAM PLEDGE AGREEMENT" means that certain Pledge Agreement
executed by Tokheim Sofitam S.A. in favor of the Agent for the benefit of the
Holders of Secured Obligations, as amended, restated or otherwise modified from
time to time.
"TOKHEIM SOFITAM RECEIVABLE ASSIGNMENT" means that certain Master
Assignment for trade receivables of Tokheim Sofitam executed by Tokheim Sofitam
in favor of the Agent for the benefit of the Holders of Secured Obligations, as
amended, restated or otherwise modified from time to time.
"TYPE" means, with respect to any Loan or Advance, its nature as an
Alternate Base Rate Advance or Loan or Eurocurrency Advance or Loan.
"UK BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on Schedule
--------
1.1.2 and identified as "UK Borrowing Subsidiaries" thereon and (ii) each other
- -----
Wholly-Owned Subsidiary of the Company organized under the laws of England or
Scotland and added as a Borrowing Subsidiary pursuant to the terms of Section
-------
2.5.14 of this Agreement, and, in each case, their permitted successors and
- ------
assigns, including a debtor-in-possession on behalf of such UK Borrowing
Subsidiary.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all currently accrued vested nonforfeitable benefits under all Single
Employer Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined on an ongoing Plan basis as set forth in the
then most recent actuarial valuation for such Plans.
"UNMATURED DEFAULT" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"U.S. GAAP" means accounting principles generally accepted in the United
States of America as recommended by the Financial Accounting Standards Board as
in effect as of the Effective Date.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying
30
<PAGE>
(a) the amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"WHOLLY-OWNED," when used in connection with any Subsidiary, means (i) any
Subsidiary all of the outstanding voting securities of which shall at the time
be owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled.
"YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs,
problems and uncertainties associated with the inability of certain computer
applications and imbedded systems to effectively handle data, including dates,
on and after January 1, 2000, as it affects the business, operations, and
financial condition of such Person, and such Person's customers, suppliers and
vendors.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
1.2. Accounting Terms and Determinations. Unless otherwise specified
-----------------------------------
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with U.S. GAAP. Unless
otherwise set forth in this Agreement, all financial covenant calculations (and
the components thereof) shall be calculated after the elimination of minority
interests in Consolidated Subsidiaries which are not Wholly-Owned Subsidiaries.
1.3. References to Subsidiaries. Unless otherwise specified herein, all
--------------------------
references to the Subsidiaries herein shall include the French Borrowing
Subsidiaries, the Dutch Borrowing Subsidiaries, the German Borrowing
Subsidiaries, the UK Borrowing Subsidiaries and each of their Subsidiaries.
31
<PAGE>
1.4. Rounding and Other Consequential Changes. Without prejudice to any
----------------------------------------
method of conversion or rounding prescribed by any legislative measures of the
Council of the European Union, each reference in this Agreement to a fixed
amount or to fixed amounts in a National Currency Unit to be paid to or by the
Agent shall be replaced by a reference to such comparable and convenient fixed
amount or fixed amounts in the Euro as the Agent may from time to time specify
unless such National Currency Unit remains available and the applicable Borrower
and the Agent agree to use such National Currency Unit instead of the Euro.
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES
-------------------------------------------
2.1. The Revolving Loan, Swing Loan and Term Loan Facilities.
-------------------------------------------------------
2.1.1. Revolving Loans. (i) Upon the satisfaction of the applicable
---------------
conditions precedent set forth in Sections 4.1, 4.2 and 4.3, from and including
------------ --- ---
the date of this Agreement and prior to the Termination Date, each Lender
severally and not jointly agrees, on the terms and conditions set forth in this
Agreement (including, without limitation, the terms and conditions of Section
-------
2.5.11 and Section 8.1 relating to the reduction, suspension or termination of
- ------ -----------
the Aggregate Revolving Loan Commitment), to make revolving loans (each
individually, a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS") in
Dollars, or, after the Agent has concluded that the syndication process has been
completed with Lenders that can lend the Agreed Currencies or the Revolving Loan
restructured to provide a tranche to be provided by Lenders that can provide the
Agreed Currencies, one or more other Agreed Currencies to the applicable
Borrower from time to time in a Dollar Amount not to exceed such Lender's
Revolving Loan Percentage of Revolving Credit Availability at such time;
provided, that each Revolving Loan made on or after the Euro Implementation Date
- --------
shall be made in the Euro if such Revolving Loan would, but for this provision,
be capable of being made in either the Euro or the National Currency Unit
requested by the applicable Borrower unless otherwise consented to by the Agent.
Nothing herein shall obligate any Lender other than the Swing Loan Lenders to
make Swing Loans. Subject to the terms of this Agreement (including, without
limitation, the terms and conditions of Section 2.5.11 and 8.1 relating to the
-------------- ---
reduction, suspension or termination of the Aggregate Revolving Loan
Commitment), a Borrower may borrow, repay and reborrow Revolving Loans at any
time prior to the Termination Date. The Revolving Loans made on the Effective
Date or on or before the third (3d) Business Day thereafter shall initially be
Alternate Base Rate Loans and thereafter may be continued as Alternate Base Rate
Loans or converted into Eurocurrency Loans in the manner provided in Section
-------
2.2.3. Unless earlier terminated in accordance with the terms and conditions of
- -----
this Agreement, the Revolving Loan Commitments of the Lenders to lend hereunder
shall expire on the Termination Date. The proceeds of all Revolving Loans made
under this Section 2.1.1 shall be used first to repay principal of and accrued
-------------
and unpaid interest on any outstanding Swing Loans advanced to any Borrower, and
thereafter in accordance with the terms of Section 6.2. All outstanding
-----------
Revolving Loans shall be paid in full by the applicable Borrower on the
Termination Date.
32
<PAGE>
(ii) Borrowing Notice. When the applicable Borrower desires to borrow
----------------
under this Section 2.1.1, a Financial Officer shall deliver to the Agent a
-------------
Borrowing Notice, signed by it, specifying that the Borrower is requesting a
Revolving Loan pursuant to this Section 2.1.1. Any Borrowing Notice given
-------------
pursuant to this Section 2.1.1 shall be irrevocable.
-------------
(iii) Maximum Revolving Credit Amount. At no time shall the Revolving
------------------------------
Credit Obligations exceed the Maximum Revolving Credit Amount.
(iv) Making of Revolving Loans. Promptly after receipt of the Borrowing
-------------------------
Notice under Section 2.1.1(ii) in respect of Revolving Loans, the Agent shall
-----------------
notify each Lender with a Revolving Loan Commitment greater than zero by telex
or telecopy, or other similar form of transmission, of the proposed Advance.
Each Lender with a Revolving Loan Percentage greater than zero shall make
available its Revolving Loan in accordance with the terms of Section 2.5.1. The
-------------
Agent will make the funds so received from the Lenders available to the
applicable Borrower in accordance with the terms of Section 2.5.1 and shall
-------------
disburse such proceeds in accordance with the Company's disbursement
instructions set forth in such Borrowing Notice. The failure of any Lender to
deposit the amount described above with the Agent on the applicable Borrowing
Date shall not relieve any other Lender of its obligations hereunder to make its
Revolving Loan on such Borrowing Date.
2.1.2 Swing Loans. (i) Subject to the terms and conditions set forth in
-----------
this Agreement, the Swing Loan Lenders shall make loans (the "Swing Loans") to
the Company in Dollars or to any of the Non-Domestic Borrowing Subsidiaries in
French Francs or such other currencies that the Swing Loan Lenders have agreed
in writing to provide such Borrowing Subsidiary, from time to time prior to the
Termination Date, up to an aggregate principal amount at any one time
outstanding which shall not exceed the least of (i) $10,000,000 for all Swing
Loans by all Swing Loan Lenders, (ii) the amount by which the Maximum Revolving
Credit Amount at such time exceeds the Revolving Credit Obligations at such time
and (iii) as to each Swing Loan Lender, the amount set forth opposite the name
of such Lender under the heading "Maximum Swing Loan Obligation" on Schedule I.
All Swing Loans shall be subject to all the terms and conditions applicable to
Revolving Loans, except that (x) each Swing Loan shall be in a minimum amount of
$500,000 or the Approximate Equivalent Amount of an Agreed Currency and integral
multiples of $100,000 or the Approximate Equivalent Amount of an Agreed Currency
in excess of that amount and (y) all interest on the Swing Loans made by a Swing
Loan Lender shall be payable to the Agent for the account of such Swing Loan
Lender. The Swing Loan Lenders shall not make any Swing Loan in the period
commencing on the first Business Day after receipt of written notice from any
Lender (I) that one or more of the applicable conditions precedent contained in
Article IV will not on such date be satisfied until such Lender confirms that
- ----------
such condition precedent has been met, or (II) that a Default or Unmatured
Default has occurred, and ending when such Default or Unmatured Default no
longer exists and the Swing Loan Lenders shall not otherwise be required to
determine that, or take notice whether, (x) the applicable conditions precedent
set forth in Article IV hereof have been satisfied or (y) a Default or Unmatured
----------
Default has occurred and is continuing. In no event shall the number of Swing
Loans made in Dollars outstanding at any time be greater than three. In no
33
<PAGE>
event shall the number of Swing Loans made in an Agreed Currency outstanding at
any time be greater than three.
(ii) Borrowing Notice. When a Borrower desires to borrow under this
----------------
Section 2.1.2, a Financial Officer shall deliver to the applicable Swing Loan
- -------------
Lender and the Agent a Borrowing Notice, signed by it, no later than 1:00 p.m.
(Indianapolis time) if such Swing Loan is to be denominated in Dollars and no
later than 12:00 noon local time in the city of the applicable Swing Loan
Lender's applicable Eurocurrency Payment Office three (3) Business Days' prior
to the Borrowing Date if such Swing Loan is to be denominated in an Agreed
Currency on the applicable Borrowing Date which Borrowing Notice shall indicate
that the Borrower is requesting a Swing Loan pursuant to this Section 2.1.2.
-------------
Such Borrowing Notice shall specify (i) the date of the proposed Swing Loan
(which shall be a Business Day, and with respect to Swing Loans denominated in
Dollars may be the same Business Day as the date of such Borrowing Notice and
with respect to Swing Loans denominated in the applicable Agreed Currency will
be three Business Days' following the date of such Borrowing Notice, or such
shorter period as may be agreed to by the applicable Swing Loan Lender), (ii)
the amount of the proposed Swing Loan, (iii) the Swing Loan Lender or Swing Loan
Lenders requested to make such Swing Loan and (iv) instructions for the
disbursement of the proceeds of the proposed Swing Loan. Any Borrowing Notice
given pursuant to this Section 2.1.2
-------------
shall be irrevocable.
(iii) Making of Swing Loans. If a Swing Loan is to be denominated in
---------------------
Dollars, the applicable Swing Loan Lender shall promptly deposit the amount of
the Swing Loan requested by the applicable Borrower from it with the Agent in
immediately available funds on the date of the proposed Swing Loan applicable
thereto. Subject to the fulfillment of the applicable conditions precedent set
forth in Article IV, the Agent will promptly make the proceeds of such amounts
----------
received by it available to the applicable Borrower at the Agent's office in
Indianapolis, Indiana. If such Swing Loan is denominated in an Agreed Currency,
the applicable Swing Loan Lender shall notify the Agent of the Borrower's
request and, subject to the fulfillment of the applicable conditions precedent
set forth in Article IV, deposit the amount of the Swing Loan requested in such
----------
account as the applicable Borrower shall designate in the Swing Loan Lender's
Eurocurrency Payment Office, provided, however, that with respect to any Swing
Loan to be made available to any of the Borrowing Subsidiaries, such funds shall
be made available by the applicable Swing Loan Lender's Lending Installation.
Subject to the terms of this Agreement (including, without limitation, the terms
and conditions of Section 2.5.11 and Section 8.1 relating to the reduction,
-------------- -----------
suspension or termination of the Aggregate Revolving Loan Commitment), the
Borrowers may borrow, repay and reborrow Swing Loans at any time prior to the
Termination Date. Unless earlier terminated in accordance with the terms and
conditions of this Agreement, the obligations of the Swing Loan Lenders to make
Swing Loans hereunder shall expire on the Termination Date.
(iv) Repayment of Swing Loans. The applicable Borrower shall repay each
------------------------
Swing Loan on the earlier to occur of (a) the date that is the Termination Date
and (b) the date that is five (5) days after the making of such Swing Loan and
if, for any reason the Dollar Amount of the Swing
34
<PAGE>
Loans exceed $10,000,000 in the aggregate, the applicable Borrowers or the
Company on behalf of such Borrowers shall immediately make a repayment of the
Swing Loans (allocated to all of the outstanding Swing Loans in the order of
their maturity beginning with the Swing Loan which has been outstanding longest)
such that the aggregate Dollar Amount of the Swing Loans does not exceed
$10,000,000; provided, however, that nothing in this Section 2.1.2 shall be
-------- ------- -------------
construed as limiting or modifying the obligation of any Borrower to repay any
or all of the outstanding Swing Loans at any earlier time in accordance with the
terms of this Agreement. Outstanding Swing Loans may be repaid from the proceeds
of Loans or from the proceeds of Swing Loans. Any repayment of the Swing Loans
shall be accompanied by accrued interest thereon and shall be in the minimum
Dollar Amount of $250,000 and increments of $50,000 in excess thereof. If a
Borrower at any time fails to repay a Swing Loan on the applicable date when
due, such Borrower shall be deemed to have elected to borrow an Alternate Base
Rate Advance consisting of Revolving Loans from the Lenders, as of such due date
equal in amount to the unpaid amount of the Swing Loans, and interest thereon,
due on such due date. Such Advance shall be made (notwithstanding the minimum
amount of Advances as provided in Section 2.5.2) as of such due date,
-------------
automatically, without further notice and without any requirement to satisfy the
conditions precedent otherwise applicable to an Alternate Base Rate Advance if
such Borrower shall have failed to make such payment to the Agent for the
account of the applicable Swing Loan Lender prior to such time. The proceeds of
any such Alternate Base Rate Advance shall be used to repay the Swing Loans and
interest thereon. If, for any reason, a Borrower fails to repay a Swing Loan on
the applicable due date and, for any reason, the Lenders with a Revolving Loan
Percentage greater than zero are unable to make or have no obligation to make an
Advance, then such Swing Loans shall bear interest from and after such day,
until paid in full, at the interest rate then applicable to Alternate Base Rate
Advances.
(v) Participation in Swing Loans. Immediately upon the making of each
----------------------------
Swing Loan, each Lender with a Revolving Loan Percentage greater than zero shall
be deemed to have automatically, irrevocably and unconditionally purchased and
received from the applicable Swing Loan Lender an undivided interest and
participation in and to such Swing Loan and the obligations of Borrower in
respect thereof in an amount equal to the amount of such Swing Loan multiplied
by such Lender's Revolving Loan Percentage. The Agent will notify each Lender
promptly if any Borrower fails to pay the Agent for the account of the
applicable Swing Loan Lender amounts required to be paid by it under this
Section 2.1.2 with respect to any Swing Loan and each Lender with a Revolving
- -------------
Loan Percentage greater than zero shall promptly and unconditionally pay to the
Agent for the account of the applicable Swing Loan Lender, in immediately
available funds an amount equal to such Lender's percentage (as described above)
of the amount due from the Borrower with respect thereto (without duplication as
to amounts funded as Revolving Loans under clause (d) used to repay such Swing
----------
Loans). The obligation of each Lender to pay the Agent for the account of the
Swing Loan Lenders under this Section 2.1.2 shall be unconditional, continuing,
-------------
irrevocable and absolute. In the event that any Lender fails to make payment to
the Agent of any amount due under this Section 2.1.2, the Agent shall be
-------------
entitled to receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Agent on behalf of
the Swing Loan Lenders receives such payment from such Lender or such obligation
is otherwise fully
35
<PAGE>
satisfied; provided, however, that nothing contained in this sentence shall
-------- -------
relieve such Lender of its obligation to reimburse the Agent such amount in
accordance with this Section 2.1.2. If any amount required to paid under
-------------
this Section is not in fact made available to the Agent for remittance to the
Swing Loan Lenders as described above by any Lender, such Swing Loan Lenders
shall be entitled to recover such amount on demand from such Lender, together
with accrued interest thereon from the date of demand therefor on any Business
Day until the date such amount is paid to the Agent by such Lender, for one (1)
Business Day at the Federal Funds Effective Rate and thereafter at the interest
rate applicable to such Swing Loans. The failure of any Lender to pay such
amount to the Agent shall not relieve any other Lender of its obligation to make
the payment to be made by it. Upon the purchase by each Lender of a
participation in any Swing Loans pursuant to this Section 2.1.2, such Lender
-------------
shall be deemed to have made an Alternate Base Rate Loan under Section 2.1.2 in
-------------
the amount of such participation, and such Swing Loans shall be deemed to have
been repaid in such amount.
2.1.3. Term Loans. (i) Amount of Term Loans. Subject to the terms and
---------- --------------------
conditions set forth in this Agreement, each Term Loan Lender on the Effective
Date severally and not jointly agrees to make on the Effective Date, a term
loan, in Dollars to the Company and/or Gasboy in an aggregate amount equal to
such Lender's Term Loan Commitment (each individually, a "TERM LOAN" and,
collectively, the "TERM LOANS"). All Term Loans shall be made by the Term Loan
Lenders on the Effective Date simultaneously and proportionately to their
respective Term Loan Percentages, it being understood that no Lender shall be
responsible for any failure by any other Lender to perform its obligation to
make any Term Loan hereunder nor shall the Term Loan Commitment of any Lender be
increased or decreased as a result of any such failure.
(ii) Borrowing Notice. Each of the Company and Gasboy shall deliver to
----------------
the Agent a Borrowing Notice, signed by it, on the Effective Date. Such
Borrowing Notice shall specify (a) the aggregate amount of the Term Loans being
requested by each of the Company and Gasboy and (b) instructions for the
disbursement of the proceeds of such Term Loans. The Term Loans shall initially
be Alternate Base Rate Loans and thereafter may be continued as Alternate Base
Rate Loans or converted into Eurocurrency Loans in the manner provided in
Section 2.2.3 and subject to the other conditions and limitations therein set
- -------------
forth and set forth in this Article II. Any Borrowing Notice given pursuant to
----------
this Section 2.1.3(ii) shall be irrevocable.
-----------------
(iii) Making of Term Loans. Promptly after receipt of the Borrowing
--------------------
Notice under Section 2.1.3(ii) in respect of the Term Loans, the Agent shall
-----------------
notify each Lender by telex or telecopy, or other similar form of transmission,
of the proposed Advance. Each Lender shall deposit an amount equal to its Term
Loan Percentage of the Term Loans with the Agent at its office in Indianapolis,
Indiana, in immediately available funds, on the Effective Date, as specified in
the Borrowing Notice. Subject to the fulfillment of the conditions precedent
set forth in Sections 4.1 and 4.2, as applicable, the Agent shall make the
------------ ---
proceeds of such amounts received by it available to the Company or Gasboy, as
applicable, at the Agent's office in Indianapolis, Indiana on the Effective Date
and shall disburse such proceeds in accordance with the Company's and/or
Gasboy's disbursement instructions set forth in such Borrowing Notice. The
failure of any Lender to deposit
36
<PAGE>
the amount described above with the Agent on the Effective Date shall not
relieve any other Lender of its obligations hereunder to make its Term Loan on
the Effective Date.
(iv) Repayment of the Term Loans. The Term Loans shall be repaid in
---------------------------
twenty-two (22) installments, payable on the last Business Day of each fiscal
quarter of the Company, commencing on November 30, 1998 and continuing
thereafter as prescribed below until the Term Loan Termination Date, and the
Term Loans shall be permanently reduced by the amount of each installment on the
date payment thereof is made hereunder. The principal amount of the
installments may be paid by either Tokheim or Gasboy at their discretion
provided that each of the installments shall be in the aggregate amounts set
forth below:
<TABLE>
<CAPTION>
TERM LOAN
INSTALLMENT DATE INSTALLMENT AMOUNT
---------------- ------------------
<S> <C>
February 28, 2000 $ 1,875,000
May 31, 2000 $ 1,875,000
August 31, 2000 $ 1,875,000
November 30, 2000 $ 1,875,000
February 28, 2001 $ 2,500,000
May 31, 2001 $ 2,500,000
August 31, 2001 $ 2,500,000
November 30, 2001 $ 2,500,000
February 28, 2002 $ 3,125,000
May 31, 2002 $ 3,125,000
August 31, 2002 $ 3,125,000
November 30, 2002 $ 3,125,000
February 28, 2003 $ 3,750,000
May 31, 2003 $ 3,750,000
August 31, 2003 $ 3,750,000
November, 30, 2003 $ 3,750,000
February 29, 2004 $37,500,000
Term Loan
Termination Date $37,500,000
</TABLE>
Notwithstanding the foregoing, the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition, the then
outstanding principal balance of the Term Loans, if any, shall be due and
payable on the Term Loan Termination Date. No installment of any Term Loan
shall be reborrowed once repaid.
37
<PAGE>
(v) In addition to the scheduled payments on the Term Loans, the Company
and Gasboy, as applicable, (a) may make the voluntary prepayments described in
Section 2.5.3(A) for credit against the scheduled payments on the Term Loans
- ----------------
pursuant to Section 2.5.3(B) and (b) shall make the mandatory prepayments
----------------
prescribed in Section 2.5.3(B) for credit against the scheduled payments on the
----------------
Term Loans pursuant to Section 2.5.3(B).
----------------
2.1.4. Alternate Currency Loans.
------------------------
(i) Upon the satisfaction of the conditions precedent set forth in
Sections 4.1, 4.2 and 4.3 hereof and set forth in the applicable Alternate
- ------------ --- ---
Currency Addendum, from and including the later of the date of this Agreement
and the date of execution of the applicable Alternate Currency Addendum and
prior to the Termination Date (unless an earlier termination date shall be
specified in the applicable Alternate Currency Addendum), each applicable
Alternate Currency Bank agrees, on the terms and conditions set forth in this
Agreement and in the applicable Alternate Currency Addendum, to make Alternate
Currency Loans under such Alternate Currency Addendum to the applicable Borrower
party to such Alternate Currency Addendum from time to time in the applicable
Alternate Currency, in an amount not to exceed each such Alternate Currency
Bank's applicable Alternate Currency Commitment; provided, however, at no time
-------- -------
shall the Dollar Amount of the outstanding principal amount of the Alternate
Currency Loans for all Alternate Currencies exceed $80,000,000 other than as a
result of currency fluctuations and then only to the extent permitted in Section
-------
2.5.3.(B)(i)(d); provided, further, at no time shall the Dollar Amount of the
- ---------------
Alternate Currency Loans for any specific Alternate Currency exceed the maximum
amount specified as the maximum amount for such Alternate Currency in the
applicable Alternate Currency Addendum other than as a result of currency
fluctuations and then only to the extent permitted in Section 2.5.3.(B)(i)(d).
-----------------------
Each Alternate Currency Loan under this Section 2.1.4. shall consist of
-------------
Alternate Currency Loans made by each applicable Alternate Currency Bank ratably
in proportion to such Alternate Currency Bank's respective Alternate Currency
Percentage. Subject to the terms of this Agreement and the applicable Alternate
Currency Addendum, the applicable Borrowers may borrow, repay and reborrow
Alternate Currency Loans at any time prior to the Termination Date (unless an
earlier termination date shall be specified in the applicable Alternate Currency
Addendum). On the Termination Date (unless an earlier termination date shall be
specified in the applicable Alternate Currency Addendum), the outstanding
principal balance of the Alternate Currency Loans shall be paid in full by the
applicable Borrower and prior to the Termination Date (unless an earlier
termination date shall be specified in the applicable Alternate Currency
Addendum) prepayments of the Alternate Currency Loans shall be made by the
applicable Borrower if and to the extent required in Section 2.5.3.(B).
-----------------
(ii) Borrowing Notice. When the applicable Borrower desires to borrow
----------------
under this Section 2.1.4., a Financial Officer shall deliver to the applicable
-------------
Alternate Currency Agent a Borrowing Notice, signed by it, specifying that the
Borrower is requesting an Alternate Currency Loan pursuant to this Section
-------
2.1.4. Any Borrowing Notice given pursuant to this Section 2.1.4. shall be
- ----- -------------
irrevocable.
38
<PAGE>
(iii) Additional Alternate Currency Commitments. The Company may, by
-----------------------------------------
written notice to the Agent request the establishment of additional Alternate
Currency Commitments in additional Alternate Currencies other than Deutsche
Marks, provided the Dollar Amount of the aggregate amount of all of the
Alternate Currency Commitments does not exceed $80,000,000 ("Request for a New
-----------------
Alternate Currency Facility"). The Agent will promptly forward to the Lenders
- ---------------------------
any Request for a New Alternate Currency Facility received from the Company;
provided each Lender shall be deemed not to have agreed to such request unless
- --------
its written consent thereto has been received by the Agent within ten (10)
Business Days from the date of such notification by the Agent to such Lender.
In the event that sufficient Lenders consent to such Request for a New Alternate
Currency Facility, upon execution of the applicable Alternate Currency Addendum
and the other documents, instruments and agreements required pursuant to this
Agreement and such Alternate Currency Addendum, the Alternate Currency Loans
with respect thereto may be made.
(iv) Termination. Except as otherwise required by applicable law, in
-----------
no event shall the Alternate Currency Agent or Alternate Currency Banks have the
right to accelerate the Alternate Currency Loans outstanding under any Alternate
Currency Addendum or to terminate their commitments (if any) thereunder to make
Alternate Currency Loans prior to the stated termination date in respect
thereof, except that such Alternate Currency Agent and Alternate Currency Banks
shall, in each case, have such rights upon an acceleration of the Loans and a
termination of the Revolving Loan Commitments pursuant to Article VIII.
------------
(v) Statements. Each Alternate Currency Agent shall furnish to the
----------
Agent and the applicable Alternate Currency Banks, not less frequently than
monthly, and at any other time at the reasonable request of the Agent, a
statement setting forth the outstanding Alternate Currency Loans made and repaid
during the period since the last such report under such Alternate Currency
Addendum.
(vi) Risk Participation. Immediately and automatically upon the
------------------
occurrence of an Event of Default under Section 7.2, 7.7 or 7.8, each Lender
----------- --- ---
shall be deemed to have unconditionally and irrevocably purchased from each
Alternate Currency Bank, without recourse or warranty, an undivided interest in
and participation in each Alternate Currency Loan ratably in accordance with
such Bank's Revolving Loan Percentage of the amount of such Loan, and
immediately and automatically all Alternate Currency Loans shall be converted to
and redenominated in Dollars equal to the Dollar Amount of each such Alternate
Currency Loan determined as of the date of such conversion; provided, that to
--------
the extent such conversion shall occur other than at the end of an Interest
Period, the applicable Borrower shall pay to the Agent for the account of the
applicable Alternate Currency Lenders, all losses and costs related thereto in
accordance with Section 3.5. Each of the Lenders shall pay to the applicable
-----------
Alternate Currency Bank not later than two (2) Business Days following a request
for payment from such Alternate Currency Bank, in Dollars, an amount equal to
the undivided interest in and participation in the Alternate Currency Loan
purchased by such Lender pursuant to this Section 2.1.4(vi). In the event that
-----------------
any Lender fails to make payment to the applicable Alternate Currency Bank of
any amount due under this Section 2.1.4(vi), the Agent shall be entitled to
-----------------
receive, retain and apply against such obligation the
39
<PAGE>
principal and interest otherwise payable to such Lender hereunder until the
Agent receives from such Lender an amount sufficient to discharge such Lender's
payment obligation as prescribed in this Section 2.1.4(vi) together with
-----------------
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of demand by the Agent and ending on the date such
obligation is fully satisfied. The Agent will promptly remit all payments
received as provided above to the applicable Alternate Currency Bank.
