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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended November 30, 1998
Commission file number 1-6018
TOKHEIM CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-0712500
(State of Incorporation) (I.R.S. Employer I.D. No.)
10501 Corporate Dr. 46845
Fort Wayne, Indiana (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code (219) 470-4600
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange
Title of each class on which registered
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Common Stock, no par value.......................... New York Stock Exchange
Preferred Stock Purchase Rights..................... New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by references in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of February 23, 1999, 12,659,879 shares of voting common stock were
outstanding. The aggregate market value of shares held by non-affiliates was
$96,727,700 million (based on the closing price of these shares on the New
York Stock Exchange on such date).
Documents Incorporated by Reference
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Document Form 10-K
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<S> <C>
Proxy Statement.................................... Part III, Items 10-13
</TABLE>
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TOKHEIM CORPORATION
1998 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
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Page
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PART I
Item 1. Business...................................................... 1
Item 2. Properties.................................................... 5
Item 3. Legal Proceedings............................................. 6
Item 4. Submission of Matters to a Vote of Security Holders........... 6
PART II
Item 5. Market For The Registrant's Common Equity and Related
Shareholder Matters........................................... 6
Item 6. Selected Financial Data....................................... 7
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 9
Item 8. Financial Statements and Supplementary Data................... 18
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure...................................... 51
PART III
Item 10. Directors and Executive Officers of the Registrant............ 51
Item 11. Executive Compensation........................................ 51
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................... 51
Item 13. Certain Relationships and Related Transactions................ 51
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-
K............................................................. 52
</TABLE>
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PART I
Item 1. Business.
(a) General:
Tokheim Corporation, including its subsidiaries ("Tokheim" or the
"Company"), is the world's largest manufacturer and servicer of electronic and
mechanical petroleum dispensing systems. These systems include petroleum
dispensers and pumps, retail automation systems (including point-of-sale
("POS") systems), dispenser payment or "pay-at-the-pump" terminals,
replacement parts and upgrade kits. The Company provides products and services
to customers in more than 80 countries. The Company is the largest supplier of
petroleum dispensing systems in Europe, Africa, Canada and Mexico, and one of
the largest in the United States. The Company also has established operations
in Asia and Latin America.
The Company was organized as the Tokheim Manufacturing Company in Cedar
Rapids, Iowa in 1901. In 1918, Tokheim was purchased by a group of businessmen
and was moved to Fort Wayne, Indiana, where it was incorporated in Indiana
under the name Tokheim Oil Tank and Pump Company. The present name was adopted
in December 1953.
In September 1996, the Company acquired the petroleum dispenser business of
Sofitam S.A. ("Sofitam") for $107.4 million less certain adjustments. The
acquisition included Sofitam's in-house service provider, Sogen S.A., as well
as the two distinct brand names-EIN and Satam. Sofitam had and continues to
have a leading market position in France and northern Africa, as well as a
strong market position in southern Europe.
In December 1997, the Company acquired Management Solutions, Inc. ("MSI").
MSI develops and distributes retail automation systems (including POS
software), primarily for the convenience store, petroleum dispensing and fast
food service industries. The Company paid MSI's stockholders an initial amount
of $12.0 million. The Company is also obligated to make contingent payments of
up to $13.2 million over fiscal years 1998, 1999 and 2000 based upon MSI's
performance. In 1998, the Company was not obligated to and did not make any
additional payments.
In March 1998, the Company completed the sale of 4,370,000 shares of its
common stock (the "Common Stock Offering"). Net proceeds from the Common Stock
Offering totaled approximately $67.7 million. The Company used approximately
$39.4 million of the proceeds to redeem $35.0 million in aggregate principal
amount of its 11.5% Senior Subordinated Notes due 2006 (the "11.5% Notes").
The remaining $28.3 million of proceeds was applied to reduce borrowings under
the then-existing credit agreement and for general corporate purposes.
In September, 1998, the Company acquired the RPS Division (the "RPS
Division") of Schlumberger Limited ("Schlumberger") for $330.0 million in
cash, notes, and warrants, subject to certain post-closing adjustments. Of the
$330.0 million purchase price, $100.0 million was paid in cash borrowed under
the terms of a new bank credit agreement with a consortium of banks (the "New
Credit Agreement") as well as $22.5 million of senior notes (the "Senior
Notes"). The seller note portion of the purchase price consisted of $170.0
million in 12.0% senior subordinated notes due January 29, 1999 (the "Senior
Subordinated Seller Notes"), and $40.0 million in ten year, 12.0% junior
subordinated payment-in-kind notes issued to Schlumberger (the "Junior
Notes"). The remaining $20.0 million of the purchase price was paid with
common stock warrants (the "Warrants") exercisable for five years, beginning
January 30, 1999 to purchase, at a nominal price, 2,526,923 shares of the
Company's common stock. The Senior Subordinated Seller Notes, along with the
Senior Notes, were repaid on January 29, 1999 with the proceeds from a private
placement (the "Offering") of $123.0 million of 11.375% senior subordinated
notes due 2008 (the "Dollar Notes") and ^75.0 million (approximately $87.0
million) of 11.375% senior subordinated notes due 2008 (the "Euro Notes").
The information that follows should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and related notes
included elsewhere in this Form 10-K. Unless otherwise noted, references to
years in this Report are to the Company's fiscal years ended November 30.
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Certain statements contained in this Report, 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 (the "PSLRA"). 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 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, German marks and the British pound; costs in
adjusting to the new common European currency, the euro; competition;
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 in 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, software, products or suppliers of the Company or its
customers, suppliers or resellers; and other factors referenced in this
Report. Certain of these factors are discussed in more detail elsewhere in
this Report, including, without limitation, under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
in the Consolidated Financial Statements and related notes. Given these
uncertainties, investors 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.
(b) Financial Information About Industry Segments:
In 1998, 1997 and 1996, the Company had only one reportable industry
segment--the design, manufacture and servicing of petroleum dispensing
systems.
(c) Narrative Description of Business:
Principal Products and Services
The Company's principal product offerings include petroleum dispensers and
pumps, retail automation systems (including POS systems), dispenser payment or
"pay-at-the-pump" terminals, replacement parts and upgrade kits. Petroleum
dispensers and pumps transfer fuel from storage tanks to vehicles or portable
containers. Dispensers include meters, which measure the quantity of fuel
pumped and transfer the information and calculators which determine a sales
price based on the information received from the meter. Retail automation
systems control in-store and at-the-pump fuel sales, pump activation and
credit card transactions, monitor inventory, transmit data to a central
management system and perform other management functions. Pay-at-the-pump
terminals automate customer payment at the pump with cash or credit/debit
cards. Upgrade kits permit owners to upgrade a dispenser's capabilities and
functionality without incurring the cost of replacing the entire dispenser.
The Company also offers services for its products through authorized service
representatives ("ASRs") and Company-owned facilities.
In 1998, 1997 and 1996, the petroleum industry accounted for all of the
Company's sales. Approximately 88%, 89% and 86%, respectively, of the
Company's sales were derived from the sale of retail service station gasoline
dispensers, parts, accessories, and service contracts.
2
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Markets
The Company's products are sold primarily to retail service station
operators and commercial customers which fall into seven categories.
Major Oil Companies ("MOCs")--MOCs are typically large multinational
companies that are vertically integrated with retail operations in developed
and emerging markets. They sell "branded" products and typically have standard
station formats, including dispenser design and proprietary credit card
networks.
National Oil Companies ("nationals")--A national is a non-U.S. oil Company
that operates exclusively (or almost exclusively) in a single national market.
Most nationals are, or until recently were, state-owned. In recent years, a
number of nationals have been privatized or have relinquished their monopolies
over the local retail petroleum markets.
Independent Oil Companies ("independents")--Independents are usually U.S.
companies that sell "branded" products regionally rather than nationally. They
typically have station and dispenser designs which are standardized, similar
to MOCs.
Jobbers--Jobbers are independent service station owners that operate under
the brand of a MOC. A station owned by a jobber looks substantially the same
as one owned by a MOC, selling MOC-branded products and using standard MOC
station layouts. Most jobbers own multiple stations. Some jobbers work
exclusively with one MOC, while others have multiple MOC partners. Moreover,
jobbers can change their MOC affiliations within contractual limitations
between the jobber and the MOC. Usually, jobbers are not required to purchase
their petroleum dispensing equipment from the same manufacturers as their
affiliated MOC.
Convenience Store Stations--Convenience store stations are petroleum
retailers who source over 50% of their sales from merchandise rather than from
petroleum products. A significant number of convenience store stations are
owned by MOCs. The Company's convenience store station customers include
national and regional operators, as well as small, local businesses.
Hypermarkets--The Company is the leading supplier to French hypermarkets.
The hypermarket is a retailing format pioneered in France, with a growing
presence in the rest of Europe. A hypermarket is similar to a strip mall in
the United States, with a supermarket as the anchor retailer. Hypermarkets
typically offer competitively-priced, private label petroleum products to
attract customers. In France, more than 50% of retail petroleum sales are
through hypermarkets.
Commercial Customers--The commercial market is characterized by companies
whose fuel consumption needs justify maintaining internal fueling
capabilities, such as truck fleets and municipalities. Through its Gasboy
subsidiary, the Company is the leading supplier of fuel dispensing equipment
to the U.S. commercial market.
Sales and Distribution
Products are distributed in the United States by a sales organization which
operates from national account offices, district sales offices, petroleum
equipment firms, industrial suppliers and distributors in major cities across
the United States. In areas outside the United States, product distribution is
accomplished by the international division through foreign subsidiaries,
distributors, and special sales representatives. In addition to its widespread
sales organization, there are more than 1,400 trained field service
representatives acting as independent contractors, many of whom maintain a
service parts inventory. The Company's customer service division maintains a
help desk which is available 24 hours a day, 365 days a year, for immediate
response to service needs in most markets. Additionally, the customer service
division maintains a continuing program of service clinics for customers, ASRs
and distributors, both in the field and at the Company's training centers.
In recent years, MOCs and nationals have been moving toward granting
national, regional and global contracts or "tenders" and toward creating
alliances and preferred supplier relationships with suppliers. The
3
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Company believes that its acquisitions of Sofitam and the RPS Division, which
increased its global sales and services capabilities, positions it positively
in response to this trend.
New Products; Research and Development
The Company continually seeks to enhance its existing product lines to offer
increased functionality in new or existing products and has dedicated research
and engineering staffs. The Company, not including the RPS Division for 1997
and 1996, spent approximately $21.1 million, $18.3 million and $15.9 million
in 1998, 1997 and 1996, respectively, to improve existing products and
manufacturing methods, develop new products and pursue other applied research
and development. The RPS Division spent $16.6 million and $15.9 million in
1996 and 1997, respectively. The Company has also begun to form exclusive
relationships with the MOCs to develop products that meet their specific needs
and with electronics companies to develop advanced technologies.
In 1997, the Company began market testing of its RFID technology. Similar to
the drive-through payment system at toll booths in major metropolitan areas,
this technology automatically charges a consumer's account, which is read from
either a microchip key ring tag or a microchip window tag. By eliminating the
need to pay for fuel with cash or credit cards, the system speeds gas
purchases, both increasing consumer convenience and enabling stations to fuel
more cars in less time. The technology also permits the gathering of
information about consumer buying habits to improve marketing techniques, such
as promotion of food and car washes on pump-mounted displays. Tokheim's RFID
system is compatible with all POS systems and with other manufacturer's
dispensers (as an upgrade). The Company has entered into an agreement with
Micron Communications to further develop its RFID system, which is currently
being test marketed with consumers.
Raw Materials
The principal raw materials essential to the Company's business are flat
sheet steel, aluminum, copper tubing, iron castings and electronics, POS
systems, and computer components, all of which are generally available through
competitive sources of supply. The Company has not experienced any difficulty
in obtaining these materials or products.
Patents, Licenses and Trademarks
The Company has filed patent applications on its technologies for RFID, a
new metering device and virtual classrooms. The Company also holds other
patents, none of which are considered essential to its overall operations, and
has acquired several additional patents with the acquisition of the RPS
Division. The Company entered into a license agreement, effective December 1,
1997, pursuant to which the Company will pay a $3.0 million fixed royalty fee,
payable in 12 quarterly installments, plus earned royalties for the use of a
patented vapor recovery system and certain vapor recovery improvements, an
electronic blender and a printed receipt severing device.
Seasonality
In recent years, the Company's sales have not been seasonal. See Note 14 to
the Consolidated Financial Statements, "Quarterly Financial Information
(unaudited)."
Working Capital Practices
There are no special inventory requirements or credit terms extended to
customers that would have a material adverse effect on the Company's working
capital.
Dependence on a Single Customer
No single customer accounted for 10% or more of the Company's consolidated
sales in 1998, 1997 or 1996.
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Backlog
The Company's backlog of firm orders as of the end of 1998 was approximately
$67.3 million, compared to approximately $26.2 million at the end of 1997. The
increase in 1998 backlog as compared to 1997 is due to including the newly
acquired RPS Division. In addition, the RPS Division's revenues are made up of
a large portion of service contract sales over the next year, which have been
included as backlog due to the firmness of the commitments. The Company
expects that the entire backlog will be filled in 1999. The Company believes
that its backlog is not necessarily an indicator of sales during the
forthcoming year because the average length of the backlog is not very long
(four to six weeks of shipments). Factors affecting backlog levels include the
timing of purchases by MOCs, announcements of price adjustments, sales
promotions, and production delays. The effect of these factors limits the
usefulness of comparing backlogs in different periods.
Competition
Competition within the retail petroleum dispensing equipment industry is
intense, and has caused the average price of the Company's products to fall
significantly over the past few years. Prices may continue to fall in the
future. The Company competes principally against, among others, Gilbarco, Inc.
(a division of GEC, Plc), Wayne (a division of Halliburton Co.), Scheidt &
Bachmann GmbH and Tatsuno Corporation. Measured in industry sales, the Company
believes that it is the largest global manufacturer and servicer of petroleum
dispensing equipment.
The Company believes that the principal methods of competition include
price, product quality, service, technology and the ability to provide
products globally. The Company believes that a number of factors make it a
premier manufacturer and servicer of petroleum dispenser systems. These
factors include the Company's: (1) global capabilities, which allow it to
satisfy the complete petroleum dispensing equipment needs of customers
throughout the world; (2) world's largest service network; (3) strong customer
relationships; (4) broad, technologically advanced product line; and (5)
proven management team. Several of the Company's current and potential future
competitors are subsidiaries or divisions of much larger corporations,
however, and have significantly greater financial, technical and marketing
resources than the Company.
Environmental Regulations
The Company's operations and properties are subject to a variety of complex
and stringent federal, state and local laws and regulations, including those
governing the use, storage, handling, generation, treatment, emission,
release, discharge and disposal of certain materials, substances and wastes,
the remediation of contaminated soil and groundwater, and the health and
safety of employees. The Company does not believe that compliance with any
existing environmental regulations will result in material capital
expenditures or have a material adverse effect on the Company's financial
condition or results of operations. Environmental regulations also tend to
affect the Company's customers, increasing their spending and their demand for
the Company's products as they attempt to remain in compliance. See Note 20 to
the Consolidated Financial Statements, "Contingent Liabilities."
Employees
As of January 31, 1999, the Company employed approximately 4,700 persons.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales:
Financial information about foreign and domestic operations and export sales
for 1998, 1997, and 1996 is set forth in Note 16 to the Consolidated Financial
Statements, captioned "Geographical Segments."
Item 2. Properties.
The Company owns properties in: Fort Wayne, Indiana; Fremont, Indiana;
Washington, Indiana; Lansdale, Pennsylvania; Brighton, Ontario, Canada; Kya
Sand, Randburg, South Africa; Glenrothes, Scotland; Weilheim, Germany;
Grentheville, France; Scurzolengo, Italy; Abidjan, Ivory Coast; Bonham, Texas;
Dundee, Scotland; and
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Bladel, Holland. The Company leases properties in: Greenwood Village,
Colorado; Tremblay, France; Casablanca, Morocco; Solothurn, Switzerland; West
Sussex, United Kingdom; Vilvoorde, Belgium; Barcelona, Spain; La Soukra,
Tunisia; Dakar, Senegal; Douala, Cameroon; Leiderdorp, the Netherlands;
Scurzolengo, Italy; and additional sites in France, Austria, Denmark, Norway,
Great Britain, Czech Republic, Slovakia, Hungary, Italy, Spain, Switzerland,
Ireland, the Netherlands, Germany, Poland and the U.S. The majority of the
Company's manufacturing operations are concentrated in the following cities:
Fort Wayne, Indiana; Washington, Indiana; Lansdale, Pennsylvania;
Grentheville, France; Kya Sand, Randburg, South Africa; Glenrothes, Scotland;
Turnhout, Belgium; Bladel, the Netherlands; Dundee, Scotland; and Bonham,
Texas. The Company recently announced that it will close the facilities in
Glenrothes, Scotland and Bonham, Texas. The Company believes that it has
sufficient production capacity to meet demand over the next several years. The
Company also owns an engineering and design center and a corporate office
building in Fort Wayne, Indiana. The remaining properties owned or leased by
the Company are primarily for warehouse space or sales and service except that
the Colorado facility is for software development. The Company is currently
holding for sale facilities in Falaise, France, Jasper, Tennessee and Atlanta,
Georgia, as well as a 109-acre tract of unimproved land located in Fort Wayne,
Indiana. The Company has entered into a contract for the sale of 34 acres of
the 109-acre tract of unimproved land.
Item 3. Legal Proceedings.
As more fully described in Note 20 to the Consolidated Financial Statements,
"Contingent Liabilities," the Company is defending various claims and legal
actions, including claims relating to the U.S. Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA") and other environmental
laws, product liability and various contract and employee matters. These legal
actions involve primarily claims for damages arising out of the Company's
manufacturing operations, product liability and various contractual and
employment issues. Management believes that the outcome of such pending claims
will not, individually or in the aggregate, have a material adverse effect on
the Company's financial condition or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market For The Registrant's Common Equity and Related Shareholder
Matters.
The Company's common stock, no par value (the "Common Stock"), is traded on
the New York Stock Exchange under the symbol "TOK." The high and low sales
prices for the Common Stock for 1997 and 1998 are set forth as follows:
QUARTERLY HIGH-LOW SHARE PRICES
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High Low
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Year Ended November 30, 1997
First Quarter................................................... 9 7/8 7 1/4
Second Quarter.................................................. 10 1/8 8
Third Quarter................................................... 14 3/8 9 3/4
Fourth Quarter.................................................. 18 13/16 13 3/8
Year Ended November 30, 1998
First Quarter................................................... 20 7/8 16 3/8
Second Quarter.................................................. 18 1/4 14 7/8
Third Quarter................................................... 22 15/16 7
Fourth Quarter.................................................. 10 1/8 5 3/8
</TABLE>
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The Company has not declared or paid dividends on the Common Stock in recent
years. Currently, the Company does not anticipate paying any cash dividends on
the Common Stock in the foreseeable future. The New Credit Agreement and the
indentures governing the Dollar Notes and the Euro Notes also restrict the
payment of dividends.
The number of Common Stock shareholders of record on February 23, 1999, was
approximately 2,100. On February 23, 1999, the closing price of the Common
Stock, as reported on the New York Stock Exchange, was $7.8125 per share.
Item 6. Selected Financial Data.
The following selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Item 7 and the Consolidated Financial Statements and related
notes in Item 8.
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SELECTED FINANCIAL DATA
(Amounts in thousands except dollars per share)
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Year Ended November 30,
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1998(A) 1997 1996(B) 1995 1994
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Statement of Operations
Data:
Net sales................... $466,440 $385,469 $279,733 $221,573 $202,134
Operating profit (loss)(C).. 14,769 20,645 6,356 5,811 3,780
Interest expense, net....... 19,257 16,451 7,191 3,319 2,806
Earnings (loss) before
income taxes(D)............ (2,698) 5,197 (1,229) 3,270 1,932
Earnings (loss)(D).......... (3,774) 3,980 (2,009) 3,231 1,675
Preferred stock dividends... 1,484 1,512 1,543 1,580 1,617
Earnings (loss) applicable
to common stock(D)......... (5,228) 2,468 (3,552) 1,651 58
Earnings (loss) per common
share(D):
Basic..................... $ (0.46) $ 0.31 $ (0.45) $ 0.21 $ 0.01
Weighted average shares
outstanding.............. 11,371 8,042 7,940 7,911 7,801
Diluted................... $ (0.46) $ 0.27 $ (0.45) $ 0.17 $ 0.01
Weighted average shares
outstanding.............. 11,371 9,005 7,940 9,500 7,801
Balance Sheet Data (at year
end):
Working capital............. $ 92,596 $ 41,650 $ 54,356 $ 50,353 $ 47,040
Property, plant and
equipment, net............. 77,905 42,535 41,010 28,558 27,425
Total assets................ 776,642 290,619 309,861 124,332 116,251
Total debt(E)............... 443,331 140,980 155,745 38,612 38,825
ESOP preferred stock, net... 12,130 9,853 8,137 6,426 5,005
Common shareholders' equity,
net(F)..................... 64,631 10,618 17,678 23,797 22,857
Other Data:
Cash flows from operating
activities................. 9,790 21,202 5,897 3,347 2,069
Cash flows for investing
activities................. (124,414) (10,394) (54,079) (4,910) (2,562)
Cash flows from financing
activities................. 125,669 (11,795) 57,016 754 (5,063)
Capital expenditures........ (14,548) 11,154 3,061 5,559 2,757
Depreciation and
amortization............... 13,136 9,232 5,028 4,857 4,672
Interest expense and
preferred stock dividends.. 21,563 18,800 9,336 5,168 4,675
EBITDA (as defined)(G)...... 43,707 34,767 17,842 14,126 10,230
</TABLE>
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(A) Results for 1998 include eleven months of MSI operations and two months of
RPS operations.
(B) Results for 1996 include three months of Sofitam operations.
(C) Operating profit (loss) equals net sales less cost of sales, selling,
general and administrative expenses, depreciation and amortization, and
merger and acquisition costs and other unusual items.
(D) The amounts for the years ended November 30, 1998 and 1997 exclude $23,924
and $1,886, respectively, for extraordinary loss on debt extinguishment.
The 1994 amount excludes the cumulative effect of change in method of
accounting for post-retirement benefits other than pensions of $13,416.
(E) Total debt includes all senior subordinated notes, junior subordinated
notes, senior notes, long-term borrowings under the credit agreements and
other credit agreements, the current portion of such borrowings, cash
overdraft facilities and the guaranteed ESOP Obligation.
(F) 1998 common shareholders' equity includes net proceeds from the Company's
1998 common stock offering of $67,724 and $20,000 of common stock warrants
issued in connection with the RPS Division acquisition.
(G) EBITDA represents earnings (loss) from continuing operations before income
taxes and extraordinary loss, net interest expense, depreciation and
amortization, merger and acquisition costs and other unusual items and
minority interest. Management uses EBITDA as a financial indicator of the
Company's ability to service debt, although the precise definition of
EBITDA is subject to variation among companies. EBITDA should not be
construed as an alternative to operating income or cash flows from
operating activities (as determined in accordance with generally accepted
accounting principles) and should not be construed as an indication of the
Company's operating performance or as a measure of liquidity. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" for additional information on the Company's results of
operations and liquidity and capital resources. For additional information
concerning the Company's historical cash flows, see the consolidated
statement of cash flows included elsewhere herein.
8
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
On September 30, 1998, the Company completed the acquisition ("Acquisition")
of the fuel dispenser systems and service business (the "RPS Division") of
Schlumberger Limited ("Schlumberger") for a price equal to $330.0 million in
cash, notes, and warrants, subject to certain post-closing adjustments. Of the
$330.0 million purchase price, $100.0 million was paid in cash borrowed under
the terms of the Company's new bank credit agreement (the "New Credit
Agreement") as well as $22.5 million of senior notes due 2005 (the "Senior
Notes"). The $210.0 million seller note portion of the purchase price
consisted of $40.0 million in ten year, 12.0% junior subordinated payment-in-
kind notes (the "Junior Notes") and $170.0 million in 12.0% senior
subordinated notes due January 29, 1999 (the "Senior Subordinated Seller
Notes"). $20.0 million of the purchase price was paid with warrants (the
"Warrants") exercisable for five years, beginning January 30, 1999 to purchase
at a nominal price, 2,526,923 shares of the Company's common stock.
The Acquisition has been accounted for using the purchase method of
accounting, and the RPS Division's results of operations have been included in
the consolidated financial statements of the Company from the date of
acquisition. The purchase price has been preliminarily allocated to assets
acquired and liabilities assumed based on the RPS Division's net book value of
assets at September 30, 1998, as adjusted, which is estimated to approximate
fair value. The purchase price allocated under this assumption exceeded the
estimated fair value of the tangible net assets acquired by approximately
$263.4 million, which is recognized as goodwill and is being amortized over
forty years. The current purchase price allocation is preliminary due to the
timing of the acquisition relative to the Company's year end. A more precise
allocation of purchase price is currently being performed at various RPS
Division locations to more accurately identify and value the assets, including
intangibles, and liabilities assumed. Finalization of the purchase price
allocation is not expected to have a material impact on the Company's
financial position or results of operations as of and for the year ended
November 30, 1998.
The Company is to reimburse Schlumberger for cash (net of adjustments) that
remained in the RPS Division on the effective date of the Acquisition. This
amount is currently estimated to be approximately $6.5 million. It is
anticipated that this payment to Schlumberger will be made in the second
quarter of 1999 from funds available through the revolving working capital
facility under the New Credit Agreement.
Simultaneously with the Acquisition, the Company entered into a note
purchase agreement, pursuant to which the Company issued $22.5 million
aggregate principal amount of Senior Notes. Proceeds from the Senior Notes
were used in connection with the financing of the Acquisition and the
refinancing of existing indebtedness.
On January 29, 1999, the Company redeemed the Senior Subordinated Seller
Notes and the Senior Notes with the proceeds from the issuance of $123.0 in
million aggregate principal amount of its 11.375% Senior Subordinated Notes
due 2008 (the "Dollar Notes") and ^75.0 in million aggregate principal amount
(approximately $87.0 million) of its 11.375% Senior Subordinated Notes due
2008 (the "Euro Notes") in a private placement pursuant to Rule 144A and
Regulation S (the "Offering"). The Senior Subordinated Seller Notes were
redeemed at an aggregate price of $176.7 million, representing principal of
$170.0 million and accrued and unpaid interest thereon of $6.7 million. The
Senior Notes were redeemed at an aggregate price of $23.2 million,
representing principal of $22.5 million, accrued and unpaid interest thereon
of $0.2 million and an applicable call premium of $0.5 million.
Also simultaneously with the Acquisition, the Company executed the New
Credit Agreement with a consortium of banks to pay a portion of the purchase
price and to refinance previously existing indebtedness. The New Credit
Agreement provides for a six year, $120.0 million revolving working capital
facility and a six year $120.0 million term loan facility. An additional
agreement provides for the assignment of a three year $7.6 million ESOP loan
facility.
Also on September 30, 1998, the Company completed the repurchase of the
final $55.0 million of 11.5% Senior Subordinated Notes due 2006 (the "11.5%
Notes") that were then outstanding. These notes were
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redeemed at an aggregate premium and consent payment of $12.3 million along
with accrued interest of $1.1 million. The premium and consent payment was
aggregated with the write off of the remaining deferred issuance costs related
to the 11.5% Notes and the Old Credit Agreement and reported as an
extraordinary loss on debt extinguishment of approximately $19.0 million in
the fourth quarter of 1998.
In March 1998, the Company completed an offering of 4,370,000 shares of its
common stock (the "Common Stock Offering"). Net proceeds from the Common Stock
Offering totaled approximately $67.7 million. The Company used $39.4 million
of the proceeds to redeem $35.0 million in aggregate principal amount of its
11.5% Notes. These 11.5% Notes were redeemed at the call price of 109.857%,
expressed as a percentage of the original face value, resulting in premiums
paid of $3.5 million along with accrued interest of $0.9 million. Following
the redemption, $55.0 million in aggregate principal amount of the 11.5% Notes
remained outstanding. The Company recorded an extraordinary loss on the
extinguishment of the 11.5% Notes of approximately $5.0 million during the
second quarter of 1998. This loss includes $3.5 million of premiums paid to
purchase the 11.5% Notes and $1.5 million representing the write-off of a
proportionate share of the original unamortized deferred issuance costs. The
remaining $28.3 million was applied toward the Old Credit Agreement and
general corporate purposes.
The Company acquired Sofitam in September 1996 for $107.4 million less
certain adjustments. The Company's 1996 financial statements include three
months of Sofitam operations, and the 1997 and 1998 financial statements
include a full year of Sofitam operations. A comparison of sales in 1997
versus 1996 of entities that were part of Tokheim before the acquisition is
not meaningful because certain sales made by these entities were conducted
through Sofitam in 1996 and 1997.
International sales by foreign subsidiaries and exports from the U.S.
totaled approximately 60%, 64%, and 47% of consolidated net sales in 1998,
1997, and 1996, respectively. The acquisition of Sofitam has significantly
extended the Company's international distribution network, reducing its
reliance on U.S. domestic sales. Furthermore the acquisition of the RPS
Division will significantly increase the percentage of international sales in
relation to future consolidated sales.
In December 1997, the Company acquired Management Solutions, Inc. ("MSI").
MSI develops and distributes retail automation systems (including POS
software), primarily for the convenience store, petroleum dispensing and fast
food service industries. The Company paid MSI's stockholders an initial amount
of $12.0 million. The Company is also obligated to make contingent payments of
up to $13.2 million over fiscal years 1998, 1999 and 2000 based on MSI's
performance. The $13.2 million consists of $8.0 million of additional purchase
price, $2.6 million related to a non-compete agreement, and $2.6 million of
additional employee compensation. The Company borrowed funds for the initial
purchase price under the Old Credit Agreement.
Results of Operations
Net sales for 1998 were $466.4 million. Net sales excluding the current year
acquisitions of MSI and the RPS Division (the "Acquisitions") were $390.4
million as compared to $385.5 million in 1997.
After excluding the effects of the acquisitions, net sales for 1998
increased by 1.3% from 1997 levels. Sales for North America, excluding export
sales, increased 18.4% from $139.9 million in 1997 to $165.6 million in 1998.
This increase was driven by a stronger demand in the Company's retail
distribution, commercial dispensers and service parts sales. This demand was
driven by new, more convenient products, such as credit/debit card readers,
and environmental regulations, such as those requiring vapor recovery systems.
During the current year the oil industry had various major oil companies merge
together. It is currently unknown what the effect, if any, of these mergers
will have on the Company's future sales levels or operations. International
sales, including domestic export sales, were $224.8 million in 1998 compared
to $245.5 million in 1997, representing a decrease of $20.7 million or 8.4%.
This decrease is due in part to the continued decline in foreign currency
exchange rates from prior year levels. International sales would have been
$5.9 million higher if average exchange rates of European and African
currencies remained consistent with 1997 rates. The other major contributing
factor is a
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significant decline in current year domestic export sales to the Asia Pacific
and Middle East regions compared to prior year levels. The depressed sales to
the Asia Pacific region compared to prior year levels has been caused by a
significant economic downturn in that regions economy. There can be no
assurance as to when Asian market conditions will improve or whether they may
worsen or spread to other regions.
Net sales for 1997 were $385.5 million, an increase of 37.8% from 1996 sales
of $279.7 million. Substantially all of this increase was due to the inclusion
of a full year of Sofitam's results in 1997 compared to three months of
Sofitam's results in 1996. These increases were offset by the impact of a
decline in revenues due to a decline in foreign currency exchange rates. Sales
for 1997 would have been $20.9 million higher if average exchange rates of
European and African currencies had remained the same as in 1996.
Gross margin as a percent of sales (defined as net sales less cost of sales,
divided by net sales) was 26.0% in 1998 compared to 26.3% in 1997. This
decline is due to the historically lower gross margins in the RPS Division's
business, offset partially by manufacturing improvements made in certain of
the Company's operations. During 1998 the Fort Wayne, Indiana manufacturing
facility implemented operational improvements. The Company's operational
excellence strategy provides an integrated process resulting in what the
Company believes is a true world-class manufacturing facility. This
comprehensive approach utilizes advanced operations techniques encompassing
lean manufacturing, six sigma quality, high performance organizations,
supplier partnerships, advanced materials management and strategies to gain
the maximum amount of operational efficiencies. Once fully implemented at the
Fort Wayne, Indiana facility, these same techniques will be implemented in all
other manufacturing facilities.
Gross margin for 1997 was 26.3%, up from 24.8% in 1996. This increase is due
to (i) the inclusion of Sofitam's operations at higher margin levels for a
full year, (ii) personnel reductions and related cost savings, (iii) reduction
of warranty expense in North America, and (iv) the results of concentrated
efforts to improve manufacturing efficiencies globally. These cost reductions
were offset somewhat by decreasing sales prices.
Selling, general and administrative expense ("SG&A") as a percentage of net
sales was 17.1% for 1998. After removing the effects of the Acquisitions SG&A
was 17.6% or $68.9 million in 1998 compared to 17.7% or $68.2 million in 1997.
The slight increase in dollars is primarily attributed to increased costs
associated with year 2000 corrective actions and increased incentive
compensation related to sales and earnings performance. SG&A was 17.7% or
$68.2 million in 1997, compared to 18.5% or $51.7 million in 1996. This
increase over 1996 is largely attributable to a full year of Sofitam expenses.
These increases were offset by a program implemented by the Company in 1997 to
improve efficiency and reduce personnel, which translated into lower total
compensation cost.
Net interest expense increased in 1998 to $19.2 million from $16.5 million
in 1997. This increase is the direct result of higher levels of debt incurred
to effect the acquisition of the RPS Division. Net interest expense increased
in 1997 to $16.5 million from $7.2 million in 1996, reflecting a full year's
interest expense on the Company's 11.5% Senior Subordinated Notes due 2006
issued to finance the acquisition of Sofitam.
A net foreign currency exchange gain of $1.4 million was realized in 1998
compared to a net currency loss of less than $0.1 million in 1997 and a net
currency loss of $0.2 million in 1996. During the second quarter of 1998 the
company realized a foreign currency gain of $0.8 million associated with the
repayment of various French franc denominated borrowings previously entered
into under the Company's Old Credit Agreement. Due to the decline in the value
of the French franc, the Company was able to repay these borrowings with less
U.S. dollars than it had received when the original contracts were entered
into. During the fourth quarter of 1998 the Company settled a foreign
denominated obligation which resulted in a foreign currency gain of $0.6
million. The 1997 currency loss was due principally to the decline of the
French franc against the U.S. dollar and was partially offset by a foreign
currency gain of $0.5 million on the sale of a foreign currency option
contract.
Other income, net was $0.7 million in 1998 compared to $1.4 million in 1997.
This decrease is principally due to lower gains realized on the sale of
property, plant and equipment. Other income, net was $1.4 million in
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1997 compared to $0.2 million in 1996. This increase is partly due to gains on
the sale of property, plant and equipment that were $0.4 million greater in
1997 than 1996 and to the inclusion of Sofitam's other income for the full
year. In addition, other income in 1996 of $0.2 million includes $0.3 million
of expense for a litigation settlement of a non operating nature.
Income tax expense for 1998 was $1.0 million, which is comparable with the
prior year. As in prior years, the majority of this amount is comprised of
foreign taxes and U.S. state taxes. The Company's domestic and foreign
operations benefit from the use of net operating loss carryforwards generated
in prior years. Income tax expense for 1997 was $1.2 million, an increase from
$0.8 million in 1996. The increase was due to higher income, offset partially
by utilization of net operating loss carryforwards and adjustments of prior
year's taxes and refunds. At the end of 1998, the Company recorded a net
deferred tax asset of $40.2 million, which was offset in full by a valuation
allowance due largely to uncertainties associated with the Company's ability
to fully use these tax benefits. The Company is continuing to evaluate the
likelihood that all or part of the deferred tax asset will be realized through
the generation of future taxable earnings. If, in the future, the Company is
able to generate sufficient levels of taxable income, the valuation allowance
will be adjusted accordingly. See Note 15 of the Consolidated Financial
Statements for additional information concerning the Company's income tax
position at November 30, 1998.
Loss before extraordinary loss on debt extinguishment in 1998 was $3.7
million, or $0.46 loss per diluted common share, compared with 1997 earnings
before extraordinary loss on debt extinguishment of $4.0 million or $0.27
earnings per diluted common share and a loss of $2.0 million or $0.45 loss per
diluted common share in 1996. Net loss in 1998 included merger and acquisition
costs and other unusual items of $13.7 million, compared to $3.5 million in
1997 and $6.5 million in 1996. For further discussion see Note 3 to the
Consolidated Financial Statements.
In 1998, the Company incurred a $23.9 million extraordinary loss, or $2.10
loss per diluted common share, as a result of redeeming all outstanding 11.5%
Notes and refinancing borrowings under the Old Credit Agreement. This loss
includes $15.7 million of premiums paid to purchase these notes and $8.2
million of the remaining unamortized deferred issuance costs associated with
the 11.5% Notes and the Old Credit Agreement. In 1997, the Company incurred a
$1.9 million extraordinary loss, or $0.21 loss per diluted common share, as a
result of the open-market purchase and retirement of $10.0 million in
aggregate principal amount of the 11.5% Notes. This loss includes $1.4 million
of premiums paid to purchase the 11.5% Notes and $0.5 million representing the
write-off of a proportionate share of the original unamortized deferred
issuance costs. See further discussions under "--Liquidity and Capital
Resources" and Note 7 to the Consolidated Financial Statements, "Senior
Subordinated Notes."
On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's common currency, the euro. The Company conducts business in
member countries. The transition period for the introduction of the euro is
from January 1, 1999 to June 30, 2002. The Company has been, and is continuing
to, address the issues involved with the introduction of the euro. The more
important issues facing the Company include: converting information technology
systems; reassessing currency exchange rate risk; negotiating and amending
licensing agreements and contracts; product pricing; and processing tax and
accounting records. Conversion to the euro may reduce the Company's intra-
European exposure to changes in foreign currency exchange rates. As a result,
the Company's intra-European foreign currency translation and transaction
gains and losses could be reduced.
Based upon the Company's plans and progress to date, the Company believes
that use of the euro will not have a significant impact on the manner in which
it conducts its business affairs and processes its business and accounting
records. However there can be no certainty that such plans will be
successfully implemented or that external factors will not have an adverse
effect on the Company's operations. Any costs of compliance associated with
the adoption of the euro will be expensed as incurred and the Company does not
expect these costs to be material to its financial condition, results of
operations or cash flows.
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Inflation has not had a significant impact on the Company's results of
operations.
The Company is a party to various legal matters, and its operations are
subject to federal, state, and local environmental laws and regulations. For
further details, see Note 20 to the Consolidated Financial Statements,
"Contingent Liabilities."
Liquidity and Capital Resources
Cash provided from operations was $9.8 million in 1998 compared to $21.2
million in 1997 and $5.9 million in 1996. The decrease from 1997 to 1998 is
primarily due to increased receivables, principally at the RPS Division
locations since the date of Acquisition. The increase in receivables was
caused by the increased year-end RPS Division sales. The increase in 1997 cash
provided from operations was achieved primarily through improved earnings,
reductions in receivables and inventory, and an increase in accounts payable.
The improved cash flow from operations is the result of continued efforts to
increase the efficiency of the two consolidated businesses (Sofitam and
Tokheim) and improved working capital management. Cash flow from operations in
1996 was enhanced by improved receivables collection and increased accrued
expenses.
The Company's capital expenditures amounted to $14.5 million in 1998, $11.2
million in 1997, and $3.1 million in 1996. The increases in 1998 and 1997
relate primarily to capital requirements for implementing both the
consolidation plan for Sofitam, improvements at the Company's Fort Wayne,
Indiana manufacturing facility, and capitalizable cost associated with the
implementation of new finance and accounting software packages at the Fort
Wayne, Indiana, Lansdale, Pennsylvania and Trembley, France locations. At
November 30, 1998, no significant contractual commitments existed for future
capital expenditures. The Company expects to commit approximately $10.0
million for capital expenditures during 1999.
On September 30, 1998, the Company completed the Acquisition of the RPS
Division of Schlumberger for a price equal to $330.0 million in cash, notes,
and warrants, subject to certain post-closing adjustments. Of the $330.0
million purchase price, $100.0 million was paid in cash borrowed under the
terms of the Company's New Credit Agreement as well as $22.5 million of Senior
Notes. The $210.0 million seller note portion of the purchase price consisted
of $40.0 million in ten year, 12.0% junior subordinated payment-in-kind notes
and $170.0 million in 12.0% senior subordinated notes due January 29, 1999.
The remaining $20.0 million of the purchase price was paid with warrants
exercisable for five years, beginning January 30, 1999 to purchase at a
nominal price, 2,526,923 shares of the Company's common stock.
Simultaneously with the Acquisition, the Company executed the New Credit
Agreement with a consortium of banks to pay a portion of the purchase price
and to refinance previously existing indebtedness. The New Credit Agreement
provides for a six year, $120.0 million revolving working capital facility and
a six year $120.0 million term loan facility. An additional agreement provides
for the assignment of a three year $7.6 million ESOP loan facility. At
November 30, 1998 the outstanding borrowings were $62.1 million under the
revolving working capital facility, $120.0 million under the term loan, and
$7.0 million under the ESOP facility. The term loan calls for equal quarterly
principal payments aggregating $7.5 million in year 2000; $10.0 million in
2001; $12.5 million in 2002; $15.0 million in 2003; $37.5 million in a single
payment due first quarter 2004; and the remainder due at maturity. Available
borrowings under the revolving working capital facility were $57.9 million at
November 30, 1998, subject to the Company's borrowing base calculation and
certain other loan covenants. The New Credit Agreement replaced Tokheim's Old
Credit Agreement.
Also on September 30, 1998, the Company completed the repurchase of the
final $55.0 million of its 11.5% Notes that were then outstanding. These notes
were redeemed at an aggregate premium and consent payment of $12.3 million
along with accrued interest of $1.1 million. The premium and consent payment
was aggregated with the write off of the remaining deferred issuance costs
related to the 11.5% Notes and the Old Credit
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Agreement and reported as an extraordinary loss on debt extinguishment of
approximately $19.0 million in the fourth quarter of 1998.
On January 29, 1999, the Company redeemed the Senior Subordinated Seller
Notes and the Senior Notes with the proceeds from the issuance of $123.0 of
million Dollar Notes and ^75.0 million of Euro Notes (approximately $87.0
million) in a private placement pursuant to Rule 144A and Regulation S. The
Senior Subordinated Seller Notes were redeemed at an aggregate price of $176.7
million, representing principal of $170.0 million and accrued and unpaid
interest thereon of $6.7 million. The Senior Notes were redeemed at an
aggregate price of $23.2 million, representing principal of $22.5 million,
accrued and unpaid interest thereon of $0.2 million and an applicable call
premium of $0.5 million.
During the first quarter of 1999, the Company incurred an extraordinary loss
on debt extinguishment of approximately $6.3 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes. This
amount consists of $0.5 million of premiums on the Senior Notes and
approximately $5.8 million of unamortized deferred issuance costs.
The Company is to reimburse Schlumberger for cash (net of adjustments) that
remained in the RPS Division at the acquisition date. This amount is currently
estimated to be approximately $6.5 million. It is anticipated that this
payment to Schlumberger will be made in the second quarter of 1999 from funds
available through the revolving working capital facility under the New Credit
Agreement.
In March 1998, the Company completed the Common Stock Offering. Net proceeds
from the Common Stock Offering totaled approximately $67.7 million. The
Company used $39.4 million of the proceeds to redeem $35.0 million in
aggregate principal amount of its 11.5% Notes. These 11.5% Notes were redeemed
at the call price of 109.857%, expressed as a percentage of the original face
value, resulting in premiums paid of $3.5 million along with accrued interest
of $0.9 million. Following the redemption, $55.0 million in aggregate
principal amount of the 11.5% Notes remained outstanding. The Company recorded
an extraordinary loss on the extinguishment of the 11.5% Notes of
approximately $5.0 million during the second quarter of 1998. This loss
includes $3.5 million of premiums paid to purchase the 11.5% Notes and $1.5
million representing the write-off of a proportionate share of the original
unamortized deferred issuance costs. The remaining $28.3 million was applied
toward the Old Credit Agreement and general corporate purposes.
As part of the purchase price of the RPS Division, the Company has provided
for certain costs it expects to incur to close down redundant operations in
connection with the reorganization and rationalization of the RPS Division's
operations. The Company expects to incur approximately $18.6 million
associated with involuntary termination costs to reduce redundant staffing
levels, approximately $0.5 million of facility closure and other exit costs,
and approximately $1.2 million associated with lease breakage fees. These
costs have been aggregated and included in accrued liabilities. In addition,
the Company will incur additional cash expenditures of approximately $2.2
million, consisting of $0.9 million capitalizable expenditures and $1.3
million of normal operating costs to close redundant facilities. These amounts
do not include costs associated with the consolidation of previously existing
Tokheim subsidiaries, which will be expensed as incurred, nor do these costs
benefit future periods. The Company estimates the cash expenditures necessary
to close or consolidate certain of the existing Tokheim subsidiaries to
approximate $6.6 million. These costs will be funded with cash generated from
operations, working capital improvements and, if needed, borrowings from the
revolving working capital facility.
As part of the MSI acquisition, the Company is obligated to make contingent
payments of up to $13.2 million over the next three years based on MSI's
performance. The $13.2 million consists of $8.0 million of additional purchase
price, $2.6 million related to a non-compete agreement, and $2.6 million of
additional employee compensation. In 1998 the Company was not required to and
did not make any additional payments.
In connection with the continued implementation of the Sofitam consolidation
plan, the Company expects to incur additional expenditures of approximately
$4.0 million in 1999 to complete the consolidation plan. In 1998, the Company
charged $3.3 million against the acquisition accrual recorded for estimated
cost necessary to
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realign the Sofitam operations in Europe, including the closure of certain
redundant operations. This realignment also resulted in $7.5 million of
charges against operating income for 1998 principally related to the closure
of the Glenrothes, Scotland facility.
The Company has guaranteed loans to the Employees' Stock Ownership Plan
("ESOP") in the amounts of $7.0 million and $7.6 million at November 30, 1998
and 1997, respectively. The Trustee who holds the ESOP Preferred Stock may
elect to convert each preferred share to one common share in the event of a
redemption by the Company, certain consolidations or mergers of the Company,
or a redemption by the Trustee that is necessary to provide for distributions
under the Company's Retirement Savings Plan. A participant may elect to
receive a distribution from the plan in cash or common stock. If redeemed by
the Trustee, the Company is responsible for purchasing the preferred stock at
the twenty-five dollar floor value. The Company may elect to pay the
redemption price in cash or an equivalent amount of common stock. Preferred
stock dividends paid were $1.5 million in 1998 and 1997, respectively.
In December 1997, the Company initiated its Year 2000 plan, including the
organization and staffing of a full-time Year 2000 program office. The Company
has organized the process into the following sections: product certification
(ensuring all products sold by the Company are Year 2000 ready); internal
information systems (ensuring all internal hardware and software is Year 2000
ready through upgrades or replacement); suppliers, distributors and external
agents (ensuring all suppliers, distributors and external agents used by the
Company to purchase or sell goods and services are Year 2000 ready); and
manufacturing and infrastructure (ensuring manufacturing and infrastructure
systems are Year 2000 ready).
As of December 31, 1998 most of the Company's products worldwide had been
tested for Year 2000 readiness. A substantial majority of the Company's total
product lines are Year 2000 ready, and the Company believes that the remaining
products will be Year 2000 ready by December 1999. The Company's products
presently being sold are Year 2000 ready. The Company is currently assessing
which products in the field are not Year 2000 ready and its responsibility to
the customers, if any, to remedy non-compliant products. This assessment is
being done for all products sold by each entity with the assessment efforts
focused on the recently acquired RPS Division locations. There is a
possibility that certain third-party networks over which the POS systems must
operate may not be Year 2000 ready, but the Company's products will still
allow the pumping of petroleum products. The Company has surveyed its critical
suppliers, and about half of the respondents have indicated that they are Year
2000 ready. The other half of those responding have indicated that they are
still working to achieve Year 2000 readiness, but none has indicated that it
expects not to be ready. The Company believes that all of its information
systems will be Year 2000 ready no later than the third quarter of 1999. To
date, the Company has not uncovered any material Year 2000 problems. The total
costs associated with required modifications to become Year 2000 ready are not
expected to be material to the Company's financial position, results of
operations or cash flows. The Company estimates that it will spend a total of
approximately $3.7 million by December 31, 1999, of which approximately $0.8
million had been spent by November 30, 1998, to become Year 2000 ready. The
Company has enlisted the assistance of a third-party consulting company to
provide independent verification and validation of its entire Year 2000 plan.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operation, liquidity, and financial condition. The Company believes
that the most likely failure scenario is that its POS systems that have not
been corrected may fail, but the Company's dispensers will still allow the
pumping of petroleum products. Under such a scenario, purchasers of petroleum
products would still be able to use the dispensers but would be required to
pay for their purchases at the cashier rather than at the pump.
Due to the general uncertainty inherent in the Year 2000 problem, resulting
in part from the uncertainty of the Year 2000 readiness of third-party
suppliers, customers, and devices that interface with the Company's products,
the Company is unable to determine at this time whether the consequences of
Year 2000 failures will have a material impact on the Company's results of
operations, liquidity, or financial condition. The Year 2000 plan is expected
to significantly reduce the Company's level of uncertainty about the Year 2000
problem and, in particular, about the Year 2000 readiness of its material
external agents. The Company believes that with the
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implementation of new business systems and completion of the Year 2000 plan as
scheduled, the possibility of significant interruptions of normal operations
should be reduced. However, contingency planning for all sections discussed
above commenced in the fourth quarter of 1998, and the Company is currently
focusing on assessing the potential Year 2000 problems that may arise and the
risks of not becoming Year 2000 ready for each section mentioned. The Company
expects to have a contingency plan in place by the end of the second quarter
of 1999.
The Future
The Company's principal sources of liquidity in the future are expected to
be cash flow from operations, including cash flow anticipated to be generated
from the recently acquired RPS Division, and available borrowings under the
New Credit Agreement. It is expected that the Company's principal uses of
liquidity will be to provide working capital, finance capital expenditures,
fund costs associated with the Company's integration and rationalization plan
and meet debt service requirements. As a result of the Acquisition, the
Company has a significant level of debt. Based upon current levels of
operations and anticipated cost savings and future growth, the Company
believes that its expected cash flow from operations, together with available
borrowings under the New Credit Agreement and its other sources of liquidity,
including leases, will be adequate to meet its anticipated requirements for
working capital, capital expenditures, lease payments and scheduled principal
and interest payments. There can be no assurance, however, that the Company's
business will continue to generate cash flow at or above current levels, that
estimated cost savings or growth will be achieved or that the Company will be
able to refinance its existing indebtedness in whole or in part.
The indentures under which the Dollar Notes and the Euro Notes were issued
(the "Indentures") and the New Credit Agreement contain a number of
significant covenants. The New Credit Agreement requires the Company to
maintain specified financial ratios and satisfy certain financial tests. The
Company's ability to meet such financial ratios and tests may be affected by
events beyond its control. There can be no assurance that the Company will
meet such financial ratios and tests. In addition, the Indentures limit the
ability of the Company and its subsidiaries to, among other things: incur
additional debt; pay dividends on capital stock or repurchase capital stock or
make certain other restricted payments; use the proceeds of certain asset
sales; make certain investments; create liens on assets to secure debt; enter
into transactions with affiliates; merge or consolidate with another company;
and transfer and sell assets.
New Accounting Pronouncements
The Company has considered the impact that accounting pronouncements
recently issued by the Financial Accounting Standards Board and American
Institute of Certified Public Accountants will have on the Consolidated
Financial Statements as of November 30, 1998. None of the pronouncements that
have been issued but not yet adopted by the Company are expected to have a
material impact on the Company's financial position, results of operations or
cash flows. See Note 1 to the Consolidated Financial Statements for additional
information regarding recently issued accounting pronouncements.
16
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
17
<PAGE>
Item 8. Financial Statements and Supplementary Data.
CONSOLIDATED STATEMENT OF EARNINGS
for the years ended November 30, 1998, 1997, and 1996
(Amounts in thousands except dollars per share)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Net sales....................................... $466,440 $385,469 $279,733
Cost of sales, exclusive of items listed below.. 345,031 283,932 210,223
Selling, general, and administrative expenses... 79,819 68,167 51,667
Depreciation and amortization................... 13,136 9,232 5,028
Merger and acquisition costs and other unusual
items.......................................... 13,685 3,493 6,459
-------- -------- --------
Operating profit................................ 14,769 20,645 6,356
Interest expense (net of interest income of
$822, $837 and $602, respectively)............. 19,257 16,451 7,191
Foreign currency (gain) loss.................... (1,442) 48 159
Minority interest in subsidiaries............... 327 394 393
Other income, net............................... (675) (1,445) (158)
-------- -------- --------
Earnings (loss) before income taxes and
extraordinary loss............................. (2,698) 5,197 (1,229)
Income taxes.................................... 1,046 1,217 780
-------- -------- --------
Earnings (loss) before extraordinary loss....... (3,744) 3,980 (2,009)
Extraordinary loss on debt extinguishment....... (23,924) (1,886) --
-------- -------- --------
Net earnings (loss)............................. (27,668) 2,094 (2,009)
Preferred stock dividends ($1.94 per share)..... (1,484) (1,512) (1,543)
-------- -------- --------
Earnings (loss) applicable to common stock...... $(29,152) $ 582 $ (3,552)
======== ======== ========
Earnings (loss) per common share:
Basic
Before extraordinary loss................... $ (0.46) $ 0.31 $ (0.45)
Extraordinary loss on debt extinguishment... (2.10) (0.23) --
-------- -------- --------
Net earnings (loss)......................... $ (2.56) $ 0.08 $ (0.45)
======== ======== ========
Weighted average shares outstanding......... 11,371 8,042 7,940
======== ======== ========
Diluted
Before extraordinary loss................... $ (0.46) $ 0.27 $ (0.45)
Extraordinary loss on debt extinguishment... (2.10) (0.21) --
-------- -------- --------
Net earnings (loss)......................... $ (2.56) $ 0.06 $ (0.45)
======== ======== ========
Weighted average shares outstanding......... 11,371 9,005 7,940
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
for the years ended November 30, 1998, 1997, and 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net earnings (loss)............................ $(27,668) $ 2,094 $ (2,009)
Adjustments to reconcile net earnings (loss) to
net cash provided from operating activities:
Write-off of in-process research and
development................................. 5,879 -- --
Extraordinary loss on debt extinguishment.... 23,924 1,886 --
Depreciation and amortization................ 13,136 9,232 5,028
Gain on sale of property, plant, and
equipment................................... (36) (408) (59)
Deferred income taxes........................ (431) (139) (251)
Changes in assets and liabilities (net of
effects of the acquisitions in 1998 and
1996):
Receivables, net........................... (21,439) 4,254 2,363
Inventories................................ 4,327 5,975 (2,626)
Other current assets....................... 3,185 (2,001) 5,987
Accounts payable........................... 7,691 5,116 (1,425)
Accrued expenses........................... 6,370 (3,395) 4,249
Other...................................... (5,148) (1,412) (5,360)
-------- -------- --------
Net cash provided from operating
activities.............................. 9,790 21,202 5,897
-------- -------- --------
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired............. (110,641) -- (52,105)
Property, plant, and equipment additions....... (14,548) (11,154) (3,061)
Proceeds from sale of property, plant and
equipment..................................... 775 760 1,087
-------- -------- --------
Net cash used in investing activities.... (124,414) (10,394) (54,079)
-------- -------- --------
Cash Flows From Financing Activities:
Proceeds from senior notes..................... 22,500 -- --
Proceeds from senior subordinated notes........ -- -- 100,000
Redemption of senior subordinated notes........ (90,000) (10,000) --
Payments on term and other debt................ (4,267) (3,747) (31,800)
Net increase (decrease) in notes payable,
banks......................................... 158,769 1,770 (5,044)
Net increase in cash overdraft................. 3,571 1,874 7,237
Debt issuance costs............................ (16,157) -- (11,506)
Proceeds from issuance of common stock......... 74,057 1,706 42
Equity issuance costs.......................... (4,858) -- --
Treasury stock, net............................ (719) (496) (370)
Premiums paid on debt extinguishment........... (15,743) (1,390) --
Preferred stock dividends...................... (1,484) (1,512) (1,543)
-------- -------- --------
Net cash provided from (used in)
financing activities.................... 125,669 (11,795) 57,016
-------- -------- --------
Effect of translation adjustments on cash........ 9,318 (2,389) (4,482)
-------- -------- --------
Increase (decrease) in cash.................... 20,363 (3,376) 4,352
Cash and cash equivalents:
Beginning of year.............................. 6,438 9,814 5,462
-------- -------- --------
End of year.................................... $ 26,801 $ 6,438 $ 9,814
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
CONSOLIDATED BALANCE SHEET
as of November 30, 1998 and 1997
(Amounts in thousands)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents.................................. $ 26,801 $ 6,438
Accounts receivable, less allowance for doubtful accounts
of $2,115 and $1,392, respectively........................ 172,693 83,011
Inventories:
Raw materials and supplies............................... 70,545 29,427
Work in process.......................................... 27,418 27,514
Finished goods........................................... 25,070 7,406
-------- --------
123,033 64,347
Other current assets....................................... 19,139 6,705
-------- --------
Total current assets..................................... 341,666 160,501
Property, plant and equipment, at cost:
Land and land improvements................................. 5,644 4,679
Buildings and building improvements........................ 41,803 27,956
Machinery and equipment.................................... 97,138 70,068
Construction in progress................................... 6,041 4,514
-------- --------
150,626 107,217
Less accumulated depreciation............................ 72,721 64,682
-------- --------
77,905 42,535
Other tangible assets........................................ 4,873 3,615
Goodwill, net................................................ 324,113 67,695
Other non-current assets and deferred charges, net........... 28,085 16,273
-------- --------
Total assets............................................. $776,642 $290,619
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
CONSOLIDATED BALANCE SHEET
as of November 30, 1998, and 1997
(Amounts in thousands except dollars per share)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt.................... $ 2,110 $ 2,391
Notes payable to banks.................................. 410 98
Cash overdrafts......................................... 15,064 10,575
Accounts payable........................................ 95,322 54,597
Accrued expenses........................................ 136,164 51,190
-------- --------
Total current liabilities............................. 249,070 118,851
Notes payable, bank credit agreement...................... 182,145 24,090
Senior notes.............................................. 22,500 --
Senior subordinated notes................................. 170,000 90,000
Junior subordinated payment-in-kind notes................. 40,000 --
Other long-term debt, less current maturities............. 4,115 4,397
Guaranteed Employees' Stock Ownership Plan (ESOP)
obligation............................................... 6,987 9,429
Post-retirement benefit liability......................... 14,418 14,378
Minimum pension liability................................. 3,135 2,173
Other long-term liabilities............................... 7,511 6,830
-------- --------
699,881 270,148
-------- --------
Commitments and contingencies (Note 21)
Redeemable convertible preferred stock, at liquidation
value of $25 per share, 1,700 shares authorized, 960
shares issued............................................ 24,000 24,000
Guaranteed Employees' Stock Ownership Plan (ESOP)
obligation............................................... (6,987) (9,429)
Treasury stock, at cost, 195 and 189 shares,
respectively............................................. (4,883) (4,718)
-------- --------
12,130 9,853
-------- --------
Preferred stock, no par value; 3,300 shares authorized and
unissued................................................. -- --
Common stock, no par value; 30,000 shares authorized,
12,698 and 8,232 shares issued, respectively............. 90,354 21,158
Common stock warrants..................................... 20,000 --
Minimum pension liability................................. (3,135) (2,173)
Foreign currency translation adjustments.................. (22,598) (18,048)
Retained earnings (accumulated deficit)................... (19,295) 9,821
-------- --------
65,326 10,758
Treasury stock, at cost, 38 and 9 shares, respectively.... (695) (140)
-------- --------
64,631 10,618
-------- --------
Total liabilities and shareholders' equity............ $776,642 $290,619
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For the years ended November 30, 1998, 1997 and 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
Common Stock Foreign Retained Total
-------------------- Guaranteed Minimum Currency Earnings Common
Outstanding Treasury ESOP Pension Translation (Accumulated Shareholders'
Amount Amount Warrants Obligation Obligation Adjustments Deficit) Equity
----------- -------- -------- ---------- ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at November 30,
1995................... $19,409 $(231) $ -- $(786) $(3,868) $ (3,542) $ 12,815 $23,797
Stock options
exercised............. 43 -- -- -- -- -- -- 43
Employee termination
benefits.............. -- 11 -- -- -- -- -- 11
Treasury stock
purchases............. -- 28 -- -- -- -- -- 28
Decrease in guaranteed
ESOP obligation....... -- -- -- 483 -- -- -- 483
Minimum pension
liability adjustment.. -- -- -- -- 620 -- -- 620
Foreign currency
translation
adjustments........... -- -- -- -- -- (3,729) -- (3,729)
Net loss............... -- -- -- -- -- -- (2,009) (2,009)
Treasury stock
transactions.......... -- -- -- -- -- -- (23) (23)
Preferred stock
dividends............. -- -- -- -- -- -- (1,543) (1,543)
------- ----- ------- ----- ------- -------- -------- -------
Balance at November 30,
1996................... $19,452 $(192) $ -- $(303) $(3,248) $ (7,271) $ 9,240 $17,678
Stock options
exercised............. 1,706 -- -- -- -- -- -- 1,706
Treasury stock
purchases............. -- 52 -- -- -- -- -- 52
Decrease in guaranteed
ESOP obligation....... -- -- -- 303 -- -- -- 303
Minimum pension
liability adjustment.. -- -- -- -- 1,075 -- -- 1,075
Foreign currency
translation
adjustments........... -- -- -- -- -- (10,777) -- (10,777)
Net earnings........... -- -- -- -- -- -- 2,094 2,094
Treasury stock
transactions.......... -- -- -- -- -- -- (1) (1)
Preferred stock
dividends............. -- -- -- -- -- -- (1,512) (1,512)
------- ----- ------- ----- ------- -------- -------- -------
Balance at November 30,
1997................... $21,158 $(140) $ -- -- $(2,173) $(18,048) $ 9,821 $10,618
Stock options
exercised............. 1,472 -- -- -- -- -- -- 1,472
Common stock offering.. 67,724 -- -- -- -- -- -- 67,724
Common stock warrants
issued................ -- -- 20,000 -- -- -- -- 20,000
Treasury stock
purchases............. -- (555) -- -- -- -- -- (555)
Minimum pension
liability adjustment.. -- -- -- -- (962) -- -- (962)
Foreign currency
translation
adjustments........... -- -- -- -- -- (4,550) -- (4,550)
Net (loss)............. -- -- -- -- -- -- (27,668) (27,668)
Minority interest
dividends............. -- -- -- -- -- -- 36 36
Preferred stock
dividends............. -- -- -- -- -- -- (1,484) (1,484)
------- ----- ------- ----- ------- -------- -------- -------
Balance at November 30,
1998................... $90,354 $(695) $20,000 $ -- $(3,135) $(22,598) $(19,295) $64,631
======= ===== ======= ===== ======= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except dollars per share)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation--The Consolidated Financial Statements include
the accounts of Tokheim Corporation and its wholly- and majority-owned
subsidiaries (the "Company"). The Consolidated Financial Statements include
100% of the assets and liabilities of these subsidiaries, with the ownership
interest of minority participants recorded as minority interest. All
significant intercompany accounts and transactions have been eliminated in
consolidation. In September 1996, the Company acquired the petroleum dispenser
business ("Sofitam") of Sofitam, S.A., in December 1997, the Company acquired
Management Solutions Inc ("MSI"), and in September 1998, the Company acquired
the fuel dispenser systems and service business (the "RPS Division") of
Schlumberger Limited. The accounts of these three acquired companies are
included in the Consolidated Financial Statements since the respective dates
listed above. (See Note 2.)