(vii) Other Provisions Applicable to Alternate Currency Loans. The
-------------------------------------------------------
specification of payment of Alternate Currency Loans in the related Alternate
Currency at a specific place pursuant to this Agreement is of the essence. Such
Alternate Currency shall be the currency of account and payment of such Loans
under this Agreement and the Notes. Notwithstanding anything in this Agreement,
the obligation of the applicable Borrower in respect of such Loans shall not be
discharged by an amount paid in any other currency or at another place, whether
pursuant to a judgment or otherwise, to the extent the amount so paid, on prompt
conversion into the applicable Alternate Currency and transfer to such Lender
under normal banking procedure, does not yield the amount of such Alternate
Currency due under this Agreement and the Notes. In the event that any payment,
whether pursuant to a judgment or otherwise, upon conversion and transfer, does
not result in payment of the amount of such Alternate Currency due under this
Agreement and the Notes, such Lender shall have an independent cause of action
against the Borrowers for the currency deficit.
2.2. Types and Interest Periods.
--------------------------
2.2.1. Types of Advances. The Revolving Loans and the Term Loans may be
-----------------
Alternate Base Rate Loans or Eurocurrency Loans, or a combination thereof,
selected by the applicable Borrower in accordance with Sections 2.2.2 and 2.2.3.
-------------- -----
The Swing Loans shall be Alternate Base Rate Loans. Notwithstanding anything
herein to the contrary, without the Agent's consent, no Borrower may select a
Eurocurrency Rate with an Interest Period greater than seven (7) days until the
earlier of (i) the completion of the syndication of the facilities hereunder (as
determined by the Arranger) and (ii) ninety (90) days following the initial
funding hereunder; provided, that, in any event, such Borrower agrees to pay any
--------
breakage costs as prescribed in Section 3.5 with respect to Loans assigned in
-----------
connection with such syndication on a date which is not the last day of an
applicable Interest Period.
2.2.2. Method of Selecting Types and Interest Periods for New Advances.
---------------------------------------------------------------
The applicable Borrower shall select the Type of Advance and, in the case of
each Alternate Currency Loan and Eurocurrency Advance, the Interest Period
applicable to each Advance from time to time. The applicable Borrower shall
give the Agent or applicable Alternate Currency Agent irrevocable notice (a
"Borrowing Notice"), or, if such Borrower is a Borrowing Subsidiary, the Company
may on behalf of such Borrowing Subsidiary give a Borrowing Notice, not later
than 11:00 a.m. (Indianapolis time) (x) on the Borrowing Date of each Alternate
Base Rate Advance, (y) three Business Days before the Borrowing Date for each
Eurocurrency Advance in Dollars or each Alternate Base Rate Advance in an Agreed
Currency other than Dollars, and (z) four Business Days
40
<PAGE>
before the Borrowing Date for each Eurocurrency Advance in an Agreed Currency
other than Dollars and each Alternate Currency Loan (or such other period as may
be specified in the applicable Alternate Currency Addendum), provided that there
shall be no more than twelve (12) Interest Periods in effect with respect to all
of the Loans at any time. A Borrowing Notice shall specify:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance;
(ii) the aggregate amount and the currency of such Advance,
provided, that, if any Advance made (or to be made) on or after
--------
the Euro Implementation Date would, but for this provision, be
capable of being made either in the Euro or in the applicable
National Currency Unit requested by the applicable Borrower,
such Advance shall be made in the Euro;
(iii) in the case of Term Loans or Revolving Loans, the Type of
Advance selected and in respect of all Loans, the currency
thereof;
(iv) whether such borrowing is pursuant to a Term Loan, Revolving
Loan, or Alternate Currency Loan;
(v) in the case of each Alternate Currency Loan or Eurocurrency
Advance, the Interest Period applicable thereto; and
(vi) whether such Advance is to be made to the Company or to a
specified Borrowing Subsidiary.
2.2.3. Conversion and Continuation of Outstanding Advances. Alternate
---------------------------------------------------
Base Rate Advances shall continue as Alternate Base Rate Advances unless and
until such Alternate Base Rate Advances are converted into Eurocurrency
Advances. Each Eurocurrency Advance shall continue as a Eurocurrency Advance
until the end of the then applicable Interest Period therefor, at which time
such Eurocurrency Advance shall be automatically converted into an Alternate
Base Rate Advance unless the applicable Borrower shall have given the Agent an
irrevocable notice (a "Conversion/Continuation Notice") requesting that, at the
end of such Interest Period, such Eurocurrency Advance either continue as a
Eurocurrency Advance for the same or another Interest Period or be converted
into an Alternate Base Rate Advance. Subject to the terms of Sections 2.2.1 and
--------------
2.5.2, such Borrower may elect from time to time to convert all or any part of
- -----
an Advance of any Type (other than Alternate Currency Loans and Swing Loans)
into any other Type or Types of Advances (other Alternate Currency Loans and
than Swing Loans); provided that any conversion of any Eurocurrency Advance
shall be made on, and only on, the last day of the Interest Period applicable
thereto. The applicable Borrower shall give the Agent the
Conversion/Continuation Notice of each conversion of an Advance or continuation
of a Eurocurrency Advance not later than 10:00 a.m. (Indianapolis time) at least
one Business Day, in the case of a conversion into an Alternate Base Rate
Advance, or three Business Days, in the case of a conversion into or
41
<PAGE>
continuation of a Eurocurrency Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a Eurocurrency Advance, the duration of
the Interest Period applicable thereto.
2.3. Applicable Margin. The Applicable Margins set forth below, with
-----------------
respect to each Advance and for commitment fees and Letter of Credit Fees
payable hereunder, shall be subject to adjustment (upwards or downwards, as
appropriate) based on the Company's status (the "Company's Status") as at the
end of each fiscal quarter in accordance with the table set forth below. The
Company's Status as at the last day of each fiscal quarter shall be determined
from the annual or quarterly financial statements of the Company which first
included such fiscal quarter delivered by the Company to the Lenders pursuant to
Section 6.1. The adjustments, if any, to the Applicable Margin shall be
- -----------
effective five days after the Agent has received such annual or quarterly
financial statements, as the case may be. In the event that the Company shall at
any time fail to furnish to the Lenders such financial statements within the
time limitations specified by Section 6.1, then the Company's Status shall be
-----------
Level I Status from the date of such failure until the fifth day after such
financial statements are so delivered.
42
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
EUROCURRENCY ALTERNATE BASE RATE COMMITMENT
MARGINS MARGINS FEE
PERCENTAGE
-----------------------------------------------------------
REVOLVING TERM LOANS REVOLVING TERM LOANS
LOANS LOANS
LEVERAGE
RATIO
===============================================================================================
<S> <C> <C> <C> <C> <C>
Level I 3.50% 4.00% 2.50% 3.00% 0.50%
Status
- -----------------------------------------------------------------------------------------------
Level II 3.25% 4.00% 2.25% 3.00% 0.50%
Status
- -----------------------------------------------------------------------------------------------
Level III 3.00% 4.00% 2.00% 3.00% 0.50%
Status
- -----------------------------------------------------------------------------------------------
Level IV 2.75% 4.00% 1.75% 3.00% 0 .50%
Status
- -----------------------------------------------------------------------------------------------
Level V 2.50% 4.00% 1.50% 3.00% 0.375%
Status
- -----------------------------------------------------------------------------------------------
Level VI 2.25% 4.00% 1.25% 3.00% 0.375%
Status
- -----------------------------------------------------------------------------------------------
</TABLE>
For the purposes of this Agreement, the Company's Status will be determined
based on the following definitions:
"Level I Status" exists at any date if, as of the last day of the then
most recently ended fiscal quarter of the Company, the Leverage Ratio is
greater than or equal to 5.5 to 1.0.
"Level II Status" exists at any date if, as of the last day of the
then most recently ended fiscal quarter of the Company, the Leverage Ratio
is greater than or equal to 5.0 to 1.0 but less than 5.5 to 1.0.
43
<PAGE>
"Level III Status" exists at any date if, as of the last day of the
then most recently ended fiscal quarter of the Company, the Leverage Ratio
is greater than or equal to 4.5 to 1.0 but less than 5.0 to 1.0.
"Level IV Status" exists at any date if, as of the last day of the
then most recently ended fiscal quarter of the Company, the Leverage Ratio
is greater than or equal to 4.0 to 1.0 but less than 4.5 to 1.0.
"Level V Status" exists at any date if, as of the last day of the then
most recently ended fiscal quarter of the Company, the Leverage Ratio is
greater than or equal to 3.5 to 1.0 but less than 4.0 to 1.0.
"Level VI Status" exists at any date if, as of the last day of the
then most recently ended fiscal quarter of the Company, the Leverage Ratio
is less than 3.5 to 1.0
Notwithstanding the foregoing, the Applicable Margin for the period from the
date hereof until March 31, 1999 shall be the Applicable Margin assuming the
Company's Status is Level I Status. On March 31, 1999, the Applicable Margin
shall be based upon the Company's Status as at the end of the fiscal quarter
most recently ended prior to such date and for which the Agent has received
financial statements pursuant to Section 6.1, which Applicable Margin shall
-----------
remain in effect until adjusted pursuant to the provisions of this Section 2.5
-----------
set forth above.
2.4. Fees. In addition to the Letter of Credit Fees and issuance
----
fees identified in Section 2.6.5, the Company and the Borrowing Subsidiaries
-------------
agree to pay the following fees:
2.4.1. Commitment Fee. The Company and the Borrowing Subsidiaries
--------------
hereby jointly and severally agree to pay to the Agent for the ratable account
of each Lender, for the period from the date hereof to and including the
Termination Date, a commitment fee at a rate per annum equal to the annual
percentage rate indicated as the Applicable Margin for the commitment fee on the
average daily amount by which such Lender's Revolving Loan Commitment exceeds
the sum of the outstanding principal balance of such Lender's Revolving Loans
plus Swing Loans plus such Lender's Percentage of the L/C Obligations, the
accrued but unpaid portion of which shall be payable on each Payment Date
hereafter and on the Termination Date. All accrued commitment fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Revolving Loans and issue or participate in Letters of Credit
hereunder, and commitment fees shall cease to accrue thereafter. For purposes of
calculating the commitment fee hereunder, the principal amount of each Advance
or Swing Loan made in a currency other than Dollars shall be the Dollar Amount
of such Advance as determined under clause (ii) of the definition herein of
-----------
"Dollar Amount".
2.4.2. Agent Fees. The Company agrees to pay certain fees to the
----------
Agent and the Arranger, for its sole account, on the dates and in the amounts
set forth in each of (i) the fee letter among Company, the Arranger and The
First National Bank of Chicago, dated June 19, 1998, and (ii) the
44
<PAGE>
fee letter among the Company, the Agent and the Arranger, dated September 30,
1998, in each case, as amended from time to time (the "Fee Letters").
2.4.3. Prepayment Fee. The Company agrees that if the Borrowers
--------------
shall prepay the entire amount of the Term Loans (x) on or before the first
anniversary of the Effective Date, the Borrowers shall pay to the Agent for the
account of the Lenders a prepayment fee equal to three percent (3.0%) of the
Aggregate Term Loan Commitments as of the Effective Date; (y) on or before the
second anniversary of Effective Date but after the first anniversary of the
Effective Date, the Borrowers shall pay to the Agent for the account of the
Lenders a prepayment fee equal to two percent (2.0%) of the outstanding balance
of the Term Loans as of the first anniversary of the Effective Date (as reduced
by regularly scheduled prepayments and mandatory prepayments subsequent to the
first anniversary of the Effective Date; (z) prior to the third anniversary of
the Effective Date but after the second anniversary of the Effective Date, the
Borrowers shall pay to the Agent for the account of the Lenders a prepayment fee
equal to one percent (1.0%) of the outstanding balance of the Term Loans as of
the second anniversary of the Effective Date (as reduced by regularly scheduled
prepayments and mandatory prepayments subsequent to the second anniversary of
the Effective Date.
2.5. General Facility Terms.
----------------------
2.5.1. Method of Borrowing. (i) Promptly after receipt of a
-------------------
Borrowing Notice, the Agent shall notify each Lender by telex, or telecopy, or
other similar form of transmission, of the proposed Advance. On each Borrowing
Date, each Lender shall make available its Revolving Loan or Term Loan, as
applicable, (x) if such Loan is denominated in Dollars, not later than 2:00
p.m., Indianapolis time, in Federal or other funds immediately available to the
Agent, in Indianapolis, Indiana at its address specified in or pursuant to
Article XIV and, (y) if such Loan is denominated in another currency, not later
- -----------
than 12:00 noon, local time in the city of the Agent's Eurocurrency Payment
Office for such currency, in such funds as may then be customary for the
settlement of international transactions in such currency in the city of and at
the address of the Agent's Eurocurrency Payment Office for such currency,
provided, however, that with respect to any Loans to be made to any of the
French Borrowing Subsidiaries, such funds shall be made available to the Agent's
French Lending Installation by such Lender's French Lending Installation. Unless
the Agent determines that any applicable condition specified in Article IV has
----------
not been satisfied, the Agent will make the funds so received from the Lenders
available to the applicable Borrower at the Agent's aforesaid address not later
than 3:00 p.m. local time. Notwithstanding the foregoing provisions of this
Section 2.5.1, to the extent that a Loan made by a Lender matures on the
- -------------
Borrowing Date of a requested Loan, such Lender shall apply the proceeds of the
Loan it is then making to the repayment of principal of the maturing Loan.
(ii) Subject to the procedures set forth in the applicable
Alternate Currency Addendum, each Alternate Currency Bank shall make available
its Alternate Currency Loan or Loans, in funds immediately available to the
Alternate Currency Agent at its office designated in the Alternate Currency
Addendum for payments of such Alternate Currency in the Alternate Currency. The
45
<PAGE>
Alternate Currency Agent will promptly make the funds so received from the
Alternate Currency Banks available to the applicable Borrower. Promptly upon any
such disbursement of an Alternate Currency Loan, the Alternate Currency Agent,
shall give written notice to the Agent by telex or telecopy of the making of
such Loan, which notice shall be substantially in the form attached hereto as
Exhibit K.
- ---------
(iii) If for any reason any applicable Alternate Currency Bank
fails to make payment to the applicable Alternate Currency Agent of any amount
due under Section 2.5.1(ii) and the applicable Alternate Currency Addendum, the
-----------------
applicable Alternate Currency Agent shall be entitled to receive, retain and
apply against such obligation the principal and interest otherwise payable to
such Alternate Currency Bank hereunder until the Alternate Currency Agent
receives such payment from such Alternate Currency Bank or such obligation is
otherwise fully satisfied. In addition to the foregoing, if for any reason any
Alternate Currency Bank fails to make payment to the applicable Alternate
Currency Agent of any amount due under Section 2.5.1(ii) and the applicable
-----------------
Alternate Currency Addendum, such Alternate Currency Bank shall be deemed, at
the option of the applicable Alternate Currency Agent, to have unconditionally
and irrevocably purchased from the applicable Alternate Currency Agent, without
recourse or warranty, an undivided interest in and participation in the
applicable Alternate Currency Loan in the amount such Alternate Currency Bank
was required to pay pursuant to Section 2.5.1(ii) and the applicable Alternate
-----------------
Currency Addendum, and such interest and such participation may be recovered
from such Alternate Currency Bank together with interest thereon at the Federal
Funds Effective Rate for each day during the period commencing on the date of
demand by the applicable Alternate Currency Agent and ending on the date such
obligation is fully satisfied.
2.5.2. Minimum Amount of Each Advance. Each Advance shall be in the
------------------------------
minimum amount of $1,000,000 and in integral multiples of $500,000 if in excess
thereof (or the Approximate Equivalent Amount if denominated in an Agreed
Currency other than Dollars or an Alternate Currency (or such other amounts as
may be specified in the applicable Alternate Currency Addendum)); provided,
however, that any Alternate Base Rate Advance may be in the amount of (i) the
aggregate applicable unused Aggregate Revolving Loan Commitment and (ii) any
Alternate Base Rate Advance required to be made in connection with the required
repayment of a Swing Loan under Section 2.1.2(iv).
-----------------
2.5.3. Prepayments. (A) Optional Payments. (i) Any Borrower may
----------- -----------------
from time to time prepay, without penalty or premium, all or any portion of all
outstanding Swing Loans. Payments in respect of the Swing Loans shall be applied
to each of the outstanding Swing Loans in the order of their maturity beginning
with the Swing Loan which has been outstanding longest.
(ii) Any Borrower may from time to time and at any time repay or
prepay all or any part of outstanding Alternate Base Rate Advances without
premium or penalty of any kind except as provided in Section 2.4.3; provided,
------------- --------
that no Borrower may so prepay Alternate Base Rate Advances consisting of Term
Loans unless it shall have provided at least one Business Day's written notice
to the Agent of such prepayment. Eurocurrency Advances and Alternate Currency
46
<PAGE>
Loans may be voluntarily repaid or prepaid prior to the last day of the
applicable Interest Period, subject to the indemnification provisions contained
in Section 3.4 and the provisions of Section 2.4.3, provided, that the Borrower
----------- ------------- --------
may not so prepay Eurocurrency Advances unless it shall have provided at least
two (2) Business Days' written notice to the Agent of such prepayment. Unless
the aggregate outstanding principal balance of the Term Loans is to be prepaid
in full, voluntary prepayments of the Term Loans shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount, and shall be applied ratably to each of the then remaining
installments payable thereunder; provided, that optional prepayments of
--------
Eurocurrency Advances made pursuant to Section 2.1.1 shall be for the entire
-------------
amount of the outstanding Eurocurrency Advance.
(B) Mandatory Prepayments.
---------------------
(i) Mandatory Prepayments of Term Loans.
-----------------------------------
(a) Upon the consummation of any Asset Sale by the Company
or any Subsidiary of the Company, other than those Asset Sales
permitted pursuant to Section 6.9(i), (iii), (iv), (v), (vi) and (ix),
--------------------- ---- --- ---- ----
except to the extent that the Net Cash Proceeds of such Asset Sale,
when combined with the Net Cash Proceeds of all such Asset Sales
during the immediately preceding twelve-month period, do not exceed
$1,000,000 or the Approximate Equivalent Amount of any Agreed Currency
other than Dollars, and except as provided in the second sentence of
this Section 2.5.3(B)(i)(a), within three (3) Business Days after the
----------------------
Company's or any of its Subsidiaries' (i) receipt of any Net Cash
Proceeds from any such Asset Sale, or (ii) conversion to cash or Cash
Equivalents of non-cash proceeds (whether principal or interest and
including securities, release of escrow arrangements or lease
payments) received from any Asset Sale, the Company shall, or shall
cause the other Borrowers to, make a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
Net Cash Proceeds or such proceeds converted from non-cash to cash or
Cash Equivalents. Net Cash Proceeds of Asset Sales with respect to
which the Company shall have given the Agent written notice of its
intention to replace the assets within twelve (12) months, following
such Asset Sale shall not be subject to the provisions of the first
sentence of this Section 2.5.3(B)(i)(a) unless and to the extent that
----------------------
such applicable period shall have expired without such replacement
having been made.
(b) (i) Except as provided in clause (b)(ii) below, upon
--------------
the consummation of any Financing by the Company or any Subsidiary of
the Company, within three (3) Business Days after the Company's or any
of its Subsidiaries' receipt of any Net Cash Proceeds from such
Financing, the Company shall, or shall cause the other Borrowers to,
make a mandatory prepayment of the Obligations in an amount equal to
one hundred percent (100%) of such Net Cash Proceeds.
(ii) Notwithstanding the foregoing, Net Cash Proceeds
subject to clause (i) above shall not include Net Cash Proceeds
----------
received in connection with the issuance of any Capital
47
<PAGE>
Stock, other than Disqualified Stock, to any employee, executive,
director or officer and if the Company or any Subsidiary of the
Company issues Equity Interests of such Person or any Permitted
Refinancing Indebtedness of such Person, the proceeds of any such
offering of Equity Interests or Indebtedness may be used to refinance
the Seller Senior Subordinated Note or the Additional Junior Security.
(c) Simultaneously with the delivery of the annual audited
financial statements required to be delivered pursuant to Section
-------
6.1(i) for each fiscal year beginning with the fiscal year ending
------
November 30, 1999, the Company shall calculate Excess Cash Flow for
such fiscal year and shall, or shall cause the other Borrowers to,
make a mandatory prepayment of the Obligations, payable not later than
the earlier of ten (10) days after such financial statements and
calculation are delivered or one hundred (100) days after the end of
such fiscal year, in an amount equal to:
(x) at any time the Leverage Ratio (calculated as of the
last day of such fiscal year) shall be greater than or equal to 4.5 to
1.0, 85% of such Excess Cash Flow; and
(y) at any time the Leverage Ratio (calculated as of the
last day of such fiscal year) shall be less than 4.5 to 1.0, 50% of
such Excess Cash Flow.
(d) If on the last Business Day of any month:
(x) the Dollar Amount of the Revolving Credit Obligations
exceeds 105% of the Maximum Revolving Credit Amount,
the Company for the ratable benefit of the Lenders
shall or shall cause the other Borrowers to immediately
prepay Loans (to be applied to such Loans as the
Company shall direct at the time of such payment) in an
aggregate amount such that after giving effect thereto
the Dollar Amount of the Revolving Credit Obligations
is less than or equal to the Maximum Revolving Credit
Amount; or
(y) the Dollar Amount of all outstanding Alternate Currency
Loans under the Alternate Currency Addenda exceeds 105%
of the aggregate Alternate Currency Commitments with
respect thereto, the applicable Borrowers shall on such
date prepay Alternate Currency Loans in an aggregate
amount such that after giving effect thereto the Dollar
Amount of all such Alternate Currency Loans is less
than or equal to the aggregate Alternate Currency
Commitments with respect thereto; or
(z) the Dollar Amount of the aggregate outstanding
principal amount of Alternate Currency Loans exceeds
$80,000,000, the applicable Borrowers shall on such
date prepay Alternate Currency Loans in an aggregate
amount
48
<PAGE>
such that after giving effect thereto the Dollar amount
of all Alternate Currency Loans is less than or equal
to $80,000,000.
(e) Nothing in this Section 2.5.3(B)(i) shall be construed
-------------------
to constitute the Lenders' consent to any transaction referred to in
clauses (a) and (b) above which is not expressly permitted by the
--- ---
terms of this Agreement.
(f) Each mandatory prepayment required by clauses (a), (b)
-------------- ---
and (c) of this Section 2.5.3(B) shall be referred to herein as a
--- ----------------
"Designated Prepayment". Designated Prepayments shall be allocated and
applied to the Obligations as follows:
(I) the amount of each Designated Prepayment shall be
applied to each of the then remaining installments
payable under the Term Loans on a ratable basis based
upon the respective amounts of such remaining
installments; and
(II) following the payment in full of the Term Loans, the
amount of each Designated Prepayment shall be applied
to repay Revolving Loans (but shall not reduce
Revolving Loan Commitments) and following the payment
in full of the Revolving Loans, the amount of each
Designated Prepayment shall be applied first to
interest on the Reimbursement Obligations, then to
principal on the Reimbursement Obligations, then to
fees on account of Letters of Credit and then, to the
extent any L/C Obligations are contingent, deposited
with the Agent as cash collateral in respect of such
L/C Obligations.
(ii) Mandatory Prepayments of Revolving Loans. In addition to
----------------------------------------
repayments under Section 2.5.3(B)(i)(d), if at any time and for any reason other
----------------------
than the fluctuation in currency exchange rates the Dollar Amount of the
Revolving Credit Obligations are greater than the Maximum Revolving Credit
Amount, the Company shall immediately make a mandatory prepayment of the
Obligations in an amount equal to such excess. If after giving effect to such
payment the Dollar Amount of L/C Obligations outstanding at any time is greater
than the Maximum Revolving Credit Amount at such time, the Company shall deposit
cash collateral with the Agent in an amount in Dollars equal to such excess.
(iii) Subject to the preceding provisions of this Section 2.5.3(B),
----------------
all of the mandatory prepayments made under this Section 2.5.3(B) shall be
----------------
applied first to Alternate Base Rate Loans and to any Eurocurrency Loans and
Alternate Currency Loans in the Equivalent Amount of such prepayment maturing on
such date and then to subsequently maturing Eurocurrency Loans and Alternate
Currency Loans in order of maturity; provided, that, if requested by the
--------
Company, the Agent shall hold as cash collateral the part of any such prepayment
which, in accordance with this clause (iii) is to be applied to outstanding
------------
Eurocurrency Loans. The Agent shall apply such cash
49
<PAGE>
collateral to outstanding Eurocurrency Loans on the last day of the next
expiring Interest Period with respect to such Loans.
2.5.4. Interest Rates; Interest Periods. Each Alternate Base Rate
--------------------------------
Loan shall bear interest on the outstanding principal amount thereof, for each
day from the date such loan is made until it becomes due at a rate per annum
equal to the Alternate Base Rate for such day. Each Eurocurrency Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Eurocurrency Rate
applicable thereto. Each Alternate Currency Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum set forth in the applicable Alternate Currency
Memorandum. Subject to the provisions of Section 2.5.5, each Advance shall bear
-------------
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the earlier of (i) the last day of such Interest
Period or (ii) the date of any earlier prepayment as permitted by Section 2.5.3,
-------------
at the interest rate determined as applicable to such Advance.
2.5.5. Default Rate. After the occurrence and during the
------------
continuance of a Default, at the option of the Agent or at the direction of the
Required Lenders, the interest rate(s) applicable to the Obligations and the
fees payable under Section 2.4 shall be equal to the interest rate(s) and fees
-----------
applicable for Level I Status plus two percent (2.0%) per annum.
----
2.5.6. Interest Payment Dates; Interest Basis. Interest accrued on
--------------------------------------
each Alternate Base Rate Advance and each Swing Loan shall be payable on each
Payment Date and with respect to any Swing Loan, on any date on which such Swing
Loan is repaid or prepaid, whether due to acceleration or otherwise and at
maturity. Interest accrued on each Eurocurrency Advance shall be payable on the
last day of its applicable Interest Period, on any date on which such
Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurocurrency Advance having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Except as may otherwise be
prescribed in the applicable Alternate Currency Addendum, interest on Alternate
Base Rate Loans, Alternate Currency Loans, the commitment fee payable under
Section 2.4.1 and any other fees payable pursuant to this Agreement shall be
- -------------
calculated for actual days elapsed on the basis of a 365/366-day year. All
Eurocurrency Loans shall be calculated for actual days elapsed on the basis of a
360-day year (or a 365-day year if that is deemed by the Agent to be consistent
with market practices for the applicable currency). Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance or a Swing Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.5.7. Method of Payment. Each Advance shall be repaid or prepaid
-----------------
in the currency in which it was made in the amount borrowed and interest payable
thereon shall be paid in such currency. Subject to the last sentence of Section
-------
2.5.1, all payments of principal, interest, and fees
- -----
50
<PAGE>
in Dollars hereunder shall be made by noon (Indianapolis time) on the date when
due in immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the Agent
-----------
specified in writing by the Agent to the Company and shall be made ratably among
all Lenders in the case of fees and payments in respect of Advances. After the
occurrence of a Default, all payments of principal shall be applied ratably
among all outstanding Advances. Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds which the Agent received at its address specified
pursuant to Article XIV or at any Lending Installation specified in a notice
-----------
received by the Agent from such Lender. All payments to be made by the Borrowers
hereunder or under the Notes in any currency other than Dollars (other than in
respect of any Alternate Currency Loan) shall be made in such currency on the
date due in such funds as may then be customary for the settlement of
international transactions in such currency for the account of the Agent, at its
Eurocurrency Payment Office for such currency, provided, however, that with
respect to any such payments by any of the French Borrowing Subsidiaries, such
payments shall be made at the Agent's French Lending Installation. All payments
to be made by the Borrowers hereunder in respect of any Alternate Currency Loans
shall be made in the currencies in which such Loans are denominated and in funds
immediately available, at the office or branch from which the Loan was made
under Section 2.1.4 not later than 3:00 p.m. local time on the date on which
-------------
such payment shall become due. Promptly upon receipt of any payment of principal
of the Alternate Currency Loans the Lender receiving such payment shall give
written notice to the Agent by telex or telecopy of the receipt of such payment,
which notice shall be substantially in the form attached hereto as Exhibit L.
---------
The Agent will promptly cause such payments to be distributed to each Lender in
like funds and currency. Notwithstanding the foregoing provisions of this
Section, if, after the making of any Advance in any currency other than Dollars,
currency control or exchange regulations are imposed in the country which issues
such currency with the result that different types of such currency (the "New
Currency") are introduced and the type of currency in which the Advance was made
(the "Original Currency") no longer exists or the applicable Borrower is not
able to make payment to the Agent for the account of the Lenders in such
Original Currency, then all payments to be made by the applicable Borrower
hereunder or under the Notes in such currency shall be made in such amount and
such type of the New Currency or Dollars as shall be equivalent to the amount of
such payment otherwise due hereunder or under the Notes in the Original
Currency, it being the intention of the parties hereto that the Borrowers take
all risks of the imposition of any such currency control or exchange
regulations. In addition, notwithstanding the foregoing provisions of this
Section, if, after the making of any Advance in any currency other than Dollars,
the applicable Borrower is not able to make payment to the Agent for the account
of the Lenders in the type of currency in which such Advance was made because of
the imposition of any such currency control or exchange regulation, then such
Advance shall instead be repaid when due in Dollars in a principal amount equal
to the Dollar Amount (as of the date of repayment) of such Advance; provided,
--------
that if and to the extent that any legislative measures of the Council of the
European Union for the introduction of, changeover to or operation of a single
or unified currency provided that following the commencement of the third stage
of the Economic and Monetary Union an amount denominated either in the Euro or
in the National Currency Unit of a participating member state and payable within
that participating member state by crediting an account of the
51
<PAGE>
creditor can be paid by the debtor either in the Euro or in that National
Currency Unit and so long as the applicable National Currency Unit in which the
applicable Loan was made is an Eligible Currency, each Borrower shall be
entitled to pay or repay any such amount either in the Euro or in such National
Currency Unit.
2.5.8. Notes; Telephonic Notices. Each Lender is hereby authorized
-------------------------
to record on the schedule attached to each of its Notes, or otherwise record in
accordance with its usual practice, the date, the currency, the amount and the
maturity of each of its Loans of the type evidenced by such Note; provided,
however, that any failure to so record shall not affect the Company's or any
Subsidiary's obligations under any Loan Document. The Company and each Borrower
hereby authorize the Lenders, the Agent, the Issuing Lenders and the Swing Loan
Lenders to extend or continue Advances, effect selections of Types of Advances
and transfer funds based on telephonic notices made by any person or persons the
Agent or such Lender, Issuing Lender or Swing Loan Lender in good faith believes
to be a Financial Officer or an officer, employee or agent of the Company
designated by a Financial Officer. The Company agrees to deliver or to cause to
deliver promptly to the Agent a written confirmation of each telephonic notice
given by the Company or any Subsidiary, signed by a Financial Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent, the Lenders, the Issuing Lenders, or the Swing Loan Lenders, the
records of the Agent, the Lenders, the Issuing Lenders and the Swing Loan
Lenders shall govern absent manifest error.
2.5.9. Notification of Advances, Interest Rates and Prepayments.
--------------------------------------------------------
Promptly after receipt thereof, the Agent will notify each Lender of the
contents of each Aggregate Revolving Loan Commitment reduction notice, Borrowing
Notice, Conversion/Continuation Notice, and repayment notice received by it
hereunder. The Agent will notify each Lender of the interest rate applicable to
each Eurocurrency Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.
2.5.10. Non-Receipt of Funds by the Agent. Unless the Company, a
---------------------------------
Borrowing Subsidiary, a Lender or a Swing Loan Lender, as the case may be,
notifies the Agent prior to the date on which it is scheduled to make payment to
the Agent of (i) in the case of a Lender or Swing Loan Lender, the proceeds of a
Loan or (ii) in the case of the Company or a Borrowing Subsidiary, a payment of
principal, interest or fees to the Agent for the account of the Lenders or Swing
Loan Lenders, that it does not intend to make such scheduled payment, the Agent
may assume that such scheduled payment has been made. The Agent may, but shall
not be obligated to, make the amount of such scheduled payment available to the
intended recipient in reliance upon such assumption. If such Lender, Swing Loan
Lender, Borrowing Subsidiary or the Company, as the case may be, has not in fact
made such scheduled payment to the Agent, the recipient of such scheduled
payment shall, on demand by the Agent, repay to the Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to (x)
in the case of scheduled payment by a Lender or a Swing Loan Lender, the Federal
52
<PAGE>
Funds Effective Rate for such day or (y) in the case of scheduled payment by the
Company or a Borrowing Subsidiary, the interest rate applicable to the relevant
Loan.
2.5.11. Termination or Reduction in the Aggregate Revolving Loan
--------------------------------------------------------
Commitment. The Company may at any time after the date hereof permanently
- ----------
reduce the Aggregate Revolving Loan Commitment or the Alternate Currency
Commitments, in whole, or in a minimum aggregate amount of $1,000,000 and in
integral multiples of $1,000,000 if in excess thereof (or in such amounts as may
be set forth on the applicable Alternate Currency Addendum), ratably among the
Lenders upon at least one Business Day's prior written notice to the Agent,
which notice shall specify the amount of such reduction; provided, however, no
-------- -------
such notice of reduction shall be effective to the extent that it would reduce
the Aggregate Revolving Loan Commitment to an amount which would be less than
the outstanding Dollar Amount of the Revolving Credit Obligations outstanding at
the time such reduction is to take effect; provided, further, that no such
-------- -------
notice of reduction shall be effective to the extent that it would reduce the
aggregate Alternate Currency Commitments in any Alternate Currency to an amount
which would be less than the outstanding amount of the Alternate Currency Loans
in such currency at the time such reduction is to take effect. The Aggregate
Revolving Loan Commitment once reduced as provided in this Section 2.5.11 may
--------------
not be reinstated. If (y) any Lender notifies the Company in accordance with
Section 2.5.15 or (z) a Borrower reasonably determines that it is or will be
- --------------
required to make any additional payment to any Lender under Section 3.1, 3.2 or
----------- ---
3.3 the Company may, at any time thereafter (provided that no Default or
- ---
Unmatured Default then exists and no satisfactory solution has been reached
pursuant to Section 3.6) and by not less than five Business Days' prior written
-----------
notice to the Agent, cancel such Lender's Commitment, whereupon such Lender
shall cease to be obliged to make further Loans hereunder and its Commitment
shall be reduced to zero. Upon termination of such Lender's Commitment, each
applicable Borrower shall, subject to the last sentence of this subparagraph
(i), pay all outstanding Obligations owing to such Lender. Any notice of
cancellation given pursuant to this Section 2.5.11 shall be irrevocable and
--------------
shall specify the date upon which such cancellation is to take effect.
Notwithstanding any such cancellation, the obligations of the Company and the
Borrowing Subsidiaries under Sections 3.1, 3.2, 3.3 and 10.6 shall survive any
------------ --- --- ----
such cancellation and be enforceable by such Lender. In any case described in
clauses (i)(y) or (i)(z) above in which the Company has the right to cancel a
- -------------- ------
Lender's Commitment, the Company may, in connection with such cancellation
arrange for a sale (at par) of such Commitment and all outstanding Loans held by
such Lender pursuant to the terms of Section 13.3 and such Lender will promptly
------------
enter into any such sale arranged by the Company.
2.5.12. Market Disruption. Notwithstanding the satisfaction of all
-----------------
conditions referred to in Article II with respect to any Advance in any currency
----------
other than Dollars, if there shall occur on or prior to the date of such Advance
any change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls which would in the
reasonable opinion of the Agent or the Required Lenders make it impracticable
for the Eurocurrency Loans or Alternate Currency Loans comprising such Advance
to be denominated in the currency specified by the applicable Borrower, then the
Agent shall forthwith give notice thereof to the Company and the Lenders, and
such Loans shall not be denominated in such currency
53
<PAGE>
but shall be made on such Borrowing Date in Dollars, in an aggregate principal
amount equal to the Dollar Amount of the aggregate principal amount specified in
the related Borrowing Notice, as Alternate Base Rate Loans, unless the
applicable Borrower notifies the Agent at least one Business Day before such
date that (i) it elects not to borrow on such date or (ii) it elects to borrow
on such date in a different Agreed Currency or Alternate Currency, as the case
may be, in which the denomination of such Loans would in the opinion of the
Agent and the Required Lenders be practicable and in an aggregate principal
amount equal to the Dollar Amount of the aggregate principal amount specified in
the related Borrowing Notice.
2.5.13. Lending Installations. Subject to Section 3.6, each Lender
--------------------- -----------
may, by written, telex or telecopy notice to the Agent and the Company, book its
Loans at any Lending Installation selected by such Lender and may from time to
time, change its Lending Installation and for whose account Loan payments are to
be made, provided that no Lender (other than a Lender organized under the laws
of the Republic of France) may designate a French Lending Installation located
outside the European Community with respect to the French Borrowing
Subsidiaries. Each Lender will notify the Agent and the Company on or prior to
the date of this Agreement of the Lending Installation which it intends to
utilize for each type of Loan hereunder. Each Lender's Lending Installation for
Loans to any of the French Borrowing Subsidiaries (the "French Lending
Installations") is specified on Schedule II.
-----------
2.5.14. Borrowing Subsidiaries. The Company may at any time or from
----------------------
time to time, with the consent of the Agent, which consent shall not be
unreasonably withheld, add as a party to this Agreement any French, Dutch,
English, Scottish, German or domestic Subsidiary to be a "Borrowing Subsidiary"
hereunder by (a) the execution and delivery to the Agent of a duly completed
Assumption Letter by such Subsidiary, with the written consent of the Company at
the foot thereof and (b) the execution and delivery to the Agent of such other
guaranty and security documents as may be reasonably required by the Agent, such
documents with respect to any additional French, Dutch, German, English or
Scottish Subsidiaries to be substantially similar in form and substance to the
Loan Documents executed on or about the date hereof by the French, Dutch,
German, English or Scottish Subsidiaries parties hereto as of the Effective
Date. Upon such execution, delivery and consent such Subsidiary shall for all
purposes be a party hereto as a Borrowing Subsidiary as fully as if it had
executed and delivered this Agreement. So long as the principal of and interest
on any Advances made to any Borrowing Subsidiary under this Agreement shall have
been repaid or paid in full, all Letters of Credit issued for the account of
such Borrowing Subsidiary have expired or been returned and terminated and all
other obligations of such Borrowing Subsidiary under this Agreement shall have
been fully performed, the Company may, by not less than five Business Days'
prior notice to the Agent (which shall promptly notify the Lenders thereof),
terminate such Borrowing Subsidiary's status as a "Borrowing Subsidiary".
2.5.15. Withholding Tax Exemption. (i) On or prior to the date of
-------------------------
its execution and delivery of this Agreement in the case of any Lender, Swing
Loan Lender or Issuing Lender (and on or prior to the effective date specified
in the Notice of Assignment pursuant to which a Purchaser becomes a Lender in
the case of each other Lender), each Lender, Swing Loan Lender or
54
<PAGE>
Issuing Lender that is not incorporated under the laws of the United States of
America, or a state thereof, agrees that it will deliver to the Company and the
Agent two duly completed copies of United States Internal Revenue Service Form
1001 or 4224 (or other appropriate form), certifying in either case that such
Lender, Swing Loan Lender or Issuing Lender is entitled to receive payments
under the Loan Documents without deduction or withholding of any United States
federal income taxes. Each Lender, Swing Loan Lender or Issuing Lender which so
delivers a Form 1001 or 4224 further undertakes to deliver to the Company and
the Agent two additional copies of such form (or a successor form) on or before
the date that such form (or a replacement of an expired form) expires
(currently, three successive calendar years for Form 1001 and one calendar year
for Form 4224) or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company or the Agent, in each case certifying that such Lender,
Swing Loan Lender or Issuing Lender is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender, Swing Loan Lender or Issuing Lender from
duly completing and delivering any such form with respect to it and such Lender,
Swing Loan Lender or Issuing Lender promptly advises the Company and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax. If any Lender, Swing Loan
Lender or Issuing Lender so advises the Company and the Agent of such fact, the
Company shall be entitled to exercise its rights under Section 2.5.11.
--------------
(ii) Within five Business Days after any request made in writing by
any UK Borrowing Subsidiary in relation to payments under or pursuant to this
Agreement by such UK Borrowing Subsidiary, each Lender, Swing Loan Lender or
Issuing Lender (and on or prior to the effective date specified in the Notice of
Assignment pursuant to which a Purchaser becomes a Lender in the case of each
other Lender), in relation to which such payments are to be made and which is
not a Qualifying Bank, agrees that it will complete and file, with the relevant
tax authority in the jurisdiction in which it is treated as resident for the
purposes of any double taxation treaty between that jurisdiction and the United
Kingdom, such form as may be required in order to facilitate the obtaining by
such UK Borrowing Subsidiary of a direction issued by the United Kingdom Inland
Revenue pursuant to The Double Taxation Relief (Taxes on Income)(General)
Regulations 1970 (or any legislation replacing those regulations) by which such
UK Borrowing Subsidiary is directed to make payments under or pursuant to this
Agreement to such Lender without deduction or withholding of any United Kingdom
income tax.
(iii) Each Lender, Swing Loan Lender, or Issuing Lender agrees to
file with the Agent and the Company, in duplicate, (a) on the date such Lender,
Swing Loan Lender, or Issuing Lender (and on or prior to the effective date
specified in the Notice of Assignment pursuant to which a Purchaser becomes a
Lender in the case of each other Lender) becomes an Alternate Currency Bank with
respect to an Alternate Currency or a Lender, Swing Loan Lender or Issuing
Lender with respect to an Obligation of a Dutch Borrowing Subsidiary and (b)
thereafter as frequently as
55
<PAGE>
required by applicable law unless not legally able to do so as a result of a
change in applicable tax law enacted, or treaty promulgated, after the date on
which such Lender, Swing Loan Lender, or Issuing Lender becomes a party
hereunder on or prior to the immediately following due date of any payment by
the Borrowers hereunder, a properly completed and executed copy of any form,
certification or similar documentation, if any, necessary for claiming complete
exemption from withholding taxes with respect to all payments to be made to such
Alternate Currency Bank under the applicable Alternate Currency Addendum or by
such Dutch Borrowing Subsidiary to such Lender, Swing Loan Lender or Issuing
Lender, as the case may be, or an opinion of counsel reasonably acceptable to
Borrowers confirming such exemption; provided that such Lender's failure to
--------
complete, execute and file such form, certification or similar documentation
shall not relieve the Borrowers of any of their obligations under this
Agreement, other than their obligations under Section 3.1 and Section 3.2 with
----------- -----------
respect to increased costs that are a result of such failure and the applicable
Borrower, the Agent and the Alternate Currency Agent shall be permitted to
withhold federal, state and local income taxes due under the relevant
jurisdiction from any payments made under such Alternate Currency Addendum at
the applicable statutory rate.
2.5.16. Judgment Currency. If for the purposes of obtaining judgment
-----------------
in any court it is necessary to convert a sum due from a Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "specified currency") into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency at the Agent's office in Indianapolis, Indiana on the Business Day
preceding that on which final, non-appealable judgment is given. The obligations
of the applicable Borrower in respect of any sum due to any Lender or the Agent
hereunder or under any Note shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Agent (as the case may be)
of any sum adjudged to be so due in such other currency such Lender or the Agent
(as the case may be) may in accordance with normal, reasonable banking
procedures purchase the specified currency with such other currency. If the
amount of the specified currency so purchased is less than the sum originally
due to such Lender or the Agent, as the case may be, in the specified currency,
the applicable Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Lender or the Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the sum originally due
to any Lender or the Agent, as the case may be, in the specified currency and
(b) any amounts shared with other Lenders as a result of allocations of such
excess as a disproportionate payment to such Lender under Section 12.2, such
------------
Lender or the Agent, as the case may be, agrees to remit such excess to the
applicable Borrower.
2.5.17 Overall Effective Rate; Limitation on German Borrowing
------------------------------------------------------
Subsidiaries' Obligations.
- -------------------------
(a) For the purposes of Articles L 313.1 and L 313.2 of the
French consumer code (Code de la Consommation) only, the Lenders represent to
the Borrowers, who accept such
56
<PAGE>
representation, that the "overall effective rate" (taux effectif global, within
the meaning of French law) calculated in accordance with the above articles on
the basis of a three hundred and sixty-five (365) day year, would be [___]%
([___] percent per annum) if the French Borrowing Subsidiaries were to borrow on
October 15, 1998.
(b) The above overall effective rate was calculated on the
assumptions of (i) an existing Level I Status, (ii) an Advance to the Borrowers
in an amount of [$_________ (_______ Million Dollars)], (iii) a Borrowing Date
on October 15, 1998 and (iv) an Alternate Base Rate at [____%] plus the
Applicable Margin at [_____%].
(c) The obligations of any German Borrowing Subsidiary under
this Agreement or any other Loan Document shall always be limited to the extent
that the enforcement of any of its obligations hereunder would cause its net
assets (Reinvermogen) to be reduced below the amount of its registered share
capital, as protected by Sections 30 and 31 of the German Act concerning Limited
Liability Companies (GmbHG).
2.6. Letter of Credit Facility.
--------------------------
2.6.1. Letters of Credit. (a) Upon receipt of duly executed
-----------------
applications therefor, and such other documents, instruments and agreements as
an Issuing Lender may reasonably require, and subject to the provisions of
Article IV, the Agent or one of its affiliates that is a Lender shall, or any
- ----------
other Lender, in its sole discretion, may, issue Letters of Credit for the
account of the applicable Borrower (the Agent and each such other Lender in such
capacity being referred to as an "Issuing Lender"), on terms as are satisfactory
to such Issuing Lender; provided, however, that no Letter of Credit will be
-------- -------
issued for the account of any Borrower by an Issuing Lender if on the date of
issuance, before or after taking such Letter of Credit into account (i) the
Dollar Amount of the aggregate unpaid principal balance of the Revolving Credit
Obligations at such time would exceed the Maximum Revolving Credit Amount at
such time or (ii) the aggregate outstanding amount of the L/C Obligations would
exceed $20,000,000; and provided, further, that no Letter of Credit shall be
-------- -------
issued unless (A) it is denominated in Dollars or Agreed Currency and (B) it has
an expiration date that is (1) no more than one year after the date of issuance
of such Letter of Credit (provided that a Letter of Credit may provide for an
annual renewal if such renewal is consented to by the Issuing Lender and the
conditions precedent to the issuance of such Letter of Credit are met at the
time of such renewal) and (2) no later than the Termination Date. If any
Borrower applies for a Letter of Credit from any Lender other than the Agent,
such Borrower or the Company on behalf of such Borrower shall simultaneously
notify the Agent of the proposed amount and expiration date of such Letter of
Credit. The Agent shall promptly notify the applicable Borrower and the Lender
to which such application has been made whether the issuance of such Letter of
Credit would comply with the terms of this Section 2.6.1. Upon the effectiveness
-------------
of this Agreement, the Existing Letters of Credit shall be deemed to constitute
Letters of Credit hereunder having as their issuance date the effective date of
this Agreement. Fees shall accrue in respect of the Existing Letters of Credit
as provided in Section 2.6.5 of this Agreement beginning as of the effective
-------------
date of this Agreement
57
<PAGE>
but the Company shall receive full credit for fees paid in advance with respect
to such Existing Letters of Credit.
2.6.2. Letter of Credit Participation. Immediately upon the
-------------------------------
Effective Date with respect to the Existing Letters of Credit and immediately
upon the issuance of each other Letter of Credit hereunder, each Lender with a
Revolving Loan Commitment greater than zero shall be deemed to have
automatically, irrevocably and unconditionally purchased and received from the
applicable Issuing Lender an undivided interest and participation in and to such
Letter of Credit, the obligations of the applicable Borrower in respect thereof,
and the liability of the applicable Issuing Lender thereunder (collectively, an
"L/C Interest") in an amount equal to the amount available for drawing under
------------
such Letters of Credit multiplied by a fraction having as its numerator such
Lender's Revolving Loan Commitment and as its denominator, the Aggregate
Revolving Loan Commitment. The Agent will notify each Lender (or in the case of
an Issuing Lender other than the Agent, such Issuing Lender shall notify the
Agent who in turn will notify each Lender) promptly upon presentation to it of
an L/C Draft or upon any other draw under any Letter of Credit. On or before
the Business Day on which any Issuing Lender makes payment of each such L/C
Draft or, in the case of any other draw on the Letter of Credit, on demand of
such Issuing Lender, each Lender shall make payment to the Agent for the account
of the applicable Issuing Lender, in immediately available funds in an amount
equal to such Lender's ratable share (determined in accordance with the fraction
described above) of the amount of such payment or draw. The obligation of each
Lender with a Revolving Loan Commitment greater than zero to pay the Agent for
the account of the applicable Issuing Lender under this Section 2.6.2 shall be
-------------
unconditional, continuing, irrevocable and absolute and shall not be affected or
impaired by, among other things, the reduction, suspension or termination of the
Aggregate Revolving Loan Commitment pursuant to this Agreement. In the event
that any Lender fails to make payment to the Agent of any amount due under this
Section 2.6.2, the Agent shall be entitled to receive, retain and apply against
- -------------
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; provided, however, that nothing
-------- -------
contained in this sentence shall relieve such Lender of its obligation to
reimburse the Agent for such amount in accordance with this Section 2.6.2.
-------------
2.6.3. Reimbursement Obligation. Each Borrower agrees
------------------------
unconditionally, irrevocably and absolutely upon receipt of notice from the
Agent or the applicable Issuing Lender to pay immediately to the Agent, for the
account of the applicable Issuing Lenders or the account of the Lenders, as the
case may be, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto issued at such Borrower's
request (such obligation of any Borrower to reimburse the Issuing Lender or the
Agent for an advance made under a Letter of Credit or L/C Draft being
hereinafter referred to as a "Reimbursement Obligation" with respect to a Letter
------------------------
of Credit or L/C Draft). If any Borrower at any time fails to repay a
Reimbursement Obligation pursuant to this Section 2.6.3, such Borrower shall be
-------------
deemed to have elected to borrow an Alternate Base Rate Advance from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation
58
<PAGE>
and such an Advance shall be available from the Lenders notwithstanding the fact
that the Aggregate Revolving Loan Commitment may have been reduced, suspended or
terminated pursuant to this Agreement (notwithstanding the minimum amount of
Advances as provided in Section 2.5.2). If, for any reason, the Borrower fails
-------------
to repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises, then such Reimbursement Obligation shall bear interest from and after
such day, until paid in full, at the interest rate applicable to Alternate Base
Rate Advances.
2.6.4. Cash Collateral. Notwithstanding anything to the contrary
---------------
herein or in any application for any Letter of Credit, (a) after the occurrence
and during the continuance of a Default or (b) to the extent necessary in
connection with any mandatory reduction of the Aggregate Revolving Loan
Commitment pursuant to Section 2.5.11, each Borrower with outstanding L/C
--------------
Obligations shall, upon the Agent's demand or if earlier, at the time of the
applicable mandatory reduction of the Aggregate Revolving Loan Commitment
pursuant to Section 2.5.11 or mandatory prepayment or repayment of Loans
--------------
pursuant to Section 2.5.3, as the case may be, deliver to the Agent for the
-------------
benefit of the Lenders, cash collateral in an amount equal to the aggregate
outstanding L/C Obligations of such Borrower, or in connection with a deposit
made pursuant to the foregoing clause (b), such lesser amount of the outstanding
----------
L/C Obligations of such Borrower as shall satisfy the requirements of Section
-------
2.5.11 or Section 2.5.3, as applicable. Any such collateral shall be held by
- ------ -------------
the Agent in a separate account appropriately designated as a cash collateral
account in relation to this Agreement and the Letters of Credit and retained by
the Agent for the benefit of the Lenders as collateral security for the
applicable Borrower's obligations in respect of this Agreement and the Letters
of Credit and L/C Drafts. Such amounts shall be applied to reimburse the Agent
or each Issuing Lender for drawings or payments under or pursuant to the Letters
of Credit or L/C Drafts, or if no such reimbursement is required, to payment of
any other due and unpaid costs, fees, expenses and other Obligations related to
the Letters of Credit, any L/C Drafts and such cash collateral account, as the
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this Section 2.6.4 pursuant
-------------
to clause (a) above which are not to be applied to reimburse the Agent for
----------
amounts drawn under the Letters of Credit or L/C Drafts or to the payment of
related costs, fees, expenses and other Obligations then due and payable as
described above, shall be returned to the Borrower. In addition, if the
conditions giving rise to a deposit of cash collateral pursuant to clause (b)
----------
above cease to exist, any amounts remaining in any cash collateral account
established pursuant to this Section 2.6.4 pursuant to such clause (b) which are
------------- ----------
not to be applied to reimburse the Agent for amounts drawn under the Letters of
Credit or L/C Drafts or to the payment of related costs, fees, expenses and
other Obligations then due and payable as described above, shall be returned to
the applicable Borrower. Investment earnings (net of any unpaid costs, fees,
expenses and other Obligations related to the Letters of Credit, any L/C Drafts
and such cash collateral account) on amounts on deposit in the cash collateral
account shall be for the account of the Borrower, and the Agent shall remit any
such accrued earnings to the Borrower no less frequently than quarterly.
2.6.5. Letter of Credit Fees. The Borrowers agree to pay (a) to
----------------------
the Agent for the ratable benefit of the Lenders, a letter of credit fee (the
"Letter of Credit Fee") equal to the Applicable
59
<PAGE>
Letter of Credit Fee Rate in effect from time to time (such rate to change as
and when prescribed in Section 2.3) on the maximum aggregate daily amount
-----------
expected to be available for drawing under the outstanding Letters of Credit,
such fee to be paid to the Agent for the ratable benefit of the Lenders with a
Revolving Loan Commitment greater than zero quarterly in advance on each Payment
Date and on the Termination Date; provided, however, that in the event that the
-------- -------
actual amount available for drawing under the outstanding Letters of Credit is
less than expected during any quarter, the Borrowers shall receive a rebate
equal to the Letter of Credit Fee paid in connection with such reduced amount
and (b) to the Issuing Lenders, such fronting fees as may be agreed upon between
the applicable Borrower and each such Issuing Lender (not to exceed .25% on the
face amount of such Letter of Credit) and all customary fees and other issuance,
amendment, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by each such Issuing Lender with respect to standby
letters of credit, payable at the time of invoice of such amounts.
2.6.6. Indemnification; Exoneration. (a) In addition to amounts
----------------------------
payable as elsewhere provided in this Agreement, the Company and each Borrowing
Subsidiary hereby agree to protect, indemnify, pay and save harmless the Agent,
each Issuing Lender, each Swing Loan Lender and each Lender from and against any
and all liabilities and costs which the Agent, any Issuing Lender, any Swing
Loan Lender or any Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the issuer thereof, as a result of its Gross Negligence or willful misconduct,
as determined by the final judgment of a court of competent jurisdiction, or
(ii) the failure of the issuer thereof to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto governmental authority (all such acts or
omissions herein called "Governmental Acts").
-----------------
(b) As among the Borrowers, the Issuing Lenders, the Swing
Loan Lenders, the Lenders and the Agent, the Borrowers assume all risks of the
acts and omissions of, or misuse of a Letter of Credit by, the beneficiary of
any Letter of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the letter of credit application and the letter of
credit reimbursement agreement executed by the applicable Borrower in connection
with any Letter of Credit, the issuer of any Letter of Credit, the Agent, the
Swing Loan Lenders and the Lenders shall not be responsible (in the absence of
Gross Negligence or willful misconduct in connection therewith, as determined by
the final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply duly with conditions required in order to draw
upon any Letter of Credit provided that all documents required to be presented
in connection with any such drawing appear on their face to have been presented
and to be in proper form; (iv) for errors, omissions,
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<PAGE>
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telecopy, telex, or other similar form of teletransmission or
otherwise; (v) for errors in interpretation of technical trade terms; (vi) for
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of any Letter of Credit of the
proceeds of any drawing under any Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Agent, the issuer of
any Letter of Credit, and the Lenders including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or prevent the
vesting of any rights or powers of the issuer of any Letter of Credit under this
Section 2.6.6.