Nature of Operations--The Company engages principally in the design,
manufacture and servicing of electronic and mechanical petroleum dispensing
marketing systems, including service station equipment, point-of-sale control
systems, and card- and cash-activated transaction systems for customers around
the world. The Company markets its products through subsidiaries located
throughout the world and has major facilities in the United States, France,
Canada, Germany, Italy, the Netherlands, Scotland, and South Africa.
Translation of Foreign Currency--The financial position, results of
operations and cash flows of the Company's foreign subsidiaries are measured
using local currency as the functional currency. Revenues and expenses of such
subsidiaries have been translated into U.S. dollars at average exchange rates
prevailing during the period. Assets and liabilities have been translated at
the rates of exchange at the balance sheet date. Translation gains and losses
are deferred as a separate component of shareholders' equity. Aggregate
foreign currency transaction gains and losses are included in determining net
earnings.
Risks and Uncertainties--The Company is not dependent on any single
customer, group of customers, market, geographic area or supplier of
materials, labor or services. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the
Consolidated Financial Statements and accompanying notes. The more significant
areas requiring the use of management's estimates include allowances for
obsolete inventory and uncollectible receivables, product warranty claims,
environmental and product liabilities, postretirement, pension, and other
employee benefits, valuation allowances for deferred tax assets, future
obligations associated with the Company's restructuring plans, future cash
flows associated with assets, and useful lives for depreciation and
amortization. Actual results could differ from these estimates, making it
reasonably possible that a change in certain of these estimates could occur in
the near term. Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and trade
receivables. The Company places its cash with high credit quality financial
institutions. At times, cash in United States banks may exceed FDIC insurance
limits. Concentration of credit risk with respect to trade receivables is
considered to be minimal due to the Company's large customer base and ongoing
control procedures, which monitor the credit worthiness of customers.
Fair Value of Financial Instruments--The fair value of cash and cash
equivalents, trade receivables, and accounts payable approximates the carrying
value because of the short-term maturities of these financial instruments.
The interest rate on the Company's bank credit agreement (the "New Credit
Agreement") fluctuates with current market rates. Consequently, the carrying
value of the New Credit Agreement approximates the market prices for the same
or similar issues in future periods. The estimated fair value of the Company's
12.0% senior subordinated notes (the "Senior Subordinated Seller Notes") and
the Company's 12.5% senior notes due 2005 (the "Senior Notes") approximated
the carrying value at November 30, 1998 since both notes were redeemed at
23
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
face value on January 29, 1999. The Company estimates that the fair value of
the $40,000 Junior Subordinated 12.0% Payment-in-Kind notes (the "Junior
Notes") approximated the carrying value at November 30, 1998 as there were no
significant changes in the market conditions or risks related to these notes
during the two month period between the time when the notes were issued on
September 30, 1998 and November 30, 1998.
The fair value of the Company's $20,000 common stock warrants (the
"Warrants") approximates $21,795 at November 30, 1998. This amount is computed
based on the Company's November 30, 1998 common stock price of $8.625 per
share less the nominal consideration to be received if exercised.
The fair value of the Company's convertible preferred stock, which is held
in the Trust of the Company's Retirement Savings Plan ("RSP"), approximates
the carrying value, as such stock is not traded in the open market, and the
value at conversion is equal to a fixed redemption value in cash or equivalent
amounts of common stock.
Inventory Valuation--Inventories are valued at the lower of cost or market.
Cost is determined using the first-in, first-out (FIFO) method.
Property and Depreciation--Depreciation of plant and equipment is generally
determined on a straight-line basis over the estimated useful lives of the
assets. Upon retirement or sale of assets, the cost of the disposed assets and
related accumulated depreciation are removed from the accounts, and any
resulting gain or loss is credited or charged to income. These gains and
losses are accumulated and shown as a component of other income, net in the
statement of earnings. Buildings are generally depreciated over 40 years.
Machinery and equipment are depreciated over periods ranging from five to ten
years. Expenditures for normal repairs and maintenance are charged to expense
as incurred. Expenditures for improving or rebuilding existing assets which
extend the useful life of the assets are capitalized.
Software and Research and Development Costs--Costs incurred to address year
2000 issues are expensed when incurred. Costs incurred related to software
developed or obtained for internal use are capitalized during the application
development stage of the software development and are amortized over 3 years.
Amortization of capitalized software development costs offered for sale is
provided over the estimated economic useful life of the software product on a
straight-line basis, generally three to four years. Unamortized software costs
included in other non-current assets were $8,711, and $1,089 at November 30,
1998 and 1997, respectively. The amounts amortized and charged to expense in
1998, 1997 and 1996 were $2,025, $260 and $163, respectively. Included in
unamortized software costs at November 30, 1998 is approximately $4,850
related to software technology costs capitalized in connection with the
acquisition of MSI.
All other product development expenditures are charged to research and
development expense in the period incurred. These expenses amounted to
$21,080, $18,284 and $15,909 in 1998, 1997 and 1996, respectively. In addition
to these expenses, the Company wrote off $5,879 of in-process research and
development expenses in connection with the acquisition of MSI and the related
purchase price allocation. See Note 2 for additional information.
Goodwill and Other Intangible Assets--Goodwill is amortized on a straight-
line basis over 40 years. The Company will continue to review facts and
circumstances to determine whether the remaining estimated useful life of
goodwill warrants revision or whether the carrying amount may not be
recoverable, using profitability projections to assess whether future
operating income on a non-discounted basis is likely to exceed the
24
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
amortization over the remaining life of the goodwill. The amounts amortized
and charged to expense in 1998, 1997 and 1996 were approximately $2,709,
$1,490 and $420, respectively. Accumulated amortization of goodwill at
November 30, 1998 and 1997 was $4,619 and $1,910, respectively. The Company is
in the process of valuing certain tangible and intangible assets acquired with
the RPS Division and will finalize the preliminary purchase price allocation
upon completion of these valuations. The goodwill recorded in connection with
the RPS Division is currently being amortized over 40 years. The Company will
determine the appropriate amounts and useful lives of the identified
intangible assets upon completion of the valuations. Finalization of the
purchase price allocation is not expected to have a material impact on the
Company's financial position or results of operations as of and for the year
ended November 30, 1998.
Other non-current assets and deferred charges consist primarily of debt
issuance costs. These costs are amortized over the terms of the related debt
agreements on a straight-line basis, which is not materially different from
the effective interest method, with periods ranging from six to eight years.
Amortization of these deferred charges included in interest expense at
November 30, 1998, 1997 and 1996 was $1,658, $1,623, and $401, respectively.
During 1998, the Company capitalized $16,160 of debt issuance costs incurred
in connection with the acquisition of the RPS Division and related financing
and charged $6,666 of deferred debt issuance costs to extraordinary loss on
debt extinguishment. During 1997, the Company charged $496 of deferred bond
issuance costs to extraordinary loss on debt extinguishment. This amount
represents the write-off of a proportionate share of the original unamortized
deferred issuance cost incurred in connection with the issuance of the senior
subordinated notes for the acquisition of Sofitam. During 1996, the Company
wrote-off approximately $233 of deferred debt issuance costs and capitalized
approximately $11,506 of costs incurred in connection with the refinancing of
the Company's preexisting debt and issuance of senior subordinated notes.
Accumulated amortization of other non-current assets and deferred charges at
November 30, 1998 and 1997 was $420 and $2,520, respectively.
Advertising and Promotion--All costs associated with advertising and product
promotion are expensed in the period incurred. These expenses amounted to
$3,577, $2,687 and $2,268 in 1998, 1997 and 1996, respectively.
Income Taxes--The Company accounts for income taxes under the liability
method in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109 "Accounting for Income Taxes." The provision for income taxes includes
federal, foreign, state and local income taxes currently payable as well as
deferred taxes. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in years in which those
temporary differences are expected to be recovered or settled. If it is more
likely than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is recognized. No additional U.S. income taxes
or foreign withholding taxes have been provided on accumulated earnings of
foreign subsidiaries approximating $20,543 which are expected to be reinvested
indefinitely. (See Note 15).
Environmental Cleanup Matters--The Company adopted The American Institute of
Certified Public Accountants ("AICPA") Statement of Position ("SOP") No. 96-1,
"Environmental Remediation Liabilities" during 1998. This SOP did not have a
material impact on the Company's financial position, results of operations or
cash flows for 1998. The Company expenses environmental expenditures related
to existing conditions resulting from past or current operations and from
which no current or future benefit is discernible. Expenditures which extend
the life of the related property or mitigate or prevent future environmental
contamination are capitalized. The Company determines its liability on a site
by site basis and records a liability at the time when the associated expenses
can be reasonably estimated.
New Accounting Pronouncements
SFAS No. 129, "Disclosure of Information about Capital Structure," was
adopted during the first quarter of the fiscal year ended November 30, 1998.
This statement did not have a material impact on the Company's financial
position, results of operations or cash flows as disclosure requirements did
not change for the Company
25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
with this new statement. SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," and SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," are effective for the year
ending November 30, 1999. In the opinion of management, these statements will
not have a material impact on the Company's financial position, results of
operations, or cash flows since they are "disclosure only" standards. The
Company is currently evaluating the impact that SFAS No. 131 will have on its
current segment groupings. SFAS No. 130, "Reporting Comprehensive Income," is
effective for the year ending November 30, 1999. Due to the significance of
the foreign currency translation adjustments recorded, comprehensive income
would have been less than reported net earnings or reduced net loss had SFAS
No. 130 been adopted. SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued in June 1998 and is effective for the year
ending November 30, 2000. SFAS No. 133 establishes a new model for accounting
for derivatives in the balance sheet as either assets or liabilities and
measures them at fair value. Certain disclosures concerning the designation
and assessment of hedging relationships are also required. Management has not
yet determined the impact of this statement on the Company's consolidated
financial statements.
SOP No. 97-2 "Software Revenue Recognition," is effective for the Company
for the year ended November 30, 1999. SOP No. 97-2 supersedes SOP No. 91-1 and
provides more specific guidance on revenue recognition related to software
products. The Company does not expect the adoption of SOP No. 97-2 to have a
material impact on the Company's financial position, results of operations or
cash flows.
Product Warranty Costs--Anticipated costs related to product warranty are
expensed in the period of sale.
Cash Flows--For purposes of the Statement of Cash Flows, the Company
considers all highly liquid investments purchased with an initial maturity of
90 days or less to be cash equivalents.
Supplemental disclosures of cash flow information:
<TABLE>
<CAPTION>
1998 1997 1996
-------- ------- --------
<S> <C> <C> <C>
Cash paid during the year for interest........... $ 15,930 $15,204 $ 4,918
Cash paid during the year for income taxes....... 1,194 921 1,013
Senior Subordinated Seller Notes issued in
connection with the RPS acquisition............. 170,000 -- --
Junior Notes issued in connection with the RPS
acquisition..................................... 40,000 -- --
Liabilities assumed in the Acquisitions including
accrued merger and acquisition costs............ 101,830 -- 123,575
</TABLE>
Reclassifications--Certain prior year amounts in these financial statements
have been reclassified to conform with the current year presentation.
2. ACQUISITIONS
Acquisition of MSI--In December 1997, the Company acquired MSI. MSI develops
and distributes retail automation systems (including Point of Sale ("POS")
software), primarily for the convenience store, petroleum dispensing and fast
food service industries. The Company paid MSI's stockholders an initial amount
of $12,000. The Company is also obligated to make contingent payments of up to
$13,200 over the years 1998, 1999 and 2000 based upon MSI's performance. The
$13,200 consists of $8,000 of additional purchase price, $2,600 related to a
non-compete agreement, and $2,600 of additional employee compensation. The
Company borrowed funds for the initial purchase price under the Company's Old
Credit Agreement.
26
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
The MSI acquisition has been accounted for as a purchase, and accordingly,
the results of operations of MSI have been included in the Company's
Consolidated Financial Statements since the date of acquisition. Assets of
approximately $2,700 were acquired and liabilities of approximately $1,400
were assumed and have been recorded at their determined fair values. An
independent valuation was performed for intangible assets acquired. As such,
intangible software technology was recorded which is being amortized over four
years and $5,879 was allocated to in-process research and development projects
that have not reached technological feasibility and have no alternative future
use. This amount was charged to operations at the date of acquisition and is
included in merger and acquisition costs and other unusual items in the
consolidated statement of earnings. The portion of the contingent payments
that do not relate to employee compensation will be allocated to various
intangible assets and goodwill and amortized over periods ranging from four to
twelve years, if payments are required. The Company was not required to make
any contingent purchase price payments for the year ended November 30, 1998.
As of the acquisition date, MSI was developing the CVN POS(TM) for
Windows(R) solution (CVN Windows) in order to provide a next-generation
comprehensive point of sale (POS) software application in the convenience
store, petroleum dispensing and fast food service industries. CVN Windows will
incorporate a graphical user interface with touch screen controls and allow
the system to be used with most POS systems. CVN Windows was under development
for approximately two years and was in the alpha testing stage at the time of
the acquisition. At the date of acquisition, approximately 85% of the research
and development costs related to CVN Windows had been incurred, based on
remaining costs to complete development, testing and quality assurance. The
Company expects to complete the development tasks for CVN Windows remaining at
November 30, 1998 by May 31, 1999, with projected expenditures of
approximately $1,000.
To determine the fair value of acquired IPR&D and other identifiable
intangible assets, the Company used an independent appraisal which utilized
standard appraisal methodologies. The appraisal procedures performed to
establish the fair value of IPR&D involved projected cash flows for CVN
Windows over the next five years, commensurate with its useful life, net of
capital charges for all employed intangible and tangible assets, and
discounted to present value, using a discount rate that reflected a 700 basis
point risk premium reflective of the in process nature of the remaining
activities. This risk assessment reflects uncertainty related to the Company's
ability to successfully integrate remaining functionality and performance
features into the CVN Windows product, combined with the added complexity of
porting legacy DOS functionality onto a Windows platform. If the Company is
delayed in its market entry with the completed CVN Windows product, it could
adversely affect future operations.
RPS Division Acquisition--On September 30, 1998 the Company completed the
Acquisition of the RPS Division for a purchase price equal to $330,000, of
which $100,000 of which was paid in cash borrowed under the terms of the New
Credit Agreement as well as $22,500 of Senior Notes. The $210,000 seller note
portion of the purchase price consisted of $40,000 in Junior Notes, and
$170,000 in Senior Subordinated Seller Notes. $20,000 of the purchase price
was paid in the form of Warrants. See Note 7, 8 and 12 for additional
information on the debt and warrant instruments used to finance the
Acquisition.
The RPS Division is a leading manufacturer and servicer of fuel dispensing
systems in Western Europe.
The Acquisition has been accounted for as a purchase and the RPS Division's
results of operations have been included in the Consolidated Financial
Statements of the Company from the date of acquisition. The purchase price has
been preliminarily allocated to assets acquired and liabilities assumed based
on the RPS Division's net book value of assets as of September 30, 1998, as
adjusted, which is estimated to approximate fair value. The purchase price
allocated under this assumption is preliminary and exceeded the estimated fair
value of tangible net assets acquired by $263,389, which has been recorded as
goodwill. The Company is in the
27
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
process of valuing certain tangible and intangible assets acquired with the
RPS Division and will finalize the preliminary purchase price allocation upon
completion of these valuations. The goodwill recorded in connection with the
RPS Division is currently being amortized over 40 years. The Company will
determine the appropriate amounts and useful lives of the identified
intangible assets upon completion of the valuations. Finalization of the
purchase price allocation is not expected to have a material impact on the
Company's financial position or results of operations as of and for the year
ended November 30, 1998. The Company is to reimburse Schlumberger Limited for
cash (net of adjustments) that remained in the RPS Division at the date of
closing of the Acquisition. This amount is currently estimated to be
approximately $6,500. It is anticipated that this payment will be made in the
second quarter of 1999 using the revolving working capital facility under the
New Credit Agreement.
Included in accrued liabilities are certain costs the Company will incur to
effect an integration and rationalization plan for the RPS Division's
operations. These costs represent involuntary termination costs and other
closure costs in connection with closing redundant manufacturing and service
operations. These accrued costs do not include costs associated with
consolidation of previously existing Tokheim subsidiaries, which will be
expensed as incurred or separately accrued once all criteria for accrual are
met, nor do these costs benefit future periods. The Company expects the
integration and rationalization plan to be completed by the end of the year
2001. The table below summarizes the accrued liability by major category and
initiatives:
<TABLE>
<S> <C>
Involuntary employee termination benefits for approximately 540
employees......................................................... $18,617
Facility closure and other closure costs........................... 482
Lease and contract termination fees................................ 1,195
-------
Total accrued integration and rationalization costs.............. $20,294
=======
</TABLE>
During 1998, approximately $371 was charged against the accrual, primarily
for employee termination costs.
The table below summarizes the acquisition liabilities as they relate to the
consolidation plan for Sofitam which was established in 1996. The amounts do
not include costs associated with consolidation of previously-existing Tokheim
subsidiaries, which were or will be expensed as incurred, nor do they reflect
costs expected to provide benefits in future periods. The Company expects the
consolidation plan to be completed by the end of 1999. (See Note 3 for
additional information regarding the Company's consolidation plan.)
<TABLE>
<CAPTION>
Charged to
November 30, 1997 Acquisition November 30, 1998
Item Balance Accrual Balance
---- ----------------- ----------- -----------------
<S> <C> <C> <C>
Involuntary employee
termination benefits (A)..... $4,124 $2,279 $1,845
Asset write-off and disposal
costs (B).................... 2,232 154 2,078
Leases and other contract
terminations costs........... 941 863 78
------ ------ ------
$7,297 $3,296 $4,001
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
November 30, 1996 Adjustments
Original to Charged to
Acquisition Acquisition Acquisition November 30, 1997
Item Accrual Accrual Accrual Balance
---- ----------------- ----------- ----------- -----------------
<S> <C> <C> <C> <C>
Involuntary employee
termination benefits
(A).................... $6,651 $(186) $2,341 $4,124
Asset write-off and
disposal costs (B)..... 2,108 183 59 2,232
Leases and other
contract terminations
costs.................. 1,040 700 799 941
------ ----- ------ ------
$9,799 $ 697 $3,199 $7,297
====== ===== ====== ======
</TABLE>
- - --------
(A) Approximately 300 employees included in the original consolidation plan.
(B) For 9 locations under the original consolidation plan.
The following unaudited pro forma information summarizes consolidated
results of operations of Tokheim, the RPS Division and MSI as if the
acquisitions had occurred at the beginning of 1998 and 1997. These unaudited
pro forma results include certain adjustments, such as additional amortization
expense as a result of
28
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
goodwill and other intangible assets and increased interest expense on
acquisition debt. They do not purport to be indicative of the results of
operations which actually would have resulted had the acquisition occurred on
December 1, 1997 or 1996, or future results of operations. The Company is in
the process of closing several redundant manufacturing, sales, service and
administrative operations as part of the integration and rationalization plans
discussed above. Anticipated synergies from the merger of Tokheim, the RPS
Division and MSI have been excluded from the amounts included in the pro forma
summary information presented below.
<TABLE>
<CAPTION>
Unaudited
Years Ended
November 30,
------------------
1998 1997
-------- --------
<S> <C> <C>
Net sales................................................ $743,623 $737,520
Net loss................................................. (49,189) (37,966)
Net loss per common share (Basic and Diluted)............ (4.67) (3.48)
</TABLE>
3. MERGER AND ACQUISITION COSTS AND OTHER UNUSUAL ITEMS
For the years ended November 30, 1998, 1997 and 1996, the Company identified
certain expenses related primarily to the acquisition of the RPS Division in
1998 and the acquisition of Sofitam in 1996. These costs, although not
uncommon to the Company's industry, are considered by the Company to be
attributable to the purchase and integration of the acquired companies or
otherwise significant enough in size or unusual enough in nature to warrant
separate disclosure. These costs are shown in aggregate as a single operating
line item, "Merger and acquisition costs and other unusual items," on the
Consolidated Statement of Earnings.
Merger and acquisition costs/Restructuring--During 1998, as a result of the
acquisitions of the RPS Division and MSI, the Company initiated an integration
and rationalization plan that entails the closure and reorganization of
certain manufacturing, sales, service and administrative operations. Amounts
charged to operations for involuntary employee termination costs and other
exit costs incurred to execute certain projects of the integration and
rationalization plan were approximately $7,700 in 1998. Of this amount,
approximately $2,815 relates to employee severance and related costs for
approximately 136 employees that served in various manufacturing, sales,
service and administrative capacities. The other $4,885 represents accrued
exit costs for the write off of certain assets and other miscellaneous closure
costs. During 1997 and 1996 the Company implemented several corporate
realignment initiatives, including work force reductions and reorganization of
its domestic and international operations, related to the consolidation of
Sofitam. Amounts charged to operations as incurred for the matters described
above for the years ended November 30, 1997 and 1996 approximated $1,736 and
$2,035, respectively.
Litigation/Other--In connection with the purchase of MSI in the first
quarter of fiscal 1998, the Company recorded a $5,879 charge relating to the
write-off of in-process research and development ("IPR&D"). This amount
represents the estimated fair value of acquired incomplete research and
development projects of MSI at the date of acquisition. See Note 2 for
additional information on the IPR&D. During 1997, the Company settled a claim
against it directly associated with the purchase of Sofitam related to a
personnel matter that resulted in an outcome adverse to the Company. The
Company also favorably settled a claim that involved a former supplier, which
resulted in the reversal of an accrued liability which had been charged to
"Merger and acquisition costs and other unusual items" in 1996. In addition,
during 1997 the Company recorded a charge for an impaired asset related to
license technology. In 1996 the Company settled claims related to a prior
distributor and a foreign distributor to extinguish an exclusive sales
representative agreement. The Company also incurred a charge to operations for
the adverse outcome in a Pension Benefit Guarantee Corporation inquiry with
respect to a terminated benefit plan payout from 1991. In addition, the
Company incurred charges in 1996 related to customer satisfaction programs
relating to dispensers sold in prior years. Amounts charged to merger and
acquisition costs and other unusual items relating to litigation/other for
1998, 1997 and 1996 were $5,985, $1,757, and $4,424, respectively.
29
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
4. ACCRUED EXPENSES
Accrued expenses consisted of the following at November 30, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
-------- -------
<S> <C> <C>
RPS Division integration and rationalization plan.......... $ 20,294 $ --
Schlumberger Limited....................................... 6,507 --
Sofitam integration plan................................... 4,001 7,297
Compensated absences....................................... 14,644 7,087
Salaries, wages, and commissions........................... 14,871 6,076
Retirement benefits and profit sharing..................... 9,625 5,921
Interest................................................... 4,984 3,755
Warranty................................................... 10,627 3,742
Legal and professional..................................... 3,788 3,102
Employee payroll taxes..................................... 5,634 2,708
Deferred revenue........................................... 5,645 2,453
Taxes (sales, VAT, and other).............................. 11,072 2,434
Other...................................................... 24,472 6,615
-------- -------
$136,164 $51,190
======== =======
</TABLE>
5. NOTES PAYABLE, BANK CREDIT AGREEMENT
On September 30, 1998, Tokheim and certain of its subsidiaries, including
certain of the subsidiaries used to acquire the RPS Division (the "Borrowers")
entered into a credit agreement (the "New Credit Agreement") with certain
lenders. The New Credit Agreement replaced the existing ("old credit
agreement") and consists of a six year working capital/letter of credit
facility and a six year term loan facility, each in an aggregate principal
amount of $120,000. Pursuant to the New Credit Agreement, $20,000 of the
availability under the working capital facility may be utilized for issuance
of standby letters of credit, and $10,000 of the availability under the
working capital facility may be utilized for swing line facilities to be
provided to Tokheim and certain of the other Borrowers. The New Credit
Agreement permits borrowings in U.S. dollars, and, if certain additional
conditions are met, in French francs, British pounds, Dutch guilders, German
marks and euros (so long as such non-U.S. currencies are freely traded,
readily available and convertible into U.S. dollars) and such other currencies
as agreed by each Bank.
An additional agreement provides for the assignment of a three year $7,600
ESOP loan facility with certain banks (the "ESOP Credit Agreement").
At November 30, 1998, the outstanding borrowings were $62,145 under the
revolving working capital facility, $120,000 under the term loan, and $6,987
under the ESOP facility. The term loan calls for equal quarterly principal
payments aggregating to $7,500 in year 2000; $10,000 in year 2001; $12,500 in
year 2002; $15,000 in year 2003; $37,500 in a single payment due first quarter
2004; and the remainder due at maturity. The revolving working capital
facility is due on September 30, 2004. Available borrowings under the
revolving working capital facility were $57,900 at November 30, 1998 subject
to a borrowing base limitation and certain other loan covenant restrictions.
Indebtedness of the Company under the New Credit Agreement (a) is secured by
(i) a first perfected security interest in and lien on certain of the real and
personal property assets of Tokheim (including claims against certain
subsidiaries to which Tokheim has made intercompany loans) and Tokheim's
direct and indirect material majority-owned U.S. subsidiaries, (ii) a pledge
of 100% of the stock of Tokheim's direct and indirect material majority-owned
U.S. subsidiaries, and (iii) a pledge of 65% of the stock of Tokheim's first-
tier material foreign subsidiaries and (b) is guaranteed by all of Tokheim's
direct and indirect material majority-owned U.S. subsidiaries. Certain
indebtedness of Tokheim's foreign subsidiaries which are Borrowers or become
Borrowers under the New Credit Agreement will be secured by certain of the
personal property of such foreign subsidiaries.
30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
Indebtedness under the New Credit Agreement bears interest based upon (at
the applicable Borrower's option) (i) the Base Rate in the case of U.S. dollar
denominated loans (defined as the higher of (x) the applicable prime rate and
(y) the federal funds rate (as adjusted pursuant to the New Credit Agreement)
plus 0.50%) plus an applicable margin based upon the Company's leverage ratio
(with a range of 1.50% to 3.00% for revolving loans and 3.00% for term loans)
or (ii) the applicable Eurocurrency Rate (as defined in the New Credit
Agreement) for a deposit in the currency of, and for a maturity corresponding
to, the applicable loan and interest period, plus an applicable margin based
upon the Company's leverage ratio (with a range of 2.50% to 4.00% for
revolving loans and 4.00% for term loans). The unused portion of the
commitment under the New Credit Agreement will be subject to a commitment fee
in the range of 0.375% to 0.50% depending upon the leverage ratio of the
Company.
Indebtedness under the ESOP Credit Agreement will amortize with a final
principal payment on July 1, 2001.
The revolving loan commitment under the New Credit Agreement may be
voluntarily permanently reduced by the Company in whole or in part on one
day's notice without premium or penalty. The Borrower may prepay the term
loans subject to a pre-payment penalty if the Borrowers prepay the entire
amount of the term loans in the first 3 years after September 30, 1998. The
Borrowers will be able to prepay the loans in accordance with the terms of the
New Credit Agreement. Subject to the provisions of the New Credit Agreement,
the Borrowers will be able to, from time to time, borrow, repay and reborrow
under the working capital facility.
The New Credit Agreement requires an amount equal to all net proceeds from
asset sales by the Company or any of its subsidiaries (with certain
exceptions) to be applied to repay the loans under the New Credit Agreement.
The New Credit Agreement also requires the Company to prepay the loans under
the New Credit Agreement in an amount equal to (i) all net proceeds from the
sale or issuance of debt (with certain exceptions), (ii) all net proceeds from
the sale or issuance of equity (with certain exceptions) and (iii) a
percentage of Excess Cash Flow (as defined in the New Credit Agreement) for
each fiscal year with a range of 50% to 85%, based upon the Company's leverage
ratio, commencing with the Company's fiscal year ending November 30, 1999.
The New Credit Agreement requires the Company to meet certain consolidated
financial tests, including minimum level of consolidated net worth, minimum
level of EBITDA (as defined in the New Credit Agreement), minimum level of
consolidated interest coverage, maximum consolidated leverage ratio and senior
leverage ratio and minimum consolidated fixed charge coverage ratio. The New
Credit Agreement also contains covenants which, among other things, limit the
incurrence of additional indebtedness, dividends, transactions with
affiliates, asset sales, acquisitions, investments, mergers and
consolidations, prepayments of certain other indebtedness, amendments to
certain other indebtedness, liens and encumbrances and other matters
customarily restricted in such agreements.
At November 30, 1998 and 1997, the aggregate amounts outstanding under
working capital facilities were $62,145 and $24,090, respectively. These
amounts are classified as long-term debt because the Company had the ability
(under the terms of the facility) and the intent to finance these obligations
beyond one year. The total line of credit under the working capital facility
was approximately $120,000 and $67,768, of which $57,855 and $43,678 was
unused at November 30, 1998 and 1997, respectively. The weighted average
annual interest rates for these lines of credit were 7.1% and 7.6% for 1998
and 1997, respectively. The range of rates at November 30, 1998 and 1997 was
5.1% to 7.5% and 7.6% to 8.9%, respectively.
6. SENIOR NOTES
As part of the financing for the acquisition of the RPS Division, the
Company entered into a note purchase agreement, pursuant to which the Company
issued $22,500 million aggregate principal amount of Senior Notes
31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
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%. The Company
has the option, subject to bank approval, to redeem (in whole or in part) the
Senior Notes. The Note Purchase Agreement is subject to certain restrictions
and covenants common to such agreements. On January 29, 1999 the Senior Notes
were repaid. See Note 21 for additional information.