- -------------
(c) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or omitted by
the issuer of any Letter of Credit under or in connection with a Letter of
Credit issued on behalf of any Borrower or any related certificates shall not,
in the absence of Gross Negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction, put such issuer, the Agent,
any Issuing Lender, any Swing Loan Lender or any Lender under any resulting
liability to the Company or any Guarantor or relieve the Borrower or any
Guarantor of any of its obligations hereunder or under the relevant Guaranty to
any such Person.
(d) Without prejudice to the survival of any other
agreement of any Borrower hereunder, the agreements and obligations of the
Borrowers contained in this Section 2.6.6 shall survive the payment in full of
-------------
principal and interest hereunder, the termination of the Letters of Credit and
the termination of this Agreement.
(e) Notwithstanding anything therein to the contrary, in
the event any of the provisions of any application submitted by any Borrower in
connection with any Letter of Credit conflict with the provisions of this
Agreement, the terms of this Agreement shall govern.
2.7 Termination Date. This Agreement shall be effective until
----------------
the earlier of (A) the later of (i) the Termination Date, (ii) the Term Loan
Termination Date and (iii) the date on which all Rate Hedging Obligations shall
have been fully paid and satisfied or (B) the date on which no Loans shall be
outstanding, all of the Secured Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied, all Commitments shall
have been terminated, and all of the Letters of Credit shall have expired, been
canceled or terminated or cash collateralized. Upon termination of this
Agreement all of the rights and remedies under this Agreement and the other Loan
Documents (other than those which by their terms survive such termination) shall
terminate and the Agent shall release its security interest in and to all
existing and future Collateral and return any Collateral in its possession to
the Borrowers or applicable parties.
61
<PAGE>
ARTICLE III: CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Taxes.
-----
3.1.1. Payments to be Free and Clear. All sums payable by each Borrower
-----------------------------
under the Loan Documents, whether in respect of principal, interest, fees or
otherwise, shall be paid without deduction for any present and future taxes,
levies, imposts, deductions, charges or withholdings imposed by any government
or any political subdivision or taxing authority thereof (but excluding any
franchise tax or tax on or measured by the net income, profits or gains of any
Lender, Swing Loan Lender, or Issuing Lender) and all interest, penalties or
similar liabilities with respect thereto (collectively, all such as excluded
taxes, "taxes"), which amounts shall be paid by the applicable Borrower as
provided in Section 3.1.2 and subject to Section 3.1.3 below.
------------- -------------
3.1.2. Grossing-up of Payments. If: (a) any Borrower or any other Person
-----------------------
is required by law to make any deduction or withholding on account of any such
taxes from any sum paid or expressed to be payable by the applicable Borrower to
any Lender, Swing Loan Lender or Issuing Lender under this Agreement; or (b) any
party to this Agreement (or any Person on its behalf) other than any Borrower is
required by law to make any deduction or withholding from, or any payment on or
calculated by reference to the amount of, any such sum received or receivable
(other than on account of any excluded taxes) by any Lender, Swing Loan Lender
or Issuing Lender under this Agreement then subject to Section 3.1.3 below:
-------------
(i) the applicable party shall notify the Agent and, if such party
is not the applicable Borrower, the Agent will notify the applicable
Borrower in writing of any such requirement or any change in any such
requirement as soon as such party becomes aware of it;
(ii) the applicable Borrower shall pay any such taxes before the
later of (i) the date on which penalties attached thereto become due and
payable or (ii) 15 days after the date of receipt by the applicable
Borrower of such written notification provided by the Agent in accordance
with paragraph (i) if such applicable party is not the applicable Borrower,
such payment to be made (if the liability to pay is imposed on such
Borrower) for its own account or (if that liability is imposed on any party
to this Agreement) on behalf of and in the name of that party;
(iii) the sum payable by the applicable Borrower in respect of which
the relevant deduction, withholding or payment is required shall (except,
in the case of any such payment, to the extent that the amount thereof is
not ascertainable when that sum is paid) be increased to the extent
necessary to ensure that, after the making of that deduction, withholding
or payment, that party receives on the due date and retains (free from any
liability in respect of any such deduction, withholding or payment) a sum
equal to that which it would have received and so retained had no such
deduction, withholding or payment been required or made; and
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<PAGE>
(iv) within thirty (30) days after payment of any sum from which the
applicable Borrower is required by law to make any deduction or
withholding, and within thirty (30) days after the due date of payment of
any tax or other amount which it is required by paragraph (ii) to pay, it
shall deliver to the Agent all such certified documents and other evidence
as to the making of such deduction, withholding or payment as (a) are
reasonably satisfactory to the affected parties as proof of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing
or other authority and (b) are required by any such party to enable it to
claim a tax credit with respect to such deduction, withholding or payment.
3.1.3 Certification of Withholding Tax Exemption. (a) For any period
-------------------------------------------
with respect to which a Lender, Swing Loan Lender, or Issuing Lender has failed
to provide the Company with an appropriate form described in Section 2.5.15(i)
-----------------
(other than if such failure is due to a change in law occurring after the date
on which such Lender, Swing Loan Lender, or Issuing Lender became a party
hereunder), such Lender, Swing Loan Lender, or Issuing Lender shall not be
entitled to indemnification under this Agreement with respect to taxes imposed
by the United States; provided, however, that should a Lender become subject to
-------- -------
such taxes because of its failure to deliver a form required hereunder, the
Company shall take such steps as such Lender shall reasonably request to assist
such Lender to recover such taxes. If at the time a Lender, Swing Loan Lender,
or Issuing Lender first becomes a party to this Agreement such party does not
deliver to the Company and the Agent an appropriate form described in Section
-------
2.5.15(i) that indicates a complete exemption from (or a complete reduction in
- ---------
rate of) United States withholding tax, withholding tax at such rate shall be
considered excluded from taxes for purposes of Section 3.1 unless and until such
-----------
Lender provides an appropriate form certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered excluded
from taxes for purposes of Section 3.1 for periods governed by such form.
-----------
(b) For any period with respect to which a Lender, Swing Loan Lender,
or Issuing Lender which is entitled to receive payment under or pursuant to this
Agreement from any UK Borrowing Subsidiary either:
(i) has ceased to be a Qualifying Bank (unless such cessation is due to a
change in law or regulation occurring after the date on which such
Lender, Swing Loan Lender, or Issuing Lender became a party
hereunder); or
(ii) not being a Qualifying Bank, has failed to file a form following a
written request as referred to in, and in accordance with, Section
-------
2.5.15(ii) (other than if such failure is due to a change in treaty,
----------
law or regulation occurring after the date on which such Lender, Swing
Loan Lender, or Issuing Lender became a party hereunder);
such Lender, Swing Loan Lender, or Issuing Lender shall not be entitled to
indemnification under this Agreement with respect to taxes imposed by the
United Kingdom; provided, however, that should a Lender, Swing Loan Lender,
-------- -------
or Issuing Lender become subject to
63
<PAGE>
such taxes because of its failure to make such filing as is required
hereunder, the Company shall, and shall procure that such UK Borrowing
Subsidiary shall, take such steps as such Lender shall reasonably request
to assist such Lender to recover such taxes.
(c) For any period with respect to which a Lender, Swing Loan Lender,
or Issuing Lender has failed to provide the Company with an appropriate form
described in Section 2.5.15(iii) (other than if such failure is due to a change
-------------------
in law or any regulation occurring after the date on which such Lender, Swing
Loan Lender, or Issuing Lender became a party hereunder), such Lender, Swing
Loan Lender or Issuing Lender shall not be entitled to indemnification under
this Agreement with respect to taxes imposed as a result of such failure and the
Agent or the Alternative Currency Agent, as applicable, shall be permitted to
withhold federal, state and local income taxes due under the relevant
jurisdiction from any payments at the applicable statutory rate; provided,
--------
however, that should a Lender, Swing Loan Lender or Issuing Lender became
- -------
subject to such taxes because of its failure to deliver a form required
hereunder, the Company shall, and shall cause such Borrowing Subsidiary to, take
such steps as such Lender, Swing Loan Lender or Issuing Lender, shall reasonably
request to assist such Lender to recover such taxes.
3.2. Increased Costs. If, at any time after the date of this Agreement,
---------------
the adoption of any law or the application of any governmental or quasi-
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any change therein, or any change in the
interpretation or administration thereof,
(i) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender, any
Swing Loan Lender or any Issuing Lender or any applicable Lending
Installation (other than reserves and assessments taken into account in
determining the interest rate applicable to Advances bearing interest at
the Eurocurrency Rate), or
(ii) imposes any other condition (not being a tax imposed, levied,
collected, withheld or assessed by any taxing authority), the result of
which is to increase the cost to any Lender, any Swing Loan Lender or any
Issuing Lender or any applicable Lending Installation of making, funding or
maintaining such Loans or issuing or participating in Letters of Credit or
reduces any amount receivable by any Lender, Swing Loan Lender or Issuing
Lender or any applicable Lending Installation in connection with such Loans
or Letters of Credit, or requires any Lender, Swing Loan Lender or Issuing
Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of such Loans or Letters of Credit
held or interest received by it, by an amount deemed material by such
Lender, Swing Loan Lender or Issuing Lender,
then, within 15 days of written demand by such Lender, Swing Loan Lender or
Issuing Lender, the applicable Borrower shall pay such Lender, Swing Loan Lender
or Issuing Lender that portion of such increased expense incurred or reduction
in an amount received which such Lender, Swing
64
<PAGE>
Loan Lender or Issuing Lender determines (as evidenced by its written demand) is
attributable to making, funding and maintaining its Loans, its L/C Interests,
the Letters of Credit and its Revolving Loan Commitment.
3.3. Changes in Capital Adequacy Regulations. If a Lender, Swing Loan
---------------------------------------
Lender or Issuing Lender reasonably determines that the amount of capital
required or expected to be maintained by such Lender, Swing Loan Lender or
Issuing Lender, any Lending Installation of such Lender, Swing Loan Lender or
Issuing Lender or any corporation controlling such Lender, Swing Loan Lender or
Issuing Lender attributable to this Agreement, the Loans, the L/C Interests, the
Letters of Credit or its obligation to make Loans or participate in Letters of
Credit hereunder is increased as a result of a Change (as hereafter defined),
then, within 15 days of written demand by such Lender, Swing Loan Lender or
Issuing Lender (with a copy of such demand to the Agent), the Company shall pay
such Lender, Swing Loan Lender or Issuing Lender the amount which such Lender,
Swing Loan Lender or Issuing Lender determines is necessary to compensate it for
any reduction in the rate of return on capital to an amount below that which
such Lender, Swing Loan Lender or Issuing Lender could have achieved but for
such Change and is attributable to this Agreement, the Loans, its L/C Interests,
the Letters of Credit or its obligation to make Loans or participate in Letters
of Credit hereunder. "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as hereafter defined) or (ii)
any adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender, Swing
Loan Lender or Issuing Lender or any Lending Installation or any corporation
controlling any Lender, Swing Loan Lender or Issuing Lender. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in the United
States of America on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States of America implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.4. Availability of Types of Advances. If the Required Lenders
---------------------------------
reasonably determine that (i) deposits of a type and maturity appropriate to
match fund Advances bearing interest at the Eurocurrency Rate are not available
or (ii) the interest applicable to a Type of Advance does not accurately reflect
the cost of making or maintaining such Advance, then the Agent shall suspend the
availability of the affected Type of Advance. If any Lender determines that
maintenance of its Eurocurrency Loans would violate any applicable law, rule,
regulation or directive, whether or not having the force of law, then such
Lender may by notice to the applicable Borrower, through the Agent, require that
any of its Eurocurrency Loans be promptly converted to an unaffected Type of
Loan until such illegality shall cease; and thereafter, any request for a
Eurocurrency Loan shall, with respect to such Lender, be deemed a request for an
Alternate Base Rate Loan.
65
<PAGE>
3.5. Funding Indemnification. If any payment of a Eurocurrency Advance
-----------------------
or a Swing Loan occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or otherwise
(including, without limitation, any conversion of an Alternate Currency Loan to
Dollars pursuant to Section 2.1.4(vi) or any receipt by a Lender of all or a
-----------------
portion of the principal of a Loan prior to the last day of the applicable
Interest Period as a result of a sale arranged by the Company pursuant to
Section 2.5.11) or a Eurocurrency Advance or Swing Loan is not made on the date
- --------------
specified by the applicable Borrower for any reason other than default by the
Lenders or applicable Swing Loan Lenders, such Borrower will indemnify each
Lender or Swing Loan Lender, as applicable for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurocurrency
Advance or Swing Loan. In connection with any assignment by any Lender pursuant
to Section 13.3 of any portion of the Loans made prior to the earlier of (i) the
------------
completion of the syndication of the facilities hereunder (as determined by the
Arranger) and (ii) ninety (90) days following the initial funding hereunder, if
any Borrower has Eurocurrency Loans outstanding an interest in which is being
assigned, then, unless the assigning Lender in its discretion agrees otherwise,
such Borrower shall be deemed to have repaid all outstanding Eurocurrency
Advances as of such date and reborrowed such amount as an Alternate Base Rate
Advance and/or Eurocurrency Advance (chosen in accordance with the provisions of
Article II) and the indemnification provisions under this Section 3.5 shall
- ---------- -----------
apply.
3.6. Mitigation of Additional Costs or Adverse Circumstances. If, in
--------------------------------------------------------
respect of any Lender, Swing Loan Lender and Issuing Lender, circumstances arise
which would or would upon the giving of notice result in:
(a) an increase in the liability of a Borrower to such Lender under
Section 3.1, 3.2 or 3.3 or
----------- --- ---
(b) the unavailability of a Type of Loan under Section 3.4;
-----------
then, without in any way limiting, reducing or otherwise qualifying the
applicable Borrower's obligations under any of the clauses referred to above in
this Section 3.6 and subject to Section 2.5.11, such Lender shall promptly upon
----------- --------------
becoming aware of the same notify the Agent thereof and shall, in consultation
with the Agent and the Company and to the extent that it can do so without
prejudice to its own position, take such reasonable steps as may be reasonably
open to it to mitigate the effects of such circumstances (including, without
limitation, (i) the transfer of its Loans to a Lending Installation in another
jurisdiction, (ii) the assignment of its rights and obligations hereunder to a
financial institution willing to participate in this facility or (iii) the
restructure of its participation in this facility in a manner which will avoid
the event in question and on terms mutually acceptable to such Lender, the Agent
and the Company). If and so long as a Lender has been unable to take, or has
not taken, steps acceptable to the Company to mitigate the effect of the
circumstances in question, such Lender shall be obliged, at the request of the
Company, to assign all its rights and obligations hereunder to a financial
institution nominated by the Company with the approval of the Agent and willing
to participate in the facility in place of such Lender; provided
66
<PAGE>
that such financial institution satisfies all of the requirements of this
Agreement including, but not limited to, providing the forms required by
Sections 2.5.15 and 13.3.2. Notwithstanding any such assignment, the obligations
- --------------- ------
of the Company under Sections 3.1, 3.2, 3.3 and 10.6 shall survive any such
------------ --- --- ----
assignment and be enforceable by such Lender.
3.7. Lender Statements; Survival of Indemnity. Each Lender, Swing Loan
----------------------------------------
Lender and Issuing Lender shall deliver a written statement of such Lender,
Swing Loan Lender or Issuing Lender as to the amount due, if any, under Section
-------
3.1, 3.2, 3.3 or 3.5. Such written statement shall set forth in reasonable
- --- --- --- ---
detail the event by reason of which such Lender, Swing Loan Lender or Issuing
Lender is entitled to make a claim for such amount and the calculations upon
which such Lender, Swing Loan Lender or Issuing Lender determined such amount,
which shall be final, conclusive and binding on the applicable Borrower in the
absence of manifest error. Determination of amounts payable under such Sections
in connection with a Eurocurrency Loan shall be calculated as though each Lender
funded its Eurocurrency Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Eurocurrency applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable within three (3) Business Days of demand after receipt by the
applicable Borrower of the written statement. Notwithstanding any contrary
provision of this Article III, no Borrower shall be required to make any
-----------
payments to any Lender, Swing Loan Lender or Issuing Lender pursuant to Sections
--------
3.2 or 3.3 with respect to periods of time more than 60 days prior to date upon
- --- ---
which such Lender's, Swing Loan Lender's or Issuing Lender's written statement
in accordance with the terms of this Section 3.7 is first delivered to the
-----------
applicable Borrower. The obligations of such Borrower under Sections 3.1, 3.2,
------------ ---
3.3 and 3.5 shall survive payment of any other of such Borrower's Obligations
- --- ---
and the termination of this Agreement.
ARTICLE IV: CONDITIONS PRECEDENT
--------------------
4.1. Initial Advance. The initial Advance hereunder shall occur no later
---------------
than October 30, 1998. No Lender shall be required to make the Term Loans or
any initial Revolving Loan or purchase participations in the Letters of Credit,
Swing Loans or Alternate Currency Loans hereunder, no Issuing Lender shall be
required to issue the initial Letter of Credit hereunder, and no Swing Loan
Lender shall be required to make any Swing Loans hereunder, and no Alternate
Currency Lender shall be required to make any Alternate Currency Loan hereunder
unless (a) the Company has furnished or caused to be furnished to the Agent with
sufficient copies for the Lenders:
(i) Copies of the articles of incorporation of each Borrower and each
Guarantor Subsidiary, together with all amendments, and a
certificate of good standing, both certified by the appropriate
governmental officer in its jurisdiction of incorporation, along
with copies, certified as a true up to date copy, dated not more
than fifteen (15) days prior to the date of this Agreement, by a
duly
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<PAGE>
authorized officer of each of the French Borrowing
Subsidiaries, of the constitutional documents of the French
Borrowing Subsidiaries, as filed with the Registry of Commerce
and Companies and a K-bis record, dated not more than fifteen
(15) days prior to the date of this Agreement.
(ii) Copies, certified by the Secretary or Assistant Secretary of
each Borrower and each Guarantor Subsidiary, of its by-laws,
"statuts" or comparable governance documents and of its Board
of Directors' resolutions (and resolutions of other bodies, if
any are deemed necessary by counsel for the Agent) authorizing
the execution of the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each Borrower and each Guarantor
Subsidiary, which shall identify by name and title and bear the
signature of the officers of such Borrower or such Guarantor
Subsidiary, as applicable, authorized to sign the Loan
Documents and, if applicable, to make borrowings hereunder,
upon which certificate the Agent, the Lenders, the Swing Loan
Lenders and the Issuing Lenders shall be entitled to rely until
informed of any change in writing by the Company.
(iv) A certificate, signed by a Financial Officer of the Company,
stating that on the initial Borrowing Date no Default or
Unmatured Default has occurred and is continuing.
(v) A certificate, signed by a Financial Officer of the Company,
stating that on the initial Borrowing Date the representations
and warranties contained in the Loan Documents are true and
correct in all material respects.
(vi) A written opinion of the counsel (a) to the Company and the
Guarantor Subsidiaries with respect to U.S. law addressed to
each of the Lenders, in substantially the form of Exhibit E
---------
hereto, (b) to the Company and the French Borrowing
Subsidiaries with respect to the laws of France addressed to
each of the Lenders in substantially the form of Exhibit F-1
-----------
hereto, (c) to the Company and the Dutch Borrowing Subsidiaries
with respect to the laws of The Netherlands addressed to each
of the Lenders in substantially the form of Exhibit F-2 hereto,
-----------
(d) to the Company and the German Borrowing Subsidiaries with
respect to the laws of Germany addressed to each of the Lenders
in substantially the form of Exhibit F-3 hereto, and (e) to the
-----------
Company and the UK Borrowing Subsidiaries with respect to
Scottish law addressed to each of the Lenders in substantially
the form of Exhibit F-4 hereto.
-----------
(vii) The Notes payable to the order of each of the Lenders.
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<PAGE>
(viii) Evidence satisfactory to the Agent and the Required Lenders
that the Company's directors and shareholders, and, to the
extent required under applicable law, the directors and
shareholders of any of the Company's Acquisition
Subsidiaries (and, to the extent required under applicable
law, the directors and shareholders of Schlumberger) shall
have approved the Schlumberger Acquisition.
(ix) Evidence of regulatory and legal approval, if any, for the
Schlumberger Acquisition and the financing described herein,
including without limitation any French or European Union
regulatory approvals.
(x) A Certificate signed by either the chief executive officer
or the chief financial officer of the Company that since
December 31, 1997, no change, event, development or
combination of developments shall have occurred which,
individually or in the aggregate has resulted in a Material
Adverse Effect on the business acquired pursuant to the
Schlumberger Acquisition.
(xi) Unqualified audited financial statements for the last three
fiscal years with respect to the fuel dispenser,
manufacturing, sales and service business units of
Schlumberger, certified by Befec Price Waterhouse, including
balance sheets, related profit and loss and reconciliation
of surplus statements and a statement of cash flows,
together with copies of such financial statements which have
been translated into English and converted into Dollar
Amounts as of and for the periods stated by Befec Price
Waterhouse.
(xii) An Officer's Certificate from a Financial Officer of the
Company with respect to value, solvency, and other
appropriate factual information regarding the Company and
its Subsidiaries, including without limitation the Borrowing
Subsidiaries, that after giving effect to the Schlumberger
Acquisition, the Company and its Subsidiaries, including the
Borrowing Subsidiaries, on a consolidated basis, are solvent
and will be solvent subsequent to incurring the Indebtedness
to be incurred in connection with the Schlumberger
Acquisition, will be able to pay their debts and liabilities
as they become due, and will not be left with unreasonably
small capital with which to engage in their businesses.
(xiii) Evidence reasonably satisfactory to the Agent that the
Borrowers and each of their Subsidiaries (a) has made a full
and complete assessment of the Year 2000 Issues; (b) has a
realistic and achievable program for remediating the Year
2000 Issues, including a timetable and budget of anticipated
costs; and (c) has a source of funds as required in such
budget.
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<PAGE>
(xiv) Pro Forma opening financial statements ("Pro Forma Opening
---------
Statements") giving effect to the Schlumberger Acquisition and
projections ("Updated Projections") updating the projections
dated as of June 16, 1998 ("Earlier Projections") previously
provided to the Agent, together with such information as the
Agents and the Required Lenders may reasonably request to
confirm the tax, legal, and business assumptions made in such
Pro Forma Opening Statements and Updated Projections which Pro
Forma Opening Statements and Updated Projections demonstrate,
in the reasonable judgment of the Agents and the Required
Lenders, together with all other information then available to
the Agents and the Required Lenders, that the ability of the
Company and its Subsidiaries to repay their debts and satisfy
their respective other obligations as and when due and to
comply with the financial covenants acceptable to the Agents
and Required Lenders has not changed in any material respect
from the Earlier Projections.
(xv) Such other documents as any Lender or its counsel may have
reasonably requested including without limitation those
documents set forth on the List of Closing Documents attached
hereto as Exhibit G.
---------
and (b)
(i) There shall be no injunction or temporary restraining order
which, in the judgment of the Agent or the Required Lenders,
would prohibit the making of the Advance or the consummation of
the Schlumberger Acquisition.
(ii) There shall be no litigation which would reasonably be expected
to result in a Material Adverse Effect.
(iii) The Agent and the Lenders shall be satisfied with the results
of the due diligence investigation of the Borrowing
Subsidiaries including, without limitation, contingent
liabilities and contractual obligations.
(iv) All financial, accounting and tax aspects of the Schlumberger
Acquisition shall be acceptable to the Agent and the Lenders.
(v) The representations and warranties contained in the Acquisition
Agreement shall be accurate in all material respects as of the
date of the Schlumberger Acquisition; the Acquisition Agreement
shall not have been amended or modified by the Company without
the prior agreement and consent of the Agent; and the
conditions to the consummation of the Schlumberger Acquisition
set forth in the Acquisition Agreement, other than the transfer
of funds, shall have been satisfied or, with the prior written
consent of the Agent, waived.
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<PAGE>
(vi) All obligations of the Company or the Borrowing Subsidiaries
under existing loan facilities shall have been prepaid (other
than Indebtedness scheduled on Schedule 6.18).
-------------
(vii) Liens creating a first priority security interest in the
Collateral subject to Liens permitted hereunder in favor of the
Agent on behalf of the Lenders shall have been granted pursuant
to the Loan Documents and appropriate financing statements
shall have been signed by the Borrowers in proper form for
filing in the appropriate jurisdictions to perfect such
security interests.
(viii) No Material Adverse Change shall have occurred since (i) May
31, 1998 in the case of the Company and its Subsidiaries (not
including the fuel dispenser, manufacturing, sales and service
business units of Schlumberger) and (ii) December 31, 1997 in
the case of the fuel dispenser, manufacturing, sales and
service business units of Schlumberger.
(ix) Each of the Loan Documents shall have been duly executed by the
Borrowers and the Subsidiary Guarantors parties thereto.
(x) The terms and conditions of the Seller Subordinated Notes,
including, without limitation, in respect of subordination
provisions, interest rate, maturity, amortization, premiums,
fees, blockage periods, standstill periods, covenants, events
of default and remedies, shall be acceptable to the Agent and
the Lenders.
(xi) The terms and conditions of the Seller Equity Interests issued
by the Company to Schlumberger shall be acceptable to the Agent
and the Lenders.
1. (xii) The Seller Senior Subordinated Note shall constitute payment of
not less than $170,000,000 of the purchase price for the
Schlumberger Acquisition. The Seller Junior Subordinated Note
shall constitute payment of not less than $40,000,000 of the
purchase price for the Schlumberger Acquisition. The Seller
Equity Interests shall constitute payment of not less than
$20,000,000 of the purchase price for the Schlumberger
Acquisition. Not less than $20,000,000 of the purchase price
for the Schlumberger Acquisition will be paid in additional
Seller Subordinated Notes or Seller Equity Interests (the
"Additional Junior Security").
4.2. Initial Advance to Each New Borrowing Subsidiary. No Lender shall
------------------------------------------------
be required to make an Advance hereunder or purchase participations in Letters
of Credit, Swing Loans or Alternate Currency Loans hereunder, no Issuing Lender
shall be required to issue a Letter of Credit hereunder, no Swing Loan Lender
shall be required to make any Swing Loans hereunder, and no
71
<PAGE>
Alternate Currency Lender shall be required to make any Alternate Currency
Loans, in each case, to a new Borrowing Subsidiary added after the Effective
Date unless (a) all such documents, instruments and agreements required by the
Agent granting a first priority security interest in substantially all of the
Property of such new Borrowing Subsidiary (subject to Liens permitted hereunder,
and other than property which the Agent and the Company agree to exclude, and
limited, in the case of a domestic Subsidiary pledging the Capital Stock of a
foreign subsidiary, to 65% of such issued and outstanding Capital Stock to
secure all of the Secured Obligations) in favor of the Agent on behalf of the
Lenders and the Holders of Secured Obligations shall have been executed and
ready to be filed in the appropriate jurisdictions and (b) the Company has
furnished or caused to be furnished to the Agent with sufficient copies for the
Lenders:
(i) The Assumption Letter executed and delivered by such Borrowing
Subsidiary and containing the written consent of the Company at
the foot thereof, as contemplated by Section 2.5.14.
--------------
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrowing Subsidiary, of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) approving the Assumption
Letter.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrowing Subsidiary, which shall
identify by name and title and bear the signature of the
officers of such Borrowing Subsidiary authorized to sign the
Assumption Letter and the other documents to be executed and
delivered by such Borrowing Subsidiary hereunder, upon which
certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by the Company.
(iv) An opinion of counsel to such Borrowing Subsidiary,
substantially in the form of Exhibit H hereto or, in the case
---------
of a new Non-Domestic Borrowing Subsidiary, in a form
reasonably acceptable to the Agent.
(v) The Notes payable to the order of each of the Lenders.
(vi) A pledge agreement in form and substance acceptable to the
Agent pursuant to which all of the outstanding Capital Stock of
such Borrowing Subsidiary is pledged to the Agent for the
benefit of itself and the Holders of Secured Obligations
limited, in the case of the Company or a domestic Subsidiary
pledging Capital Stock of a foreign subsidiary to 65% of such
issued and outstanding Capital Stock.
(vii) Guaranty documentation and contribution agreement documentation
from such Borrowing Subsidiary in form and substance acceptable
to the Agent.
72
<PAGE>
(viii) Collateral Documents with respect to such Borrowing
Subsidiary's Property in form and substance reasonably
acceptable to the Agent.
(ix) With respect to the initial Advance made to any UK Borrowing
Subsidiary, the Agent shall have received originals and/or
copies, as applicable, of all filings required to be made
establishing to the Agent's satisfaction that each Lender,
Swing Loan Lender or Issuing Lender is entitled to receive
payments under the Loan Documents without deduction or
withholding of any English taxes.
4.3. Each Advance and Letter of Credit. No Lender shall be required to
---------------------------------
make any Advance or Swing Loan (including, without limitation, the initial
Advance hereunder) or purchase participations in Letters of Credit, Swing Loans
or Alternate Currency Loans and no Issuing Lender shall be required to issue
Letters of Credit hereunder, unless on the applicable Borrowing Date:
(i) Prior to and after giving effect to such Advance, Swing Loan or
Letter of Credit there exists no Default or Unmatured Default.
(ii) The representations and warranties contained in the Loan
Documents are true and correct in all material respects as of
such Borrowing Date or date for issuance of such Letter of Credit
(except such representations and warranties which expressly
relate solely to, and were true and correct in all material
respects as of, an earlier date).
(iii) All legal and regulatory matters incident to the making of such
Advance or Swing Loan or issuing such Letter of Credit shall be
reasonably satisfactory to the Lenders and their counsel,
including, without limitation, the compliance by the Company and
its Subsidiaries with Regulations T, U and X.
Each borrowing or Letter of Credit shall constitute a representation and
warranty by the applicable Borrower that the conditions contained in Section
-------
4.3(i) and (ii) have been satisfied.
- ------ ----
ARTICLE V: REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Company and its
--------------------------------
domestic Borrowing Subsidiaries is duly incorporated or duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except to the extent that the
failure to be have such authority would not reasonably be expected to result in
a Material Adverse Effect. Each of the French Borrowing Subsidiaries is duly
incorporated and validly existing under
73
<PAGE>
the laws of France as a societe anonyme and has power to carry on its business
as it is now being conducted and to own its property and other assets.
5.2. Authorization and Validity. The Company and each of the Borrowing
--------------------------
Subsidiaries has the corporate or other power and authority and legal right to
execute and deliver the Loan Documents and to perform its obligations
thereunder. The execution and delivery by the Company and each of the Borrowing
Subsidiaries of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate or other proceedings,
and the Loan Documents constitute legal, valid and binding obligations of the
Company and each of the Borrowing Subsidiaries enforceable against them in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles. It is not
necessary to ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement that it or any other instrument be filed, recorded,
registered or enrolled in any court, public office or elsewhere in France or
that any stamp, registration or similar tax be paid in France or in relation to
this Agreement, except for the stamp duty known as "timbre de dimension" which
is due if this Agreement is signed in France. This Agreement, once translated
into French by a sworn translator before the French courts, is in proper form
for its enforcement in the courts of France.
5.3. No Conflict; Government Consent. Neither the execution and delivery
-------------------------------
by the Company and the Borrowing Subsidiaries of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate any law (including, without limitation, any law
of the United States of America, England, Scotland, The Netherlands, the
Republic of France or the European Community), rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Company or any of its
Borrowing Subsidiaries or the Company's or any Borrowing Subsidiary's articles
of incorporation or by-laws or the provisions of any indenture, instrument or
agreement to which the Company or any of its Borrowing Subsidiaries is a party
or is subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the Property of the Company or a Borrowing Subsidiary pursuant
to the terms of any such indenture, instrument or agreement, in any such case
which violation, conflict, default, creation or imposition could reasonably be
expected to have a Material Adverse Effect. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
the execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, any of the Loan Documents except filings necessary
to create or perfect security interests in the Collateral.
5.4. Financial Statements. The November 30, 1997 financial statements of
--------------------
the Company and its Consolidated Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with U.S. GAAP in effect on the date such
statements were prepared and fairly present the financial condition of the
Company and its Consolidated Subsidiaries at such date and the results of their
operations for the period then ended. The financial statements of the fuel
dispenser, manufacturing,
74
<PAGE>
sales and service business units of Schlumberger attached hereto as Schedule 5.4
------------
were prepared in accordance with U.S. GAAP in effect on the date such statements
were prepared and fairly present the financial condition of such units at such
date and the results of their operations for the period then ended.
5.5. Material Adverse Change. Since May 31, 1998, in the case of the
-----------------------
Company and its Subsidiaries and since December 31, 1997 in the case of the fuel
dispenser, manufacturing, sales and service business units of Schlumberger
acquired pursuant to the Schlumberger Acquisition there has occurred no Material
Adverse Change which have not been previously disclosed to the Agent.
5.6. Taxes. The Company and its Consolidated Subsidiaries have filed all
-----
United States federal income tax returns and all other material tax returns
which are required to be filed and have paid all material taxes due pursuant to
said returns or pursuant to any assessment received by the Company or any of its
Consolidated Subsidiaries, except such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. The United
States consolidated income tax returns of the Company and its Consolidated
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended November 30, 1990. To the best of the Company's knowledge,
the Borrowing Subsidiaries have filed all income tax returns and all other
material tax returns which are required to be filed pursuant to the laws of the
jurisdiction of their incorporation and any division thereof and have paid all
material taxes due pursuant to said returns or pursuant to any assessment
received by any of such Borrowing Subsidiaries, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company and
its Consolidated Subsidiaries in respect of any taxes or other governmental
charges are adequate. Provided that payments by the Borrowers are made in
accordance with this Agreement, no Taxes are imposed by withholding or otherwise
by the Republic of France on any payment to be made by the Borrowers under this
Agreement or are imposed on or by virtue of the execution or delivery by the
Borrowers of this Agreement or any document or instrument to be executed or
delivered under this Agreement, except for the stamp duty known as "timbre de
dimension" and the stamp duty known as "timbre d'enregistrement" each of which
is due if the Agreement is signed in France.
5.7. Litigation. There is no litigation, arbitration, governmental
----------
investigation, proceeding or inquiry pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect.
5.8. Subsidiaries. Schedule 5.8 hereto contains an accurate list of all
------------ ------------
of the presently existing Subsidiaries of the Company as of the Effective Date,
setting forth their respective jurisdictions of incorporation and the percentage
of their respective Capital Stock owned by the Company or other Subsidiaries.
All of the issued and outstanding shares of Capital Stock of the Material
Subsidiaries have been duly authorized and issued and are fully paid and non-
assessable.
75
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5.9. ERISA. Neither the Company nor any ERISA Affiliate maintains or
-----
contributes to any Plan as of the Effective Date other than those listed on
Schedule 5.9 hereto. Each Plan which is intended to be qualified under Section
- ------------
401(a) of the Internal Revenue Code as currently in effect has been determined
by the IRS to be so qualified, and each trust related to any such Plan has been
determined to be exempt from federal income tax under Section 501(a) of the
Internal Revenue Code as currently in effect. Except as disclosed in Schedule
--------
5.9, neither the Company nor any Subsidiary maintains or contributes to any
- ---
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA. The Company and all its ERISA Affiliates are
in compliance in all material respects with the responsibilities, obligations or
duties imposed on them by ERISA, the Internal Revenue Code and regulations
promulgated thereunder with respect to all Plans. No Benefit Plan has incurred
any accumulated funding deficiency (as defined in Sections 302(a)(2) of ERISA
and 412(a) of the Internal Revenue Code) whether or not waived. Neither the
Company nor any ERISA Affiliates nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt prohibited transaction
described in Sections 406 of ERISA or 4975 of the Internal Revenue Code or (ii)
has taken or failed to take any action which would constitute or result in a
Termination Event that could result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has any material liability of any kind
whatsoever, whether direct, indirect, contingent or otherwise, (i) on account of
any violation of the health care requirements of Part 6 of Title I of ERISA or
Section 4980B of the Code, (ii) under Section 502(i) or Section 502(l) of ERISA
or Section 4975 of the Code, (iii) under Section 302 of ERISA or Section 412 of
the Code or (iv) under Title IV of ERISA. Neither the Company nor any ERISA
Affiliate has incurred any liability to the PBGC which remains outstanding other
than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and furnished to the Lender is
complete and accurate. Since the date of each such Schedule B, there has been
no material adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B. Neither the Company nor any ERISA
Affiliate has (i) failed to make a required contribution or payment to a
Multiemployer Plan or (ii) suffered a complete or partial withdrawal under
Sections 4203 or 4205 of ERISA from a Multiemployer Plan. Neither the Company
nor any ERISA Affiliate has failed to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment. Neither the Company nor any
ERISA Affiliate is required to provide security to a Benefit Plan under Section
401(a)(29) of the Internal Revenue Code due to a Plan amendment that results in
an increase in current liability for the plan year. Except as disclosed on
Schedule 5.9, the Company does not have, by reason of the transactions
- ------------
contemplated hereby any obligation to make any payment to the employee pursuant
to any Plan or existing contract or arrangement. The Company has given to the
Agent copies of all of the following: each Benefit Plan and related trust
agreement (including all amendments to such Plan and trust) in existence or
committed to as of the Effective Date and in respect to which the Company or any
ERISA Affiliate is currently an "employer" as defined in Section 3(5) of ERISA,
and the most recent actuarial report, determination letter issued by the IRS and
Form 5500 filed in respect of each such Benefit Plan in existence; a listing of
all of the Multiemployer Plans currently contributed to by the
76
<PAGE>
Company or any ERISA Affiliate with the aggregate amount of the most recent
annual contributions required to be made by the Company and all ERISA Affiliates
to each such Multiemployer Plan, any information which has been provided to the
Company or an ERISA Affiliate regarding withdrawal liability under any
Multiemployer Plan and the collective bargaining agreement pursuant to which
such contribution is required to be made.
For purposes of this Section 5.9 and Section 6.19 below, the Company and any
----------- ------------
ERISA Affiliate shall be deemed to know all facts known by the Administrator of
any Plan of which the Company or any ERISA Affiliate is the plan sponsor.
5.10. Full Disclosure. The financial statements referred to in Section
--------------- -------
5.4 with respect to the Company and its Consolidated Subsidiaries, and, to the
- ---
best of the Company's knowledge with respect to Schlumberger, do not, nor do any
other written statements furnished by the Company to the Agent or the Lenders in
connection with the negotiation of the Loan Documents taken as a whole, contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading as of the dates thereof.
5.11. Assets and Properties. The Borrower and each of its Subsidiaries
---------------------
has good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets) (in each
case necessary for the conduct of its business), and all such assets and
property are free and clear of all Liens, except Liens securing the Obligations
and Liens permitted under Section 6.10. On the Effective Date, except as
------------
specified on Schedule 5.11, substantially all of the assets and properties owned
-------------
by, leased to or used by the Borrower and/or each such Subsidiary of the
Borrower (in each case necessary for the conduct of its business) are in
adequate operating condition and repair, ordinary wear and tear excepted. Except
for Liens granted to the Agent for the benefit of the Agent and the Lenders,
neither this Agreement nor any other Loan Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of the Borrower or such Subsidiary in and to any of such assets in a manner that
would have or is reasonably likely to have a Material Adverse Effect.
5.12. Patents and Trademarks. The Company and each Material Subsidiary
----------------------
owns or possesses all material patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for the
future conduct of its business, without any known material conflict with the
rights of others.
5.13. No Defaults. No Default or Unmatured Default has occurred and is
-----------
continuing. Neither the Company nor any Borrowing Subsidiary is in default in
the payment of principal or interest on any Indebtedness in excess of $3,000,000
(or the Equivalent Amount of Indebtedness if denominated in a currency other
than Dollars) in the aggregate, is not in default under any instrument or
instruments or agreements under and subject to which such Indebtedness has been
77
<PAGE>
issued, no event has occurred and is continuing under the provisions of any such
instrument or agreement which with the lapse of time or the giving of notice, or
both, would constitute an event of default thereunder and the Company is not in
violation of any term of its articles of incorporation.
5.14. Investment Company Act. Neither the Company nor any Subsidiary
----------------------
is an "investment company" or an "affiliated person" thereof or an "affiliated
person" of such affiliated person as such terms are defined in the Investment
Company Act of 1940, as amended.
5.15. Compliance with Environmental Laws. Neither the Company nor any
----------------------------------
Subsidiary has notice or knowledge of any violation of any applicable Federal,
state, regional, departmental or local laws, statutes, rules, regulations or
ordinances relating to public health, safety or the environment, including,
without limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or
urea formaldehyde, to the treatment, storage, disposal or management of
hazardous or dangerous substances (including, without limitation, petroleum,
crude oil or any fraction thereof, or other hydrocarbons), pollutants or
contaminants, to exposure to toxic, hazardous or other controlled, prohibited or
regulated substances or emissions which violation could reasonably be expected
to have a Material Adverse Effect. The total liability arising out of any
environmental matters, if adversely determined, would not reasonably be expected
to exceed a Substantial Portion.
5.16. Regulations T, U and X. The Company and its Subsidiaries,
----------------------
including the French Borrowing Subsidiaries, are in compliance with Regulations
T, U and X. Margin stock (as defined in Regulations U and X) constitutes less
than 25% of those assets of the Company and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder.
5.17. Filing. To ensure the enforceability or admissibility in evidence
------
of this Agreement and the Notes executed by any French Borrowing Subsidiary in
such French Borrowing Subsidiary's country of organization or incorporation and
country which is its principal place of business (each, a "SUBJECT COUNTRY"), it
is not necessary that this Agreement or the Notes of such French Borrowing
Subsidiary or any other document be filed or recorded with any court or other
authority in any Subject Country or that any stamp or similar tax be paid to or
in respect of this Agreement, except for the stamp duty known as "timbre de
dimension" which is due if this Agreement is signed in France, or the Notes of
such French Borrowing Subsidiary except as specified in Section 5.2. The
-----------
qualification by any Lender or the Agent for admission to do business under the
laws of any Subject Country does not constitute a condition to, and the failure
to so qualify does not affect, the exercise by any Lender or the Agent of any
right, privilege, or remedy afforded to any Lender or the Agent in connection
with the Loan Documents to which such French Borrowing Subsidiary is a party or
the enforcement of any such right, privilege, or remedy against such French
Borrowing Subsidiary. The performance by any Lender or the Agent of any action
required or permitted under the Loan Documents will not (i) violate any law or
regulation of any Subject Country or any political subdivision thereof, (ii)
result in any tax or other monetary liability
78
<PAGE>
to such party pursuant to the laws of any such Subject Country or political
subdivision or taxing authority thereof (provided that, should any such action
result in any such tax or other monetary liability to the Lender or the Agent,
the Company hereby agrees to indemnify such Lender or the Agent, as the case may
be, against (x) any such tax or other monetary liability and (y) any increase in
any tax or other monetary liability which results from such action by such
Lender or the Agent and, to the extent the Company makes such indemnification,
the incurrence of such liability by the Agent or any Lender will not constitute
a Default) or (iii) violate any rule or regulation of any federation or
organization or similar entity of which such Subject Country is a member.
5.18. No Immunity. No French Borrowing Subsidiary nor any of its assets
-----------
is entitled to immunity from suit, execution, attachment or other legal process.
Such French Borrowing Subsidiary's execution and delivery of the Loan Documents
to which it is a party constitute, and the exercise of its rights and
performance of and compliance with its obligations under such Loan Documents
will constitute, private and commercial acts done and performed for private and
commercial purposes.
5.19. Contingent Obligations. Other than any liability incident to any
----------------------
pending litigation, arbitration or proceedings, neither the Company nor any
Borrowing Subsidiary has material contingent obligations as of the Effective
Date not provided for or disclosed in the financial statements referred to in
Section 5.4.
- -----------
5.20. Foreign Employee Benefit Matters. Each Foreign Employee Benefit
--------------------------------
Plan is in compliance in all respects with all laws, regulations and rules
applicable thereto and the respective requirements of the governing documents
for such Plan, except for any non-compliance the consequences of which, in the
aggregate, would not result in a material obligation to pay money. The
aggregate of the accumulated benefit obligations under all Foreign Pension Plans
does not exceed the current Fair Market Value of the assets held in the trusts
or similar funding vehicles for such Plans or reasonable reserves have been
established in accordance with prudent business practices or as required by U.S.
GAAP with respect to any shortfall. With respect to any Foreign Employee
Benefit Plan maintained or contributed to by the Company or any Subsidiary or
any member of its Controlled Group (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the jurisdiction
in which such Plan is maintained. There are no actions, suits or claims (other
than routine claims for benefits) pending or, to the knowledge of the Borrowers,
threatened against the Company or any Subsidiary or any ERISA Affiliate with
respect to any Foreign Employee Benefit Plan.
5.21. French Withholding. As at the date of this Agreement, with
------------------
respect to any portion of the Aggregate Revolving Loan Commitment, the interest
referred to in Article II is not subject to withholding in France if the initial
----------
Lender in respect of such portion of the Term Loans or the Aggregate Revolving
Loan Commitment is (x) a non-French Bank and the debt claim in respect of which
such interest or commission or utilization commissions is not effectively
connected with the French branch (if any) of such non-French Bank, or (y) the
foreign branch of a French Bank, and
79
<PAGE>
the income of such branch is taxed in the country in which it is situated. If
any interest referred to in Article II due to a French Bank or to the French
----------
branch of a non-French Bank are paid to the Agent in accordance with the
provisions of Article XI, then, as at the date of this Agreement, such interest
----------
or commitment and utilization commission is not subject to any withholding in
France. For the purposes of this Section, a "French Bank" shall mean a Lender
incorporated in France, and a "non-French Bank" shall mean a Lender incorporated
in a country other than France.
5.22 Year 2000 Issues. Each of the Company and its Subsidiaries has made
----------------
a reasonable assessment of the Year 2000 Issues with respect to the Company and
its Subsidiaries (other than with respect to the Subsidiaries and assets
acquired from Schlumberger (the "Schlumberger Assets")) and has a realistic and
achievable program for remediating such Year 2000 Issues on a timely basis.
Tokheim Sofitam has made an initial assessment of the Year 2000 Issues with
respect to the Schlumberger Assets and believes it has a realistic and
achievable program for remediating such Year 2000 Issues on a timely basis.
Based on this assessment and program, the Company does not, as of the Effective
Date, reasonably anticipate any Material Adverse Effect on its or its
Subsidiaries' operations, business or financial condition as a result of Year
2000 Issues.
ARTICLE V-A: REPRESENTATIONS AND WARRANTIES OF ADDITIONAL
--------------------------------------------
FRENCH BORROWING SUBSIDIARIES
-----------------------------
Each French Borrowing Subsidiary which is a party hereto or which becomes a
party hereto after the Effective Date represents and warrants to the Lenders as
provided in this Article V-A that:
-----------
5A.1. Corporate Existence and Standing. Such French Borrowing
--------------------------------
Subsidiary is a societe anonyme duly incorporated, validly existing and in good
standing under the laws of France and has all requisite authority to conduct its
business as it is now being conducted except where the failure to have such
requisite authority would not have a Material Adverse Effect.
5A.2. Authorization and Validity. Such French Borrowing Subsidiary has
--------------------------
the corporate power and authority and legal right to execute and deliver the
Loan Documents to which it is a party and to perform its obligations thereunder.
The execution and delivery by such French Borrowing Subsidiary of the Loan
Documents to which it is a party and the performance by it of its obligations
thereunder have been duly authorized by proper corporate proceedings, and such
Loan Documents constitute legal, valid and binding obligations of such French
Borrowing Subsidiary enforceable against such French Borrowing Subsidiary in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5A.3. No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by such French Borrowing Subsidiary of the Loan Documents to which it
is a party, nor the consummation
80
<PAGE>
by it of the transactions therein contemplated to be consummated by it, nor
compliance by such French Borrowing Subsidiary with the provisions thereof will
violate any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on such French Borrowing Subsidiary or any of its Subsidiaries or
such French Borrowing Subsidiary's or any of its Subsidiaries' certificates or
articles of incorporation or by-laws (statuts) or the provisions of any
indenture, instrument or agreement to which such French Borrowing Subsidiary or
any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the Property of
such French Borrowing Subsidiary or any of its Subsidiaries pursuant to the
terms of any such indenture, instrument or agreement in any such case which
violation, conflict, default, creation or imposition could reasonably be
expected to have a Material Adverse Effect. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental agency is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents other than the mandatory filings with the relevant French Companies
Register and the French tax authorities, as the case may be.
5A.4. Filing. To ensure the enforceability or admissibility in evidence
------
of this Agreement and the Notes of such French Borrowing Subsidiary in France,
it is not necessary that this Agreement or the Notes of such French Borrowing
Subsidiary or any other document be filed or recorded with any court or other
authority in France or that any stamp or similar tax be paid to or in respect of
this Agreement or the Notes of such French Borrowing Subsidiary other than taxes
paid or payable in connection with any real property lien filings with respect
to the real property collateral and the stamp duty known as "timbre de
dimension" which is due if this Agreement is signed in France. The
qualification by any Lender or the Agent for admission to do business under the
laws of France does not constitute a condition to, and the failure to so qualify
does not affect, the exercise by any Lender or the Agent of any right,
privilege, or remedy afforded to any Lender or the Agent in connection with the
Loan Documents to which such French Borrowing Subsidiary is a party or the
enforcement of any such right, privilege, or remedy against such French
Borrowing Subsidiary. The performance by any Lender or the Agent of any action
required or permitted under the Loan Documents will not (i) violate any law or
regulation of France or any political subdivision thereof, (ii) result in any
tax or other monetary liability to such party pursuant to the laws of France or
political subdivision or taxing authority thereof (provided that, should any
such action result in any such tax or other monetary liability to the Lender or
the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as
the case may be, against (x) any such tax or other monetary liability and (y)
any increase in any tax or other monetary liability which results from such
action by such Lender or the Agent and, to the extent the Borrower makes such
indemnification, the incurrence of such liability by the Agent or any Lender
will not constitute a Default) or (iii) violate any rule or regulation of any
federation or organization or similar entity of which France is a member.
5A.5. No Immunity. Neither such French Borrowing Subsidiary nor any of
-----------
its assets is entitled to immunity from suit, execution, attachment or other
legal process. Such French
81
<PAGE>
Borrowing Subsidiary's execution and delivery of the Loan Documents to which it
is a party constitute, and the exercise of its rights and performance of and
compliance with its obligations under such Loan Documents will constitute,
private and commercial acts done and performed for private and commercial
purposes.
ARTICLE V-B: REPRESENTATIONS AND WARRANTIES OF
---------------------------------
EACH DUTCH BORROWING SUBSIDIARY
-------------------------------
Each Dutch Borrowing Subsidiary which is a party hereto or which becomes a
party hereto after the Effective Date represents and warrants to the Lenders as
provided in this Article V-B that:
-----------
5B.1. Corporate Existence and Standing. Such Dutch Borrowing
--------------------------------
Subsidiary is a private company with limited liability ("besloten vennootschap
met beperkte aansprakolijkheid") duly incorporated and validly existing and in
good standing under the laws of The Netherlands and has all requisite authority
to conduct its business as it is now being conducted except where the failure to
have such requisite authority would not have a Material Adverse Effect.
5B.2. Authorization and Validity. Such Dutch Borrowing Subsidiary has
--------------------------
the corporate power and authority and legal right to execute and deliver the
Loan Documents to which it is a party and to perform its obligations thereunder.
The execution and delivery by such Dutch Borrowing Subsidiary of the Loan
Documents to which it is a party and the performance by it of its obligations
thereunder have been duly authorized by proper corporate proceedings, and such
Loan Documents constitute legal, valid and binding obligations of such Dutch
Borrowing Subsidiary enforceable against such Dutch Borrowing Subsidiary in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
5B.3. No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by such Dutch Borrowing Subsidiary of the Loan Documents to which it is
a party, nor the consummation by it of the transactions therein contemplated to
be consummated by it, nor compliance by such Dutch Borrowing Subsidiary with the
provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Dutch Borrowing Subsidiary
or any of its Subsidiaries or such Dutch Borrowing Subsidiary's or any of its
Subsidiaries' articles of association ("statuten") or the provisions of any
indenture, instrument or agreement to which such Dutch Borrowing Subsidiary or
any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the Property of
such Dutch Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms
of any such indenture, instrument or agreement in any such case which violation,
conflict, default, creation or imposition could reasonably be expected to have a
Material Adverse Effect. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any governmental agency is required to
82
<PAGE>
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents other than the mandatory filings with the relevant
Dutch Companies Register ("handels-Register") and the Dutch tax authorities, as
the case may be.
5B.4. Filing. To ensure the enforceability or admissibility in evidence
------
of this Agreement and the Notes of such Dutch Borrowing Subsidiary in The
Netherlands, it is not necessary that this Agreement or the Notes of such Dutch
Borrowing Subsidiary or any other document be filed or recorded with any court
or other authority in The Netherlands or that any stamp or similar tax be paid
to or in respect of this Agreement or the Notes of such Dutch Borrowing
Subsidiary. The qualification by any Lender or the Agent for admission to do
business under the laws of The Netherlands does not constitute a condition to,
and the failure to so qualify does not affect, the exercise by any Lender or the
Agent of any right, privilege, or remedy afforded to any Lender or the Agent in
connection with the Loan Documents to which such Dutch Borrowing Subsidiary is a
party or the enforcement of any such right, privilege, or remedy against such
Dutch Borrowing Subsidiary. The performance by any Lender or the Agent of any
action required or permitted under the Loan Documents will not (i) violate any
law or regulation of The Netherlands or any political subdivision thereof, (ii)
result in any tax or other monetary liability to such party pursuant to the laws
of The Netherlands or political subdivision or taxing authority thereof
(provided that, should any such action result in any such tax or other monetary
liability to the Lender or the Agent, the Borrower hereby agrees to indemnify
such Lender or the Agent, as the case may be, against (x) any such tax or other
monetary liability and (y) any increase in any tax or other monetary liability
which results from such action by such Lender or the Agent and, to the extent
the Borrower makes such indemnification, the incurrence of such liability by the
Agent or any Lender will not constitute a Default) or (iii) violate any rule or
regulation of any federation or organization or similar entity of which The
Netherlands is a member.
5B.5. No Immunity. Neither such Dutch Borrowing Subsidiary nor any of
-----------
its assets is entitled to immunity from suit, execution, attachment or other
legal process. Such Dutch Borrowing Subsidiary's execution and delivery of the
Loan Documents to which it is a party constitute, and the exercise of its rights
and performance of and compliance with its obligations under such Loan Documents
will constitute, private and commercial acts done and performed for private and
commercial purposes.
ARTICLE V-C: REPRESENTATIONS AND WARRANTIES OF
---------------------------------
EACH GERMAN BORROWING SUBSIDIARY
--------------------------------
Each German Borrowing Subsidiary which is a party hereto or which becomes a
party hereto after the Effective Date represents and warrants to the Lenders as
provided in this Article V-C that:
-----------
83
<PAGE>
5C.1. Corporate Existence and Standing. Such German Borrowing
--------------------------------
Subsidiary is a limited liability company (GmbH) and upon registration with the
Commercial Registry will be duly incorporated and validly existing under the
laws of Germany, and has all requisite authority to conduct its business as it
is now being conducted except where the failure to have such requisite authority
would not have a Material Adverse Effect.