7. SENIOR SUBORDINATED NOTES
As part of the financing for the Acquisition of the RPS Division, the
Company issued $170,000 in Senior Subordinated Seller Notes due one hundred
twenty days after the Acquisition closing date. The Company has the option,
subject to bank approval, to redeem (in whole or in part) the Senior
Subordinated Seller Notes. Under the terms of the Senior Subordinated Seller
Notes, to the extent the Company has not refinanced the Senior Subordinated
Seller Notes within one hundred twenty days of the Acquisition closing date,
such notes convert into an equal principal amount of eight year notes with an
interest rate starting at 12.0% and increasing by 0.5% every three months to a
maximum of 14.5%. Interest exceeding 12.0% will be payable in kind. The Senior
Subordinated Seller Notes are subject to certain restrictions and covenants
common to such agreements. On January 29, 1999 the Senior Subordinated Seller
Notes were repaid. See Note 21 for additional information.
In August 1996 the Company issued $100,000 aggregate principal amount of
11.5% Senior Subordinated Notes due 2006 (the "11.5% Notes") to finance the
acquisition of Sofitam. Interest on these notes accrues at the rate of 11.5%
per annum and is payable semi-annually in cash on each February 1 and August 1
to the registered holders at the close of business on January 15 and July 15
immediately preceding the applicable interest payment date.
During the fourth quarter of 1997, the Company used proceeds from its Old
Credit Agreement to purchase $10,000 face value of the 11.5% Notes. The
Company purchased these 11.5% Notes on the open market at an aggregate price
of $11,390 plus accrued interest and recorded an extraordinary loss of $1,886.
This amount includes $1,390 of premiums paid to repurchase the 11.5% Notes and
$496 representing the write-off of a proportionate share of the original
unamortized deferred issuance costs.
The Company used proceeds from the March 1998 Common Stock Offering of
$39,356 to redeem $35,000 in aggregate principal amount of the 11.5% Notes.
These 11.5% Notes were redeemed at a call price of 109.857%, expressed as a
percentage of the original face value, resulting in premiums paid of $3,450
along with accrued interest of $906. Following the redemption, $55,000 in
aggregate principal amount of the 11.5% Notes remained outstanding. The
Company recorded an extraordinary loss on the extinguishment of the 11.5%
Notes of approximately $4,965 during the second quarter of 1998. This loss
includes $3,450 of premiums paid to purchase the 11.5% Notes and $1,515
representing the write-off of a proportionate share of the original
unamortized deferred issuance costs.
On September 30, 1998, the Company completed the repurchase of the final
$55,000 of 11.5% Notes that were then outstanding. These 11.5% Notes were
redeemed at an aggregate premium and consent payment of $12,332 along with
accrued interest of $1,072. The company recorded an extraordinary loss on the
extinguishment of the 11.5% Notes of approximately $14,940 in the fourth
quarter of 1998. These notes were repurchased with proceeds from borrowings
under the New Credit Agreement. See also Note 21.
8. JUNIOR SUBORDINATED PIK NOTES
In connection with the acquisition of the RPS Division, the Company issued
$40,000 million in Junior Notes. Interest on the Junior Notes is payable
quarterly in cash or in-kind at the Company's option. All existing U.S.
subsidiaries have guaranteed, and all future U.S. subsidiaries will guarantee,
the Junior Notes on a junior subordinated basis with unconditional guarantees
that are or will be unsecured and subordinated to senior debt of such
subsidiaries.
32
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
The Junior Notes are unsecured junior subordinated obligations of the Company
and are junior to the Company's senior debt. The Junior Notes were issued under
an indenture (the "Junior Indenture") that limits the ability of the Company
and its subsidiaries to, among other things: incur indebtedness; pay dividends
and make certain other payments; make certain investments; sell certain assets;
enter into certain transactions with affiliates; restrict distributions from
subsidiaries; incur liens; and consolidate, merge or transfer all or
substantially all of its or its subsidiaries' assets.
Subject to the terms of the Junior Indenture, the Junior 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. Upon a change of control (as defined
in the Junior Indenture, and subject to certain conditions set forth in the
Junior Indenture), any holder of Junior Notes will have the right to cause the
Company to repurchase all or any part of the Junior Notes of such Holder at a
purchase price equal to 101% of the principal amount of the Junior Notes to be
repurchased plus accrued and unpaid interest thereon, if any, to the date of
repurchase. The Junior Notes are subject to a registration rights agreement,
with registration rights that can be exercised any time after the date that is
120 days after the issue date of the Junior Notes.
9. OTHER LONG TERM DEBT AND GUARANTEED EMPLOYEES' STOCK OWNERSHIP PLAN (ESOP)
OBLIGATION
Term debt at November 30, 1998 and 1997 consisted of the following:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
0.0% Belgian government note due in 1999 (a)..................... $ 58 $ 93
3.5% German bonds, due in semiannual installments through 1998
(a)............................................................. -- 80
6.0% notes payable, due in semiannual installments through 2004
(a)............................................................. 679 --
8.1% note payable, due in semiannual installments through 2001
(a)............................................................. -- 160
11.5% note payable, due in quarterly installments through 1998
(a)............................................................. -- 405
15.0% note payable, due in quarterly installments through 2002
(a)............................................................. 315 372
14.3% note payable, due in monthly installments through 2000
(a)............................................................. -- 149
27.5% note payable, due in monthly installments through 2000
(a)............................................................. 303 343
5.0% to 16.50% capital lease obligations, due in quarterly
installments through 2002 (a)................................... 2,140 2,315
9.33% capital lease obligation, due in annual installments
through 2004 (a)................................................ 2,356 2,559
Other............................................................ -- 311
5.0% to 15.0% notes payable, due in annual installments through
2004 (a)........................................................ 374 --
------ ------
6,225 6,787
Less: Current maturities......................................... 2,110 2,390
------ ------
$4,115 $4,397
====== ======
Guaranteed Employees' Stock Ownership Plan (ESOP) obligation at
November 30, 1998 and 1997 consisted of the following:
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Guaranteed Employees' Stock Ownership Plan (ESOP) obligation,
variable rate, maturing $640 to $760 quarterly through 2001,
rate of 7.41% at November 30, 1998 (b).......................... $6,987 $9,429
</TABLE>
Aggregate scheduled maturities of the above term debt and Guaranteed Employees'
Stock Ownership Plan (ESOP) obligation during the upcoming five years
approximate $4,747; $4,418; $2,272; $637; and $482, respectively.
(a) Aggregate cost of plant and equipment pledged as collateral under revenue
bonds and lease obligations is $6,231.
(b) Per the New Credit Agreement as described in Note 5, the ESOP obligation
matures on September 3, 2002.
33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
10. OPERATING LEASES
The Company leases certain manufacturing equipment, office equipment,
computers, vehicles, and office and warehousing space under operating leases.
These leases generally expire in periods ranging from one to five years.
Amounts charged to expenses under operating leases in 1998, 1997 and 1996
were $6,364, $4,104, and $2,835, respectively. Future minimum rental payments
under noncancelable operating leases during the upcoming five years
approximate $6,158, $5,020, $2,865, $2,371 and $2,260.
11. STOCK OPTION PLANS
The Company has three separate Stock Option Plans, as outlined below:
1992 Stock Incentive Plan (SIP)
The Plan contains both incentive stock options (ISOs) and non-qualified
stock options (NSOs). The price of each share under this Plan for an ISO or
NSO shall not be less than the fair market value of Tokheim Corporation Common
Stock on the date the option is granted.
Options granted under the SIP become exercisable at the rate of 25% of the
total options granted per year, beginning one year after the grant date. All
options expire within ten years from the date on which they were granted.
In addition, the SIP provides for the granting of Stock Appreciation Rights
(SARs) and Restricted Stock Awards (RSAs). During 1998, there were no SARs or
RSAs granted.
1982 Incentive Stock Option Plan (ISOP) and 1982 Unqualified Stock Option
Plan (USOP)
Effective January 21, 1992, no additional shares could be granted under
these plans. All options expire within ten years from the date on which they
were granted.
The price of each share under the ISOP was not less than fair market value
of Tokheim Corporation Common Stock on the date the option was granted, and
under the USOP was not less than 85% of the fair market value of Tokheim
Corporation Common Stock on the date the option was granted.
Options granted under the respective plans during 1998, 1997, and 1996, are
as follows:
<TABLE>
<CAPTION>
1992 Stock
Incentive Plan
------------------
Year of Grant ISO NSO RSA
------------- ------- --- ------
<S> <C> <C> <C>
1998.................................................. 2,000 -- --
1997.................................................. 468,000 -- 42,500
1996.................................................. 45,000 -- --
</TABLE>
34
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
The following table sets forth the status of all outstanding options at
November 30, 1998:
<TABLE>
<CAPTION>
Exercisable In Total Options
Option Price Options The Next One Authorized and
Per Share Exercisable To Four Years Outstanding
------------ ----------- -------------- --------------
<S> <C> <C> <C>
$20.0000 15,300 -- 15,300
$18.6875 -- 2,000 2,000
$18.1250 4,375 13,125 17,500
$12.2500 500 -- 500
$11.9375 2,500 -- 2,500
$9.0000 -- 1,000 1,000
$8.8800 36,250 -- 36,250
$8.6880 81,250 285,000 366,250
$8.5000 11,250 3,750 15,000
$7.9380 2,000 21,000 23,000
$7.1250 19,000 21,500 40,500
------- ------- -------
172,425 347,375 519,800
======= ======= =======
</TABLE>
154,982 and 335,388 options were exercisable as of November 30, 1997 and
1996 respectively.
The weighted average exercise price was $9.25 and $9.10 and the weighted
average remaining contractual life was 6.83 and 7.15 years for all outstanding
options as of November 30, 1998, and 1997, respectively.
Transactions in stock options under these plans are summarized as follows:
<TABLE>
<CAPTION>
Shares
Under Option Price Range
------------ ------------
<S> <C> <C>
Outstanding, November 30, 1995..................... 482,341 $6.81-$20.00
Granted............................................ 45,000 $7.13-$9.00
Exercised.......................................... (5,000) $8.75
Canceled or expired................................ (70,087) $6.81-$20.00
--------
Outstanding, November 30, 1996..................... 452,254 $6.81-$20.00
Granted............................................ 468,000 $7.94-$18.13
Exercised.......................................... (235,547) $6.81-$9.38
Canceled or expired................................ (58,225) $6.81-$20.00
--------
Outstanding, November 30, 1997..................... 626,482 $6.81-$20.00
Granted............................................ 2,000 $18.69
Exercised.......................................... (94,907) $6.81-$11.94
Canceled or expired................................ (13,775) $7.94-$20.00
--------
Outstanding, November 30, 1998..................... 519,800
========
</TABLE>
Reserved for the granting of new options:
<TABLE>
<CAPTION>
Shares
-------
<S> <C>
November 30, 1996.................................................... 98,774
November 30, 1997.................................................... 133,274
November 30, 1998.................................................... 158,774
</TABLE>
35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
Effective December 1, 1996, the Company adopted the disclosure-only
provisions of SFAS No. 123. Accordingly, no compensation cost has been
recognized for the existing stock option plans under the provisions of this
statement. The Company continues to account for stock options at their
intrinsic value under the provisions of APBO No. 25, which is allowed under
SFAS No. 123. Under APBO No. 25, because the option terms are fixed and the
exercise price of employee stock options equals the market price on the date
of grant, no compensation expense is recorded. Had compensation cost for the
Company's stock option plan been determined based on the fair value at the
grant date, consistent with the provisions of SFAS No. 123, the Company's net
earnings (loss) would have been impacted as indicated below:
<TABLE>
<CAPTION>
1998 1997
------------------ -----------------
As Pro As Pro
Reported Forma Reported Forma
-------- -------- -------- -------
(in thousands except per share
data)
<S> <C> <C> <C> <C>
Earnings (loss) before extraordinary
loss.................................... $ (3,744) $ (3,744) $ 3,980 $ 3,980
Estimated fair value of the year's option
grants.................................. -- (4) -- (313)
-------- -------- ------- -------
Earnings (loss) before extraordinary
loss.................................... (3,744) (3,748) 3,980 3,667
Extraordinary loss on debt
extinguishment.......................... (23,924) (23,924) (1,886) (1,886)
-------- -------- ------- -------
Net earnings (loss)...................... $(27,668) $(27,672) $ 2,094 $ 1,781
======== ======== ======= =======
Preferred stock dividends ($1.94 per
share).................................. $ (1,484) $ (1,484) $(1,512) $(1,512)
Earnings (loss) applicable to common
stock................................... $(29,152) $(29,156) $ 582 $ 269
Earnings (loss) per common share:
Basic
Before extraordinary loss............ $ (0.46) $ (0.46) $ 0.31 $ 0.27
Extraordinary loss on debt
extinguishment...................... (2.10) (2.10) (0.23) (0.23)
-------- -------- ------- -------
Net earnings (loss).................. $ (2.56) $ (2.56) $ 0.08 $ 0.04
======== ======== ======= =======
Weighted average number of shares
outstanding......................... 11,371 11,371 8,042 8,042
======== ======== ======= =======
Diluted
Before extraordinary loss............ $ (0.46) $ (0.46) $ 0.27 $ 0.24
Extraordinary loss on debt
extinguishment...................... (2.10) (2.10) (0.21) (0.21)
-------- -------- ------- -------
Net earnings (loss).................. $ (2.56) $ (2.56) $ 0.06 $ 0.03
======== ======== ======= =======
Weighed average number of shares
outstanding......................... 11,371 11,371 9,005 9,005
======== ======== ======= =======
</TABLE>
For purposes of pro forma disclosures, the estimated fair value of the
options (stock-based compensation) is amortized to expense on a straight-line
basis over the options' vesting period. The pro forma information above only
includes the effects of 1998 and 1997 grants. As such, the impacts are not
necessarily indicative of the effects on reported net earnings (loss) of
future years.
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions for 1998 and 1997:
<TABLE>
<CAPTION>
Assumptions 1998 1997
----------- ------- -------
<S> <C> <C>
Dividend yield............................................... -- --
Risk free interest rate...................................... 5.88% 6.37%
Expected life of options..................................... 5 years 5 years
Expected volatility.......................................... 38.76% 38.76%
Estimated fair value of options granted per share............ $8.94 $9.01
</TABLE>
36
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
12. COMMON AND PREFERRED STOCK
Changes in common stock and common treasury stock are shown below:
<TABLE>
<CAPTION>
Common
Common Stock Treasury Stock
------------------ ---------------
Shares Amount Shares Amount
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Balance, November 30, 1995............... 7,949,000 $19,409 13,000 $ 231
Stock options exercised.................. 5,000 43 -- --
Employee termination benefits............ -- -- (1,000) (11)
Other.................................... -- -- (1,000) (28)
---------- ------- ------- -----
Balance, November 30, 1996............... 7,954,000 19,452 11,000 192
Stock options exercised.................. 278,000 1,706 -- --
Shares purchased......................... -- -- 8,000 105
Other.................................... -- -- (10,000) (157)
---------- ------- ------- -----
Balance, November 30, 1997............... 8,232,000 $21,158 9,000 $ 140
Stock options exercised.................. 6,000 1,472 -- --
Shares purchased......................... -- -- 29,000 555
Equity Offering.......................... 4,370,000 67,724 -- --
---------- ------- ------- -----
Balance, November 30, 1998............... 12,698,000 $90,354 38,000 $ 695
========== ======= ======= =====
</TABLE>
Changes in redeemable convertible preferred stock and related treasury stock
are shown below:
<TABLE>
<CAPTION>
Preferred
Preferred Stock Treasury Stock
--------------- ---------------
Shares Amount Shares Amount
------- ------- ------- ------
<S> <C> <C> <C> <C>
Balance, November 30, 1995.................. 960,000 $24,000 151,000 $3,784
Shares redeemed............................. -- -- 31,000 771
RSP contributions........................... -- -- (15,000) (384)
------- ------- ------- ------
Balance, November 30, 1996.................. 960,000 $24,000 167,000 $4,171
Shares redeemed............................. -- -- 48,000 1,197
RSP contributions........................... -- -- (26,000) (650)
------- ------- ------- ------
Balance, November 30, 1997.................. 960,000 $24,000 189,000 $4,718
Shares redeemed............................. -- -- 43,000 1,079
RSP contributions........................... -- -- (37,000) (914)
------- ------- ------- ------
Balance, November 30, 1998.................. 960,000 $24,000 195,000 $4,883
======= ======= ======= ======
</TABLE>
On July 10, 1989, the Company sold 960,000 shares of redeemable convertible
preferred stock (the "Preferred Stock") to the Trust of the Company's RSP at
the liquidation value of $25 per share or $24,000. The Preferred Stock has a
dividend rate of 7.75%. The Trustees who hold the Preferred Stock may elect to
convert each preferred share to one common share in the event of redemption by
Tokheim, certain consolidations or mergers of Tokheim, or a redemption by the
Trustees which is necessary to provide for distributions under the RSP. A
participant may elect to receive a distribution from the RSP in cash or common
stock. If redeemed by the Trustees, the Company is responsible for purchasing
the Preferred Stock at the $25 floor value. The Company may elect to pay the
redemption price in cash or an equivalent amount of common stock. Due to the
redemption characteristics of the stock, the aggregate amount of future
redemptions for the next five years cannot be determined. See Note 18 for
further discussions on the Company's Preferred Stock.
37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
On March 1998, the Company completed a secondary public offering of
4,370,000 shares of Tokheim common stock at an initial offering price of
$16.5625 per share. The net proceeds of the offering totaled $67,724. The
Company used the proceeds to repurchase $35,000 in aggregate principal amount
of outstanding 11.5% Notes, repayment of amounts outstanding under the Old
Credit Agreement and general corporate purposes.
As part of the consideration paid ($20,000) in the RPS Division Acquisition,
the Company issued the Warrants, exercisable for up to 19.9% of the
outstanding shares of the Company's common stock at an exercise price of $.01
per share. The actual number of shares issuable upon exercise is 2,526,923.
The Warrants are exercisable for five years beginning January 30, 1999.
The number of shares of the Company's common stock issuable upon exercise of
the Warrants, along with the purchase price of the common stock Warrants, will
be further adjusted to reflect any stock splits, stock subdivisions or
combinations of the Company's common stock, any reclassification of the
Company's common stock, any capital reorganization, merger or consolidation of
the Company, any issuance of common stock by the Company, and any issuance of
convertible securities by the Company.
The Company may redeem the Warrants, in whole or in part, at any time on or
before January 29, 1999, by paying $20.0 million (or an appropriate percentage
thereof if the Warrants are redeemed in part).
13. EARNINGS PER SHARE
The Company adopted SFAS No. 128, Earnings Per Share, during the first
quarter of fiscal 1998. Under SFAS No. 128, the Company presents two earnings
per share ("EPS") amounts, Basic and Diluted. Basic EPS is calculated based on
earnings available to common shareholders and the weighted average number of
shares outstanding during the reported period. Diluted EPS includes additional
dilution from potential common stock, such as stock issuable pursuant to the
conversion of preferred stock or the exercise of stock options and warrants
outstanding. The incremental shares from conversions of preferred stock and
the exercise of stock options and rants were not included in computing diluted
EPS for the years ended November 30, 1998, and 1996, since the effect of such
is antidilutive during periods when a loss from continuing operations
applicable to common shareholders is reported. For the year ended November 30,
1998, the weighted average of potentially issuable common shares included
764,664 shares of convertible preferred stock outstanding, 210,488 shares for
stock options and 428,938 shares related to the Warrants. During the year
ended November 30, 1996, the weighted average of potentially issuable common
shares included 800,400 shares of convertible preferred stock outstanding and
67,504 shares for stock options. EPS for the years ended November 30, 1997 and
1996 have been restated to apply the provisions of SFAS No. 128. Earnings per
common share calculated for the years ended November 30, 1997 and 1996 on a
primary and fully diluted basis under the provisions of Accounting Principles
Board Opinion No. 15 differed by less than one cent per share from that
calculated on a basic and diluted basis under SFAS No. 128 as there is no
difference in the earnings amounts applicable to common stock and the
difference between the weighted average shares outstanding used in the two
calculations is not material.
38
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
The following table presents the share information necessary to calculate
earnings (loss) per share for fiscal years ended November 30, 1998, 1997, and
1996:
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Basic shares outstanding:
Weighted average outstanding............................ 11,371 8,042 7,940
====== ===== =====
Diluted shares outstanding:
Weighted average outstanding............................ 11,371 8,042 7,940
Share equivalents....................................... -- 177 --
Weighted conversion of preferred stock.................. -- 786 --
------ ----- -----
Adjusted outstanding.................................... 11,371 9,005 7,940
====== ===== =====
</TABLE>
The AICPA issued SOP No. 93-6, Employers' Accounting for Employee Stock
Ownership Plans, in November 1993. As allowed by that statement, the Company
has elected to continue its current accounting practices for the ESOP which
are based on SOP No. 76-3 and subject to consensuses of the Emerging Issues
Task Force of the Financial Accounting Standards Board. Dividends paid on
Preferred Stock are deducted from EPS computations and Preferred Stock
outstanding is converted at a ratio of one-for-one.
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
1998
---------------------------------------------------------
1st 2nd 3rd 4th Total
Quarter(A) Quarter Quarter Quarter(B) (A)(B)
---------- ------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Net sales............... $90,852 $99,652 $101,492 $174,443 $466,440
Cost of sales (C)....... 67,074 73,118 73,782 131,057 345,031
Earnings (loss) before
extraordinary loss..... (5,606) 2,427 2,929 (3,496) (3,744)
Extraordinary loss on
debt extinguishment.... -- (4,965) -- (18,959) (23,924)
Net earnings (loss)..... (5,606)(D) (2,538)(E) 2,929 (22,455)(F) (27,668)
Earnings (loss) per
common share:
Basic:
Before extraordinary
loss............... (0.72) 0.17 0.20 (0.31) (0.46)
Extraordinary loss
on debt
extinguishment..... -- (0.42) -- (1.50) (2.10)
Net earnings
(loss)............. (0.72) (0.25) 0.20 (1.81) (2.56)
Diluted:
Before extraordinary
loss............... (072) 0.16 0.19 (0.31) (0.46)
Extraordinary loss
on debt
extinguishment..... -- (0.39) -- (1.50) (2.10)
Net earnings
(loss)............. (0.72) (0.23) 0.19 (1.81) (2.56)
</TABLE>
- - --------
(A) Includes MSI's results of operations since December 31, 1997, the date of
acquisition.
(B) Includes the RPS Division's results of operations since September 30,
1998, the date of acquisition.
(C) Includes product development expenses and excludes depreciation and
amortization.
(D) Includes a $5,879 write-off of in-process research and development in
connection with the MSI acquisition
(E) Includes a $4,965 extraordinary loss on debt extinguishment on the
redemption of $35,000 of the 11.5% Notes, repurchased with proceeds from
the Company's Common Stock Offering. Includes a currency gain of $770
associated with the repayment of various French franc denominated
borrowings.
39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
(F) Includes an extraordinary loss on debt extinguishment on the redemption of
$55,000 of the 11.5% Notes and refinancing of the company's bank debt. In
addition, the Company recorded merger and acquisition costs and other
unusual items of $7,089 associated with various integration and
rationalization plans for the RPS Division and Sofitam.
<TABLE>
<CAPTION>
1997
--------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales........................ $92,024 $95,857 $91,781 $105,807 $385,469
Cost of products sold (A)........ 70,391 70,379 68,667 74,495 283,932
Earnings before extraordinary
item............................ 125 1,210 152 2,493 3,980
Extraordinary loss on debt
extinguishment.................. -- -- -- (1,886) (1,886)
Net earnings..................... 125 1,210 152 607 2,094
Earnings (loss) per common share:
Basic:
Before extraordinary item.... (0.03) 0.10 (0.03) 0.26 0.31
Extraordinary loss on debt
extinguishment.............. -- -- -- (0.23) (0.23)
Net earnings (loss).......... (0.03) 0.10 (0.03) 0.03 0.08
Diluted:
Before extraordinary item.... (0.03) 0.09 (0.03) 0.23 0.27
Extraordinary loss on debt
extinguishment.............. -- -- -- (0.20) (0.21)
Net earnings (loss).......... (0.03) 0.09 (0.03) 0.03 0.06
</TABLE>
- - --------
(A) Includes product development expenses and excludes depreciation and
amortization.
15. INCOME TAXES
Earnings (loss) before income taxes and extraordinary loss consists of the
following:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------ -------
<S> <C> <C> <C>
Domestic............................................ $ 2,117 $4,209 $ (542)
Foreign............................................. (4,815) 988 (687)
------- ------ -------
$(2,698) $5,197 $(1,229)
======= ====== =======
Income tax provision (benefit) consists of the following:
<CAPTION>
1998 1997 1996
------- ------ -------
<S> <C> <C> <C>
Current:
Federal........................................... $ (340) $ 240 $ (460)
State............................................. 747 311 277
Foreign........................................... 596 652 906
Deferred:
Foreign........................................... 43 14 57
------- ------ -------
Total tax provision............................. $ 1,046 $1,217 $ 780
======= ====== =======
</TABLE>
40
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
A reconciliation of the reported tax expense (benefit) and the amount
computed by applying the statutory U.S. federal income tax rate of 35% to
earnings (loss) before income taxes and extraordinary loss is as stated below.
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit).......... $ (944) $1,819 $ (430)
Increase (decrease) in taxes resulting from:
State income taxes net of federal tax benefit.... 487 202 180
Tax effect of dividends paid on stock held in
Retirement Savings Plans........................ (519) (529) (540)
Adjustments to prior year accruals and refunds... -- (600) (111)
Foreign income (losses) not tax effected at
statutory rate.................................. 2,030 917 1,248
Miscellaneous items, net......................... (8) (592) 433
------ ------ ------
Reported tax expense............................... $1,046 $1,217 $ 780
====== ====== ======
</TABLE>
The components of the deferred tax assets and liabilities as of November 30,
1998 and 1997 are as stated below.
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Gross deferred tax assets:
Accounts receivable................................... $ 958 $ 346
Compensation and benefit accruals..................... 7,453 7,336
Accrued expenses...................................... 5,065 1,234
Net operating loss carryforwards...................... 33,145 12,822
Tax credit............................................ 383 378
Inventory............................................. 4,238 --
Intangible assets..................................... 4,944 --
Valuation allowance................................... (48,211) (19,095)
-------- --------
Total deferred tax asset............................ $ 7,975 $ 3,021
======== ========
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Gross deferred tax liabilities:
Property, plant and equipment......................... $ 1,494 $ 1,529
Pension assets........................................ 797 700
Inventory............................................. 1,819 476
Accrued expenses...................................... 3,865 --
Miscellaneous other, foreign.......................... -- 658
-------- --------
Total deferred tax liability........................ 7,975 3,363
-------- --------
Net deferred tax liability.............................. $ -- $ (342)
======== ========
</TABLE>
For domestic federal income tax purposes, the net operating loss ("NOL")
carryovers amount to $46,578 which will expire from 2006 to 2019.
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
At November 30, 1998, the Company recorded a net deferred tax asset of
approximately $40,240, which was offset in full by a valuation allowance due
largely to uncertainties associated with the Company's ability to fully use
these tax benefits. The Company is continuing to evaluate the likelihood that
all or part of the deferred tax asset will be realized through the generation
of future taxable earnings. If, in the future, the Company is able to generate
sufficient levels of taxable income, the valuation allowance will be adjusted
accordingly.
16. GEOGRAPHICAL SEGMENTS
Domestic and foreign operations information for the years ended November 30,
1998, 1997, and 1996 is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Net sales--unaffiliated customers:
North America................................ $186,835 $139,928 $147,763
Export....................................... 30,744 46,529 38,541
Europe....................................... 226,587 176,402 80,370
Africa....................................... 22,274 22,610 13,059
-------- -------- --------
$466,440 $385,469 $279,733
======== ======== ========
Inter-area sales eliminations:
North America................................ $ 7,162 $ 8,432 $ 9,471
======== ======== ========
Europe....................................... $ 3,470 $ 3,660 $ 1,100
======== ======== ========
Africa....................................... $ 3 $ 286 $ 510
======== ======== ========
Operating profit:
North America................................ $ 2,198 $ 5,557 $ 494
Europe....................................... 11,666 10,259 2,649
Africa....................................... 1,052 1,444 633
Adjustments and eliminations................. (147) 3,385 2,580
-------- -------- --------
$ 14,769 $ 20,645 $ 6,356
======== ======== ========
Identifiable assets:
North America................................ $595,291 $207,209 $216,989
Europe....................................... 509,684 169,110 186,372
Africa....................................... 15,798 14,448 14,955
Adjustments and eliminations................. (345,311) (100,148) (108,455)
-------- -------- --------
$775,642 $290,619 $309,861
======== ======== ========
</TABLE>
The Company's foreign operations are located in: Canada; South Africa;
Scotland; Germany; France; Italy; Ivory Coast; Morocco; Switzerland; Spain;
Tunisia; Senegal; Cameroon; the Netherlands; Belgium; Poland; Austria;
Denmark; Norway; Great Britain; Czech Republic; Slovakia; Hungary and Ireland.
Transfers between geographical areas are at cost plus an incremental amount
intended to provide a reasonable profit margin to the selling enterprise.
42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
17. ALLOWANCE FOR DOUBTFUL ACCOUNTS
Changes in the allowance for doubtful accounts are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Balance, beginning of year......................... $1,392 $ 904 $1,150
Sofitam acquisition adjustments.................... -- 350 --
Charged to operations.............................. 1,210 192 667
Uncollectible accounts written off, less
recoveries........................................ (507) (34) (900)
Foreign currency translation adjustments........... 20 (20) (13)
------ ------ ------
Balance, end of year............................. $2,115 $1,392 $ 904
====== ====== ======
</TABLE>
18. RETIREMENT PLAN COST
The Company has several retirement plans covering most employees, including
certain employees in foreign countries. Charges to operations for the cost of
the Company's retirement plans, including the RSP, were $2,470, $2,625 and
$3,052 in 1998, 1997 and 1996, respectively.
Defined Benefit Plans (U.S.)--The Company maintains two noncontributory
defined benefit pension plans which cover certain union employees. The Company
makes contributions to the plans equal to the minimum contribution required by
the Internal Revenue Code. The benefits are based upon a fixed benefit rate
and the employee's years of service. Future benefits under these plans were
frozen as of December 31, 1990, at which time the plans' participants became
eligible to participate in the RSP.