5C.2. Authorization and Validity. Such German Borrowing Subsidiary has
--------------------------
the corporate power and authority and legal right to execute and deliver the
Loan Documents to which it is a party and to perform its obligations thereunder.
The execution and delivery by such German Borrowing Subsidiary of the Loan
Documents to which it is a party and the performance by it of its obligations
thereunder have been duly authorized by proper corporate proceedings, and such
Loan Documents constitute legal, valid and binding obligations of such German
Borrowing Subsidiary enforceable against such German Borrowing Subsidiary in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
5C.3. No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by such German Borrowing Subsidiary of the Loan Documents to which it
is a party, nor the consummation by it of the transactions therein contemplated
to be consummated by it, nor compliance by such German Borrowing Subsidiary with
the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such German Borrowing
Subsidiary or any of its Subsidiaries or such German Borrowing Subsidiary's or
any of its Subsidiaries' certificates or articles of incorporation or by-laws
(Satzung or Gesellschaftevertrag) or the provisions of any indenture, instrument
or agreement to which such German Borrowing Subsidiary or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of such German
Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any
such indenture, instrument or agreement in any such case which violation,
conflict, default, creation or imposition could reasonably be expected to have a
Material Adverse Effect. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any governmental agency is required to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents other than the
mandatory filings with the relevant German Companies Register and the German tax
authorities, as the case may be.
5C.4. Filing. To ensure the enforceability or admissibility in evidence
------
of this Agreement and the Notes of such German Borrowing Subsidiary in Germany,
it is not necessary that this Agreement or the Notes of such German Borrowing
Subsidiary or any other document be filed or recorded with any court or other
authority in Germany or that any stamp or similar tax be paid to or in respect
of this Agreement or the Notes of such German Borrowing Subsidiary. The
qualification by any Lender or the Agent for admission to do business under the
laws of Germany does not constitute a condition to, and the failure to so
qualify does not affect, the exercise by any Lender or the Agent of any right,
privilege, or remedy afforded to any Lender or the Agent in connection with
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the Loan Documents to which such German Borrowing Subsidiary is a party or the
enforcement of any such right, privilege, or remedy against such German
Borrowing Subsidiary. The performance by any Lender or the Agent of any action
required or permitted under the Loan Documents will not (i) violate any law or
regulation of Germany or any political subdivision thereof, (ii) result in any
tax or other monetary liability to such party pursuant to the laws of Germany or
political subdivision or taxing authority thereof (provided that, should any
such action result in any such tax or other monetary liability to the Lender or
the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as
the case may be, against (x) any such tax or other monetary liability and (y)
any increase in any tax or other monetary liability which results from such
action by such Lender or the Agent and, to the extent the Borrower makes such
indemnification, the incurrence of such liability by the Agent or any Lender
will not constitute a Default) or (iii) violate any rule or regulation of any
federation or organization or similar entity of which Germany is a member.
5C.5. No Immunity. Neither such German Borrowing Subsidiary nor any of
-----------
its assets is entitled to immunity from suit, execution, attachment or other
legal process. Such German Borrowing Subsidiary's execution and delivery of the
Loan Documents to which it is a party constitute, and the exercise of its rights
and performance of and compliance with its obligations under such Loan Documents
will constitute, private and commercial acts done and performed for private and
commercial purposes.
ARTICLE V-D: REPRESENTATIONS AND WARRANTIES OF
---------------------------------
EACH UK BORROWING SUBSIDIARY
----------------------------
Each UK Borrowing Subsidiary which is a party hereto or which becomes a
party hereto after the Effective Date represents and warrants to the Lenders as
provided in this Article V-A that:
-----------
5D.1. Corporate Existence and Standing. Such UK Borrowing Subsidiary
--------------------------------
is a limited liability company duly incorporated and validly existing under the
laws of England or Scotland (as applicable) and has all requisite authority to
conduct its business as it is now being conducted except where the failure to
have such requisite authority would not have a Material Adverse Effect.
5D.2. Authorization and Validity. Such UK Borrowing Subsidiary has the
--------------------------
corporate power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder. The
execution and delivery by such UK Borrowing Subsidiary of the Loan Documents to
which it is a party and the performance by it of its obligations thereunder have
been duly authorized by proper corporate proceedings, and such Loan Documents
constitute legal, valid and binding obligations of such UK Borrowing Subsidiary
enforceable against such UK Borrowing Subsidiary in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.
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<PAGE>
5D.3. No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by such UK Borrowing Subsidiary of the Loan Documents to which it is a
party, nor the consummation by it of the transactions therein contemplated to be
consummated by it, nor compliance by such UK Borrowing Subsidiary with the
provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such UK Borrowing Subsidiary or
any of its Subsidiaries or such UK Borrowing Subsidiary's or any of its
Subsidiaries' memoranda or articles of association or the provisions of any
indenture, instrument or agreement to which such UK Borrowing Subsidiary or any
of its Subsidiaries is a party or is subject, or by which it, or its Property,
is bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of such UK
Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any
such indenture, instrument or agreement in any such case which violation,
conflict, default, creation or imposition could reasonably be expected to have a
Material Adverse Effect. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any governmental agency is required to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents.
5D.4. Filing. To ensure the enforceability or admissibility in
------
evidence of this Agreement and the Notes of such UK Borrowing Subsidiary in the
United Kingdom, it is not necessary that this Agreement or the Notes of such UK
Borrowing Subsidiary or any other document be filed or recorded with any court
or other authority in the United Kingdom or that any stamp or similar tax be
paid to or in respect of this Agreement or the Notes of such UK Borrowing
Subsidiary. The qualification by any Lender or the Agent for admission to do
business under the laws of the United Kingdom does not constitute a condition
to, and the failure to so qualify does not affect, the exercise by any Lender or
the Agent of any right, privilege, or remedy afforded to any Lender or the Agent
in connection with the Loan Documents to which such UK Borrowing Subsidiary is a
party or the enforcement of any such right, privilege, or remedy against such UK
Borrowing Subsidiary. The performance by any Lender or the Agent of any action
required or permitted under the Loan Documents will not (i) violate any law or
regulation of the United Kingdom or any political subdivision thereof, (ii)
result in any tax or other monetary liability to such party pursuant to the laws
of the United Kingdom or political subdivision or taxing authority thereof
(provided that, should any such action result in any such tax or other monetary
liability to the Lender or the Agent, the Borrower hereby agrees to indemnify
such Lender or the Agent, as the case may be, against (x) any such tax or other
monetary liability and (y) any increase in any tax or other monetary liability
which results from such action by such Lender or the Agent and, to the extent
the Borrower makes such indemnification, the incurrence of such liability by the
Agent or any Lender will not constitute a Default) or (iii) violate any rule or
regulation of any federation or organization or similar entity of which the
United Kingdom is a member.
5D.5. No Immunity. Neither such UK Borrowing Subsidiary nor any of its
-----------
assets is entitled to immunity from suit, execution, attachment or other legal
process. Such UK Borrowing Subsidiary's execution and delivery of the Loan
Documents to which it is a party constitute, and the exercise of its rights and
performance of and compliance with its obligations under such Loan
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<PAGE>
Documents will constitute, private and commercial acts done and performed for
private and commercial purposes.
ARTICLE VI: COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Company will maintain, for itself and each
-------------------
Consolidated Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Agent, for distribution to the Lenders:
(i) Within 90 days after the close of each of its fiscal years,
an unqualified audit report (with all amounts stated in
Dollars) certified by independent certified public
accountants acceptable to the Required Lenders, prepared in
accordance with U.S. GAAP on a consolidated basis for itself
and the Consolidated Subsidiaries, including balance sheets
as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of
cash flows, accompanied by a certificate of said accountants
that, in the course of their examination necessary for their
certification of the foregoing, they have (x) reviewed the
calculations in respect of EBITDA for purposes of
calculating the financial covenants set forth in Article VI
----------
and such calculations of EBITDA have been adequately
prepared in accordance with the terms of this Agreement, and
(y) obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature
and status thereof.
(ii) Within 60 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Consolidated Subsidiaries, unaudited balance sheets as at
the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period from
the beginning of such fiscal year to the end of such
quarter, all certified by its Financial Officer.
(iii) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit
-------
I hereto signed by its Financial Officer showing the
-
calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured
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Defaullt exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(iv) Promptly upon the furnishing thereof to the shareholders of
the Company, copies of all financial statements, reports and
proxy statements so furnished.
(v) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Company or any of its Subsidiaries files
with the Securities and Exchange Commission.
(vi) As soon as practicable, and in any event within thirty (30)
days after the close of each calendar month, with sufficient
copies for the Lenders, a Borrowing Base Certificate,
together with such supporting documents as the Agent may
reasonably request, all certified as being true and correct
by a Financial Officer. The Company may update the Borrowing
Base Certificates and supporting documents more frequently
than monthly and the most recently delivered Borrowing Base
Certificates shall be the applicable Borrowing Base
Certificates for purposes of determining the Borrowing Base
at any time.
(vii) As soon as practicable and in any event not later than
ninety (90) days after the beginning of each fiscal year
commencing with the fiscal year beginning December 1, 1999,
for itself and the Consolidated Subsidiaries, a copy of the
plan and forecast (including a projected balance sheet,
income statement and a statement of cash flow and
management's discussion of business assumptions with respect
thereto) for the upcoming fiscal year prepared in such
detail as shall be reasonably satisfactory to the Agent.
(viii) Such other information (including non-financial information)
as the Agent or any Lender may from time to time reasonably
request.
6.2. Use of Proceeds. The Company will use the proceeds of the Term Loan
---------------
to refinance existing Indebtedness, fund the Schlumberger Acquisition pursuant
to the Acquisition Agreement, and for payment of expenses incurred in connection
therewith. The Borrowers shall use the proceeds of the Revolving Loans to
refinance existing Indebtedness of the Borrowers, for Permitted Acquisitions, to
provide funds for the additional working capital needs and other general
corporate purposes of the Company and its Subsidiaries. The French Borrowing
Subsidiaries, the Dutch Borrowing Subsidiaries, the German Borrowing
Subsidiaries and the UK Borrowing Subsidiaries will use the proceeds of each
Advance, to the extent a portion of such Advance is lent to any one of them,
solely for general corporate purposes, excluding the purchase of the Capital
Stock of any of the Non-Domestic Borrowing Subsidiaries. None of the proceeds
of the Advances shall be used to purchase or carry Margin Stock (as defined in
Regulation U) or in any manner
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<PAGE>
which would violate or cause any Lender to be in violation of Regulations T, U
or X of the Board of Governors of the Federal Reserve System.
6.3. Notice of Default. The Company will, and will cause each of its
------------------
Material Subsidiaries to, give prompt notice in writing to the Agent of the
occurrence of any Default or Unmatured Default.
6.4. Corporate Existence. The Company will, and will cause each domestic
-------------------
Material Subsidiary to, do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted except to
the extent that the failure to maintain such authority would not reasonably be
expected to result in a Material Adverse Effect. The Company will cause each
non-domestic Material Subsidiary to do all things necessary to remain duly
organized, validly existing and in good standing in its jurisdiction of
organization and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except to the extent that
the failure to maintain such authority would not reasonably be expected to
result in a Material Adverse Effect.
6.5. Taxes. The Company will, and will cause each Material Subsidiary
-----
to, pay when due all material taxes, assessments and governmental charges and
levies upon it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
6.6. Insurance. The Company will, and will cause each Material
---------
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice.
6.7. Compliance with Laws. The Company will, and will cause each
--------------------
Material Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, including,
without limitation, laws relating to pension funds and environmental
liabilities, which, if violated, could reasonably be expected to have a Material
Adverse Effect.
6.8. Inspection. The Company will, and will cause each Material and
----------
Borrowing Subsidiary to, permit the Lenders, by their respective representatives
and agents, to inspect any of the Properties, corporate books and financial
records of the Company and each such Subsidiary, to examine and make copies of
the books of accounts and other financial records of the Company and each such
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each such Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Lenders may designate,
provided that, after the occurrence and during the continuance of a Default, the
preceding references to "each Material and Borrowing Subsidiary" and "such
Subsidiary" shall be deemed to refer to each Subsidiary of the Company, whether
or not such Subsidiary is a Borrowing Subsidiary or a Material Subsidiary. The
expenses
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<PAGE>
incurred by the Lenders in connection with the first two such inspections
(including the field audit provided for in the following sentence) in any fiscal
year, and all inspections which occur after the occurrence and during the
continuance of a Default, shall be reimbursed by the Company promptly following
the Agent's demand. In addition, the Agent shall, in each fiscal year, conduct
one field audit of the Borrowers, including an audit of each Borrower's
financial condition (including each such Borrower's accounts receivable,
accounts payable, and inventory), business operations and Properties, and the
Company shall pay the Agent's customary field audit charges and expenses in
connection with such field audits.
6.9. Sale of Assets. The Company will not, nor will it permit any
--------------
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property for not less
than Fair Market Value and for consideration consisting of at
least eighty percent (80%) cash and Cash Equivalents, that,
together with all other Property of the Company and its
Subsidiaries previously leased, sold or disposed of (other than
inventory in the ordinary course of business) as permitted by this
Section during the twelve-month period ending with the month in
which any such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of the Company
and its Subsidiaries.
(iii) Sales of obsolete, surplus or worn-out equipment.
(iv) Sales or other transfers of assets from a Borrower or Subsidiary
Guarantor to another Borrower or Subsidiary Guarantor.
(v) Sales of accounts receivables which the Company has classified as
uncollectible.
(vi) Sales or other dispositions of Cash Equivalents.
(vii) Sales or leases of real property described on Schedule 6.9.
------------
(viii) Leases, sales or other dispositions not otherwise permitted by the
foregoing clauses of this Section in an aggregate amount not to
exceed $500,000 in any fiscal year.
(ix) Sales, assignments or discounting of "traites" (within the meaning
of French law) or similar post-dated checks or trade receivables
or invoices without recourse in the ordinary course of business in
an aggregate amount not to exceed $6,000,000 outstanding at any
one time.
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(x) The sale of the stock of the Subsidiary of Tokheim Sofitam to
which Tokheim Sofitam contributed its Bulk Meter business.
6.10. Liens. The Company will not, nor will it permit any Consolidated
-----
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Company or any Consolidated Subsidiary, except:
(i) Liens existing on the date of this Agreement securing
Indebtedness outstanding on the date of this Agreement as
set forth on Schedule 6.10 attached hereto;
-------------
(ii) any Lien existing on any Property of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event, provided that
such Lien does not extend to or cover any Property of the
Company or any other Consolidated Subsidiary;
(iii) any Lien on any Property securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the
cost of acquiring such Property, provided that such Lien
attaches to such Property concurrently with or within 120
days after the acquisition thereof and such Lien does not
extend to or cover any Property of the Company or any
Consolidated Subsidiary other than the Property then being
acquired;
(iv) any Lien on any Property of any other corporation existing
at the time such corporation is merged or consolidated with
or into the Company or a Consolidated Subsidiary and not
created in contemplation of such event, provided that such
Lien does not extend to or cover any Property of the Company
or any Consolidated Subsidiary other than the Property of
such other corporation;
(v) any Lien existing on any Property prior to the acquisition
thereof by the Company or a Consolidated Subsidiary and not
created in contemplation of such acquisition, provided that
such Lien does not extend to or cover any Property of the
Company or any Consolidated Subsidiary other than the
Property then being acquired;
(vi) any Lien arising out of the refinancing, extension, renewal
or refunding of any Indebtedness secured by any Lien
permitted by any of the foregoing clauses of this Section,
provided that such Indebtedness is not increased and is not
secured by any additional Property;
(vii) Liens incidental to the conduct of its business or the
ownership of its Property which (i) do not secure
Indebtedness and (ii) do not in the
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aggregate materially detract from the value of its Property
or materially impair the use thereof in the operation of its
business;
(viii) Statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen
and other similar Liens imposed by law created in the
ordinary course of business for amounts not yet due or which
are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance
with U.S. GAAP.
(ix) Liens in favor of the Agent for the benefit of itself and
the Holders of Secured Obligations to secure the Secured
Obligations.
(x) Liens not otherwise permitted by the foregoing clauses of
this Section securing Indebtedness in an aggregate principal
amount at any time outstanding not to exceed $15,000,000.
(xi) Liens on assets of Subsidiaries that are not Wholly-Owned to
secure Indebtedness permitted under Section 6.18(ix).
----------------
(xii) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings; provided, that
--------
adequate reserves with respect thereto or other appropriate
provisions are being maintained in conformity with U.S.
GAAP.
(xiii) Pledges or deposits in connection with workers'
compensation, unemployment insurance and other social
security legislation.
(xiv) Deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business in an aggregate amount not to exceed
$5,000,000 at any time.
(xv) Liens, if any, created through the sale, assignment or
discounting of "traites" or trade receivables or invoices to
the extent permitted by Section 6.9.
-----------
6.11. Rentals. Neither the Company nor any Subsidiary shall have as of
-------
the end of the fiscal year obligations for Rentals in excess of the amounts set
forth below as of the dates set forth below in the aggregate for the Company and
its Subsidiaries:
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Fiscal Year Ending On or About
the Dates Set Forth Below Maximum Amount
November 30, 1998 $11,000,000
November 30, 1999 $13,000,000
November 30, 2000 $15,000,000
November 30, 2001 $17,000,000
Thereafter $19,000,000
6.12. Consolidated Net Worth. The Company shall maintain, as of the end
----------------------
of each fiscal quarter, Consolidated Net Worth of not less than the sum of
(i)$53,000,000 plus (ii) sixty percent (60%) of Consolidated Net Income (if
----
positive) for each fiscal year of the Company commencing with the fiscal year
ending on or about November 30, 1998 and concluding with the fiscal year ending
most recently prior to the date of determination but without deduction for any
fiscal year in which there is a loss plus (iii) 100% of Net Cash Proceeds
----
received after the Effective Date from the issuance of Capital Stock of the
Company or any of its Subsidiaries to any Person other than the Company or its
Subsidiaries.
6.13. Dividends. The Company will not, nor will it permit any
---------
Subsidiary to, declare or pay any dividends or make any distributions on its
Capital Stock (other than dividends payable in its own Capital Stock) or redeem,
repurchase or otherwise acquire or retire any of its Capital Stock at any time
outstanding, except that (a) any Subsidiary may declare and pay dividends or
make distributions to the Company or to a Wholly-Owned Subsidiary and (b) the
Company may declare and pay dividends the proceeds of which are used to make
required payments on the ESOP Loans, and, after the ESOP Loans are repaid, to
fulfill the Company's obligations in connection with the Company's agreements
with its Employee Stock Ownership Plan, and (c) to repurchase stock options
provided to its employees.
6.14 Additional Guarantors/Pledge of Capital Stock. (i) The Company
---------------------------------------------
will cause each Person that becomes a material (as defined in Section 1-
02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as
amended) direct or indirect domestic Subsidiary of the Company after the date of
this Agreement (whether as the result of an Acquisition, creation or otherwise)
to execute and deliver (a) an agreement evidencing the pledge, to the Agent, for
the benefit of the Holders of Secured Obligations, of all of the Capital Stock
owned by such Subsidiary of each material (as defined in Section 1-02(w)(1), (2)
or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct
domestic Subsidiary of such Subsidiary, (b) a Subsidiary Guaranty and Subsidiary
Security Agreement to and in favor of the Agent for the benefit of itself and
the Holders of Secured Obligations and (c) a supplement to the Contribution
Agreement, in each case together with an opinion of counsel, corporate
resolutions, opinions of counsel, stock certificates, stock powers, UCC
financing statements with respect to the Capital Stock Collateral and such other
corporate documentation as the Agent may reasonably request, all in form and
substance reasonably satisfactory to the Agent and in each case within 30 days
after becoming a direct or indirect material Subsidiary of the Company. Subject
to applicable law, the Company will
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<PAGE>
cause each Person that becomes a material (as defined in Section 1-02(w)(1), (2)
or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct or
indirect Non-Domestic Borrowing Subsidiary after the date of this Agreement
(whether as the result of an Acquisition, creation or otherwise) to execute and
deliver a guaranty and security documentation to and in favor of the Agent for
the benefit of itself and the Holders of Secured Obligations with respect to the
Loans made to Non-Domestic Borrowing Subsidiaries, in each case together with an
opinion of counsel, corporate resolutions and such other corporate documentation
as the Agent may reasonably request, all in form and substance reasonably
satisfactory to the Agent and in each case within 30 days after becoming a
material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under
the Securities Act of 1933, as amended) direct or indirect Non-Domestic
Borrowing Subsidiary of the Company.
(ii) The Company shall execute and deliver an agreement evidencing the
pledge, to the Agent, for the benefit of the Holders of Secured Obligations, of
(A) all of the Capital Stock owned by the Company of each Person that becomes a
material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under
the Securities Act of 1933, as amended) direct domestic Subsidiary of the
Company after the date of this Agreement (whether as the result of an
Acquisition, creation or otherwise); and (B) the lesser of 65% of the Capital
Stock of each Person that becomes a material (as defined in Section 1-02(w)(1),
(2) or (3) of Regulation S-X under the Securities Act of 1933, as amended)
direct first-tier foreign Subsidiary of the Company after the date of this
Agreement (whether as the result of an Acquisition, creation or otherwise) or
the amount owned by the Company, within thirty (30) days after such Subsidiary
has become a Subsidiary of the Company, together, in each such case, with
corporate resolutions, opinions of counsel, stock certificates, stock powers and
such other corporate documentation as the Agent may reasonably request, all in
form and substance reasonably satisfactory to the Agent.
(iii) If at any time any foreign Subsidiary subject to clause (ii) shall
-----------
issue or cause to be issued Capital Stock, or warrants or options with respect
to its Capital Stock, such that the aggregate amount of the Capital Stock of
such Subsidiary pledged to the Agent for the benefit of the Holders of Secured
Obligations is less than 65% of all of the outstanding Capital Stock thereof and
the Company or one of its Subsidiaries owns such Capital Stock, warrants or
options which are not so pledged, the Company shall (A) promptly notify the
Agent of such deficiency and (B) deliver or cause to be delivered any
agreements, instruments, certificates and other documents as the Agent may
reasonably request all in a form and substance reasonably satisfactory to the
Agent in order to cause all of the Capital Stock thereof owned by the Company or
any of its Subsidiaries (but not in excess of 65% of all of the outstanding
Capital Stock thereof) to be pledged to the Agent for the benefit of the Holders
of Secured Obligations.
6.15 Sale and Leaseback Transactions or other Off Balance Sheet
----------------------------------------------------------
Liabilities. The Company will not, nor will it permit any Subsidiary to, enter
- -----------
into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other
transaction pursuant to which it incurs or has incurred Off Balance Sheet
Liabilities (other than Rate Hedging Obligations permitted to be incurred under
the terms of Section 6.22).
------------
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6.16 Merger and Consolidation. The Company will not, nor will it permit
------------------------
any Subsidiary to, merge or consolidate with or into any other Person, except
that a Subsidiary may merge into the Company or a Wholly-Owned Subsidiary.
6.17 Investments and Acquisitions. The Company will not, nor will it
----------------------------
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner or member in any partnership, limited liability company or
joint venture, or to make any Acquisition of any Person, except Investments
consisting of:
(i) Cash Equivalents.
(ii) Demand deposit accounts maintained in the ordinary course of
business.
(iii) Existing Investments in Subsidiaries and other Investments in
existence or currently planned on the date hereof and described in
Schedule 6.17 hereto.
-------------
(iv) Loans permitted under Section 6.18(ii), (iv), (v), (vi), (vii),
---------------- ---- --- ---- -----
(viii), (x) and (xii).
------ --- -----
(v) Investments received in connection with the sale or other
disposition of assets or received in connection with the collection
or compromise of accounts receivable.
(vi) only so long as the Leverage Ratio (calculated after giving effect
to such acquisition (including the incurrence of any Indebtedness)
on a pro forma basis for the Company and its Consolidated
--- -----
Subsidiaries as of the date of such acquisition), shall be less than
or equal to 4.5 to 1.0 and excluding those acquisitions set forth on
Schedule 6.17 hereto, acquisitions which satisfy all of the
-------------
following conditions:
(a) all acquisitions permitted by this subsection 6.17(vi) shall
-------------------
require the Company or any of its Subsidiaries to pay in cash
(or assume Indebtedness) an aggregate amount for all such
acquisitions not in excess of $5,000,000 or the Equivalent
Amount thereof;
(b) no Default or Unmatured Default shall have occurred and be
continuing at the time of the closing of any such acquisition
or would result therefrom;
(c) the business being acquired is substantially similar, related
or incidental to the business of the Company and its
Subsidiaries;
(d) the acquisition is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis;
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<PAGE>
(e) any additional Collateral Documents considered appropriate by
the Agent are executed by the applicable Person and, if
appropriate, filed;
(f) prior to any such acquisition, the Company shall deliver to
the Agent (i) a certificate demonstrating to the satisfaction
of the Agent that after giving effect to the acquisition on a
pro forma basis, the Company and its Subsidiaries will be in
compliance with the financial covenants in this Agreement and
(ii) such other information as the Agent shall reasonably
request.
6.18 Indebtedness. The Company will not, nor will it permit any
------------
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans, Reimbursement Obligations, ESOP Loans, other
Indebtedness under the Loan Documents and Permitted Subordinated
Debt.
(ii) Indebtedness existing on or about the date hereof and described
in Schedule 6.18 hereto.
-------------
(iii) Indebtedness arising under Rate Hedging Obligations permitted by
Section 6.22.
------------
(iv) Indebtedness of Tokheim Sofitam or a Borrowing Subsidiary to the
Company arising from loans made on or about the Effective Date by
the Company to such Subsidiary on terms and with interest rates
reasonably acceptable to the Agent and evidenced by notes pledged
to the Agent to secure the Secured Obligations.
(v) Indebtedness of any Subsidiary to the Company or Tokheim Sofitam or
any other Borrower pursuant to management agreements or other
similar agreements acceptable to the Agent.
(vi) Indebtedness of the Company to any Subsidiary in connection with
loans made by any such Subsidiary to the Company.
(vii) Indebtedness of any of the Borrowers or Guarantor Subsidiaries to
any of the Borrowers or Guarantor Subsidiaries evidenced by loan
agreements or notes pledged to the Agent to secure the Secured
Obligations; provided that the Non-Domestic Borrowing Subsidiaries
--------
shall pledge the notes to secure the Secured Obligations of the
Non-Domestic Borrowing Subsidiaries.
(viii) Indebtedness of Subsidiaries that are neither Borrowers nor
Guarantor Subsidiaries not otherwise permitted by the foregoing
clauses of this Section provided the aggregate outstanding
principal amount of all such Indebtedness does not at any time
exceed $20,000,000.
96
<PAGE>
(ix) Indebtedness secured by Liens permitted pursuant to Section
-------
6.10(iii), (iv) and (v), Indebtedness in connection with overdraft
--------- ---- ---
facilities and other Indebtedness not otherwise permitted by the
foregoing clauses of this Section provided the aggregate
outstanding principal amount for all such Indebtedness described in
this Section 6.18(ix) does not at any time exceed $15,000,000.
----------------
(x) Indebtedness of any Subsidiary in connection with sales made to
such Subsidiary on normal trade terms.
(xi) Indebtedness in connection with sales, assignments or discounting
of "traites" or trade receivables or invoices to the extent
permitted by Section 6.9.
-----------
(xii) Permitted Refinancing Indebtedness with respect to Indebtedness
permitted pursuant to Sections 6.18(i) through (xi).
---------------- ----
6.19 ERISA.
-----
(a) ERISA Information. The Company shall deliver or cause to be delivered
-----------------
to the Agent, at the Company's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after the Company or any ERISA
Affiliate knows or has reason to know that a Termination Event has
occurred, a written statement of the chief financial officer of the
Company describing such Termination Event and the action, if any, which
the Company or any ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or threatened
by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Company or any ERISA
Affiliate knows or has reason to know that a non-exempt prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the Internal
Revenue Code) with respect to any Plan has occurred, a statement of the
chief financial officer of the Company describing such transaction and the
action which the Company or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days after the request by the Agent
or the Required Lenders therefor, copies of each annual report (Form 5500
Series), including Schedule B thereto, filed with respect to each Benefit
Plan.
(iv) within ten (10) Business Days after request therefor by the
Agent or the Required Lenders, each actuarial report for any Benefit Plan
or Multiemployer Plan and each annual report for any Multiemployer Plan,
copies of each such report;
97
<PAGE>
(v) within ten (10) Business Days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Company or any ERISA
Affiliate with respect to such request;
(vi) within ten (10) Business Days upon the occurrence thereof,
notification of any material increase in the benefits of any existing Plan
or the establishment of any new Plan or the commencement of contributions
to any Plan to which the Company or any ERISA Affiliate was not previously
contributing;
(vii) within ten (10) Business Days after receipt by the Company or
any ERISA Affiliate of the PBGC's intention to terminate a Benefit Plan or
to have a trustee appointed to administer a Benefit Plan, copies of each
such notice;
(viii) within ten (10) Business Days after receipt by the Company or
any ERISA Affiliate of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such letter;
(ix) within ten (10) Business Days after receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, copies of each such notice;
(x) within ten (10) Business Days after the Company or any ERISA
Affiliate fails to make a required installment or any other required
payment under Section 412 of the Internal Revenue Code on or before the due
date for such installment or payment, a notification of such failure;
(xi) within ten (10) Business Days after the Company or any ERISA
Affiliate knows or has reason to know (a) a Multiemployer Plan has been
terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted
or will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan; and
(xii) within ten (10) Business Days after receipt by the Company of
a written notice from the Agent or the Required Lenders, copies of any
Foreign Employee Benefit Plan and related documents, reports and
correspondence as requested by the Lenders in such notice.
(b) The Company shall, and shall cause each of its Subsidiaries and ERISA
Affiliates to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Internal Revenue Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans.
98
<PAGE>
6.20 Affiliates. Except as otherwise specifically permitted in the other
----------
provisions of this Agreement, the Company will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would obtain in a comparable
arms-length transaction; provided, however, that nothing in this Section shall
-------- -------
prevent the Company and its Subsidiaries from entering into any management
agreement as in effect on the Effective Date or as amended or replaced
thereafter provided such amendment or replacement agreement is on terms and
conditions reasonably acceptable to the Agent and the Required Lenders or any
intercompany loan agreements or notes from the Company to any of its Wholly-
Owned Subsidiaries.
6.21 Conduct of Business. The Company will, and will cause each
-------------------
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.
6.22 Rate Hedging Obligations. The Company shall not and shall not
------------------------
permit any of its Subsidiaries to enter into any Rate Hedging Obligations or
commodity or foreign currency exchange, swap, collar, cap, leveraged derivative
or similar agreements other than as required pursuant to Section 6.33 and other
------------
Rate Hedging Obligations, foreign currency or commodity exchange, swap, collar,
cap or similar agreements pursuant to which the Company or its Subsidiaries have
hedged its or its Subsidiaries' reasonably estimated interest rate, foreign
currency or commodity exposure (such hedging agreements are sometimes referred
to herein as "INTEREST RATE AGREEMENTS").
6.23 Leverage Ratio and Senior Leverage Ratio. (a) At any and all times,
----------------------------------------
the Company shall not permit the Leverage Ratio to exceed the amounts set forth
below during the fiscal periods set forth below:
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
- -------------------------- -------------
February 28, 1999 7.5 to 1.00
May 31, 1999 7.0 to 1.00
August 31, 1999 6.5 to 1.00
November 30, 1999 5.5 to 1.00
February 29, 2000 5.5 to 1.00
May 31, 2000 5.0 to 1.00
August 31, 2000 5.0 to 1.00
November 30, 2000 4.0 to 1.00
99
<PAGE>
February 28, 2001 4.0 to 1.00
May 31, 2001 4.0 to 1.00
August 31, 2001 4.0 to 1.00
November 30, 2001 3.5 to 1.00
February 28, 2002 3.5 to 1.00
May 31, 2002 3.5 to 1.00
August 31, 2002 3.5 to 1.00
And at all times
during each fiscal quarter thereafter 3.0 to 1.00
(b) At any and all times, the Company shall not permit the Senior
Leverage Ratio to exceed the amounts set forth below during the fiscal periods
set forth below:
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
- -------------------------- -------------
February 28, 1999 4.0 to 1.00
May 31, 1999 4.0 to 1.00
August 31, 1999 4.0 to 1.00
November 30, 1999 3.5 to 1.00
February 29, 2000 3.5 to 1.00
May 31, 2000 3.5 to 1.00
August 31, 2000 3.5 to 1.00
November 30, 2000 3.0 to 1.00
February 28, 2001 3.0 to 1.00
May 31, 2001 3.0 to 1.00
August 31, 2001 3.0 to 1.00
November 30, 2001 2.5 to 1.00
February 28, 2002 2.5 to 1.00
May 31, 2002 2.5 to 1.00
August 31, 2002 2.5 to 1.00
And at all times
during each fiscal quarter thereafter 2.0 to 1.00
The Leverage Ratio and Senior Leverage Ratio shall be calculated, in each case,
determined as of the last day of each fiscal quarter based upon (A) for
Indebtedness, Indebtedness as of the last day of each such fiscal quarter; and
(B) for EBITDA, the actual amount for the four-quarter period
100
<PAGE>
ending on such day (provided, however, that the Leverage Ratio and Senior
Leverage Ratio shall be calculated using EBITDA for the Company and its
Consolidated Subsidiaries (a) for the fiscal quarter ending February 28, 1999,
multiplied by four (4), (b) for the two fiscal quarters ending May 31, 1999,
- -------------
multiplied by two (2), and (c) for the three fiscal quarters ending August 31,
- -------------
2000 multiplied by four-thirds (4/3)).
-------------
6.24 Interest Expense Coverage Ratio. The Company shall not permit the
-------------------------------
Interest Expense Coverage Ratio to be less than the amounts set forth below for
the fiscal periods set forth below:
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
- -------------------------- -------------
November 30, 1998 through August 31, 1999 1.45 to 1.00
November 30, 1999 1.50 to 1.00
February 28, 2000 through November 30, 2000 2.00 to 1.00
February 28, 2001 through November 30, 2001 2.25 to 1.00
And for each fiscal quarter ending thereafter 2.50 to 1.00
6.25 Fixed Charge Coverage Ratio. The Company shall not permit the Fixed
---------------------------
Charge Coverage Ratio to be less than the amounts set forth below for the fiscal
periods set forth below:
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
- -------------------------- -------------
November 30, 1998 through May 31, 1999 1.05 to 1.00
August 31, 1999 through November 30, 2000 1.10 to 1.00
February 28, 2001 through November 30, 2001 1.20 to 1.00
And for each fiscal quarter ending thereafter 1.25 to 1.00
6.26 Foreign Employee Benefit Compliance. The Company shall, and shall
-----------------------------------
cause each of the other Material Subsidiaries and ERISA Affiliates to,
establish, maintain and operate all Foreign Employee Benefit Plans to comply in
all material respects with all laws, regulations and rules applicable thereto
and the respective requirements of the governing documents for such Plans,
except for failures to comply which, in the aggregate, would not result in a
material obligation to pay money.
101
<PAGE>
6.27 Subordinated Indebtedness. The Company shall not amend, supplement
-------------------------
or modify the terms of the Permitted Subordinated Debt, or make any payment
required as a result of an amendment or change thereto other than amendments,
supplements or modifications which (i) decrease the rate of interest payable on
such Permitted Subordinated Debt, (ii) provide for the payment in kind in lieu
of cash of any portion of the interest on such Permitted Subordinated Debt,
(iii) provide for the extension of the maturity date with respect to any
principal or interest payment to be made under the instruments evidencing the
Permitted Subordinated Debt, (iv) provide more flexibility to the Company in
connection with any financial or other covenants, and (v) waive any defaults
existing in connection with the Permitted Subordinated Debt.
6.28 Payments and Prepayments. Neither the Company nor any of its
------------------------
Subsidiaries shall make any payment or prepayment of principal, fees or other
charges (other than interest) on or with respect to, or any redemption,
purchase, retirement, defeasance, sinking fund or payment on any claim for
damages or rescission with respect to the Permitted Subordinated Debt except in
connection with the issuance of Equity Interests or the incurrence of Permitted
Refinancing Indebtedness in respect of the Seller Senior Subordinated Notes and
the Additional Junior Security.
6.29 ERISA. The Company shall not:
-----
(i) engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
Department of Labor;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code) with
respect to any Benefit Plan, whether or not waived;
(iii) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any liability of Borrower or any ERISA
Affiliate under Title IV of ERISA in excess of $5,000,000;
(v) fail to make any contribution or payment to any Multiemployer
Plan which Borrower or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(vi) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment;
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<PAGE>
(vii) amend, or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Company or any ERISA Affiliate is required to provide security to such
Plan under Section 401(a)(29) of the Internal Revenue Code;
(viii) permit any unfunded liabilities with respect to any Foreign
Pension Plan which are not liabilities on the Company's financial
statements referred to in Section 6.1(i) and (ii) in excess of $500,000; or
-------------- ----
(ix) fail, or permit any Subsidiary or ERISA Affiliate to fail, to
pay any required contributions or payments to a Foreign Pension Plan on or
before the due date for such required installment or payment.
6.30 Year 2000 Issues. The Company shall, and shall cause each of its
----------------
Subsidiaries to, take all actions the Company believes are reasonably necessary
to assure that the Year 2000 Issues will not have a Material Adverse Effect. The
Company shall provide the Agent and each of the Lenders a copy of the Company's
program to address Year 2000 Issues, including updates and progress reports upon
request. The Company shall advise the Agent if the Company believes that any
Year 2000 Issues will have or would reasonably be expected to have a Material
Adverse Effect.
6.31 FIRREA. Upon request by the Agent and the Required Lenders, the
------
Company shall, at the Company's expense and within sixty (60) days after the
Effective Date, deliver to the Agent appraisals for real estate located in the
United States to the extent required by and in compliance with FIRREA which
appraisals shall be performed by an appraiser engaged directly by the Agent and
having no direct or indirect interest, financial or otherwise, in the properties
appraised or in the transaction which appraiser shall be reasonably acceptable
to the Company.
6.32 Environmental Reports. Upon request by the Agent and the Required
---------------------
Lenders, the Company shall, at the Company's expense and within six months after
the Effective Date, deliver to the Agent a Phase I Environmental Property
Assessment report with respect to specified manufacturing facilities owned by
the Company or one of its Subsidiaries (other than Bladel, The Netherlands),
with results reasonably acceptable to the Agent, prepared by an environmental
review firm reasonably acceptable to the Agent, as to any environmental hazards
or liabilities of the Acquired Subsidiaries and the Company's plans with respect
thereto.
6.33 Interest Rate Agreements. Within one hundred twenty (120) days
------------------------
after the Effective Date, the Company shall enter into, and shall thereafter
maintain, Interest Rate Agreements on terms and with counterparties determined
by the Company and reasonably acceptable to the Agent by which the Company is
protected against increases in interest rates from and after the date of such
contracts as to notional amount reasonably acceptable to the Agent for periods
reasonably acceptable to the Agent. In the event a Lender elects to enter into
any Interest Rate Agreement with the Company, the obligations of the Company
with respect to such Interest Rate Agreement shall be Secured Obligations
secured by the Collateral.
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<PAGE>
6.34. Minimum EBITDA. The Company shall not permit EBITDA to be less than
--------------
the amounts set forth below for the fiscal periods ending on the dates set forth
below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending on or About
the Dates Set Forth Below: Minimum EBITDA
- -------------------------- --------------
<S> <C>
November 30, 1998 $ 17,000,000
February 28, 1999 $ 34,000,000
May 31, 1999 $ 51,000,000
August 31, 1999 $ 69,000,000
November 30, 1999 $ 75,000,000
February 28, 2000 $ 78,000,000
May 31, 2000 $ 82,000,000
August 31, 2000 $ 85,000,000
November 30, 2000 $ 90,000,000
February 28, 2001 $ 92,000,000
May 31, 2001 $ 94,000,000
August 31, 2001 $ 97,000,000
November 30, 2001 and each fiscal quarter
thereafter $100,000,000
</TABLE>
In each case, EBITDA shall be determined as of the last day of each fiscal
quarter then ended for the four fiscal quarter period ending on such date
(provided, however that (a) EBITDA for the period ending on November 30, 1998
- --------- -------
shall be calculated using EBITDA for the fiscal quarter ending on November 30,
1998, (b) EBITDA for the period ending on February 28, 1999 shall be calculated
using EBITDA for the two fiscal quarters ending on February 28, 1999, and (c)
EBITDA for the period ending on May 31, 1999 shall be calculated using EBITDA
for the three fiscal quarters ending May 31, 1999).
ARTICLE VII: DEFAULTS
--------
The occurrence and continuance of any one or more of the following events
shall constitute a Default:
7.1. Any material representation or warranty made or deemed made under
Article V by the Company or any Subsidiary to the Lenders or the Agent under or
in connection with this Agreement or any certificate or other document delivered
in connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made or deemed made.
7.2. Nonpayment of principal of any Note, Swing Loan or Reimbursement
Obligation when due, or nonpayment of interest upon any Note, Swing Loan or
Reimbursement Obligation or
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<PAGE>
of any facility fee or other obligations under any of the Loan Documents within
five days after the same becomes due.
7.3. The breach by the Company of any of the terms or provisions of
Sections 6.2, 6.9, 6.10, 6.12, 6.13, 6.15, 6.16, 6.18, 6.23, 6.24, 6.25, 6.27,
- -------------------------------------------------------------------------------
6.28 and 6.34.
- ---- ----
7.4. The breach by the Company of any of the terms or provisions of
Section 6.1 which is not remedied within fifteen days of the initial occurrence
- -----------
of such breach.
7.5. The breach by the Company (other than a breach which constitutes a
Default under Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of
----------------------------
this Agreement which is not remedied within thirty days after written notice
from the Agent or any Lender.
7.6. Failure of the Company or any of its Subsidiaries to pay
Indebtedness in an aggregate amount equal to or greater than $5,000,000 (or the
Equivalent Amount of Indebtedness denominated in a currency other than Dollars)
when due; or the default by the Company or any of its Subsidiaries in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, or any other event shall
occur or condition exist, the effect of which is to cause, or to permit the
holder or holders of such Indebtedness to cause, Indebtedness in such aggregate
amount to become due prior to its stated maturity; or Indebtedness in such
aggregate amount of the Company or any of its Subsidiaries shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment or as a result of the sale of an asset securing such
Indebtedness) prior to the stated maturity thereof.
7.7. Any Borrower or any Material Subsidiary shall (i) commence a
voluntary case under any bankruptcy, insolvency or other similar law as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
fail to pay, or admit in writing its inability to pay, its debts generally as
they become due, (iv) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (v) institute any
proceeding seeking an order for relief under any bankruptcy, insolvency or other
similar law as now or hereafter in effect or seeking to adjudicate it a bankrupt
or insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.7 or (vii) fail
-----------
to contest in good faith any appointment or proceeding described in Section 7.8.
-----------
7.8. Without the application, approval or consent of any Borrower or any
Material Subsidiary, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Borrower or any Material Subsidiary or any
Substantial Portion of the Property of any such Person, or a proceeding
described in Section 7.7(iv) shall be instituted against any Borrower or any
---------------
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<PAGE>
Material Subsidiary and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days.
7.9. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of any Borrower or any Material Subsidiary
which, when taken together with all other Property of any Borrower and the
Material Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion.
7.10. The Company or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge any judgment or order for the payment of money
in excess of $5,000,000 (or the Equivalent Amount if denominated in a currency
other than Dollars), which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.11. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $5,500,000, or any Reportable Event shall occur in connection
with any Plan which could reasonably be expected to have a Material Adverse
Effect.
7.12. The Company or any of its Subsidiaries shall be the subject of any
proceeding or proceedings pertaining to the spill, release or disposal by the
Company or any of its Subsidiaries, or any other Person of any toxic, dangerous
or hazardous waste or substance into the environment, or to any violation of any
federal, state, regional, departmental or local environmental, health or safety
law or regulation, which could reasonably be expected to result in total
liability to the Company or any of its Subsidiaries, in the aggregate, in excess
of a Substantial Portion.
7.13. The obligations of the Company under Article IX hereof shall fail to
----------
remain in full force or effect or any action shall be taken to discontinue or to
assert the invalidity or unenforceability of any of such obligations, or the
Company shall deny that it has any further liability under such Article IX, or
----------
shall give notice to such effect.
7.14. Any Change in Control shall occur.
7.15. At any time, for any reason, (i) any Loan Document as a whole that
materially affects the ability of the Agent, or any of the Lenders to enforce
the Obligations or enforce their rights against the Collateral ceases to be in
full force and effect or the Company or any of its Subsidiaries party thereto
seeks to repudiate its obligations thereunder and the Liens intended to be
created thereby are, or the Company or any such Subsidiary seeks to render such
Liens, invalid and unperfected, or (ii) Liens on Collateral with a Fair Market
Value in excess of $1,000,000 in favor of the Agent contemplated by the Loan
Documents shall, at any time, for any reason, be invalidated or otherwise cease
to be in full force and effect, or such Liens shall not have the priority
contemplated by this Agreement or the Loan Documents and such situation
contemplated by this subclause (ii) shall continue for five (5) Business Days.
--------------
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<PAGE>
7.16 Any Termination Event occurs which could reasonably be expected to
subject either the Company or any ERISA Affiliate to liability individually or
in the aggregate in excess of $5,000,000.
7.17 The plan administrator of any Plan applies under Section 412(d) of
the Code for a waiver of the minimum funding standards of Section 412(a) of the
Code.
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.7 or 7.8 occurs
------------ ----------- ---
with respect to the Company or any of its Material Subsidiaries, the obligations
of the Lenders to make Loans or purchase participations in Letters of Credit
hereunder, the obligations of the Swing Loan Lenders to make Swing Loans
hereunder and the obligation of the Issuing Lenders to issue Letters of Credit
hereunder shall automatically terminate and the Obligations of the Company and
each Borrowing Subsidiary shall immediately become due and payable without
presentment, demand, protest or notice of any kind (all of which the Company
hereby expressly waives) or any other election or action on the part of the
Agent, any Lender, any Swing Loan Lender or any Issuing Lender. If any other
Default occurs and is continuing, the Required Lenders may terminate or suspend
the obligations of the Lenders to make Loans (including, without limitation,
Alternate Currency Loans) or purchase participations in Swing Loans and Letters
of Credit hereunder, whereupon the obligation of the Swing Loan Lenders to make
Swing Loans, the Alternate Currency Lenders to make Alternate Currency Loans and
the Issuing Lenders to issue Letters of Credit hereunder shall also terminate or
be suspended or declare the Obligations of the Company and each Borrowing
Subsidiary to be due and payable, or both, in either case upon written notice to
the Company and the applicable Borrower, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which each Borrower hereby expressly waives.
8.2. Amendments. Subject to the provisions of this Article VIII, the
---------- ------------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Company may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Company hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(i) Postpone or extend the Termination Date, the Revolving Loan
Termination Date, the Term Loan Termination Date (except with respect to
any modifications of the provisions relating to prepayments of Loans and
other Obligations (provided that any modifications of the provisions
relating to the prepayments of the Term Loans shall also require the
approval of Lenders with Term Loan Percentages greater than fifty percent
(50%)));
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<PAGE>
(ii) Reduce the principal amount of any Loans or L/C Obligations,
or reduce the rate or extend the time of payment of interest or fees
thereon;
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters or amend the
definitions of "Required Lenders", "Revolving Loan Percentage", "Term Loan
Percentage" or "Percentage";
(iv) Increase the amount of the Revolving Loan Commitment of any
Lender hereunder (except with respect to an increase in the amount, or
other modification to the terms or components, of the Borrowing Base) or
increase any Lender's Revolving Loan Percentage, Term Loan Percentage or
Percentage;
(v) Permit any Borrower to assign its rights under this
Agreement;
(vi) Amend or modify Section 8.1 or this Section 8.2;
----------- -----------
(vii) Amend, modify or waive Article IX or release the Company from
----------
its obligations thereunder;
(viii) Release any guarantor of the Obligations (except in
connection with a sale or other disposition of all of the Capital Stock of
such guarantor that is permitted hereunder or consented to by the Required
Lenders) or all or substantially all of the Collateral
; provided, further that no such supplemental agreement shall waive any Default
-------- -------
in respect of, or otherwise consent to or modify any provision in respect of
(including, without limitation, in respect of the refinancing thereof), the
Seller Junior Subordinated Note, without the consent of the Lenders with
Percentages equal to at least ninety percent (90%).
No amendment of any provision of this Agreement relating in any way to the
Agent, any Swing Loan Lender or any Issuing Lender shall be effective without
the written consent of the Agent, the Swing Loan Lenders or the Issuing Lenders,
as the case may be. The Agent may waive payment of the fees required under
Section 2.4.2 or Section 13.3.2 without obtaining the consent of any of the
- ------------- -------
Lenders. Notwithstanding anything herein to the contrary, after the Euro
Implementation Date, or in immediate anticipation thereof, the Agent (acting
reasonably and after consultation with other parties hereto) may by reasonable
prior notice to the other parties hereto amend this Agreement after consultation
with the Company unilaterally for the exclusive purpose of effectuating changes
hereto which are necessary to the integration of the making of Revolving Loans
hereunder in Euro and only in a manner which shall not result in a deterioration
of the position of any Agent or Lender from its respective position prior to the
Euro Implementation Date.
The Agent may notify the other parties to this Agreement of any amendments
to this Agreement which the Agent reasonably determines to be necessary as a
result of the
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<PAGE>
commencement of the third stage of the European Economic and Monetary Union and
the occurrence of the Euro Implementation Date. Notwithstanding anything to the
contrary contained herein, any amendments so notified shall take effect in
accordance with the terms of the relevant notification, and, to the extent
possible, such amendments shall be implemented to put the parties in the same
position as if the Euro Implementation Date had not occurred; provided, however,
-------- -------
that if and to the extent that the Agent determines it is not possible to put
all parties into such position, the Agent may give priority to putting the
Agent, the Arranger and the Lenders into that position.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
----------------------
Swing Loan Lenders, the Issuing Lenders or the Agent to exercise any right under
the Loan Documents shall impair such right or be construed to be a waiver of any
Default or an acquiescence therein, and the making of a Loan or issuance of a
Letter of Credit notwithstanding the existence of a Default or the inability of
the Company or a Borrowing Subsidiary to satisfy the conditions precedent to
such Loan or such issuance shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
-----------
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full and the Agent shall be
entitled to retain its security interest in and to all existing and future
Collateral for the benefit of itself and the Holders of Secured Obligations.
ARTICLE IX: GUARANTY
--------
9.1. Guaranty. For valuable consideration, the receipt of which is
--------
hereby acknowledged, and to induce the Lenders to make advances to each
Borrowing Subsidiary and to issue and participate in Letters of Credit and Swing
Loans, the Company hereby absolutely and unconditionally guarantees prompt
payment when due, whether at stated maturity, upon acceleration or otherwise,
and at all times thereafter, of any and all existing and future obligations
including without limitation the Secured Obligations, of each Borrowing
Subsidiary to the Agent, the Lenders, the Issuing Lenders, the Swing Loan
Lenders and any holder of a Note, or any of them, under or with respect to the
Loan Documents, whether for principal, interest, fees, expenses or otherwise
(collectively, the "Guaranteed Obligations").
9.2. Waivers. The Company waives notice of the acceptance of this
-------
guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. The Company further waives presentment, protest, notice of
notices delivered or demand made on any Borrowing Subsidiary or action or
delinquency in respect of the Guaranteed Obligations or any part thereof,
including any right to require the Agent and the Lenders to sue the Borrowing
Subsidiary, any other guarantor or any other Person obligated with respect to
the Guaranteed Obligations or any part thereof, or otherwise to enforce payment
thereof against any collateral securing the Guaranteed
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<PAGE>
Obligations or any part thereof, and provided further that if at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of any of the Borrowing Subsidiaries or otherwise, the Company's
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had not been made and whether or not the Agent or
the Lenders are in possession of this guaranty. The Agent and the Lenders shall
have no obligation to disclose or discuss with the Company their assessments of
the financial condition of the Borrowing Subsidiaries.
9.3. Guaranty Absolute. This guaranty is a guaranty of payment and not
-----------------
of collection, is a primary obligation of the Company and not one of surety, and
the validity and enforceability of this guaranty shall be absolute and
unconditional irrespective of, and shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral; (c) any
waiver of any right, power or remedy with respect to the Guaranteed Obligations
or any part thereof or any agreement relating thereto or with respect to any
collateral; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any collateral,
any other guaranties with respect to the Guaranteed Obligations or any part
thereof, or any other obligation of any Person with respect to the Guaranteed
Obligations or any part thereof; (e) the enforceability or validity of the
Guaranteed Obligations or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral;
(f) the application of payments received from any source to the payment of
obligations other than the Guaranteed Obligations, any part thereof or amounts
which are not covered by this guaranty even though the Agent and the Lenders
might lawfully have elected to apply such payments to any part or all of the
Guaranteed Obligations or to amounts which are not covered by this guaranty; (g)
any change in the ownership of any Borrowing Subsidiary or the insolvency,
bankruptcy or any other change in the legal status of any Borrowing Subsidiary;
(h) the change in or the imposition of any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the Guaranteed Obligations;
(i) the failure of the Company or any Borrowing Subsidiary to maintain in full
force, validity or effect or to obtain or renew when required all governmental
and other approvals, licenses or consents required in connection with the
Guaranteed Obligations or this guaranty, or to take any other action required in
connection with the performance of all obligations pursuant to the Guaranteed
Obligations or this guaranty; (j) the existence of any claim, setoff or other
rights which the Company may have at any time against any Borrowing Subsidiary,
or any other Person in connection herewith or an unrelated transaction; or (k)
any other circumstances, whether or not similar to any of the foregoing, which
could constitute a defense to a guarantor; all whether or not the Company shall
have had notice or knowledge of any act or omission referred to in the foregoing
clauses (a) through (k) of this paragraph. It is agreed that the Company's
- ----------- ---
liability hereunder is several and independent of any other guaranties or other
obligations at any time in effect with respect to the Guaranteed Obligations or
any part thereof and that the Company's
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<PAGE>
liability hereunder may be enforced regardless of the existence, validity,
enforcement or non-enforcement of any such other guaranties or other obligations
or any provision of any applicable law or regulation purporting to prohibit
payment by any Borrowing Subsidiary of the Guaranteed Obligations in the manner
agreed upon between the Borrowing Subsidiary and the Agent and the Lenders.
9.4. Acceleration. The Company agrees that, as between the Company on
------------
the one hand, and the Lenders and the Agent, on the other hand, the obligations
of each Borrowing Subsidiary guaranteed under this Article IX may be declared to
----------
be forthwith due and payable, or may be deemed automatically to have been
accelerated, as provided in Section 8.1 hereof for purposes of this Article IX,
----------- ----------
notwithstanding any stay, injunction or other prohibition (whether in a
bankruptcy proceeding affecting such Borrowing Subsidiary or otherwise)
preventing such declaration as against such Borrowing Subsidiary and that, in
the event of such declaration or automatic acceleration, such obligations
(whether or not due and payable by such Borrowing Subsidiary) shall forthwith
become due and payable by the Company for purposes of this Article IX.