The following table sets forth the aggregate defined benefit plans' funded
status and the amounts reflected in the accompanying Consolidated Balance
Sheet as of November 30, 1998 and 1997:
<TABLE>
<CAPTION>
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
-------------- -----------------
1998 1997 1998 1997
------ ------ -------- -------
<S> <C> <C> <C> <C>
Actuarial present value of accumulated plan
benefits:
Vested.................................... $1,562 $1,470 $ 9,837 $ 9,624
Non-vested................................ 84 80 672 662
------ ------ -------- -------
Accumulated benefit obligations........... $1,646 $1,550 $ 10,509 $10,286
====== ====== ======== =======
Projected benefit obligations............... $1,646 $1,550 $ 10,509 $10,286
Plan assets at fair value, principally
common stocks, bonds, and guaranteed
investment contracts, including $1,160 and
$555 for 1998 and 1997, respectively, of
the Company's common stock................. 2,179 2,149 8,924 9,477
------ ------ -------- -------
Plan assets in excess of (less than)
projected benefit obligations.............. 533 599 (1,585) (809)
Unrecognized net loss....................... 366 238 3,202 2,262
Unrecognized net assets at December 1, 1991
and 1990 being recognized over 15 years.... (173) (202) (67) (89)
Adjustment required to recognize minimum
liability.................................. -- -- (3,135) (2,173)
------ ------ -------- -------
Prepaid pension cost (pension liability)
recognized in the Consolidated Balance
Sheet...................................... $ 726 $ 635 $ (1,585) $ (809)
====== ====== ======== =======
</TABLE>
43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
The net periodic pension expense amounts were based on the following
actuarial assumptions:
<TABLE>
<CAPTION>
Assets Accumulated
Exceed Benefits
Accumulated Exceed
Benefits Assets
----------- -----------
1998 1997 1998 1997
----- ----- ----- -----
<S> <C> <C> <C> <C>
Discount rate on plan liabilities.................... 6.75% 7.25% 6.75% 7.25%
Rate of return on plan assets........................ 8.00% 8.00% 8.00% 8.00%
</TABLE>
The Company has recorded an additional minimum pension liability for the
underfunded plan of $3,135 and $2,173 at November 30, 1998 and 1997,
respectively, representing the excess of unfunded accumulated benefit
obligations over previously recorded pension cost liabilities.
The net periodic pension cost of U.S. defined benefit plans for 1998, 1997,
and 1996 includes the following components:
<TABLE>
<CAPTION>
1998 1997 1996
----- ------- -------
<S> <C> <C> <C>
Interest cost on projected benefit obligations..... $ 818 $ 844 $ 842
Return on plan assets.............................. (335) (1,739) (1,204)
Net amortization and deferral...................... (526) 1,056 619
----- ------- -------
Net periodic pension expense....................... $ 43 $ 161 $ 257
===== ======= =======
</TABLE>
Defined Benefit Plans (Foreign)--Certain Sofitam subsidiaries in France
offer unfunded defined benefit plans that cover all employees and provide
lump-sum benefit payments upon retirement unless employment is terminated
prior to retirement age. The following table sets forth the actuarial
valuation information for 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Actuarial present value of accumulated plan benefits
Vested................................................. -- --
Non-vested............................................. $ 2,549 $ 2,178
------- -------
Accumulated benefit obligations........................ 2,549 2,178
Effect of future salary increases...................... 937 1,086
======= =======
Projected benefit obligation........................... $ 3,486 $ 3,264
Plan assets at fair value................................ -- --
------- -------
Funded status.......................................... (3,486) (3,264)
Amortization of unrecognized net transition
obligation............................................ 590 692
Unrecognized net (gain) loss........................... 359 324
------- -------
Prepaid pension cost (pension liability)............... $(2,537) $(2,248)
======= =======
The net periodic pension expense amounts were based on
the following actuarial assumptions:
*Discount rate........................................... 4.77% 6.00%
*Salary growth percentage................................ 2.50% 3.50%
</TABLE>
44
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
<TABLE>
<S> <C> <C> <C>
The net periodic pension cost of the foreign defined
benefit plans includes the following components:
<CAPTION>
1998 1997 1996
---- ---- -------
<S> <C> <C> <C>
Service cost.......................................... $208 $222 $ 207
Interest cost on projected benefit obligation......... 166 201 219
Amortization.......................................... 105 114 120
---- ---- -------
Net periodic pension cost........................... $493 $537 $ 546
==== ==== =======
</TABLE>
- - --------
* In France
The information presented above was calculated based on actuarial valuations
of the plans as of August 31, 1998, 1997 and 1996, which approximates those as
of November 30, 1998, 1997 and 1996, respectively. The Company's other foreign
retirement plans represent an insignificant portion of the Company's total
retirement plans.
Defined Contribution Plan (U.S.)--The RSP covers substantially all U.S.
employees of Tokheim and includes a common and preferred stock ESOP, which
provide a retirement contribution of 2% (of salary) for factory and office
employees, and 1.5% for all other participants in the plan and a matching
contribution of at least two-thirds of the first 6% of employee contributions.
The matching contribution can increase to 150% of the first 6% of
contributions, depending on the performance of the Company. See Note 11 for a
discussion of the Company's accounting for the ESOP pursuant to SOP 76-3.
The number of shares of preferred stock in the RSP at November 30, 1998 and
1997 was 764,664 and 793,160 respectively, at a cost of $25 per share. The
number of common shares in the RSP at November 30, 1998 and 1997 was 116,708
and 137,645, respectively, at an average cost of $17.17 and $18.22 per share,
respectively. The dividend yield on the preferred stock is 7.75%, and the
conversion rate is one share of preferred stock to one share of common stock.
Each year, approximately 8% of the preferred stock held by the plan is
allocated to participants' accounts. The Company has guaranteed the RSP loans
as described in Note 7. A like amount entitled "Guaranteed Employees' Stock
Ownership Plan (RSP) obligation" is recorded as a reduction of shareholders'
equity. As the Company makes contributions to the RSP, these contributions,
plus the dividends paid on the Company's preferred and common stock held by
the RSP, are used to repay the loans. As the principal amounts of the loans
are repaid, the RSP obligation in the equity and liability sections of the
balance sheet is reduced accordingly. Company contributions in excess of
dividends are allocated to interest and compensation expense on a basis
proportional to the required debt service on RSP loans. Amounts allocated to
interest expense were $565, $631, and $715 for 1998, 1997 and 1996
respectively.
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Interest expense incurred by the Plan Trust(s) on ESOP
debt................................................. $ 511 $ 710 $1,075
Company contributions to the RSP...................... 2,513 2,464 2,541
Dividends on preferred stock used for debt service by
the RSP.............................................. 1,484 1,512 1,543
</TABLE>
45
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
19. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides defined benefit postretirement health and life
insurance benefits to most of its U.S. employees. Covered employees become
eligible for these benefits at retirement, after meeting minimum age and
service requirements. The Company continues to fund benefits on a pay-as-you-
go basis, with some retirees paying a portion of the costs.
The accumulated postretirement benefit obligations as of November 30, 1998
and 1997, respectively, consisted of unfunded obligations as follows:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Retirees and dependents.................................... $ 7,037 $ 6,890
Fully eligible active plan participants.................... 733 708
Other active plan participants............................. 6,342 4,588
------- -------
Total accumulated postretirement benefit obligations..... 14,112 12,186
Unrecognized net gain...................................... 1,477 3,092
------- -------
Accrued postretirement benefit cost........................ 15,589 15,278
Less current portion....................................... (1,171) (900)
------- -------
$14,418 $14,378
======= =======
</TABLE>
Net postretirement benefit costs for 1998, 1997 and 1996 include the
following components:
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Service costs......................................... $ 380 $ 323 $ 603
Interest costs on accumulated postretirement benefit
obligation........................................... 901 860 1,108
------ ------ ------
Net postretirement benefit costs...................... $1,281 $1,183 $1,711
====== ====== ======
</TABLE>
The assumptions used to develop the net postretirement benefit expense and
the present value of benefit obligations are as follows:
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Discount rate.................................................... 6.75% 7.25%
Health care cost trend rate for the next year.................... 6.00% 6.50%
</TABLE>
The health care cost trend rate used to value the accumulated postretirement
benefit obligation is assumed to decrease gradually to an ultimate rate of
4.5% in 2002. A 1% increase in this annual trend rate would increase the
accumulated postretirement benefit obligation as of November 30, 1998 by
approximately $1,600 and the combined service and interest components of the
annual net post-retirement health care cost by approximately $170.
20. CONTINGENT LIABILITIES
The Company is defending various claims and legal actions which are common
to its operations. These legal actions primarily involve claims for damages
arising out of the Company's manufacturing operations, including environmental
actions, patent infringement, product liability, and various contract and
employment matters.
Environmental Matters--The Company's operations and properties are subject
to a variety of complex and stringent federal, state, and local laws and
regulations, including those governing the use, storage, handling, generation,
treatment, emission, release, discharge and disposal of certain materials,
substances and wastes, the remediation of contaminated soil and groundwater,
and the health and safety of employees. As such, the nature
46
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
of the Company's operations exposes it to the risk of claims with respect to
such matters. There can be no assurance that material costs or liabilities
will not be incurred in connection with such claims. Based upon its experience
to date, the Company believes that the future costs of compliance with
existing environmental laws and regulations, and liabilities for known
environmental claims pursuant to such laws and regulations, will not have a
material adverse effect on the Company's business, financial condition,
results of operations or cash flows. However, future events, such as new
information, changes in existing laws and regulations or their interpretation,
or more vigorous enforcement policies of regulatory agencies may give rise to
additional expenditures or liabilities that could be material.
The U.S. Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), also known as the "Superfund" law, imposes liability, without
regard to fault or the legality of the original conduct, on certain classes of
persons with respect to the release of a "hazardous substance" into the
environment. These persons include the owner or operator of the disposal site
or sites where the release occurred and companies that disposed of or arranged
for the disposal of the hazardous substances found at the site. Persons who
are or were responsible for releases of hazardous substances under CERCLA may
be subject to joint and several liability for the costs of cleaning up the
releases and for damages to natural resources. It is not uncommon for
neighboring landowners and other third parties to file claims for personal
injury or property damages allegedly caused by the hazardous substances
released into the environment. In addition, where the Company has sold
properties used in its prior manufacturing operations, it may have contractual
obligations to the new owner to remediate environmental contamination on the
site arising from prior operations.
The Company also generates or has in the past generated waste, including
hazardous waste, that is subject to the federal Reserve Conservation and
Recovery Act and comparable state statutes. The U.S. Environmental Protection
Agency ("EPA") and various state agencies have promulgated regulations that
limit the disposal options for certain hazardous and non-hazardous waste. Such
regulations may also require corrective action with respect to contamination
of facilities caused by the past handling of industrial waste.
The Company has been named as a potentially responsible party ("PRP") under
CERCLA or similar state Superfund laws at three sites: the Fort Wayne
Reduction Site in Fort Wayne, Indiana; the Moyer Landfill Site in
Collegeville, Pennsylvania; and the I. Jones Recycling Site in Fort Wayne,
Indiana. The Company believes that the clean-ups at these three sites are
largely complete and that it has paid, or has currently accrued sufficient
funds to pay, any liabilities it may have associated with the clean-up of
these sites. The Company also owns or leases, and has in the past owned or
leased, numerous properties that for many years have been used in industrial
and manufacturing operations. Although the Company has in the past utilized
operating and disposal practices that were standard for the industry at the
time, hazardous substances may have been disposed of or released on or under
the properties owned or leased by the Company, or on or under other locations
where such wastes have been taken for disposal. The Company currently owns a
facility near Atlanta, Georgia that was previously used to refurbish gasoline
dispensers. As part of this operation, chlorinated solvents were inadvertently
released to the soil and groundwater through the facility septic system.
Migration of these releases has caused solvent concentrations above background
levels in the groundwater under an adjacent residential property. The Company
has completed the cleanup of this release under the oversight of the Georgia
Environmental Protection Division of the Georgia Department of Natural
Resources, and is currently monitoring the property to ensure that additional
cleanup work is not necessary.
The Company is also involved in one lawsuit with respect to environmental
liabilities under an indemnity provision of a sale agreement concerning the
sale of the die casting facility of a former subsidiary to a third party. The
Company has reached a settlement in this matter. Pursuant to the settlement
agreement, the Company will repurchase the real property and then lease the
property to the third party. The Company has agreed to place the facility into
the state remediation program. The Company presently does not anticipate any
material costs as a result of submitting the facility to the state site
remediation program.
47
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
Total amounts included in accrued expenses related to environmental matters
were $717 and $990 at November 30, 1998 and 1997, respectively. During 1995,
the Company settled two actions with the EPA. In one matter, the Company
settled for $627 as part of a global settlement with other PRPs, and the
Company recorded the liability in full at November 30, 1994. The EPA approved
this settlement in late 1997, and the Company paid one-half of the settlement
amount in December 1997. The final payment was made in December 1998. The
Company is pursuing recovery of these amounts from its insurance carriers and
has received $150 to date. In the other matter, the Company settled as a
participating generator as part of a global settlement. The Company received a
favorable judgment with respect to the environmental oversight costs from the
U.S. Court of Appeals for the 7th Circuit; the only outstanding liability is
the potential natural resource damages. The Company's portion of these damages
is estimated to be immaterial.
Product Liability and Other Matters--The Company is subject to various other
legal actions arising out of the conduct of its business, including actions
relating to product liability, and claims for damages alleging violations of
federal, state, or local statutes or ordinances dealing with civil rights,
equal pay, and sex discrimination. Total amounts included in accrued expenses
related to these actions were $1,718 and $1,330 at November 30, 1998 and 1997,
respectively. The Company is also seeking to recover in excess of $1.0 million
from its former outside legal firm for malpractice in handling a litigation
matter for the Company. In addition the Company successfully appealed a jury
verdict of $350 with respect to an equal pay act and sexual discrimination
claim to the 7th U.S. Court of Appeals.
In the opinion of the Company, amounts accrued for awards or assessments in
connection with these matters at this time are adequate, and the ultimate
resolution of environmental, product liability, and other legal matters will
not have a material effect on the Company's consolidated financial position,
results of operations, or cash flows. The Company is not able to estimate
accurately the additional loss or range of loss that is reasonably possible,
in addition to the amounts accrued. The Company reassesses these matters as
new facts and cases are brought to management's attention.
21. SUBSEQUENT EVENTS
On January 26, 1999, the Company issued $123,000 aggregate principal amount
of 11.375% Senior Subordinated Notes due 2008 (the "Dollar Notes") and ^75,000
($87,000 equivalent) aggregate principal amount of 11.375% Senior Subordinated
Notes due 2008 (the "Euro Notes") in a private placement pursuant to Rule 144A
(the "Offering"). The Notes will mature on August 1, 2008, and interest is
payable semi-annually on February 1 and August 1 of each year, commencing
August 1, 1999. The Company used the net proceeds from the Offering to redeem
in whole, the $170,000 Senior Subordinated Seller Notes and the $22,500 Senior
Notes. In addition, the Company used approximately $9,100 of the net proceeds
to reduce borrowings under the revolving credit facility under the New Credit
Agreement and to permanently reduce the bank working capital commitment from
$120,000 to $110,000.
During the first quarter of 1999, the Company incurred an extraordinary loss
on debt extinguishment of approximately $6,500 in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes with
proceeds received from the Offering. This amount consists of $500 of premiums
on the Senior Notes and approximately $6,000 of unamortized deferred issuance
costs.
Each of the Dollar Notes and the Euro Notes will be redeemable, at the
Company's option, in whole at any time, or in part from time to time, on and
after February 1, 2004, upon not less than 30 nor more than 60 days' notice,
at the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on
February 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption:
48
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Amounts in thousands except dollars per share)
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004........................................................... 105.688%
2005........................................................... 103.792%
2006........................................................... 101.896%
2007 and thereafter............................................ 100.000%
</TABLE>
Optional Redemption upon Public Equity Offerings. At any time, or from time
to time, on or prior to February 1, 2002, the Company may, at its option, use
the net cash proceeds of one or more public equity offerings to redeem up to
35% of the original principal amount of the Dollar Notes issued in the
Offering and up to 35% of the original principal amount of the Euro Notes
issued in the Offering, each at a redemption price equal to 111.375% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that at least 55% of the original principal
amount of the Dollar Notes issued in the Offering or the Euro Notes issued in
the Offering, as the case may be, remains outstanding immediately after any
such redemption and the Company shall make such redemption not more than 120
days after the consummation of any such public equity offering.
The Notes are unsecured and subordinated to all of the Company's existing
and future senior debt, including its obligations under the New Credit
Agreement. All of the Company's current and future U.S. subsidiaries will
guarantee the Notes with guarantees that will be unsecured and subordinated to
senior debt of subsidiaries. The indentures under which the Notes were issued
contain covenants limiting the Company's ability to incur additional debt; pay
dividends on capital stock, repurchase capital stock or make certain other
restricted payments; make certain investments; create liens on our assets to
secure debt; enter into transactions with affiliates; merge or consolidate
with another company; and transfer and sell assets.
The Company and the subsidiary guarantors have entered into a Registration
Rights Agreement pertaining to the Dollar Notes and another Registration
Rights Agreement pertaining to the Euro Notes (together, the "Registration
Rights Agreements"). Per the registration rights agreement the Company will,
at its own cost, (i) within 90 days after the Issue Date, file a registration
statement on the appropriate registration form (the "Exchange Offer
Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to the Exchange Offer to exchange the Euro and
Dollar for the Exchange Notes which will have terms substantially identical in
all material respects to the Dollar Notes or the Euro Notes, as the case may
be, (except that the Exchange Notes will not contain terms with respect to
transfer restrictions or liquidated damages), (ii) use its best efforts to
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act within 150 days after the Issue Date and (iii) use its best
efforts to consummate the Exchange Offer within 195 days after the Issue Date.
Upon the Exchange Offer Registration Statement being declared effective, the
Company will offer the Exchange Notes in exchange for surrender of the Euro
and Dollar Notes.
Although the Company intends to file the registration statement described
above, there can be no assurance that such registration statement will be
filed, or, if filed, that it will become effective. If the Company fails to
comply with the above provisions or if such registration statement fails to
become effective, then, as liquidated damages, additional interest (the
"Additional Interest") shall become payable with respect to the applicable
Euro and Dollar Notes at an increasing rate of 0.5% for every ninety days that
the Company fails to register such notes.
22. SHAREHOLDER RIGHTS PLAN
On January 22, 1997, the Board of Directors of the Company approved the
extension of the benefits afforded by the Company's then-existing rights plan
by adopting a new shareholder rights plan. Pursuant to the new
49
<PAGE>
Rights Agreement, dated as of January 22, 1997, and as amended by Amendment
No. 1, dated as of September 30, 1998, by and between the Company and Harris
Trust and Savings Bank, as Rights Agent, one Right was issued for each
outstanding share of Common Stock upon the expiration of the Company's then-
existing rights (February 9, 1997). Each of the new Rights entitles the
registered holder to purchase from the Company one one-thousandth of a share
of Series A Junior Preferred Stock at a price of $44.00 per one-thousandth of
a share. The Rights will not become exercisable, however, unless and until,
among other things, certain persons acquire 15% or more of the outstanding
Common Stock of the Company or the Board of Directors of the Company
determines that a person is an Adverse Person.
A person who beneficially owns 10% or more of the outstanding shares of
Common Stock of the Company will be declared an Adverse Person if the Board of
Directors determines (a) that such beneficial ownership is intended to cause
the Company to repurchase the Common Stock beneficially owned by such person
or to pressure the Company to take action or enter into transactions intended
to provide such person with short-term financial gain that are not in the best
long-term interests of the Company and its shareholders or (b) such beneficial
ownership is causing or reasonably likely to cause a material adverse impact
on the Company to the detriment of the Company's shareholders, employees,
suppliers, customers or community. If certain persons acquire 15% or more of
the outstanding Common Stock or is declared an Adverse Person (subject to
certain conditions and exceptions more fully described in the Rights
Agreement), each Right will entitle the holder (other than the person who
acquired 15% or more of the outstanding Common Stock or is declared an Adverse
Person) to purchase Common Stock of the Company having a market value equal to
twice the exercise price of a Right. The new Rights are redeemable under
certain circumstances at $0.01 per Right and will expire, unless earlier
redeemed, on February 9, 2007.
50
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors, Tokheim Corporation
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) present fairly, in all material respects, the
financial position of Tokheim Corporation and its subsidiaries at November 30,
1998 and 1997, and the results of their operations and their cash flows for
each of the three years in the period ended November 30, 1998, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
February 19, 1999
Fort Wayne, Indiana
51
<PAGE>
Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Directors
The information concerning directors required under this item is
incorporated herein by reference from the material contained under the caption
"Election of Directors" in the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission pursuant to Regulation 14A,
not later than 120 days after the close of the fiscal year. The information
concerning delinquent filers pursuant to Item 405 of Regulation S-K is
incorporated herein by reference from the material contained under the heading
"Section 16(a) Beneficial Ownership Reporting Compliance" under the caption
"Stock Ownership" in the Company's definitive proxy statement to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Executive Officers
The information concerning executive officers required under this item is
incorporated herein by reference from the material under the caption
"Executive Officers" in the Company's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
Item 11. Executive Compensation.
The information required under this item is incorporated herein by reference
from the material contained under the caption "Executive Compensation" in the
Company's definitive proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A, not later than 120 days after
the close of the fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required under this item is incorporated herein by reference
from the material contained under the caption "Stock Ownership" in the
Company's definitive proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A, not later than 120 days after
the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions.
The information required under this item is incorporated herein by reference
from the material contained under the caption "Relationship with Affiliates"
in the Company's definitive proxy statement to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A, not later than 120 days
after the close of the fiscal year.
52
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial Statements
Included as outlined in Item 8 of Part II of this Report:
<TABLE>
<S> <C>
Consolidated Statement of Earnings for each of the three years in the
period ended November 30, 1998....................................... Page 18
Consolidated Statement of Cash Flows for each of the three years in
the period ended November 30, 1998................................... Page 19
Consolidated Balance Sheet as of November 30, 1998, and 1997.......... Page 20
Consolidated Statement of Shareholders' Equity........................ Page 22
Notes to Consolidated Financial Statements............................ Page 23
Report of Independent Accountants..................................... Page 50
</TABLE>
(a) 2. Supplemental Data and Financial Statement Schedules:
Included as outlined in Item 8 of Part II of this Report:
<TABLE>
<S> <C>
Quarterly Financial Information (unaudited) in Note 14 to the
Consolidated Financial Statements.................................... Page 39
</TABLE>
3(a). Exhibits
<TABLE>
<C> <S>
1.1 Purchase Agreement, dated as of January 26, 1999, among the Registrant,
Envirotronic Systems, Inc., Gasboy International, Inc., Management
Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc., Tokheim
Automation Corporation, Tokheim Equipment Corporation, Tokheim Investment
Corp., Tokheim RPS, LLC and Tokheim Services LLC, as subsidiary
guarantors, and BT Alex. Brown, Credit Lyonnais Securities, First Chicago
Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, Paine Webber Incorporated and Schroder & Co. Inc., as
initial purchasers.
2.1 Stock Purchase Agreement, dated as of December 29, 1997 between the
Registrant and Arthur S. ("Rusty") Elston, Ronald H. Elston, Eric E.
Burwell and Curt E. Burwell (incorporated herein by reference to the
Registrant's Current Report on Form 8-K, dated December 31, 1997).
2.2 Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities,
dated as of June 19, 1998, between the Registrant and Schlumberger
(incorporated herein by reference to the Registrant's Current Report on
Form 8-K/A dated October 1, 1998).
2.3 Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares,
Assets and Liabilities, dated as of September 30, 1998 between the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
3.1 Restated Articles of Incorporation of the Registrant, as amended, as filed
with the Indiana Secretary of State on February 5, 1997 (incorporated
herein by reference to the Registrant's Annual Report on Form 10-K/A for
the year ended November 30, 1996).
3.2 Bylaws of the Registrant, as restated on July 12, 1995 and amended March
2, 1998 (incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q for the period ended May 31, 1998).
4.1 Rights Agreement, dated as of January 22, 1997, between the Registrant and
Harris Trust and Savings Bank, as Rights Agent (incorporated herein by
reference to the Registrant's Current Report on Form 8-K, filed February
23, 1997).
4.2 Amendment No. 1 to Rights Agreement, dated as of September 30, 1998,
between the Registrant and Harris Trust and Savings Bank (incorporated
herein by reference to the Registrant's Current Report on Form 8-K/A dated
October 1, 1998).
</TABLE>
53
<PAGE>
<TABLE>
<C> <S>
4.3 Indenture, dated as of August 23, 1996, between the Registrant and
Harris Trust and Savings Bank, as Trustee (incorporated herein by
reference to the Registrant's Current Report on Form 8-K, filed
September 23, 1996).
4.4 Credit Agreement, dated as of September 3, 1996, among the Registrant,
certain subsidiaries of the Registrant, certain banks and NBD Bank, N.A.
(incorporated herein by reference to the Registrant's Current Report on
Form 8-K, filed September 6, 1996).
4.5 Amendment No. 1 to Credit Agreement, dated as of May 15, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.6 Amendment No. 2 to Credit Agreement, dated as of June 30, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.7 Amendment No. 3 to Credit Agreement, dated as of September 25, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.8 Amendment No. 4 to Credit Agreement, dated as of December 29, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.9 Amendment No. 5 to Credit Agreement, dated as of March 20, 1998
(incorporated herein by reference to the Registrant's Quarterly Report
on Form 10-Q for the period ended February 28, 1998).
4.10 Securities Purchase Agreement, dated September 30, 1998, between the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.11 12% Senior Subordinated Note due January 28, 1999 in the amount of
$170,000,000 (incorporated herein by reference to the Registrant's
Current Report on Form 8-K/A dated October 1, 1998).
4.12 Senior Subordinated Note Indenture, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.13 12% Junior Subordinated Note due 2008 in the amount of $40,000,000
(incorporated herein by reference to the Registrant's Current Report on
Form 8-K/A dated October 1, 1998).
4.14 Junior Subordinated Note Indenture, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.15 Amendment No. 1 to Junior Subordinated Note Indenture, dated as of
January 25, 1999.
4.16 Warrant to Purchase up to 19.9% of the Shares of Common Stock of the
Registrant (incorporated herein by reference to the Registrant's Current
Report on Form 8-K/A dated October 1, 1998).
4.17 Form of Roll-Over Note (incorporated herein by reference to the
Registrant's Current Report on Form
8-K/A dated October 1, 1998).
4.18 Registration Rights Agreement, dated September 30, 1998, by the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
</TABLE>
54
<PAGE>
<TABLE>
<C> <S>
4.19 Note Purchase Agreement, dated as of September 30, 1998, among the
Registrant, the Subsidiaries and the Purchasers (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.20 Amended and Restated Credit Agreement, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.21 Second Amended and Restated Credit Agreement, dated as of December 14,
1998, among the Registrant, 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.
4.22 Dollar Notes Indenture, dated as of January 29, 1999, among the
Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and U.S. Bank Trust National Association, as
trustee.
4.23 Dollar Registration Rights Agreement, dated as of January 26, 1999,
among the Registrant, Envirotronic Systems Inc., Gasboy International,
Inc., Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment,
Inc., Tokheim Automation Corporation, Tokheim Equipment Corporation,
Tokheim Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN
AMRO Incorporated, PaineWebber Incorporated and Schroder & Co. Inc., as
initial purchasers.
4.24 Euro Notes Indenture, dated as of January 29, 1999, among the
Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and U.S. Bank Trust National Association, as
trustee.
4.25 Euro Registration Rights Agreement, dated as of January 26, 1999, among
the Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN
AMRO Incorporated, PaineWebber Incorporated and Schroder & Co., Inc., as
initial purchasers.
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15,
1992 (incorporated herein by reference to the Registrant's Registration
Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and
Subsidiaries (incorporated herein by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-8, File No. 33-29710,
dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated herein by reference to the Registrant's Report on Form 10-
Q/A, for the quarter ended February 29, 1996, filed November 20, 1996).
10.4 Employment Agreement, dated December 10, 1997, between the Registrant
and Douglas K. Pinner (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
</TABLE>
55
<PAGE>
<TABLE>
<C> <S>
10.5 Employment Agreement, dated December 23, 1997, between the Registrant
and John A. Negovetich (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.6 Employment Agreement, dated December 23, 1997, between the Registrant
and Jacques St-Denis (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.7 Employment Agreement, dated December 23, 1997, between the Registrant
and Norman L. Roelke (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.8 Employment Agreement, dated December 23, 1997, between the Registrant
and Scott A. Swogger. (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.9 Technology License Agreement, effective as of December 1, 1997, between
the Registrant and Gilbarco, Inc. (incorporated herein by reference to
the Registrant's Annual Report on Form 10-K for the year ended November
30, 1997).
10.10 Tokheim Corporation 1997 Incentive Plan (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K for the year
ended November 39, 1997).
10.11 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated herein by reference
to the Registrant's Annual Report on Form 10-K for the year ended
November 30, 1997).
11.1 Statement re computation of per share earnings.
21.1 Subsidiaries of the registrant.
23.1 Consents.
27.1 Financial data schedule.
</TABLE>
3(b) Reports on Form 8-K
On August 3, 1998, the Company filed a Current Report on Form 8-K to report
on the Company's proposed acquisition of the RPS Division, including financial
statements of the RPS Division and unaudited pro forma financial statements.
On October 1, 1998, the Company filed a Current Report on Form 8-K/A to report
the Company's acquisition of the RPS Division, including financial statements
of the RPS Division and unaudited pro forma financial statements. The required
interim period financial statements and interim pro forma information were not
available at that time. The Company filed Amendment No. 2 on Form 8-K/A dated
December 14, 1998 to report on the required interim period financial
statements and interim pro forma information.
56
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Tokheim Corporation
/s/ Douglas K. Pinner
By: __________________________________
Douglas K. Pinner Chairman of the
Board, President,Chief Executive
Officer
February 25, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf
of the Registrant and in the capacities indicated on this 25th day of February,
1999.
Signature Title
/s/ Douglas K. Pinner Chairman of the
- - ------------------------------------ Board, President
Douglas K. Pinner and Chief
Executive Officer
/s/ John A. Negovetich Executive Vice
- - ------------------------------------ President, Finance
John A. Negovetich and Administration
and Chief
Financial Officer
/s/ Gerald H. Frieling, Jr. Vice Chairman of
- - ------------------------------------ the Board
Gerald H. Frieling, Jr.
/s/ Walter S. Ainsworth Director
- - ------------------------------------
Walter S. Ainsworth
/s/ Robert M. Akin, III Director
- - ------------------------------------
Robert M. Akin, III
/s/ James K. Baker Director
- - ------------------------------------
James K. Baker
57
<PAGE>
Signature Title
/s/ B. D. Cooper Director
- - -------------------------------------
B. D. Cooper
/s/ Richard W. Hansen Director
- - -------------------------------------
Richard W. Hansen
/s/ Leo J. Hawk Director
- - -------------------------------------
Leo J. Hawk
/s/ Dr. Winfred M. Phillips Director
- - -------------------------------------
Dr. Winfred M. Phillips
/s/ Ian M. Rolland Director
- - -------------------------------------
Ian M. Rolland
58
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Purchase Agreement, dated as of January 26, 1999, among the Registrant,
Envirotronic Systems, Inc., Gasboy International, Inc., Management
Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc., Tokheim
Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp., Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN
AMRO Incorporated, Paine Webber Incorporated and Schroder & Co. Inc., as
initial purchasers.
2.1 Stock Purchase Agreement, dated as of December 29, 1997 between the
Registrant and Arthur S. ("Rusty") Elston, Ronald H. Elston, Eric E.
Burwell and Curt E. Burwell (incorporated herein by reference to the
Registrant's Current Report on Form 8-K, dated December 31, 1997).
2.2 Master Agreement for Purchase and Sale of Shares, Assets, and
Liabilities, dated as of June 19, 1998, between the Registrant and
Schlumberger (incorporated herein by reference to the Registrant's
Current Report on Form 8-K/A dated October 1, 1998).
2.3 Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares,
Assets and Liabilities, dated as of September 30, 1998 between the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
3.1 Restated Articles of Incorporation of the Registrant, as amended, as
filed with the Indiana Secretary of State on February 5, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K/A for the year ended November 30, 1996).
3.2 Bylaws of the Registrant, as restated on July 12, 1995 and amended March
2, 1998 (incorporated herein by reference to the Registrant's Quarterly
Report on Form 10-Q for the period ended May 31, 1998).
4.1 Rights Agreement, dated as of January 22, 1997, between the Registrant
and Harris Trust and Savings Bank, as Rights Agent (incorporated herein
by reference to the Registrant's Current Report on Form 8-K, filed
February 23, 1997).
4.2 Amendment No. 1 to Rights Agreement, dated as of September 30, 1998,
between the Registrant and Harris Trust and Savings Bank (incorporated
herein by reference to the Registrant's Current Report on Form 8-K/A
dated October 1, 1998).
4.3 Indenture, dated as of August 23, 1996, between the Registrant and
Harris Trust and Savings Bank, as Trustee (incorporated herein by
reference to the Registrant's Current Report on Form 8-K, filed
September 23, 1996).
4.4 Credit Agreement, dated as of September 3, 1996, among the Registrant,
certain subsidiaries of the Registrant, certain banks and NBD Bank, N.A.
(incorporated herein by reference to the Registrant's Current Report on
Form 8-K, filed September 6, 1996).
4.5 Amendment No. 1 to Credit Agreement, dated as of May 15, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.6 Amendment No. 2 to Credit Agreement, dated as of June 30, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.7 Amendment No. 3 to Credit Agreement, dated as of September 25, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.8 Amendment No. 4 to Credit Agreement, dated as of December 29, 1997
(incorporated herein by reference to the Registrant's Annual Report on
Form 10-K, for the year ended November 30, 1997, filed February 13,
1997).
4.9 Amendment No. 5 to Credit Agreement, dated as of March 20, 1998
(incorporated herein by reference to the Registrant's Quarterly Report
on Form 10-Q for the period ended February 28, 1998).
4.10 Securities Purchase Agreement, dated September 30, 1998, between the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
</TABLE>
<PAGE>
<TABLE>
<C> <S>
4.11 12% Senior Subordinated Note due January 28, 1999 in the amount of
$170,000,000 (incorporated herein by reference to the Registrant's
Current Report on Form 8-K/A dated October 1, 1998).
4.12 Senior Subordinated Note Indenture, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.13 12% Junior Subordinated Note due 2008 in the amount of $40,000,000
(incorporated herein by reference to the Registrant's Current Report on
Form 8-K/A dated October 1, 1998).
4.14 Junior Subordinated Note Indenture, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.15 Amendment No. 1 to Junior Subordinated Note Indenture, dated as of
January 25, 1999.
4.16 Warrant to Purchase up to 19.9% of the Shares of Common Stock of the
Registrant (incorporated herein by reference to the Registrant's Current
Report on Form 8-K/A dated October 1, 1998).
4.17 Form of Roll-Over Note (incorporated herein by reference to the
Registrant's Current Report on Form
8-K/A dated October 1, 1998).
4.18 Registration Rights Agreement, dated September 30, 1998, by the
Registrant and Schlumberger (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.19 Note Purchase Agreement, dated as of September 30, 1998, among the
Registrant, the Subsidiaries and the Purchasers (incorporated herein by
reference to the Registrant's Current Report on Form 8-K/A dated October
1, 1998).
4.20 Amended and Restated Credit Agreement, dated as of September 30, 1998,
among the Registrant, 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 (incorporated herein by reference to the
Registrant's Current Report on Form 8-K/A dated October 1, 1998).
4.21 Second Amended and Restated Credit Agreement, dated as of December 14,
1998, among the Registrant, 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.
4.22 Dollar Notes Indenture, dated as of January 29, 1999, among the
Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and U.S. Bank Trust National Association, as
trustee.
4.23 Dollar Registration Rights Agreement, dated as of January 26, 1999,
among the Registrant, Envirotronic Systems Inc., Gasboy International,
Inc., Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment,
Inc., Tokheim Automation Corporation, Tokheim Equipment Corporation,
Tokheim Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN
AMRO Incorporated, Paine Webber Incorporated and Schroder & Co. Inc., as
initial purchasers.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
4.24 Euro Notes Indenture, dated as of January 29, 1999, among the
Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and U.S. Bank Trust National Association, as
trustee.
4.25 Euro Registration Rights Agreement, dated as of January 26, 1999, among
the Registrant, Envirotronic Systems, Inc., Gasboy International, Inc.,
Management Solutions, Inc., Sunbelt Hose & Petroleum Equipment, Inc.,
Tokheim Automation Corporation, Tokheim Equipment Corporation, Tokheim
Investment Corp, Tokheim RPS, LLC and Tokheim Services LLC, as
subsidiary guarantors, and BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN
AMRO Incorporated, Paine Webber Incorporated and Schroder & Co., Inc.,
as initial purchasers.
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15,
1992 (incorporated herein by reference to the Registrant's Registration
Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and
Subsidiaries (incorporated herein by reference to Amendment No. 1 to the
Registrant's Registration Statement on Form S-8, File No. 33-29710,
dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated herein by reference to the Registrant's Report on Form 10-
Q/A, for the quarter ended February 29, 1996, filed November 20, 1996).
10.4 Employment Agreement, dated December 10, 1997, between the Registrant
and Douglas K. Pinner (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.5 Employment Agreement, dated December 23, 1997, between the Registrant
and John A. Negovetich (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.6 Employment Agreement, dated December 23, 1997, between the Registrant
and Jacques St-Denis (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.7 Employment Agreement, dated December 23, 1997, between the Registrant
and Norman L. Roelke (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.8 Employment Agreement, dated December 23, 1997, between the Registrant
and Scott A. Swogger. (incorporated herein by reference to the
Registrant's Annual Report on Form 10-K for the year ended November 30,
1997).
10.9 Technology License Agreement, effective as of December 1, 1997, between
the Registrant and Gilbarco, Inc. (incorporated herein by reference to
the Registrant's Annual Report on Form 10-K for the year ended November
30, 1997).
10.10 Tokheim Corporation 1997 Incentive Plan (incorporated herein by
reference to the Registrant's Annual Report on Form 10-K for the year
ended November 30, 1997).
10.11 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated herein by reference
to the Registrant's Annual Report on Form 10-K for the year ended
November 30, 1997).
11.1 Statement re computation of per share earnings.
21.1 Subsidiaries of the registrant.
23.1 Consents.
27.1 Financial data schedule.
</TABLE>
<PAGE>
EXHIBIT 1.1
TOKHEIM CORPORATION
$123,000,000
11 3/8% Senior Subordinated Notes due 2008
Euro 75,000,000
11 3/8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
------------------
New York, New York
January 26, 1999
BT ALEX. BROWN INCORPORATED
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
GLEACHER NATWEST INTERNATIONAL
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
SCHRODER & CO. INC.
c/o BT Alex. Brown Incorporated
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
Tokheim Corporation, an Indiana corporation (the "Company") each of
the subsidiary Guarantors listed on the Signature pages hereto, hereby confirm
their agreement with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$123,000,000 aggregate principal amount of its 11 3/8% Senior Subordinated
Notes due 2008 (the "Dollar Notes") and Euro 75,000,000 aggregate principal
amount of its 11 3/8% Senior Subordinated Notes due
<PAGE>
2008 (the "Euro Notes" and, together with the Dollar Notes, the "Notes"). The
Dollar Notes are to be issued under an indenture (the "Dollar Indenture") and
the Euro Notes are to be issued under an indenture (the "Euro Indenture" and,
together with the Dollar Indenture, "the Indentures"), each to be dated as of
the Closing Date (as defined below) by and among the Company, the Guarantors (as
defined below) and U.S. Bank Trust National Association, as Trustee (the
"Trustee"). The Dollar Notes will be unconditionally guaranteed (the "Dollar
Guarantees") and the Euro Notes will be unconditionally guaranteed (the "Euro
Guarantees", and, together with the Dollar Guarantees, the "Guarantees") by each
domestic Subsidiary (as defined below) and each Subsidiary that in the future
executes a supplemental indenture pursuant to which such Subsidiary agrees to
guarantee the Notes (each, a "Guarantor", collectively, the "Guarantors," and,
together with the Company, the "Issuers"). The Dollar Notes and the Dollar
Guarantees are collectively referred to herein as the "Dollar Securities", the
Euro Notes and the Euro Guarantees are collectively referred to as the "Euro
Securities", and the Euro Securities and the Dollar Securities are collectively
referred to as the "Securities".
The Securities will be offered and sold to the Initial Purchasers (the
"Offering") without being registered under the Securities Act of 1933, as
amended (the "Act"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum dated January 6, 1999 (including
the documents incorporated by reference therein, the "Preliminary Memorandum"),
and have prepared a final offering memorandum dated the date hereof (including
the documents incorporated by reference therein, the "Final Memorandum"; the
Preliminary Memorandum and the Final Memorandum each herein being referred to as
a "Memorandum") setting forth or including a description of (i) the terms of
the Securities, (ii) the terms of the offering of the Securities and (iii) the
Company and its Subsidiaries and any material developments relating to the
Company and its Subsidiaries occurring after the date of the most recent
historical financial statements included therein.
The Issuers understand that the Initial Purchasers propose to make an
offering of the Securities only on the terms and in the manner set forth in the
Final Memorandum and Section 8 hereof as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, to persons whom
the Initial Purchasers reasonably believe to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Act, as
such rule may be amended from time to time ("Rule 144A"), in transactions under
Rule 144A, in private sales exempt from registration under the Act, and outside
the United States to certain persons (each, a "Regulation S Purchaser") in
reliance on Regulation S under the Act.
The Initial Purchasers and their direct and indirect transferees of
the Dollar Securities will be entitled to the benefits of a Registration Rights
Agreement (the "Dollar Registration Rights Agreement") and the Initial
Purchasers and their direct and indirect transferees
<PAGE>
of the Euro Securities will be entitled to the benefits of a Registration Rights
Agreement (the "Euro Registration Rights Agreement", together with the Dollar
Registration Rights Agreement, the "Registration Rights Agreements" and,
together with the Dollar Registration Rights Agreement, this Agreement, the
Notes, the Securities and the Indentures, the "Offering Documents"), each dated
as of January 26, 1999 by and among the Company, the Guarantors and the Initial
Purchasers.
Pursuant to the Dollar Registration Rights Agreement, the Company and
the Guarantors will agree, among other things, to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein (i) a registration statement (the "Dollar Registration Statement") under
the Act relating to the Exchange Securities (as defined in the Dollar
Registration Rights Agreement and herein referred to as the "Dollar Exchange
Securities") to be offered in exchange for the Dollar Securities and to use
their respective reasonable best efforts to cause such registration statement
to be declared effective, or (ii) a shelf registration statement (the "Dollar
Shelf Registration Statement") pursuant to Rule 415 under the Act relating to
the resale of the Dollar Securities by holders thereof or, if applicable,
relating to the resale of Private Exchange Securities (as defined in the Dollar
Registration Rights Agreement and herein referred to as the "Dollar Private
Exchange Securities") by the Initial Purchasers pursuant to an exchange of the
Dollar Securities for Dollar Private Exchange Securities, and to use their
respective reasonable best efforts to cause such shelf registration statement
to be declared effective.
Pursuant to the Euro Registration Rights Agreement, the Company and
the Guarantors will agree, among other things, to file with the Commission under
the circumstances set forth therein (i) a registration statement (the "Euro
Registration Statement") under the Act relating to the Exchange Securities (as
defined in the Euro Registration Rights Agreement, herein referred to as the
"Euro Exchange Securities" and, together with the Dollar Exchange Securities,
the "Exchange Securities") to be offered in exchange for the Euro Securities
and to use their respective reasonable best efforts to cause such registration
statement to be declared effective, or (ii) a shelf registration statement (the
"Euro Shelf Registration Statement," together with the Dollar Shelf
Registration Statement, the "Shelf Registration Statements" and, together with
the Dollar Registration Statement, the Dollar Shelf Registration Statement and
the Euro Registration Statement, the "Registration Statements") pursuant to Rule
415 under the Act relating to the resale of the Euro Securities by holders
thereof or, if applicable, relating to the resale of Private Exchange Securities
(as defined in the Euro Registration Rights Agreement, herein referred to as
the "Euro Private Exchange Securities" and, together with the Dollar Private
Exchange Securities, the "Private Exchange Securities") by the Initial
Purchasers pursuant to an exchange of the Euro Securities for Euro Private
Exchange Securities, and to use their respective reasonable best efforts to
cause such shelf registration statement to be declared effective.
2. Representations and Warranties. The Issuers, jointly and
severally, represent and warrant to and agree with the Initial Purchasers that:
<PAGE>
(a) Neither the Preliminary Offering Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as defined
in Section 3 below) contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information furnished to the Company in writing by
or on behalf of any of the Initial Purchasers, as provided in Section 12,
expressly for use in the Preliminary Offering Memorandum, the Final Memorandum
or any amendment or supplement thereto.
(b) The only direct or indirect significant subsidiaries (as defined
in Rule 1-02(w) of Regulation S-X under the Act) of the Company as of the
Closing Date will be the entities listed on Schedule A hereto (the
"Subsidiaries"). The Company does not own, directly or indirectly, any shares
of stock or any other equity or long term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity other than the
Subsidiaries and the interests listed on Schedule B. As of the Closing Date (i)
the Company will have the capitalization set forth in the Final Memorandum
(except for subsequent issuances, if any, pursuant to employee stock option or
other benefit plans); (ii) except as set forth on Schedule A, all of the shares
of capital stock of the Subsidiaries will be owned by the Company, in each
case, free and clear of all liens, encumbrances, and claims or restrictions on
transferability (other than those imposed by the Credit Agreement, the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting; and (iii)
except as set forth in the Final Memorandum and except for options to purchase
common stock of the Company issued pursuant to employee stock option or other
benefit plans, there will be no options, warrants or other rights to purchase
from the Company or any of the Subsidiaries or agreements or other obligations
of the Company or any of the Subsidiaries to issue or other rights to convert
any obligation into, or exchange any securities for, shares of capital stock of
or ownership interests in the Company or any of such Subsidiaries.
(c) Each of the Company and the Subsidiaries is and will be duly
incorporated, validly existing and in good standing as a corporation under the
laws of its jurisdiction of incorporation, with all requisite corporate power
and authority to own its properties and conduct its business as now conducted
and as described in the Final Memorandum; each of the Company and the
Subsidiaries is duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction in which the ownership or leasing of its
respective properties or the conduct of its respective business requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to have a material adverse effect on the business, condition
(financial or other) or results of operations of the Company and the
Subsidiaries taken as a whole (each such event a "Material Adverse Effect").
(d) Each Issuer has the requisite corporate power and authority to
execute, deliver and perform each of its obligations under this Agreement, the
Registration Rights
<PAGE>
Agreements and the Indentures and the transactions contemplated hereby and
thereby. The Company has requisite corporate power and authority to execute,
deliver and perform each of its obligations under the Securities, the Exchange
Securities and the Private Exchange Securities. Each Guarantor has requisite
power and authority to execute, deliver and perform each of its obligations
under the Guarantees, the guarantees pertaining to the Exchange Securities (the
"Exchange Guarantees") and the guarantees pertaining to the Private Exchange
Securities (the "Private Exchange Guarantees")
(e) The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company for issuance and when
executed by the Company and authenticated by the Trustee in accordance with the
provisions of the applicable Indenture and, in the case of the Notes, delivered
to and paid for by the Initial Purchasers in accordance with the terms hereof,
will have been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company, entitled to the benefits of the
applicable Indenture and enforceable against the Company in accordance with
their terms, except that enforcement thereof may be subject to (i) the effect
of bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors and (ii) the effect of general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law) and the discretion of the court before which any proceeding
therefor may be brought.
(f) Each of the Guarantees, the Exchange Guarantees and the Private
Exchange Guarantees has been duly authorized by each Guarantor for issuance and
when executed by such Guarantor and authenticated by the Trustee in accordance
with the provisions of the applicable Indenture, will have been duly executed,
issued and delivered and will constitute legally valid and binding obligations
of such Guarantor, entitled to the benefits of the applicable Indenture and
enforceable against such Guarantor in accordance with their respective terms,
except that (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws relating to or affecting creditors' rights generally and (ii)
the availability of equitable remedies may be limited by equitable principles
of general applicability (regardless of whether considered in a proceeding in
equity or at law). The Guarantees, the Exchange Guarantees and the Private
Exchange Guarantees conform in all material respects to the description thereof
contained in the Final Offering Memorandum and, when issued, will be in the
respective forms contemplated by the applicable Indenture.
(g) Each of the Indentures has been duly and validly authorized by
each of the Issuers and upon effectiveness of the applicable Registration
Statement will be qualified under the Trust Indenture Act of 1939, as amended
(the "TIA"), and, when executed and delivered by each of the Issuers (assuming
the due authorization, execution and delivery by the Trustee), will constitute a
valid and legally binding agreement of each of the Issuers, enforceable against
each of the Issuers in accordance with its terms, except that the enforcement
thereof may be subject to (i) the effect of bankruptcy, insolvency, fraudulent
transfer, reorga-
<PAGE>
nization, moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) the effect of general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law) and the discretion of the court before which any proceeding
therefor may be brought.
(h) Each of this Agreement and each Registration Rights Agreement has
been duly authorized, executed and delivered by each of the Issuers, and each
Registration Rights Agreement (assuming the due authorization, execution and
delivery by the other parties thereto) constitutes a valid and legally binding
agreement of each of the Issuers, enforceable against each of the Issuers in
accordance with its terms except that the enforcement thereof may be subject to
(i) the effect of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors, (ii) the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and the discretion of the court before which
any proceeding therefor may be brought and (iii) with respect to each
Registration Rights Agreement, the unenforceability under certain circumstances
under law or court decisions of provisions regarding the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy.
(i) Except as set forth in the Final Memorandum, no consent, approval,
authorization or order of any court or governmental agency or body, or third
party is required for the performance of any of the Offering Documents by any of
the Company or the Subsidiaries, to the extent each is a party thereto, or the
consummation by any of the Company and the Subsidiaries of any of the
transactions contemplated thereby, except such as have been obtained or, in the
case of each Registration Rights Agreement, will be obtained under the Act, the
TIA, or state securities or "Blue Sky" laws, or except where the failure to
obtain such consent, approval, authorization or order of any court or
governmental agency or body, or third party, singly or in the aggregate, would
not be reasonably expected to have a Material Adverse Effect.
(j) Neither the Company nor any of the Subsidiaries is (i) in
violation of its articles of incorporation or bylaws or similar organizational
documents, (ii) in violation of any statute, judgment, decree, order, rule or
regulation applicable to it or any of its respective properties or assets, which
violation would, singly or in the aggregate, be reasonably likely to have a
Material Adverse Effect, or (iii) in breach of or in default in (including,
without limitation, any event which with notice or lapse of time would
constitute a breach of or a default in) the performance or observance of any
obligation, agreement, covenant or condition contained in any other contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which it
is a party or to which it or any of its respective properties or assets is or
will be bound or subject (each a "Contract"), except, in the case of clause (ii)
and (iii), breaches or defaults, which singly or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
<PAGE>
(k) The execution, delivery and full and timely performance by each
Issuer, to the extent it is a party thereto, of each of the Offering Documents,
and the consummation by each Issuer of each of the transactions contemplated
thereby, will not violate, conflict with or constitute or result in a breach of
or a default under (or an event which, with notice or lapse of time, or both,
would constitute a breach of or a default under) (i) any of the terms or
provisions of any Contract that will remain in effect after the Closing Date,
except for such violations, conflicts, breaches or defaults, which would not
reasonably be expected to, singly or in the aggregate, have a Material Adverse
Effect, (ii) the articles of incorporation or bylaws or similar organizational
documents of any such person or (iii) (assuming compliance with all applicable
state securities and "Blue Sky" laws) any statute, judgment, decree, order, rule
or regulation of any court or governmental agency or other body applicable to
the Company or any of the Subsidiaries, or any of their respective properties or
assets, which violation, conflict, breach or default would, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(l) The audited and unaudited consolidated financial statements of the
Company included in the Final Memorandum present fairly, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company at the dates and for the periods to which they relate, and
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis, except as otherwise stated
therein. To the knowledge of the Company, the audited combined financial
statements of the fuel dispenser, systems and service business (the "RPS
Division") of Schlumberger Limited, purchased by the Company pursuant to a
Master Agreement for Purchase and Sale of Assets and Liabilities dated as of
June 19, 1998 between the Company and Schlumberger Limited, as amended by
Amendment No. 1 dated as of September 30, 1998 between the Company and
Schlumberger Limited, included in the Final Memorandum present fairly, in all
material respects, the combined financial position, results of operations and
cash flows of the RPS Division at the dates and for the periods to which they
relate, and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein.
The summary and selected financial and statistical data of the Company and, to
the knowledge of the Company, of the RPS Division included in the Final
Memorandum present fairly, in all material respects, the information shown
therein and have been prepared and compiled on a basis consistent with the
audited and unaudited financial statements included therein, except as otherwise
stated therein; and PricewaterhouseCoopers LLP and, to the knowledge of the
Company, Befec-Price Waterhouse (the "Independent Accountants"), are independent
public accounting firms within the meaning of the Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
(m) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with applicable requirements of
Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (ii) have been
<PAGE>
properly computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other pro forma financial
information included in the Final Memorandum are reasonable in the judgment of
the Company and the adjustments used therein are appropriate in all material
respects to give effect to the transactions or circumstances referred to
therein.
(n) Except as described in the Final Memorandum, there is no pending
or, to the knowledge of any of the Issuers, threatened, action, suit,
proceeding, inquiry or investigation to which any of the Company or any of the
Subsidiaries is a party, or to which any of their respective properties or
assets is subject, before or brought by any court, arbitrator or governmental
agency or body, which would reasonably be expected to result in a Material
Adverse Effect, or which seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge the issuance or sale of the Securities to be sold
hereunder or the consummation of the transactions described in the Final
Memorandum.
(o) Each of the Company and each of the Subsidiaries owns or possesses
all licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities (including foreign
regulatory agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its businesses as now conducted
and except where the failure to obtain licenses, permits, certificates,
consents, orders, approvals and other authorizations, or to make all
declarations and filings, would not reasonably be expected to, singly or in the
aggregate, have a Material Adverse Effect, and the Company and each of the
Subsidiaries have not received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the Final
Memorandum or except where such revocation or modification would not reasonably
be expected to, singly or in the aggregate, have a Material Adverse Effect.
(p) Except as contemplated by this Agreement, subsequent to the
respective dates as of which information is given in the Final Memorandum and
except as described therein, (i) neither the Company nor any of the Subsidiaries
has incurred any liabilities or obligations, direct or contingent, or entered
into or agreed to enter into any transactions or contracts (written or oral), in
either case not in the ordinary course of business and which are material to the
Company and the Subsidiaries, taken as a whole, and (ii) there has not occurred
any material adverse change in the business, condition (financial or other),
results of operations of or material adverse effect on the properties or assets
of the Company and the Subsidiaries, taken as a whole (a "Material Adverse
Change"), nor has any event occurred or any information become known to the
Company which would, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Change, whether or not arising in the ordinary
course of business.
(q) None of the Issuers and no agent acting on their behalf has taken
or will
<PAGE>
take any action that is reasonably likely to cause the execution of this
Agreement or the issuance or sale of the Securities to violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System, in each case as in
effect, or as the same may hereafter be in effect, on the Closing Date.
(r) Each of the Company and each of the Subsidiaries will have, as of
the Closing Date, good and marketable title to all real property and good title
to all personal property described in the Final Memorandum as being owned by it
and good and marketable title to the leasehold estates in the real and personal
property described therein as being leased by it, free and clear of all liens,
charges, encumbrances or restrictions, except as described in the Final
Memorandum or to the extent the failure to have such title or the existence of
such liens, charges, encumbrances or restrictions would not, singly or in the
aggregate, be reasonably likely to have a Material Adverse Effect.
(s) The fair value and present fair saleable value of the assets of
the Company (on a consolidated basis) will exceed the sum of its stated
liabilities and identified contingent liabilities; the Company (on a
consolidated basis) is not and the Company (on a consolidated basis) will not
be, after giving effect to the execution, delivery and performance of the
Offering Documents and the consummation of the transactions contemplated
thereby, (i) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (ii) unable to pay its debts
(contingent or otherwise) as they mature or (iii) otherwise insolvent.
(t) None of the Issuers or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D promulgated under the Act) has directly,
or through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any "security" (as defined in the Act)
which is or will be integrated with the sale of the Securities in a manner that
would require the registration under the Act of the Securities or (ii) engaged
in any form of general solicitation or general advertising in connection with
the offering of the Securities (as those terms are used in Regulation D under
the Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(u) Assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 8 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Initial Purchasers in the
manner contemplated by this Agreement to register any of the Securities under
the Act or to qualify the Indenture under the TIA.
(v) There are no legal or governmental proceedings involving or
affecting the Company or any of the Subsidiaries or any of their respective
properties or assets which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Memorandum), nor are there
any material contracts or other documents which would be required to be
described in a prospectus pursuant to the Act that are not described in the
Final
<PAGE>
Memorandum (or, if the Final Memorandum is not in existence, the most recent
Memorandum).
(w) Except as disclosed in the Final Memorandum, no Issuer expects
that the Company or any Subsidiary will have following the Offering any
liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any Subsidiary makes or
ever has made a contribution and in which any employee of the Company or any
Subsidiary is or has ever been a participant. With respect to such plans, the
Company and the Subsidiaries are in compliance in all material respects with all
applicable provisions of ERISA.
(x) Neither the Company nor any of the Subsidiaries is an "investment
company" or "promoter" or "principal underwriter" for an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(y) 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 (other than
those assessments being contested in good faith), and no tax deficiency has been
determined adversely to the Company or any Subsidiary which has had (nor does
any Issuer have any knowledge of any tax deficiency which is reasonably expected
to have) a Material Adverse Effect.
(z) The Notes, the Guarantees and the Indentures will, when executed,
each conform in all material respects to the descriptions thereof in the Final
Memorandum.
(aa) No securities of any Issuer of the same class (within the meaning
of Rule 144A) as the Notes or the Guarantees are listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or quoted in a U.S. automated inter-dealer
quotation system.
(bb) Except as disclosed in the Final Memorandum, entry into this
Agreement and the consummation of the transactions contemplated hereby will not
result in, or cause the Company to owe, any fees to any Person other than
pursuant to this Agreement.
(cc) None of the Issuers, any of their respective Affiliates or any
person acting on any of their behalf (other than and/or as directed by the
Initial Purchaser) has engaged in any directed selling efforts (as that term is
defined in Regulation S under the Act ("Regulation S")) with respect to the
Securities; the Issuers and their respective Affiliates and any person acting
on any of their behalf (other than and/or as directed by the Initial Purchaser)
have complied with the offering restrictions requirement of Regulation S.
<PAGE>
Any certificate signed by any officer of the Company or any of the
Guarantors and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company or such
Guarantor, as the case may be, to the Initial Purchasers as to the matters
covered thereby.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Issuers agree,
jointly and severally, to issue and sell to the Initial Purchasers, and each
Initial Purchaser, acting severally and not jointly, agrees to purchase from the
Issuers in the respective amounts of Dollar Securities and Euro Securities set
forth opposite its name on Schedule I hereto at a purchase price equal to (x)
the sum of (A) 100% of the principal amount of Dollar Securities set forth
opposite such Initial Purchaser's name and (B) 100% of the principal amount of
Euro Notes set forth opposite such Initial Purchaser's name minus (y) the
amount of the fee set forth opposite such Initial Purchaser's name. Delivery of,
and payment of the purchase price for the Securities shall be made at the
offices of Cahill Gordon & Reindel at 80 Pine Street, New York, New York 10005,
or such other time, date or location as may be mutually acceptable. Such
delivery and payment shall be made at or before 9:00 A.M. New York City time, on
January 29, 1999 with respect to the Dollar Securities, or at such other time as
shall be agreed upon by the Initial Purchasers and the Company. The time and
date of such delivery and the payment are herein called the "Closing Date".
(b) Certificates for the Dollar Notes and Dollar Guarantees in
definitive global form registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), in each case for credit to the accounts of
DTC participants and indirect participants including, without limitation,
Morgan Guaranty Trust Company of New York, Brussels office, as operator (the
"Euroclear Operator") of the Euroclear System ("Euroclear") and Cedel Bank,
societe anonyme ("Cedel Bank"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Dollar Notes
(collectively, the "Dollar Global Note"), and certificates for the Euro Notes
and Euro Guarantees in definitive global form registered in the name of, and
deposited with, Midland Bank plc as common depositary (in such capacity, the
"Common Depositary") for Euroclear and Cedel Bank, having an aggregate
principal amount corresponding to the aggregate principal amount of the Euro
Notes (collectively, the "Euro Global Note", and, together with the Dollar
Global Note, the "Global Notes") shall be made available to the Initial
Purchasers for inspection not later than 10:00 A.M., New York City time, on the
business day immediately preceding the Closing Date. The Global Notes shall be
delivered to the Initial Purchasers on the Closing Date with any transfer taxes
thereon duly paid by the Company, against payment of the purchase price therefor
by wire transfer of Federal (same day) funds to the Company.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of
<PAGE>
the Initial Purchasers is advisable.
5. Covenants of the Issuers. The Issuers, jointly and severally,
covenant and agree with each of the Initial Purchasers that:
(a) The Issuers will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers and their
counsel shall not previously have been advised and furnished with a copy a
reasonable period of time prior to the proposed amendment or supplement and as
to which the Initial Purchasers shall not have given their prior consent which
will not be unreasonably withheld, conditioned or delayed. The Issuers will,
promptly upon the reasonable request by the Initial Purchasers or counsel for
the Initial Purchasers, make any amendments or supplements to any Memorandum
that may be necessary or advisable in connection with the distribution of the
Securities by the Initial Purchasers.
(b) The Issuers will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchasers may reasonably designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities; provided, however, that in connection therewith none of the Issuers
shall be required to qualify as a foreign corporation or to take any action that
would subject them to a general consent to service of process in any
jurisdiction or to subject themselves to taxation in respect of doing business
in any jurisdiction in which they are not otherwise subject.
(c) If, at any time prior to the consummation of the Exchange Offer or
the end of the Effectiveness Period (as defined in either Registration Rights
Agreement) or either Shelf Registration Statement, as the case may be, any event
occurs or information becomes known as a result of which the Final Memorandum as
then amended or supplemented would include any untrue statement of a material
fact, or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary or advisable at any time to amend or
supplement the Final Memorandum to comply with applicable law, the Issuers will
promptly notify the Initial Purchasers thereof and will prepare, at its sole
expense, an amendment or supplement to the Final Memorandum that corrects such
statement or omission or effects such compliance.
(d) The Issuers will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of each
Memorandum or any amendment or supplement thereto as the Initial Purchasers may
reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Sources and Uses of Funds" in the Final
Memorandum.
<PAGE>
(f) For and during the period ending two years after the effective
date of any Registration Statement or on the date no Securities are outstanding,
whichever shall first occur, the Company will furnish to the Initial Purchasers,
upon request, copies of all reports and other communications (financial or
otherwise) furnished by the Company to its security holders generally and copies
of any reports or financial statements furnished to or filed by any Issuer with
the Commission or any national securities exchange on which any class of
securities of such Issuer may be listed.
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers, if and to the extent and as soon as they have been prepared and are
available, a copy of any unaudited interim consolidated financial statements of
the Company and the Subsidiaries for any period subsequent to the period
covered by the most recent financial statements appearing in the Final
Memorandum.
(h) Neither the Company nor any of its Affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Securities in a manner which would require the registration under the Act of
the Securities.
(i) Neither the Company nor any of the Guarantors will solicit any
offer to buy or offer to sell the Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding, the
Issuers will make available, upon request, to any seller of such Securities the
information specified in Rule 144A(d)(4) promulgated under the Act, unless the
Company is subject to Section 13 or 15(d) of the Exchange Act.
(k) The Issuers will use their respective reasonable best efforts to
(i) permit the Dollar Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the Private Offerings, Resales
and Trading through Automated Linkages market (the "PORTAL Market") (ii) effect
the listing of the Dollar Securities and the Euro Securities on the Luxembourg
Stock Exchange; provided that such listing application and ongoing listing
requirements shall not be unduly burdensome or excessively costly to the
Issuers, as determined in the Company's sole discretion, (iii) permit the Dollar
Securities to be eligible for clearance and settlement through The Depository
Trust Company and (iv) permit the Dollar Securities and the Euro Securities to
be eligible for clearance and settlement through Euroclear and Cedel Bank.
6. Expenses. The Issuers agree, jointly and severally, that,
whether or not the transactions contemplated herein are consummated or this
Agreement is terminated pursu-
<PAGE>
ant to Section 11 hereof, they shall pay or cause to be paid all costs and
expenses incident to the performance of their obligations hereunder and shall
pay or cause to be paid all costs and expenses incident to (a) the printing or
other production (including word processing) of all documents relating to the
transactions contemplated hereby, including, without limitation, each Memorandum
and any amendment or supplement thereto, and any "Blue Sky" memoranda, (b) all
arrangements relating to the delivery to the Initial Purchasers of copies of the
foregoing documents and copies of the other Offering Documents as required by
this Agreement, (c) the fees and disbursements of the counsel, the accountants
and any other experts or advisors retained by the Company, (d) preparation
(including printing), issuance and delivery to the Initial Purchasers of the
Securities, (e) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto, (f) expenses of the Company
in connection with any meetings with prospective investors in the Securities,
(g) fees and expenses of the Trustee, including fees and expenses of its
counsel, (h) all expenses and listing fees incurred in connection with the
application for (x) quotation of the Dollar Securities on the PORTAL Market and
the approval of the Dollar Securities for clearing through DTC and (y) listing
of the Dollar Securities and the Euro Securities on the Luxembourg Stock
Exchange and the approval of the Dollar Securities and the Euro Securities for
clearing through Euroclear and Cedel Bank and (j) any fees charged by investment
rating agencies for the rating of the Securities. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 or because of any
failure, refusal or inability on the part of any of the Issuers to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder (other than solely by reason of a default by the Initial Purchasers),
the Issuers will promptly reimburse the Initial Purchasers upon demand for all
reasonable and documented out-of-pocket expenses (including reasonable and
documented fees, disbursements and charges of Cahill Gordon & Reindel, counsel
for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities.
7. Conditions of the Initial Purchasers' Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be subject to the satisfaction and
fulfillment of the following conditions on or prior to the Closing Date:
(a) The Initial Purchasers shall have received a signed opinion, dated
the Closing Date and addressed to the Initial Purchasers, of (i) Skadden, Arps,
Slate, Meagher & Flom (Illinois) ("Skadden"), special counsel for the Company,
in the form of Exhibit A hereto and (ii) Norman Roelke, general counsel to the
Company, in the form of Exhibit B. In rendering such opinion, Skadden shall
have received, and may rely upon, such certificates and other documents and
information as they may reasonably request to pass upon such matters (including
the opinion of Norman Roelke as to matters of Indiana law).
<PAGE>
(b) The Initial Purchasers shall have received a signed opinion, in
form and substance satisfactory to the Initial Purchasers, dated the Closing
Date and addressed to the Initial Purchasers, of Cahill Gordon & Reindel,
counsel for the Initial Purchasers, with respect to certain legal matters
relating to this Agreement, and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, Cahill Gordon &
Reindel shall have received, and may rely upon, such certificates and other
documents and information as they may reasonably request to pass upon such
matters.
(c) The Initial Purchasers shall have received from the Independent
Accountants comfort letters dated the date hereof and the Closing Date,
addressed to the Initial Purchasers, covering such matters as are customary in
such letters and in form and substance reasonably satisfactory to the Initial
Purchasers and Cahill Gordon & Reindel, counsel for the Initial Purchasers.
(d) The representations and warranties of each of the Issuers
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date; each of the Issuers shall have performed all covenants
and agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, in each case in all
material respects; and, subsequent to the date of the most recent financial
statements in the Final Memorandum, there shall have been no Material Adverse
Change or any development that, singly or in the aggregate, is reasonably likely
to cause a Material Adverse Change.
(e) The Offering and the sale of the Securities by the Company
hereunder shall not be enjoined (temporarily or permanently) on the Closing
Date.
(f) Subsequent to the date as of which information is given in the
Final Memorandum, the conduct of the business and operations of each of the
Company and the Subsidiaries has not been interfered with by strike, fire,
flood, hurricane, accident or other calamity (whether or not insured) or by
any court or governmental action, order or decree and, except as otherwise
stated in the Final Memorandum, the properties of each of the Company and the
Subsidiaries have not sustained any loss or damage (whether or not insured) as a
result of any such occurrence, except any such interference, loss or damage
which would not reasonably be expected to, singly or in the aggregate, have a
Material Adverse Effect.
(g) The Initial Purchasers shall have received a certificate of the
Company and each of the Guarantors, dated the Closing Date and addressed to the
Initial Purchasers, signed on behalf of the Company by its Chairman, President
or any Vice President and the Chief Financial Officer to the effect that:
(i) The representations and warranties of each of the Issuers
contained in this Agreement are true and correct in all material respects
as if made on and as of the Closing Date, and each of the Issuers has
performed in all material respects all cove-
<PAGE>
nants and agreements and satisfied all conditions on its part to be
performed or satisfied in connection with this Agreement at or prior to the
Closing Date; at the Closing Date, since the date hereof or since the
respective dates as of which information is given in the Final Memorandum
(exclusive of any amendment or supplement thereto since the date hereof),
no event or events have occurred, no information has become known nor does
any condition exist that, individually or in the aggregate, would have a
Material Adverse Effect on the Company and the Subsidiaries and
(ii) To the knowledge of such officer, the Offering and the sale of
the Securities by the Issuers have not been enjoined (temporarily or
permanently).
(h) The Initial Purchasers shall have received both Registration
Rights Agreements executed by the Company, the Guarantors and the other parties
thereto and such agreements shall be in full force and effect.
(i) The Initial Purchasers shall have received an amendment to the
Junior Subordinated Notes Indenture (the "Junior Indenture"), dated as of
September 30, 1998, by and among the Company, the Initial Guarantors party
thereto, and Harris Trust and Savings Bank, which amendment shall, to the
satisfaction of the Initial Purchasers and Cahill Gordon & Reindel, counsel to
the Initial Purchasers, (a) be duly executed and effective under Article IX of
the Junior Indenture, and (b) expressly provide that (i) the notes issued under
the Junior Indenture (the "Junior Notes") shall be subordinate in right of
payment to the Notes and (ii) all guarantees endorsed on the Junior Notes shall
be subordinate in right of payment to the Guarantees.
(j) The Initial Purchasers shall have received an amendment to the
Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of
September 30, 1998, by and among the Company, Gasboy International Inc., the
Lenders party thereto, NBD Bank, N.A., as Administrative Agent, Credit Lyonnais,
Chicago Branch, as Documentation and Collateral Agent, and Gleacher NatWest
Inc. and Bankers Trust Company, as Co-Syndication Agents, which amendment shall,
to the satisfaction of the Initial Purchasers and Cahill Gordon & Reindel,
counsel to the Initial Purchasers, (a) be duly executed and effective under
Section 8.2 of the Credit Agreement, and (b) expressly provide that the issuance
of the Securities by any of the Issuers and the use of proceeds from the sale of
the Securities contemplated in the Final Memorandum shall not violate any
provision of the Credit Agreement or cause any event of default thereunder.
On or before the Closing Date, the Initial Purchasers and Cahill
Gordon & Reindel, counsel for the Initial Purchasers, shall have received such
further documents, certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company as they shall
reasonably request from the Company.
All such opinions, certificates, letters, schedules, documents or
instruments
<PAGE>
delivered pursuant to this Section 7 will comply with the provisions hereof only
if they are reasonably satisfactory in all respects to the Initial Purchasers.
The Company shall furnish to the Initial Purchasers such conformed copies of
such opinions, certificates, letters, schedules, documents and instruments and
such other documents, in such quantities as the Initial Purchasers shall
reasonably request.
8. Offering of Securities; Restrictions on Transfer. Each of the
Initial Purchasers represents and warrants that it is a qualified institutional
buyer as defined in Rule 144A promulgated under the Act (a "QIB"). Each of the
Initial Purchasers agrees with the Company that (a) it has not and will not
solicit offers for, or offer or sell, the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act; and (b) it has and will solicit offers for the
Securities only from, and will offer the Securities only to (i) in the case of
offers inside the United States, persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A under the Act ("Rule 144A"), and, in each
case, in transactions under Rule 144A and (ii) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of clause (b) above,
in purchasing such Securities such persons are deemed to have represented and
agreed as provided under the caption "Notice to Investors" contained in the
Final Memorandum.
9. Indemnification and Contribution. (a) The Issuers agree,
jointly and severally, to indemnify and hold harmless each Initial Purchaser and
each person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which any Initial Purchaser
or such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in (A) any Memorandum or any amendment or supplement thereto
or (B) any application or other document, or any amendment or supplement
thereto, executed by any Issuer or based upon written information furnished
by or on behalf of any Issuer filed in any jurisdiction in order to qualify
the Securities under the securities or "Blue Sky" laws thereof or filed
with any securities association or securities exchange (each an
"Application"); or
(ii) the omission or alleged omission to state in (A) any Memorandum
or
<PAGE>
any amendment or supplement thereto or (B) any Application, a material
fact required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any legal or other expenses incurred by the Initial
Purchasers or such controlling person in connection with investigating or
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action in respect thereof; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Memorandum or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Initial Purchasers specifically
for use therein. The indemnity provided by this Section 9 will be in addition
to any liability that any Issuer may otherwise have to the indemnified parties.
No Issuer shall be liable under this Section 9 for any settlement of any claim
or action effected without its prior written consent (which shall not be
unreasonably withheld or delayed), provided, however, that the indemnification
contained in this paragraph (a) with respect to any Preliminary Memorandum shall
not inure to the benefit of the Initial Purchasers (or to the benefit of any
person controlling the Initial Purchasers) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Securities by the
Initial Purchasers to any person if a copy of the Final Memorandum was not
delivered or sent to such person prior to the confirmation of sale of such
Securities, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Preliminary Memorandum was
corrected in the Final Memorandum and the Final Memorandum did not contain any
other untrue statement or alleged untrue statement or omission or alleged
omission of a material fact that is the subject matter of the related
proceeding, provided that the Company has delivered the Final Memorandum to the
Initial Purchasers in requisite quantity on a timely basis to permit such
delivery or sending.
(b) Each of the Initial Purchasers severally agrees to indemnify and
hold harmless the Company, its directors and its officers and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto, or necessary to make the
statements therein not misleading, in each case to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Initial Purchaser specifically for use therein;
and, subject to the limitation set forth immediately pre-
<PAGE>
ceding this clause, will reimburse, as incurred, any legal or other expenses
incurred by the Company or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Initial Purchasers may otherwise have to the indemnified parties. The
Initial Purchasers shall not be liable under this Section 9 for any settlement
of any claim or action effected without their consent (which shall not be
unreasonably withheld or delayed). The Company shall not, without the prior
written consent of the Initial Purchasers, effect any settlement or compromise
of any pending or threatened proceeding in respect of which any Initial
Purchaser is or has been a party, or indemnity could have been sought hereunder
by any Initial Purchaser, unless such settlement (A) includes an unconditional
written release of the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of any
Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof
in writing, but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of, or
materially and adversely compromises, substantial rights or defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraphs (a) and (b) above. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, that if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties, and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. After notice from the indemnifying party to
such indem-
<PAGE>
nified party of its election so to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that, in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial Purchasers
in the case of paragraph (a) of this Section 9 or the Company, in the case of
paragraph (b) of this Section 9, representing the indemnified parties under
such paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. Any fees and expenses of any separate counsel employed by
the indemnified party in accordance with the proviso to the second sentence of
this paragraph shall be reimbursed promptly by the indemnifying party. After
notice from the indemnifying party to such indemnified party of its election to
assume the defense of such action, the indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the prior written consent of the indemnifying party
(which consent shall not be unreasonably withheld or delayed).
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is for any reason unavailable (other
than by reason of exceptions provided therein) or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages or liabilities
(or actions in respect thereof), each indemnifying party, in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party on the other from the offering
of the Securities or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Company on the one hand and any Initial Purchaser on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of discounts and commissions but before deducting expenses) received by the
Company bear to the total discounts and commissions received by such Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand, or such
<PAGE>
Initial Purchaser on the other, the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The Issuers and the Initial Purchasers agree that it would not be
just and equitable if the amount of such contribution were determined by pro
rata or per capita allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the first
sentence of the immediately preceding paragraph (d). Notwithstanding any other
provision of the immediately preceding paragraph (d), no Initial Purchaser shall
be obligated to make contributions hereunder that in the aggregate exceed the
total discounts and commissions received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial Purchaser
has otherwise paid or been required to pay by reason of the untrue or alleged
untrue statements or the omissions or alleged omissions to state a material
fact, and no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty or such fraudulent misrepresentation. For purposes of the
immediately preceding paragraph (d), each person, if any, who controls such
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Initial
Purchaser, and each director of the Company, and each officer of the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers and the
Initial Purchasers set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (a) any investigation made by or on behalf of the Issuers, any of
its officers or directors, the Initial Purchasers or any controlling person
referred to in Section 9 hereof, and (b) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 9 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Integration. This Agreement supersedes any other prior Agreement
or understanding any of the parties hereto may have with respect to the subject
matter hereof. Upon consummation of the sale of the Securities to the Initial
Purchasers, any other existing obligations or commitments, including, without
limitation, for any fees or expenses, of the Company and its subsidiaries and
affiliates to the Initial Purchasers and any of their subsidiaries or affiliates
in connection with any other offering of securities, commitment letters with
respect thereto, or loan points with respect thereto, by the Company or any of
its subsidiaries or affiliates will cease (other than with respect to indemnity
provisions contained in prior agreements relating thereto).
<PAGE>
12. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by written notice to the Issuers given
prior to the Closing Date in the event that the Issuers shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date:
(i) either the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slowdown or work stoppage or any legal or governmental proceeding, which
loss or interference, in the sole judgment of the Initial Purchasers,
singly or in the aggregate, has had or has a Material Adverse Effect or
there shall have been, in the sole judgment of the Initial Purchasers, any
Material Adverse Change, or any event or development that is reasonably
likely to cause or result in a Material Adverse Change (including, without
limitation, a change in management or control of the Company), except in
each case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been
suspended or minimum or maximum prices shall have been established
generally on the New York Stock Exchange, American Stock Exchange or the
Nasdaq National Market,
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above, and in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities as
contemplated by the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
13. Information Supplied by the Initial Purchasers. The statements
set forth in the last paragraph on the front cover page, the first paragraph on
page ii and the last two sentences of paragraph three and in the entirety of the
eighth paragraph under the heading "Private Placement" in the Final Memorandum
constitute the only information furnished by or on behalf of the Initial
Purchasers to the Company for the purposes of Sections 2(a) and 9 hereof.
<PAGE>
14. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to BT Alex. Brown Incorporated, One Bankers Trust
Plaza, 130 Liberty Street, New York, New York 10006, Attention: Corporate
Finance Department, with a copy to Cahill Gordon & Reindel, 80 Pine Street, New
York, New York 10005, Attention: Michael A. Becker, Esq., Telecopier Number
(212) 269-5420, and if sent to any of the Issuers, shall be mailed, delivered
or telecopied and confirmed in writing to Tokheim Corporation, Attention:
Executive Vice President, Finance and Administration, Fort Wayne, Indiana 46845,
Attention: Executive Vice President, Finance and Administration, Telecopier
Number (219) 484-1110, with a copy to Skadden, Arps, Slate, Meagher & Flom
(Illinois), 333 West Wacker Drive, Chicago, Illinois 60606, Attention: William
R. Kunkel, Esq., Telecopier Number (312) 407-0411.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.
15. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the Issuers and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained. This Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuers contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and its officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchasers will be deemed a
successor because of such purchase.
16. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
17. Judgment Currency. Each (x) Issuer hereby agrees, jointly and
severally, to indemnify each of the Initial Purchasers, their directors, their
officers and each person,
<PAGE>
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act against any loss incurred by such
person as a result of any judgment or order being given or made against any
Initial Purchaser, and (y) Initial Purchaser hereby agrees, severally and not
jointly, to indemnify each Issuer, their directors, their officers, and each
person, if any, who controls any Issuer within Section 15 of the Act or Section
20 of the Exchange Act against any loss incurred by such person as a result of
any judgment or order being given or made against any Issuer for any amount due
under this Agreement and such judgment or order being expressed and paid in a
currency (the "Judgment Currency") other than United States dollars and as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange in The City of New
York at which such party on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment Currency
actually received by such party. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart by telecopier shall be effective as delivery of a manually executed
counterpart.
[Signature Pages Follow]
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Guarantors and the Initial Purchasers.
Very truly yours,
TOKHEIM CORPORATION
By: _________________________________
Name:
Title:
<PAGE>
Each of the Subsidiaries specified below agrees to become a party to this
Agreement as a Guarantor as of the date hereof:
ENVIROTRONIC SYSTEMS, INC.
By: _______________________________
Name:
Title:
GASBOY INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By: _______________________________
Name:
Title:
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
By: _______________________________
Name:
Title:
<PAGE>
TOKHEIM AUTOMATION
CORPORATION
By: _______________________________
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By: _______________________________
Name:
Title:
TOKHEIM INVESTMENT
CORPORATION
By: _______________________________
Name:
Title:
TOKHEIM RPS, LLC
By: _______________________________
Name:
Title:
TOKHEIM SERVICES, LLC
By: _______________________________
Name:
Title:
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT ALEX. BROWN INCORPORATED
By: ________________________________
Name:
Title:
ABN AMRO INCORPORATED
By: ________________________________
Name:
Title:
CREDIT LYONNAIS SECURITIES (USA) INC.
By: ________________________________
Name:
Title:
FIRST CHICAGO CAPITAL MARKETS, INC.
By: ________________________________
Name:
Title:
GLEACHER NATWEST INTERNATIONAL
By: ________________________________
Name:
Title:
<PAGE>
PAINEWEBBER INCORPORATED
By: ________________________________
Name:
Title:
SCHRODER & CO. INC.
By: ________________________________
Name:
Title:
<PAGE>
Schedule I
----------
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Initial Purchasers of Dollar Securities of Dollar Securities of Euro Securities Fee
--------------------------------------- -------------------- ------------------ ---
<S> <C> <C> <C>
BT Alex. Brown Incorporated.............. $ 61,140,000.00 Euro 37,280,000.00 $3,144,713.00
Credit Lyonnais Securities (USA) Inc..... 15,896,000.00 9,693,000.00 817,625.00
First Chicago Capital Markets, Inc....... 15,896,000.00 9,693,000.00 817,625.00
Gleacher NatWest International........... 15,896,000.00 9,693,000.00 817,625.00
ABN AMRO Incorporated.................... 6,114,000.00 3,728,000.00 314,471.00
PaineWebber Incorporated................. 1,944,000.00 1,185,000.00 100,000.00
Schroder & Co. Inc....................... 6,114,000.00 3,728,000.00 314,471.00
--------------- ------------- -------------
Total............................... $123,000,000.00 Euro 75,000,000.00 $6,326,531.00
</TABLE>
<PAGE>
Schedule A
----------
List of Subsidiaries*
---------------------
<TABLE>
<CAPTION>
Percent
Ownership Jurisdiction of
Name by the Company Incorporation
- - ---- -------------- -------------
<S> <C> <C> <C>
Management Solutions, Inc. (A) 100.00% USA-Colorado
Tokheim Equipment Corporation (A) 100.00% USA-Delaware
Tokheim RPS, LLC (K) 100.00% USA-Delaware
Sunbelt Hose & Petroleum Equipment, Inc. (B) 100.00% USA-Georgia
Envirotronic Systems, Inc. (A) 100.00% USA-Indiana
Gasboy International, Inc. (B) 100.00% USA-Pennsylvania
Tokheim Automation Corporation (A) 100.00% USA-Texas
Tokheim Services LLC (Q) 100.00% USA-Indiana
Tokheim Investment Corp. (A) 100.00% USA-Texas
Tokheim Austria GesmbH (G) 100.00% Austria
Tokheim Belgium N.V. (P) 99.64% Belgium
Socatam S.A. (F) 99.91% Cameroon
Tokheim and Gasboy of Canada Limited (C) 100.00% Canada-Ontario
Tokheim Czech Republic (F) 100.00% Czech Republic
Tokheim Scandinavia A/S (J) 100.00% Denmark
Tokheim Sofitam S.A. (B) 100.00% France
Tokheim Sofitam Application S.A. (E) 100.00% France
Outelec (F) (less than) 1.00% France
Excelsior S.A. (F) 20.00% France
Serip S.A. (F) 35.80% France
Solutions Services Systemes France S.A. (F) 100.00% France
Tokheim Holding GmbH (A) 100.00% Germany
Tokheim GmbH (G) 100.00% Germany
Deutsehe Verwaltungsegasellschaft GmbH (G) 100.00% Germany
Tokheim Germann GmbH (N) 100.00% Germany
Tokheim Tanksysteme GmbH (N) 100.00% Germany
Tokheim Hungary Measurements & Systems (F) Hungary
KFT 100.00%
Tulla Electronics Limited (B) 100.00% Ireland
Tokheim Ireland Limited (B) 100.00% Ireland
CME-Rimic S.r.l. (F) 100.00% Italy
Tokheim Sofitam Italia S.r.l. (F) 70.00% Italy
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Cocitam S.A. (F) 98.60% Ivory Coast
Matam S.A. (F) 100.00% Morocco
Tokheim Z.O.O. (O) 100.00% Poland
Russgermann (O) 25.00% Russia
Cosetam S.A. (H) 100.00% Senegal
Tokheim Slovakia S.R.O (F) 100.00% Slovakia
Tokheim Properties (Proprietary) Limited (D) 100.00% South Africa
Tokheim South Africa (Proprietary) Limited (D) 100.00% South Africa
Tokheim Sofitam Iberica S.A. (F) 99.81% Spain
Koppens Iberica S.A. (M) 100.00% Spain
Tokheim Sofitam N.V. (F) 100.00% Belgium
Coguerel S.A. (F) 100.00% France
Vautrin (F) 100.00% France
Tokheim Swaziland (Proprietary) Limited (L) 100.00% Swaziland
Tokheim Switzerland S.A. (B) 100.00% Switzerland
Bennett & Sauser S.A. (F) 47.14% Switzerland
Tokheim Holding Netterlands B.V. (B) 100.00% The Netherlands
Koppens Automatic Fabrieken B.V. (I) 100.00% The Netherlands
Tokheim Sales B.V.** (I) 100.00% The Netherlands
Tokheim Netherlands B.V. (I) 100.00% The Netherlands
Koppens Holding Nederland B.V. (I) 100.00% The Netherlands
Tokheim Europe B.V. (I) 100.00% The Netherlands
HMA Rotterdam B.V. (J) 100.00% The Netherlands
Cottam Sarl (F) 100.00% Tunisia
Tokheim Sofitam UK Limited (B) 100.00% United Kingdom
Sofitam Pump Services Ltd. (F) 51.31% United Kingdom
</TABLE>
_______________________
* Subsidiaries immediately after transaction; does not take into account
subsequent liquidations, mergers, or other transactions.
** In liquidation.
A) Directly owned by Tokheim Corporation.
B) Directly owned by Tokheim Corporation's subsidiary Tokheim Investment
Corporation, or directors' qualifying shares.
C) Directly owned 65% by Tokheim Corporation's subsidiary Tokheim Investment
Corporation and 35% by Tokheum Corporation's subsidiary Gasboy
International, Inc.
D) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim and
Gasboy of Canada Limited.
<PAGE>
E) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
S.A.
F) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
Application S.A.
G) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Holding
GmbH.
H) Directly owned 66.67% by Tokheim Corporation's indirect subsidiary Tokheim
Sofitam Application S.A. and 33.33% by Tokheim Corporation's indirect
subsidiary Cocitan S.A.
I) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Holding
Netherlands B.V.
J) Directly owned by Tokheim Corporation's indirect subsidiary Koppers Holding
Nederland B.V.
K) Directly owned by Tokheim Corporation's indirect subsidiary Gasboy
International, Inc.
L) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim South
Africa (Proprietary) Limited.
M) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
Iberica S.A.
N) Directly owned by Tokheim Corporation's indirect subsidiary Deutsche
Verwaltungsgesellschaft GmbH.
O) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Germann
GmbH.
P) Directly owned 99.6% by Tokheim Corporation's indirect subsidiary Koppens
Holding Nederland B.V. and 0.04% by Tokheim Corporation's indirect
subsidiary Koppens Automatic Fabrieken B.V.
Q) Directly owned 99% by Tokheim Corporation and 1% by Tokheim Corporation's
Subsidiary Tokheim Investment Corporation.
<PAGE>
Schedule B
----------
Ownership by the Company of equity interest in
or long-term debt of any entity
-------------------------------
Investments in Subsidiaries - See Schedule A
All Intercompany Loans
<TABLE>
<CAPTION>
Other Investments U.S. Dollars Local Currency
------------ --------------
<S> <C> <C>
Tokheim Corporation
Corporate Research Center (real estate on DuPont Road) 2,252,993
Officers Life Insurance - Aggregate Cash Surrender Value 1,979,856
Joint Venture - Lictokheim - Inactive No Value
Joint Venture - Sovtexautomation - Inactive No Value
Tokheim Investment Corp.
Note Receivable - Sudameris Transportation, Inc. 40,000
Note Receivable - Central Die Casting and Manufacturing Co. 186,000
Sunbelt Hose & Petroleum Company
Note Receivable - MECO 40,750
Tokheim Sofitam Applications S.A.
Officers Life Insurance - Aggregate Cash Surrender Value 67,256 395,300 French Francs
Equity Investment in Excelsior S.A. 170,140 1,000,000 French Francs
Equity Investment in Serip S.A. 261,675 1,538,000 French Francs
Equity Investment in Outelec 42,433 249,400 French Francs
Note Receivable 453,095 2,663,073 French Francs
Tokheim Sofitam Italia S.r.l.
Equity Investment in Ardic 110,055 191,500,000 Italian Lira
Cosetam S.A.
Officers Life Insurance - Aggregate Cash Surrender Value 23,676 14,101,000 N. Africa Francs
Cocitam S.A.
Officers Life Insurance - Aggregate Cash Surrender Value 113,991 67,892,000 N. Africa Francs
</TABLE>
Minority Interests to be Purchased
Sofitam Pump Services Ltd. - to purchase the minority shares (48.69%) at an
estimated value of approximately $1,500,000.
Tokheim Sofitam Italia S.r.l. - to purchase the minority shares (30%) at an
estimated value of approximately $800,000.
<PAGE>
Exhibit 4.15
AMENDMENT No. 1, dated as of January 25, 1999, to the Indenture, dated
as of September 30, 1998 (the "Junior Indenture"), 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").
The parties desire to amend the Junior Indenture as set forth herein
to cure certain ambiguities, defects or inconsistencies and to make other
changes that do not adversely affect the legal rights under the Junior Indenture
of any Holder. Defined terms used in this Amendment No. 1 that are not otherwise
defined herein shall have the meanings ascribed to such terms in the Junior
Indenture.
Section 1. Clause (iv) of the definition of Permitted Investments is
hereby amended to read in its entirety as follows:
(iv) loans and advances totaling up to $5.0 million in the aggregate
(A) in the ordinary course of business for bona fide business purposes
or (B) to purchase the Company's Capital Stock;
Section 2. Clause (viii) of the definition of Permitted Investments
is hereby amended to read in its entirety as follows:
(viii) Investments existing on October 1,1998;
Section 3. The definition of Guarantor Senior Debt is hereby amended
by adding the word "and" immediately preceding clause (vii) thereof and by
deleting clause (viii) thereof.
Section 4. The definition of Senor Debt is hereby amended by adding
the word "and" immediately preceding clause (vii) thereof and by deleting clause
(viii) thereof.
Section 5. The definition for Traits is hereby amended to read in its
entirety as follows:
"Traits" means "traites" (as customarily used in French commerce) or
accounts receivable or invoices sold without recourse.
Section 6. Section 4.05(b) is hereby amended to read in its entirety
as follows:
<PAGE>
(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 or any Subsidiary
to any of the Company's Subsidiaries, provided such loans are
otherwise in compliance with the terms of the Indenture.
Section 7.
----------
(a) Except as otherwise expressly provided herein, the terms and
provisions of the Junior Indenture remain unchanged and in full force and
effect.
(b) This Amendment No. 1 shall be construed as supplemental to the
Junior Indenture and shall form a part thereof.
(c) This Amendment No. 1 shall be construed in accordance with and
governed by the laws of the State of New York.
(d) The parties may sign any number of copies of this Amendment No.
1. 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.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
duly executed as of the date first written above.
2
<PAGE>
TOKHEIM CORPORATION
By:/s/ John A. Negovetich
----------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:/s/ John A. Negovetich
----------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:/s/ John A. Negovetich
----------------------
Name:
Title:
TOKHEIM RPS, LLC
By:/s/ John A. Negovetich
----------------------
Name:
Title:
ENVIROTRONIC SYSTEMS, INC.
By:/s/ John A. Negovetich
----------------------
Name:
Title:
SUNBELT HOSE & PETROLEUM EQUIPMENT INC.
By:/s/ John A. Negovetich
----------------------
Name:
Title:
3
<PAGE>
GASBOY INTERNATIONAL, INC.
By:/s/ John A. Negovetich
----------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:/s/ John A. Negovetich
----------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:/s/ John A. Negovetich
----------------------
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as Trustee
By:/s/ J. Bartolini
-----------------
Name: J. Bartolini
Title: Vice President
4
<PAGE>
EXECUTION COPY
- - --------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of December 14, 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>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
ARTICLE I: DEFINITIONS...................................................................... 1
1.1. Definitions................................................................ 1
1.2. Accounting Terms and Determinations........................................ 29
1.3. References to Subsidiaries................................................. 29
1.4. Rounding and Other Consequential Changes................................... 30
ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES..................................... 30
2.1. The Revolving Loan, Swing Loan and Term Loan Facilities.................... 30
2.1.1. Revolving Loans.................................................... 30
2.1.2. Swing Loans........................................................ 31
2.1.3. Term Loans......................................................... 34
2.1.4. Alternate Currency Loans................................................... 35
2.2. Types and Interest Periods................................................. 38
2.2.1. Types of Advances.................................................. 38
2.2.2. Method of Selecting Types and Interest Periods for New Advances.... 38
2.2.3. Conversion and Continuation of Outstanding Advances................ 39
2.3. Applicable Margin.......................................................... 40
2.4. Fees....................................................................... 42
2.4.1. Commitment Fee..................................................... 42
2.4.2. Agent Fees......................................................... 42
2.4.3. Prepayment Fee..................................................... 43
2.5. General Facility Terms..................................................... 43
2.5.1. Method of Borrowing................................................ 43
2.5.2. Minimum Amount of Each Advance..................................... 44
2.5.3. Prepayments........................................................ 44
2.5.4. Interest Rates; Interest Periods................................... 47
2.5.5. Default Rate....................................................... 47
2.5.6. Interest Payment Dates; Interest Basis............................. 48
2.5.7. Method of Payment.................................................. 48
2.5.8. Notes; Telephonic Notices.......................................... 49
2.5.9. Notification of Advances, Interest Rates and Prepayments........... 49
2.5.10. Non-Receipt of Funds by the Agent.................................. 50
2.5.11. Termination or Reduction in the Aggregate Revolving Loan Commitment 50
2.5.12. Market Disruption.................................................. 51
2.5.13. Lending Installations.............................................. 51
2.5.14. Borrowing Subsidiaries............................................. 51
2.5.15. Withholding Tax Exemption.......................................... 52
2.5.16. Judgment Currency.................................................. 53
2.5.17 Overall Effective Rate for French Borrowing Subsidiaries;
Limitation on German Borrowing Subsidiaries' Obligations.......... 54
2.6. Letter of Credit Facility.................................................. 54
2.6.1. Letters of Credit.................................................. 54
2.6.2. Letter of Credit Participation..................................... 55
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
2.6.3. Reimbursement Obligation........................................... 55
2.6.4. Cash Collateral.................................................... 56
2.6.5. Letter of Credit Fees.............................................. 57
2.6.6. Indemnification; Exoneration....................................... 57
2.7 Termination Date........................................................... 58
ARTICLE III: CHANGE IN CIRCUMSTANCES........................................................ 59
3.1. Taxes...................................................................... 59
3.1.1. Payments to be Free and Clear...................................... 59
3.1.2. Grossing-up of Payments............................................ 59
3.1.3 Certification of Withholding Tax Exemption......................... 60
3.2. Increased Costs............................................................ 61
3.3. Changes in Capital Adequacy Regulations.................................... 61
3.4. Availability of Types of Advances.......................................... 62
3.5. Funding Indemnification.................................................... 62
3.6. Mitigation of Additional Costs or Adverse Circumstances.................... 63
3.7. Lender Statements; Survival of Indemnity................................... 63
ARTICLE IV: CONDITIONS PRECEDENT............................................................ 64
4.1. Effectiveness of this Agreement............................................ 64
4.2. Initial Advance to Each New Borrowing Subsidiary........................... 64
4.3. Each Advance and Letter of Credit.......................................... 65
ARTICLE V: REPRESENTATIONS AND WARRANTIES................................................... 66
5.1. Corporate Existence and Standing........................................... 66
5.2. Authorization and Validity................................................. 66
5.3. No Conflict; Government Consent............................................ 66
5.4. Financial Statements....................................................... 67
5.5. Material Adverse Change.................................................... 67
5.6. Taxes...................................................................... 67
5.7. Litigation................................................................. 68
5.8. Subsidiaries............................................................... 68
5.9. ERISA...................................................................... 68
5.10. Full Disclosure............................................................ 69
5.11. Assets and Properties...................................................... 69
5.12. Patents and Trademarks..................................................... 69
5.13. No Defaults................................................................ 69
5.14. Investment Company Act..................................................... 70
5.15. Compliance with Environmental Laws......................................... 70
5.16. Regulations T, U and X..................................................... 70
5.17. Filing..................................................................... 70
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
5.18. No Immunity................................................................ 71
5.19. Contingent Obligations..................................................... 71
5.20. Foreign Employee Benefit Matters........................................... 71
5.21. French Withholding......................................................... 71
5.22 Year 2000 Issues........................................................... 72
ARTICLE V-A: REPRESENTATIONS AND WARRANTIES OF ADDITIONAL
FRENCH BORROWING SUBSIDIARIES....................................................... 72
5A.1. Corporate Existence and Standing........................................... 72
5A.2. Authorization and Validity................................................. 72
5A.3. No Conflict; Government Consent............................................ 72
5A.4. Filing..................................................................... 73
5A.5. No Immunity................................................................ 73
ARTICLE V-B: REPRESENTATIONS AND WARRANTIES OF
EACH DUTCH BORROWING SUBSIDIARY..................................................... 73
5B.1. Corporate Existence and Standing........................................... 74
5B.2. Authorization and Validity................................................. 74
5B.3. No Conflict; Government Consent............................................ 74
5B.4. Filing..................................................................... 74
5B.5. No Immunity................................................................ 75
ARTICLE V-C: REPRESENTATIONS AND WARRANTIES OF
EACH GERMAN BORROWING SUBSIDIARY.................................................... 75
5C.1. Corporate Existence and Standing........................................... 75
5C.2. Authorization and Validity................................................. 75
5C.3. No Conflict; Government Consent............................................ 75
5C.4. Filing..................................................................... 76
5C.5. No Immunity................................................................ 76
ARTICLE V-D: REPRESENTATIONS AND WARRANTIES OF
EACH UK BORROWING SUBSIDIARY........................................................ 77
5D.1. Corporate Existence and Standing........................................... 77
5D.2. Authorization and Validity................................................. 77
5D.3. No Conflict; Government Consent............................................ 77
5D.4. Filing..................................................................... 77
5D.5. No Immunity................................................................ 78
ARTICLE VI: COVENANTS....................................................................... 78
6.1. Financial Reporting........................................................ 78
6.2. Use of Proceeds............................................................ 79
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
6.3. Notice of Default.......................................................... 80
6.4. Corporate Existence........................................................ 80
6.5. Taxes...................................................................... 80
6.6. Insurance.................................................................. 80
6.7. Compliance with Laws....................................................... 80
6.8. Inspection................................................................. 80
6.9. Sale of Assets............................................................. 81
6.10. Liens...................................................................... 82
6.11. Rentals.................................................................... 83
6.12. Consolidated Net Worth..................................................... 84
6.13. Dividends.................................................................. 84
6.14 Additional Guarantors/Pledge of Capital Stock.............................. 84
6.15 Sale and Leaseback Transactions or other Off Balance Sheet Liabilities..... 85
6.16 Merger and Consolidation................................................... 85
6.17 Investments and Acquisitions............................................... 86
6.18 Indebtedness............................................................... 87
6.19 ERISA...................................................................... 88
6.20 Affiliates................................................................. 89
6.21 Conduct of Business........................................................ 90
6.22 Rate Hedging Obligations................................................... 90
6.23 Leverage Ratio and Senior Leverage Ratio................................... 90
6.24 Interest Expense Coverage Ratio............................................ 91
6.25 Fixed Charge Coverage Ratio................................................ 92
6.26 Foreign Employee Benefit Compliance........................................ 92
6.27 Subordinated Indebtedness.................................................. 92
6.28 Payments and Prepayments................................................... 92
6.29 ERISA...................................................................... 92
6.30 Year 2000 Issues........................................................... 93
6.31 Environmental Reports...................................................... 93
6.32 Interest Rate Agreements................................................... 94
6.33. Minimum EBITDA............................................................. 94
ARTICLE VII: DEFAULTS....................................................................... 95
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES................................ 97
8.1. Acceleration............................................................... 97
8.2. Amendments................................................................. 97
8.3. Preservation of Rights..................................................... 99
ARTICLE IX: GUARANTY........................................................................ 99
9.1. Guaranty................................................................... 99
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
9.2. Waivers.................................................................... 99
9.3. Guaranty Absolute.......................................................... 100
9.4. Acceleration............................................................... 101
9.5. Marshaling; Reinstatement.................................................. 101
9.6. Termination Date........................................................... 101
ARTICLE X: GENERAL PROVISIONS............................................................... 101
10.1. Governmental Regulation.................................................... 101
10.2. Taxes...................................................................... 101
10.3. Headings................................................................... 101
10.4. Entire Agreement........................................................... 101
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.................................................... 103
10.12. Confidentiality............................................................ 104
10.13. Performance of Obligations................................................. 104
10.14. English Language........................................................... 104
10.15. Alternate Currency Addenda Binding on Each Lender; Provisions
Regarding Alternate Currency Agents...................................... 105
10.16. Effect on Other Loan Documents.............................................. 105
ARTICLE XI: THE AGENT AND THE COLLATERAL AGENT.............................................. 105
11.1. Appointment................................................................ 105
11.2. Powers..................................................................... 105
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........................................... 106
11.7. Reliance on Documents; Counsel............................................. 107
11.8. Agents' Reimbursement and Indemnification.................................. 107
11.9. Rights as a Lender and Issuing Lender...................................... 107
11.10. Lender Credit Decision..................................................... 107
11.11. Successor Agent............................................................ 108
11.12 Collateral Documents....................................................... 108
11.13 ESOP Loans................................................................. 108
11.14 Agent as Joint Creditor.................................................... 108
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
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
13.3.3 The Register............................................................... 113
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.......................................................... 114
ARTICLE XV: COUNTERPARTS.................................................................... 114
</TABLE>
vi
<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 J-2 -- Form of Alternate Currency Addendum for French Francs
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
vii
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement (this "AGREEMENT"), dated
as of December 14, 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 Amended 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.
"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 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.
<PAGE>
"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, Deutsche Marks, 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 with a Revolving Loan
Commitment; 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.
"ALTERNATE CURRENCY" shall mean (i) only so long as such currency remains
an Eligible Currency, Deutsche Marks, French Francs, Dutch Guilders and Sterling
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
2
<PAGE>
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
Revolving 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 Banks evidencing the obligation of such
Borrower to repay 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
3
<PAGE>
Currency Banks with respect to such Alternate Currency as set forth in the
applicable Alternate Currency Addendum.
"AMENDED CREDIT AGREEMENT" means that certain Amended and Restated Credit
Agreement, dated as of September 30, 1998, by and among the Borrowers, the
financial institutions parties thereto as lenders and the Agent.
"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.
"APPROVED FUND" means, with respect to any Lender that is a fund or
commingled investment vehicle that invests in commercial loans, any other fund
that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
"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.
"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.
4
<PAGE>
"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 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
5
<PAGE>
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 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
6
<PAGE>
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 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
7
<PAGE>
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 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
----
8
<PAGE>
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 September 30, 1998, the effective date of the
Amended Credit 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 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.
- - ----
9
<PAGE>
"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 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 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
10
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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 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.
"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.
"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.
--------------
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"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.
-------------
"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
12
<PAGE>
(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 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.
13
<PAGE>
"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).
"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
14
<PAGE>
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.
"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
15
<PAGE>
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, 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.
-----------
16
<PAGE>
"LEVEL III STATUS" is defined in Section 2.3.
-----------
"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 Bank, such
Alternate Currency Bank'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.
"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.
17
<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, (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
18
<PAGE>
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.
"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
19
<PAGE>
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 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.
"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,
20
<PAGE>
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.
--------------
"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
21
<PAGE>
(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 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.
22
<PAGE>
"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 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
23
<PAGE>
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.
"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
24
<PAGE>
$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).
"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.
25
<PAGE>
"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.
"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.
26
<PAGE>
"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
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
27
<PAGE>
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.
"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.
28
<PAGE>
"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 (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.
29
<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, Eurocurrency Loans in 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.
(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
30
<PAGE>
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
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
31
<PAGE>
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 to 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 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
32
<PAGE>
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 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.
33
<PAGE>
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 denominated in Dollars 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 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 February 28, 2000 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:
TERM LOAN
INSTALLMENT DATE INSTALLMENT AMOUNT
---------------- ------------------
February 28, 2000 $ 1,875,000
May 31, 2000 $ 1,875,000
34
<PAGE>
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
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.
(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
35
<PAGE>
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 borrowing of Alternate
-----------------------
Currency Loans 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 or pursuant to Section 2.1.4(iv) below),
-----------------
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 or pursuant to Section 2.1.4(iv) below) 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 Agent a
--------------
Borrowing Notice, signed by it, specifying that the Borrower is requesting an
Alternate Currency Loan pursuant to this Section 2.1.4. The Agent shall
--------------
promptly forward each Borrowing Notice to the applicable Alternate Currency
Agent. Any Borrowing Notice given pursuant to this Section 2.1.4. shall be
--------------
irrevocable.
(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 or French Francs, 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 or as
-----------
otherwise provided below in this Section 2.1.4(iv), 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 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
-------
36
<PAGE>
VIII. Each Alternate Currency Bank shall have the right, upon sixty (60) days'
- - ----
prior written notice to the Agent, the applicable Alternate Currency Agent and
the Company, to terminate its Alternate Currency Commitment under any Alternate
Currency Addendum. The applicable Borrower shall repay to such terminating
Alternate Currency Bank all of such Alternate Currency Bank's outstanding
Alternate Currency Loans to such Borrower under the applicable Alternate
Currency Addendum on the effective date of such termination or, if later in the
case of any such Alternate Currency Loan, the last day of the Alternate Currency
Interest Period with respect thereto.
(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 a 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
Lender'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 Banks, 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 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. In consideration of the risk
participations prescribed in this Section 2.1.4(vi), each Lender shall receive,
-----------------
from the interest paid by the applicable Borrower on each Alternate Currency
Loan, a fee equal to such Lender's pro rata share, based on its Revolving Loan
Percentage, of a portion of such interest corresponding to the Applicable Margin
in effect from time to time during the period such interest accrued. Such
portion of the interest paid by the applicable Borrower on Alternate Currency
Loans to the applicable Alternate Currency Agent shall be paid as promptly as
possible by such Alternate Currency Agent to the Agent, and the Agent shall as
promptly as possible convert such amount into Dollars at the spot rate of
exchange in accordance with its normal banking practices and apply such
resulting amount ratably among the Lenders (including the Alternate Currency
Banks) in proportion to their Revolving Loan Percentages.
37
<PAGE>
(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 except for the Swing Loans
made in a currency other than Dollars that shall bear interest at a rate agreed
to at the time such Swing Loan is made by the Swing Loan Lender and the
applicable Borrower. 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 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) (w) on the Borrowing Date of each Alternate Base Rate Advance, (x) three
Business Days before the Borrowing Date for each Eurocurrency Advance in
Dollars, (y) four Business Days before the Borrowing Date for each Eurocurrency
Advance in an Agreed Currency other than Dollars, and (z) five Business Days
before the Borrowing Date for 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
38
<PAGE>
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 than Alternate Currency Loans
and 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 11:00 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 continuation of a Eurocurrency Advance in
Dollars, four Business Days, in the case of a conversion into or continuation of
a Eurocurrency Advance in an Agreed Currency other than Dollars and five
Business Days, in the case of a conversion into or continuation of an Alternate
Currency Loan, 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
39
<PAGE>
(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.
40
<PAGE>
<TABLE>
<CAPTION>
================================================================================================
COMMITMENT
EUROCURRENCY ALTERNATE BASE RATE FEE
MARGINS MARGINS PERCENTAGE
---------------------------------------------------------
REVOLVING TERM LOANS REVOLVING TERM LOANS
LOANS LOANS
LEVERAGE
RATIO
================================================================================================
<S> <C> <C> <C> <C> <C>
Level I 4.00% 4.00% 3.00% 3.00% 0.50%
Status
- - ------------------------------------------------------------------------------------------------
Level II 3.75% 4.00% 2.75% 3.00% 0.50%
Status
- - ------------------------------------------------------------------------------------------------
Level III 3.50% 4.00% 2.50% 3.00% 0.50%
Status
- - ------------------------------------------------------------------------------------------------
Level IV 3.25% 4.00% 2.25% 3.00% 0 .50%
Status
- - ------------------------------------------------------------------------------------------------
Level V 3.00% 4.00% 2.00% 3.00% 0.50%
Status
- - ------------------------------------------------------------------------------------------------
Level VI 2.50% 4.00% 1.50% 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.
41
<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 and Alternate Currency
Loans, 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 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").
42
<PAGE>
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
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.
- - ---------
43
<PAGE>
(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 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
-------
3.5 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.
44
<PAGE>
(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 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 Subordinated Notes or the Seller Equity Interests and will not be
included in Net Cash Proceeds.
(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:
45
<PAGE>
(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) [Intentionally Omitted].
(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. (x) In addition to
----------------------------------------
repayments under Section 2.5.3(B)(ii)(z), 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.
(y) 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 collateral to
46
<PAGE>
outstanding Eurocurrency Loans on the last day of the next expiring Interest
Period with respect to such Loans.
(z) If on the last Business Day of any month:
(A) 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
(B) 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
(C) 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 such that after giving effect thereto the
Dollar amount of all Alternate Currency Loans is less than or
equal to $80,000,000.
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
Addendum. 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.
----
47
<PAGE>
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 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
48
<PAGE>
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 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 or any errors in such recordation 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
49
<PAGE>
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
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 Section 2.5.11,
--------------
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
50
<PAGE>
cancellation and be enforceable by such Lender. In any case described in
clauses (y) or (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 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
51
<PAGE>
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".
On or prior to the date of its execution and delivery of this
Agreement in the case of any Lender (and on or prior to the effective date
specified in any Assignment Agreement pursuant to which a Person becomes a
Lender in the case of each other Lender), each Lender that is not incorporated
under the laws of the United States of America, or a state thereof, agrees that
it will (a) if such Lender is a "bank" within the meaning of Section
881(c)(3)(A) of the Code, deliver to the Borrower and the Administrative 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 is
entitled to receive payments under the Transaction Documents without deduction
or withholding of any United States federal income taxes or, (b) if such Lender
is not a "bank" within the meaning of section 881(c)(3)(A) of the Code and
intends to claim exemption from U.S. Federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a
Form W-8, or any subsequent versions thereof or successors thereto (and, if such
non-U.S. Lender delivers a Form W-8, a certificate representing that such non-
U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such non-U.S. Lender claiming complete exemption
from U.S. Federal withholding tax on payments of interest by the applicable
Borrowers under this Agreement and the other Transaction Documents. Each Lender
which so delivers a Form 1001 or 4224 further undertakes to deliver to the
Borrower and the Administrative 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 Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under the Transaction 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 from duly completing and delivering any such form with
respect to it and such Lender promptly advises the Borrower and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(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
52
<PAGE>
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 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
53
<PAGE>
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 for French Borrowing Subsidiaries;
---------------------------------------------------------
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 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
54
<PAGE>
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 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
55
<PAGE>
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 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.
56
<PAGE>
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 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, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telecopy,
telex, or other similar
57
<PAGE>
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.
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
58
<PAGE>
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
(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.
59
<PAGE>
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 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
60
<PAGE>
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 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
61
<PAGE>
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.
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.
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<PAGE>
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 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
63
<PAGE>
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. Effectiveness of this Agreement. This Agreement shall become
-------------------------------
effective as of the date hereof when the Agent shall have received counterparts
of this Agreement executed by the Company, each of the Borrowing Subsidiaries
listed on the signature pages hereof and each of the Lenders listed on the
signature pages hereof.
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 Alternate Currency
Bank 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.
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<PAGE>
(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.
(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 or any Swing Loan 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.
65
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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 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
66
<PAGE>
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, 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.
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<PAGE>
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.
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
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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 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
issued, no event has occurred and is continuing under the provisions of any such
instrument or agreement which with
69
<PAGE>
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 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
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<PAGE>
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 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
71
<PAGE>
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 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
72
<PAGE>
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 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
73
<PAGE>
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 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
74
<PAGE>
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:
-----------
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,
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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 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
----------------------------
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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.
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
77
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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 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.
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(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 Default 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
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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 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
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Subsidiary is a Borrowing Subsidiary or a Material Subsidiary. The expenses
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.
(x) The sale of the stock of the Subsidiary of Tokheim Sofitam to which
Tokheim Sofitam contributed its Bulk Meter business.
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(xi) The transfer of intellectual property from the Company to Tokheim
Services LLC, a Delaware limited liability company, and the licensing
of such intellectual property to the Company and/or its Subsidiaries.
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 aggregate materially detract from the value of its
Property or materially impair the use thereof in the operation
of its business;
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(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)$64,000,000 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, 1999 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 plus (iv) the amount, if any, by which stockholders' equity of the
----
Company is, in accordance with U.S. GAAP, increased from time to time as a
result of the Seller Equity Interests.
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 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
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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).
------------
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.
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<PAGE>
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 and Investments in Tokheim Services LLC, a
-------------
Delaware limited liability company, permitted under Section 6.9(xi).
---------------
(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;
(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
86
<PAGE>
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
Tokheim Services LLC, a Delaware limited liability company, 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.
(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.
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<PAGE>
(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;
(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;
88
<PAGE>
(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.
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 as
permitted under Section 6.18 or any intercompany loan agreements or notes from
------------
the Company to any of its Wholly-Owned Subsidiaries and intercompany notes to
the extent the Indebtedness incurred thereby is permitted under Section 6.18.
------------
89
<PAGE>
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 6.32 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:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
- - -------------------------- -------------
<S> <C>
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
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
</TABLE>
(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
90
<PAGE>
<TABLE>
<CAPTION>
the Dates Set Forth Below: Maximum Ratio
- - -------------------------- -------------
<S> <C>
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
</TABLE>
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 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:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
- - -------------------------- -------------
<S> <C>
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
</TABLE>
91
<PAGE>
<TABLE>
<S> <C>
And for each fiscal quarter ending thereafter 2.50 to 1.00
</TABLE>
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:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
- - -------------------------- -------------
<S> <C>
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
</TABLE>
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.
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 Subordinated Notes and the
Seller Equity Interests.
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;
92
<PAGE>
(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;
(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 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.
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<PAGE>
6.32 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.
6.33. 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).
94
<PAGE>
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 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 6.33.
- - ---- ----
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
95
<PAGE>
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
---------------
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
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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.
--------------
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 Banks 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 Borrowers 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 Borrowers 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
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<PAGE>
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%)));
(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", "Alternate Currency 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; or
(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 permit or consent to
- - -------- -------
the prepayment, purchase, redemption, defeasance or refinancing (other than
through the incurrence of Permitted Refinancing Indebtedness or the issuance of
Equity Interests) of the Seller Junior Subordinated Note or the Seller Equity
Interests without the consent of the Required Lenders (including the
Administrative Agent).
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.
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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 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 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
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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 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.
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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.
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
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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, trustees, investment advisors, 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 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
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<PAGE>
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) 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.
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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 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 neither
-------------
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
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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 with a Revolving
- - -----------------------------------
Credit Commitment 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.
10.16. Effect on Other Loan Documents. Upon the effectiveness of this
------------------------------
Agreement in accordance with Section 4.1, each reference in any other Loan
-----------
Document to the Amended Credit Agreement (or to the predecessor Credit Agreement
amended and restated thereby) shall mean and be a reference to this Agreement
and this Agreement shall supercede the predecessor Credit Agreement.
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 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
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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.
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
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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 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
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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 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
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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 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 two sentences of this Section 12.3, apply all payments
------------
and (subject to the provisions of Section 2.5.3(B) and Section 8.2) 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;
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(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;
-------------
(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 and the order of priority to which the Lenders with Term Loans are
entitled shall not be modified without the approval of Lenders with Term Loan
Percentages greater than fifty percent (50%). 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.
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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, (i) 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, and (ii) any Lender which is a fund or
commingled investment vehicle that invests in commercial loans in the ordinary
course of its business may at any time, without the consent of the Borrower or
the Administrative Agent, pledge or assign all or any part of its rights under
this Agreement to a trustee or other representative of holders of obligations
owed or securities issued by such Lender as collateral to secure such
obligations or securities; 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.
--------------
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
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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 and Approved Funds 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
and, in the case of assignments of the Revolving Loan Commitments, are able to
make Eurocurrency Loans in the Agreed Currencies ("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, Affiliates of any
Lender or Approved Funds of any Lender, be in amounts equal to or greater than
$5,000,000 (or the Equivalent Amount thereof if denominated in an Alternate
Currency or an Agreed Currency other than Dollars) (treating any fund that
invests in bank loans and any other fund that invests in bank loans and is
managed by the same investment adviser of such fund or by an affiliate of such
fund as a single Purchaser) (which minimum amount shall not apply to any
assignment made prior to the completion of the Syndication Period) or such
lesser amount as may be agreed to by the Agent and the Borrower 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. Such assignment shall be substantially in the form of Exhibit B
---------
hereto. The consent of the Agent and, with respect to assignments of the
Revolving Loan Commitments, each Alternate Currency Bank, shall be required
prior to an assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate thereof or an Approved Fund of any Lender (which
shall not be unreasonably withheld or delayed).
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 any other Lender or to an Affiliate or Approved Fund
of any 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; provided, however,
-------- -------
that no such fee shall be payable in the case of an assignment to another
Lender, an Affiliate of a Lender or an Approved Fund; and provided further that,
-------- -------
in the case of contemporaneous assignments by a Lender to more than one Approved
Fund managed by the same investment advisor
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<PAGE>
(which Approved Funds are not then Lenders hereunder), only a single $3,500 fee
shall be payable for all such contemporaneous assignments. 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, the Alternate Currency Banks 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.
13.3.3 The Register. The Administrative Agent shall maintain at its
------------
address referred to in Section 14.1 a copy of each assignment delivered to and
------------
accepted by it pursuant to this Section 13.3 and a register (the "REGISTER") for
------------
the recordation of the names and addresses of the Lenders and the Commitment of
and principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender or the assignee of another Lender
pursuant to an assignment under this Section 13.3. The entries in the Register
------------
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
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).
- - ---------
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
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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.
114
<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:
<PAGE>
ABN AMRO BANK N.V.
as a Lender
By: ________________________________
Title:______________________________
By: ________________________________
Title:______________________________
Attention:
Title:
Telephone:
Facsimile:
<PAGE>
EXHIBIT 4.22
================================================================================
TOKHEIM CORPORATION
as Issuer
THE GUARANTORS NAMED HEREIN
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
_______________
INDENTURE
_______________
Dated as of January 29, 1999
$123,000,000
11 3/8% Senior Subordinated Notes due 2008
and
Series B 11 3/8% Senior Subordinated Notes due 2008
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- - ------- -------
<S> <C> <C>
310 (a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
F (a)(5).................................................. 7.08; 7.10
(b)..................................................... 7.08; 7.10; 11.02
(c)..................................................... N.A.
311 (a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312 (a)..................................................... 2.05
(b)..................................................... 11.03
(c)..................................................... 11.03
313 (a)..................................................... 7.06
(b)(1).................................................. N.A.
(b)(2).................................................. 7.06
(c)..................................................... 7.06; 11.02
(d)..................................................... 7.06
314 (a)..................................................... 4.07; 4.08; 11.02
(b)..................................................... N.A.
(c)(1).................................................. 11.04
(c)(2).................................................. 11.04
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 11.05
(f)..................................................... N.A.
315 (a)..................................................... 7.01(b)
(b)..................................................... 7.05; 11.02
(c)..................................................... 7.01(a)
(d)..................................................... 7.01(c)
(e)..................................................... 6.11
316 (a)(last sentence)...................................... 2.09
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. N.A.
(b)..................................................... 6.07
(c)..................................................... 9.05
317 (a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.04
318 (a)..................................................... 11.01
(c)..................................................... 11.01
</TABLE>
- - -------------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..............20
SECTION 1.03. Rules of Construction..........................................20
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating................................................21
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount.......21
SECTION 2.03. Registrar and Paying Agent.....................................22
SECTION 2.04. Paying Agent To Hold Assets in Trust...........................23
SECTION 2.05. Noteholder Lists...............................................23
SECTION 2.06. Transfer and Exchange..........................................23
SECTION 2.07. Replacement Notes..............................................24
SECTION 2.08. Outstanding Notes..............................................24
SECTION 2.09. Treasury Notes.................................................25
SECTION 2.10. Temporary Notes................................................25
SECTION 2.11. Cancellation...................................................25
SECTION 2.12. Defaulted Interest.............................................25
SECTION 2.13. CUSIP Number...................................................26
SECTION 2.14. Deposit of Moneys..............................................26
SECTION 2.15. Restrictive Legends............................................26
SECTION 2.16. Book-Entry Provisions for Global Note..........................27
SECTION 2.17. Registration of Transfers and Exchanges........................28
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................32
SECTION 3.02. Selection of Notes To Be Redeemed..............................32
SECTION 3.03. Notice of Redemption...........................................33
SECTION 3.04. Effect of Notice of Redemption.................................34
SECTION 3.05. Deposit of Redemption Price....................................34
SECTION 3.06. Notes Redeemed in Part.........................................34
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes...............................................34
SECTION 4.02. Maintenance of Office or Agency................................35
SECTION 4.03. Corporate Existence............................................35
</TABLE>
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<TABLE>
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<S> <C> <C>
SECTION 4.04. Payment of Taxes and Other Claims..............................35
SECTION 4.05. Maintenance of Properties and Insurance........................36
SECTION 4.06. Compliance Certificate; Notice of Default......................36
SECTION 4.07. Compliance with Laws...........................................37
SECTION 4.08. SEC Reports....................................................37
SECTION 4.09. Waiver of Stay, Extension or Usury Laws........................37
SECTION 4.10. Limitation on Restricted Payments..............................38
SECTION 4.11. Limitation on Transactions with Affiliates.....................39
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness............40
SECTION 4.13. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.......................................40
SECTION 4.14. Prohibition on Incurrence of Senior Subordinated Debt..........40
SECTION 4.15. Change of Control..............................................40
SECTION 4.16. Limitation on Asset Sales......................................42
SECTION 4.17. Limitation on Preferred Stock of Subsidiaries..................45
SECTION 4.18. Limitation on Liens............................................45
SECTION 4.19. Additional Subsidiary Guarantees...............................45
SECTION 4.20. Limitation on Amendments to Schlumberger Junior
Subordinated Notes and Warrant Repurchase Indebtedness.......46
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation or Sale of Assets of the Company.........46
SECTION 5.02. Successor Corporation Substituted..............................47
SECTION 5.03. Merger, Consolidation and Sale of Assets of Guarantors.........47
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..............................................47
SECTION 6.02. Acceleration...................................................49
SECTION 6.03. Other Remedies.................................................49
SECTION 6.04. Waiver of Past Defaults........................................50
SECTION 6.05. Control by Majority............................................50
SECTION 6.06. Limitation on Suits............................................50
SECTION 6.07. Rights of Holders To Receive Payment...........................51
SECTION 6.08. Collection Suit by Trustee.....................................51
SECTION 6.09. Trustee May File Proofs of Claim...............