----------
9.5. Marshaling; Reinstatement. None of the Lenders nor the Agent nor
-------------------------
any Person acting for or on behalf of the Lenders or the Agent shall have any
obligation to marshall any assets in favor of the Company or against or in
payment of any or all of the Guaranteed Obligations. If the Company, any
Borrower or any other guarantor of all or any part of the Guaranteed Obligations
makes a payment or payments to any Lender or the Agent, or any Lender or the
Agent receives any proceeds of Collateral, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to such Borrower, the Company, such other
guarantor or any other Person, or their respective estates, trustees, receivers
or any other party, including, without limitation, the Company, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, the part of the Guaranteed Obligations
which has been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the time immediately preceding such
initial payment, reduction or satisfaction.
9.6. Termination Date. This guaranty shall continue in effect until the
----------------
earlier of (a) the later of (i) the Termination Date, (ii) the Term Loan
Termination Date, and (b) the date on which this Agreement has otherwise expired
or been terminated in accordance with its terms and all of the Guaranteed
Obligations have been paid in full in cash.
ARTICLE X: GENERAL PROVISIONS
------------------
10.1. Governmental Regulation. Anything contained in this Agreement to
-----------------------
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Company or a Borrowing Subsidiary in violation of any limitation or
prohibition provided by any applicable statute or regulation.
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<PAGE>
10.2. Taxes. Any recording or documentary taxes or other similar
-----
assessments or charges payable or ruled payable by any governmental authority in
respect of the Loan Documents shall be paid by the Company.
10.3. Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.4. Entire Agreement. The Loan Documents embody the entire agreement
----------------
and understanding among the Borrowers, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrowers, the Agent and the
Lenders relating to the subject matter thereof except as contemplated in Section
-------
2.4.2.
- -----
10.5. Several Obligations. The respective obligations of the Lenders
-------------------
hereunder are several and not joint and no Lender shall be the partner or agent
of any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Lender to perform any of its obligations hereunder
shall not relieve any other Lender from any of its obligations hereunder. No
Lender shall have any liability for the failure of any other Lender to perform
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.6. Expenses; Indemnification. The Company and each Borrowing
-------------------------
Subsidiary, jointly and severally, shall reimburse (i) the Agent and the
Arranger for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and, in connection with the preparation,
execution and delivery of the Loan Documents, time charges of attorneys for the
Agent and/or the Arranger, which attorneys may be employees of the Agent and/or
the Arranger) including title insurance premiums, lien search charges, recording
taxes, filing charges and other similar expenses paid or incurred by the Agent
or the Arranger in connection with the preparation, review, execution, delivery,
amendment, modification and administration of the Loan Documents, and (ii) the
Agent, the Arranger, the Lenders, Swing Loan Lenders and Issuing Lenders for any
costs, internal charges and out-of-pocket expenses (including attorneys' fees
and time charges of attorneys for the Agent, the Arranger, the Lenders, the
Swing Loan Lenders or the Issuing Lenders) paid or incurred by the Agent, the
Arranger, any Lender, any Swing Loan Lender or any Issuing Lender in connection
with the collection and enforcement of the Loan Documents (except to the extent
that a court of competent jurisdiction rules against the Agent, the Arranger,
the Lenders, the Swing Loan Lenders or the Issuing Lenders in a final judgment
in any such collection or enforcement action), any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
"work-out" or any insolvency or bankruptcy proceedings in respect of the Company
or any Borrowing Subsidiary. The Company and each Borrowing Subsidiary, jointly
and severally, further agree to indemnify the Agent, the Arranger and each
Lender, Swing Loan Lender and Issuing Lender, their respective directors,
officers and employees (the "Indemnitees") against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
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<PAGE>
Arranger or any Lender, Swing Loan Lender or Issuing Lender is a party thereto)
(collectively, the "Indemnified Amounts") which any of them may pay or incur
arising out of or relating to the direct or indirect application or proposed
application of the proceeds of any Loan or Letter of Credit hereunder; provided,
however, that neither the Company nor any Borrowing Subsidiary shall be liable
to any Indemnitee for any Indemnified Amounts to the extent that a court of
competent jurisdiction has determined in a final non-appealable judgment that
the foregoing resulted solely from such Indemnitee's Gross Negligence or willful
misconduct. The Company and each Borrowing Subsidiary further agree (y) to
assert no claims for consequential damages on any theory of liability in
connection in any way with the Loan Documents or the transactions evidenced
thereby and (z) not to settle any claim, litigation or proceeding relating to
the Loan Documents or the transactions evidenced thereby unless such settlement
releases all Indemnitees from any and all liability in respect of such
transaction or unless each Indemnitee approves such settlement. The obligations
of the Company and each Borrowing Subsidiary under this Section 10.6 shall
------------
survive the termination of this Agreement.
10.7. Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.8. Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
10.9. Nonliability of Lenders. The relationship between the Borrowers
-----------------------
and the Lenders, Swing Loan Lenders, Issuing Lenders and the Agent shall be
solely that of borrower and lender. Neither the Agent nor any Lender, Swing Loan
Lender or Issuing Lender shall have any fiduciary responsibilities to the
Borrowers. Neither the Agent nor any Lender, Swing Loan Lender or Issuing Lender
undertakes any responsibility to the Borrowers to review or inform the Borrowers
of any matter in connection with any phase of the Borrowers' business or
operations.
10.10. CHOICE OF LAW. THIS AGREEMENT AND, UNLESS OTHERWISE SET FORTH
-------------
THEREIN, THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD
TO THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS. IN THE EVENT THAT A COURT DETERMINED THAT THE
PARTIES' CHOICE OF ILLINOIS LAW AS SET FORTH ABOVE IS NOT ENFORCEABLE, THIS
AGREEMENT AND, UNLESS OTHERWISE SET FORTH THEREIN, THE OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS)
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<PAGE>
OF THE STATE OF INDIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
10.11 CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT
-----------------------
ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, MAY BE RESOLVED BY STATE OR FEDERAL COURTS LOCATED IN
CHICAGO, ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO,
ILLINOIS. TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES IN
ALL DISPUTES BROUGHT PURSUANT TO THIS SECTION ANY OBJECTION THAT IT MAY HAVE TO
-------
THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
10.12. Confidentiality. Each Lender agrees to hold any confidential
---------------
information which it may receive from the Company or any Subsidiary pursuant to
this Agreement in confidence, except for disclosure (i) to other Lenders and
their respective affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender, (iii) to regulatory officials, (iv) as
requested pursuant to or as required by law, regulation, or legal process, (v)
in connection with any legal proceeding to which that Lender is a party, and
(vi) permitted by Section 13.4. The restrictions in this Section 10.12 shall not
------------ -------------
apply to any information which is or becomes generally available to the public
other than as a result of disclosure by a Lender or a Lender's representatives.
10.13. Performance of Obligations. The Company and each of the Borrowing
--------------------------
Subsidiaries agree that the Agent may, but shall have no obligation to (i) at
any time, pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral and (ii)
after the occurrence and during the continuance of a Default make any other
payment or perform any act required of the Company or any of the Borrowing
Subsidiaries under any Loan Document or take any other action which the Agent in
its discretion deems necessary or desirable to protect or preserve the
Collateral, including, without limitation, any action to (y) effect any repairs
or obtain any insurance called for by the terms of any of the Loan Documents and
to pay all or any part of the premiums therefor and the costs thereof and (z)
pay any rents payable by the Company which are more than 60 days past due, or as
to which the landlord has given notice of termination, under any lease. The
Agent shall use its best efforts to give the Company notice of any action taken
under this Section 10.13 prior to the taking of such action or promptly
-------------
thereafter provided the failure to give such notice shall not affect the
Company's obligations in respect thereof. The Company agrees to pay the Agent,
upon demand, the principal amount of all funds advanced by the Agent under this
Section 10.13, together with interest thereon at the rate from time to time
- -------------
applicable to Alternate Base Rate Loans from the date of such advance until the
outstanding principal balance thereof is paid in full. If the Borrower fails to
make payment in respect of any such advance under this Section 10.13 within one
-------------
(1) Business Day after the date the Company receives written demand therefor
from the Agent, the Agent shall promptly notify each Lender and
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<PAGE>
each Lender agrees that it shall thereupon make available to the Agent, in
Dollars in immediately available funds, the amount equal to such Lender's pro
rata share of such advance. If such funds are not made available to the Agent by
such Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of such demand and ending on the date such amount
is received. The failure of any Lender to make available to the Agent its pro
rata share of any such unreimbursed advance under this Section 10.13 shall
-------------
relieve any other Lender of its obligation hereunder to make available to the
Agent such other Lender's pro rata share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All outstanding principal of, and interest on,
advances made under this Section 10.13 shall constitute Obligations secured by
-------------
the Collateral until paid in full by the Company.
10.14. English Language. With the exception of the French Collateral
----------------
Documents, all certificates, instruments and other documents to be delivered
under or supplied in connection with this Agreement shall be in the English
language or shall attach a certified English translation thereof, which
translation shall be the governing version. Within one month of the delivery of
any financial statements written in French pursuant to the Loan Documents the
Company shall deliver to the Agent, for distribution to the Lenders, sufficient
copies for all the Lenders of an English translation of such financial
statements.
10.15 Alternate Currency Addenda Binding on Each Lender; Provisions
-------------------------------------------------------------
Regarding Alternate Currency Agents. Each of the Lenders agrees that it shall
- -----------------------------------
be bound by the provisions of each Alternate Currency Addendum entered into in
connection herewith, in particular as it relates to the provisions applicable to
the Alternate Currency Agent appointed thereunder.
ARTICLE XI: THE AGENT AND THE COLLATERAL AGENT
----------------------------------
11.1. Appointment. NBD Bank, N.A. is hereby appointed Agent and Credit
-----------
Lyonnais is hereby appointed Collateral Agent, in each case, hereunder and under
each other Loan Document and under the ESOP Loan Agreements, and each of the
Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders irrevocably
authorizes the Agents to act as the contractual representative of such Lender,
Swing Loan Lender, Issuing Lender or ESOP Lender. The Agents agree to act as
such upon the express conditions contained in this Article XI. The Agents shall
----------
not have a fiduciary relationship in respect of the Company, any Borrowing
Subsidiary, any Lender, any Swing Loan Lender, any Issuing Lender or any ESOP
Lender by reason of this Agreement or the ESOP Loan Agreements. Notwithstanding
the use of the defined term "Agent," and "Collateral Agent" it is expressly
understood and agreed that neither of the Agents shall have any fiduciary
responsibilities to any Lender, Swing Loan Lender, Issuing Lender or any ESOP
Lender by reason of this Agreement and that the Agents are merely acting as the
representative of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders', Swing Loan
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<PAGE>
Lenders', Issuing Lenders' and ESOP Lenders' contractual representative, the
Agents (i) do not assume any fiduciary duties to any of the Lenders, Swing Loan
Lenders, Issuing Lenders or ESOP Lenders, (ii) are a "representative" of the
Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders within the meaning
of Section 9-105 of the Uniform Commercial Code or "mandataire" within the
-------------
meaning of Articles 1984 et seq. of the French Civil Code and (iii) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders agrees to assert
no claim against either of the Agents on any agency theory or any other theory
of liability for breach of fiduciary duty, all of which claims each Lender,
Swing Loan Lender, Issuing Lender and ESOP Lender waives.
11.2. Powers. The Agents shall have and may exercise such powers under
------
the Loan Documents as are specifically delegated to the Agents by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agents shall have no implied duties to the Lenders, Swing Loan Lenders,
Issuing Lenders or ESOP Lenders or any obligation to the Lenders, Swing Loan
Lenders, Issuing Lenders or ESOP Lenders to take any action thereunder except
any action specifically provided by the Loan Documents to be taken by either of
the Agents.
11.3. General Immunity. Neither any Agent nor any of their respective
----------------
directors, officers, agents or employees shall be liable to the Company or to
any Borrowing Subsidiary, Lender, Swing Loan Lender, Issuing Lender or ESOP
Lender for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Document except to the extent
such action or inaction is found in a final judgment by a court of competent
jurisdiction to have arisen solely from (i) the Gross Negligence or willful
misconduct of such Person or an Affiliate thereof or (ii) breach of contract by
such Person with respect to the Loan Documents.
11.4. No Responsibility for Loans, Collateral, Recitals, etc. Neither
-------------------------------------------------------
any Agent nor any of their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder, including statements made in any offering
memorandum or "Bank Book"; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article IV, except receipt of items
----------
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith, except for the authority of the Agent's and/or the
Collateral Agent's signatory to this Agreement. Neither Agent shall be
responsible to any Lender, Swing Loan Lender, Issuing Lender or ESOP Lender for
any recitals, statements, representations or warranties herein or in any of the
other Loan Documents, for the perfection or priority of any of the Liens on any
of the Collateral, or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of any guarantor of any or all of the Obligations, the
Company or any of its Subsidiaries.
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11.5. Action on Instructions of Lenders. The Agents shall in all cases
---------------------------------
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders or all the Lenders, Swing Loan Lenders or Issuing Lenders, as
applicable, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders, Swing Loan Lenders,
Issuing Lenders and ESOP Lenders and on all holders of Notes. The Agents shall
be fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders and ESOP Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action, provided that, such indemnity need not include liability, costs and
expenses which a court of competent jurisdiction has determined in a final non-
appealable judgment arose solely from the Gross Negligence or willful misconduct
of such Agent.
11.6. Employment of Agents and Counsel. Each Agent may execute any of
--------------------------------
its duties as Agent or Collateral Agent, as applicable, hereunder and under any
other Loan Document by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders, Swing Loan Lenders, Issuing Lenders or
ESOP Lenders except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agents shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
11.7. Reliance on Documents; Counsel. The Agents shall be entitled to
------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agents, which counsel
may be employees of the Agents.
11.8. Agents' Reimbursement and Indemnification. The Lenders and ESOP
-----------------------------------------
Lenders agree to reimburse and indemnify the Agents ratably in proportion to
their respective Percentages and the outstanding balance of the ESOP Loans held
by the ESOP Lenders (i) for any amounts not reimbursed by the Company or any
Borrowing Subsidiary for which such Agent is entitled to reimbursement by the
Company or any Borrowing Subsidiary under the Loan Documents, (ii) for any other
expenses not reimbursed by the Company or any Borrowing Subsidiary incurred by
the Agents on behalf of the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP
Lenders in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents or the ESOP Loan Agreements (including
reasonable attorneys' fees) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever and not reimbursed by the Company or any
Borrowing Subsidiary which may be imposed on, incurred by or asserted against
any Agent in any way relating to or arising out of the Loan Documents or the
ESOP Loan Agreements or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender
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<PAGE>
shall be liable for any of the foregoing to the extent any of the foregoing is
found in a final non-appealable judgment by a court of competent jurisdiction to
have arisen solely from the Gross Negligence or willful misconduct of such
Agent.
11.9. Rights as a Lender and Issuing Lender. With respect to its
-------------------------------------
Revolving Loan Commitment, its Term Loan Commitment, Loans made by it (including
without limitation Swing Loans), participations in Letters of Credit and Swing
Loans, Letters of Credit issued by it, the Notes issued to it and the ESOP Loans
held by it, each Agent shall have the same rights and powers hereunder and under
any other Loan Document or the ESOP Loan Agreements as any Lender, Swing Loan
Lender, Issuing Lender or ESOP Lender, as applicable, and may exercise the same
as though it were not the Agent or Collateral Agent, as applicable, and the term
"Lender," "Lenders", "Swing Loan Lender," "Issuing Lender" or "ESOP Lender"
shall, unless the context otherwise indicates, include each of the Agents in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Company or any of its Subsidiaries.
11.10. Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon any Agent or any other Lender, Swing
Loan Lender, Issuing Lender or ESOP Lender and based on the financial statements
prepared by the Company and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender,
Swing Loan Lender, Issuing Lender or ESOP Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
11.11. Successor Agent. Any Agent may resign at any time by giving at
---------------
least 30 days' prior written notice thereof to the Lenders and the Company and
such resignation shall be effective at the end of such 30-day period or upon the
earlier appointment of a successor agent, and any Agent may be removed at any
time with or without cause by written notice received by such Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Company, the Borrowing
Subsidiaries, the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders,
a successor Agent or Collateral Agent, as applicable. If no successor Agent or
Collateral Agent, as applicable, shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty days after the
retiring Agent's or Collateral Agent's removal or giving notice of resignation,
then the retiring Agent or Collateral Agent, as applicable, may appoint, on
behalf of the Company and the Lenders, Swing Loan Lenders, Issuing Lenders and
ESOP Lenders, a successor Agent or Collateral Agent, as applicable. Such
successor Agent and Collateral Agent shall be a commercial bank having capital
and retained earnings of at least $500,000,000. The retiring Agent or
Collateral Agent, as applicable, shall be discharged from its duties and
obligations hereunder and under the other Loan Documents and the ESOP Loan
Agreements upon the effectiveness of its removal or
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<PAGE>
resignation hereunder. After any retiring Agent's or Collateral Agent's
resignation or removal hereunder as Agent or Collateral Agent, as applicable,
the provisions of this Article XI shall continue in effect for its benefit in
----------
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent or Collateral Agent, as applicable, hereunder and under the other Loan
Documents and the ESOP Loan Agreements.
11.12 Collateral Documents. Each Lender, Swing Loan Lender, Issuing
--------------------
Lender and ESOP Lender authorizes the Agents to enter into each of the
Collateral Documents to which it is a party and to take all action contemplated
by such documents. Each Lender, Swing Loan Lender, Issuing Lender and ESOP
Lender agrees that no Lender, Swing Loan Lender, Issuing Lender or ESOP Lender
shall have the right individually to seek to realize upon the security granted
by any Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent or Collateral Agent, as applicable
for the benefit of the Holders of Secured Obligations, upon the terms of the
Collateral Documents.
11.13 ESOP Loans. Each ESOP Lender hereby authorizes the Agent to
----------
enter into the ESOP Agreements on its behalf and accepts an interest in the ESOP
Loans in an amount equal to the amount set forth opposite such ESOP Lender's
name under the heading "ESOP Lenders" on Schedule I hereof.
11.14 Agent as Joint Creditor. The parties hereto agree that the Agent
-----------------------
shall be the joint and several creditor (together with each Lender or Affiliate
of a Lender) of each and every Obligation or Rate Hedging Obligation, if any,
payable by the Company or any of its Subsidiaries to such Lender or such
Affiliate of a Lender under any Loan Documents, so that accordingly the Agent
will have its own independent right to demand performance by the Company or such
of its Subsidiaries of such Obligation or Rate Hedging Obligation, as the case
may be, and such Obligation or Rate Hedging Obligation, as the case may be, will
be discharged by and to the extent of any discharge thereof either to the Agent
or to the relevant Lender or Affiliate of a Lender, as the case may be.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
------------------------
12.1. Setoff. In addition to, and without limitation of, any rights of
------
the Lenders, Swing Loan Lenders and Issuing Lenders under applicable law, if any
Borrower becomes insolvent, however evidenced, or any Default occurs, any
indebtedness from any Lender, Swing Loan Lender or Issuing Lender to such
Borrower (including all account balances, whether provisional or final and
whether or not collected or available) may be offset and applied toward the
payment of the Obligations owing to such Lender, Swing Loan Lender or Issuing
Lender whether or not the Obligations, or any part thereof, shall then be due.
12.2. Ratable Payments. If, after the occurrence of a Default, any
----------------
Lender, whether by setoff or otherwise, has payment made to it upon its share of
any Advance (other than payments
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<PAGE>
received which are for the account of the Agent, any Swing Loan Lender or any
Issuing Lender or pursuant to Article III) in a greater proportion than that
-----------
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans comprising that Advance held by the other
Lenders so that after such purchase each Lender will hold its ratable proportion
of Loans comprising that Advance. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
12.3 Application of Payments. The Agent shall, unless otherwise
-----------------------
specified at the direction of the Required Lenders which direction shall be
consistent with the last sentence of this Section 12.3, apply all payments and
------------
prepayments in respect of any Obligations and all proceeds of the Collateral in
the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the Company;
(B) second, to pay interest on and then principal of any advance
made under Section 10.13 for which the Agent has not then been paid by the
-------------
applicable Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the issuer(s) of
Letters of Credit;
(E) fifth, to pay interest due in respect of Swing Loans;
(F) sixth, to pay interest due in respect of Loans (other than
Swing Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Loans) and Reimbursement
Obligations;
(I) ninth, to provide required cash collateral, if required
pursuant to Section 2.6.4;
-------------
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<PAGE>
(J) tenth, to the ratable payment of all other Obligations; and
(K) eleventh, to the Rate Hedging Obligations, if any, payable by
the Company or any of its Subsidiaries to one or more of the Lenders or an
Affiliate of a Lender.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Company, all principal payments in respect
of Loans (other than Swing Loans) shall be applied first, to the outstanding
-----
Revolving Loans, and second, to the outstanding Term Loans, in each case, first,
------ -----
to repay outstanding Alternate Base Rate Loans, and then to repay outstanding
----
Eurocurrency Loans with those Eurocurrency Loans which have earlier expiring
Interest Periods being repaid prior to those which have later expiring Interest
Periods. The order of priority set forth in this Section 12.3 and the related
------------
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Swing Loan Lender and the issuer(s) of
Letters of Credit and other Holders of Secured Obligations as among themselves.
The order of priority set forth in clauses (D) through (K) of this Section 12.3
----------- --- ------------
may at any time and from time to time be changed by the Required Lenders without
necessity of notice to or consent of or approval by the Borrower, or any other
Person; provided, that the order of priority of payments in respect of Swing
--------
Loans may be changed only with the prior written consent of the Swing Loan
Lender. The order of priority set forth in clauses (A) through (C) of this
----------- ---
Section 12.3 may be changed only with the prior written consent of the Agent.
- ------------
ARTICLE XIII: BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS
-------------------------------------------------
13.1. Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Swing Loan Lenders and the Issuing Lenders and their respective
successors and assigns, except that (i) no Borrower shall have the right to
assign its rights or obligations under the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 13.3.
------------
Notwithstanding clause (ii) of this Section, any Lender may at any time, without
-----------
the consent of any Borrower, the Agent, any Swing Loan Lender or any Issuing
Lender, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; provided, however, that no such assignment
shall release the transferor Lender from its obligations hereunder. The Agent
may treat the payee of any Note as the owner thereof for all purposes hereof
unless and until such payee complies with Section 13.3 in the case of an
------------
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Agent. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the
time of making such request or giving such authority or consent is the holder of
any Note, shall be conclusive and binding on any subsequent holder, transferee
or assignee of such Note or of any Note or Notes issued in exchange therefor.
13.2. Participations.
--------------
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<PAGE>
13.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary
------------------------------
course of its business and in accordance with applicable law, at any time sell
to one or more financial institutions ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, the Revolving
Loan Commitment of such Lender, or any other interest of such Lender under the
Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrowers and the
Agent, Lenders, Swing Loan Lenders and Issuing Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
13.2.2. Voting Rights. Each Lender shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Revolving Loan Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable with respect to any such Loan
or Revolving Loan Commitment, postpones any date fixed for any regularly-
scheduled payment (but not prepayments) of principal of, or interest or fees on,
any such Loan or Revolving Loan Commitment, releases any guarantor of any such
Loan (other than as contemplated hereunder or under any other Loan Document), if
any, or releases all or substantially all of the Collateral, if any, securing
any such Loan.
13.2.3. Benefit of Setoff. The Borrowers agree that each Participant
------------------
shall be deemed to have the right of setoff provided in Section 12.1 in respect
------------
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 12.1 with respect to the amount
------------
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 12.1, agrees to share with each Lender, any amount received
------------
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 12.2 as if each Participant were a Lender.
------------
13.3. Assignments.
-----------
13.3.1. Permitted Assignments. Any Lender may, in the ordinary course of
---------------------
its business and in accordance with applicable law, at any time assign to one or
more financial institutions that are, at the time of such assignment, entitled
to receive interest on the Obligations being assigned to such institution
without such payments being subject to any withholding taxes ("Purchasers") all
or a portion of its rights and obligations under the Loan Documents, which
assignment shall in the case of assignments to Purchasers other than Lenders be
in amounts equal to or greater than $5,000,000
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<PAGE>
(or the Equivalent Amount thereof if denominated in an Alternate Currency or an
Agreed Currency other than Dollars) or, if less, all of such assigning Lender's
remaining Loans, Revolving Loan Commitments and participations in Letters of
Credit, Alternate Currency Loans and Swing Loans hereunder, provided, however,
that any such Purchaser must agree to designate a French Lending Installation in
compliance with Section 2.5.13 and if such French Lending Installation is an
--------------
affiliate of such Purchaser, the Revolving Loan Commitment shall be a Revolving
Loan Commitment of the Purchaser and (with respect to Loans to be made to the
French Borrower Subsidiaries) such affiliate which will not in the aggregate
exceed the amount of the Revolving Loan Commitment assigned. Such assignment
shall be substantially in the form of Exhibit B hereto. The consent of the Agent
---------
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof.
13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a
----------------------
notice of assignment, substantially in the form attached as Exhibit I to Exhibit
--------- -------
B hereto (a "Notice of Assignment"), together with any consent required by
- -
Section 13.3.1 (provided however, that no consent shall be required for an
- --------------
assignment from a Lender to an Affiliate of the Lender), and (ii) payment of a
$3,500 fee to the Agent by the assigning Lender for processing such assignment,
such assignment shall become effective on the effective date specified in such
Notice of Assignment. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as if it
were an original party hereto, and no further consent or action by any Borrower,
the Lenders, the Swing Loan Lenders, the Issuing Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Revolving Loan Commitment and Loans assigned to such Purchaser. Upon
the consummation of any assignment to a Purchaser pursuant to this Section
-------
13.3.2, the transferor Lender, the Agent and the Borrowers shall make
- ------
appropriate arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective Term
Loans and Revolving Loan Commitments, as adjusted pursuant to such assignment.
13.4. Dissemination of Information. Each Borrower authorizes each
----------------------------
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Company and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
-------
10.12 of this Agreement.
- -----
13.5. Tax Treatment. If any interest in any Loan Document is
-------------
transferred to any Purchaser which is organized under the laws of any
jurisdiction other than the United States of America or any State thereof, the
transferor Lender shall cause such Purchaser, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
-------
2.5.15(i).
- ---------
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<PAGE>
ARTICLE XIV: NOTICES
-------
14.1. Giving Notice. Except as otherwise permitted by Section 2.5.8,
------------- -------------
all notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes).
14.2. Change of Address. The Company, each Borrowing Subsidiary, the
-----------------
Agent and each Lender may change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Company, the Agent, the Lenders, the
Swing Loan Lenders and the Issuing Lenders and each party has notified the Agent
by telex or telephone, that it has taken such action.
ARTICLE XVI: WAIVER OF JURY TRIAL
--------------------
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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<PAGE>
IN WITNESS WHEREOF, the Company, the Lenders, the Swing Loan Lenders, the
Issuing Lenders and the Agent have executed this Agreement as of the date first
above written.
TOKHEIM CORPORATION
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
TOKHEIM SOFITAM APPLICATIONS S.A.,
as a Borrower
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
TOKHEIM LIMITED,
as a Borrower
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
BEROC INVESTMENTS B.V.
as a Borrower
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
TOKHEIM HOLDING GmbH
as a Borrower
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
GASBOY INTERNATIONAL, INC.
as a Borrower
By:____________________________
Title:_________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
NBD BANK, N.A., as Agent, as a Lender, as
Issuing Lender, and a Swing Loan Lender
By:______________________________
Title:___________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
CREDIT LYONNAIS, CHICAGO BRANCH,
as a Lender
By:______________________________
Title:___________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
NATIONAL WESTMINSTER BANK PLC,
as a Lender
By:______________________________
Title:___________________________
Attention: Andrew Weinberg
Title: Senior Vice President
Telephone: (212) 418-4500
Facsimile: (212) 602-4599
<PAGE>
BT INTERNATIONAL PLC
as a Lender with respect to the Non-Domestic
Borrowing Subsidiaries
By:____________________________________
Title:_________________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
BANKERS TRUST COMPANY
as a Lender
By:____________________________________
Title:_________________________________
Attention:
Title:
Telephone:
Facsimile:
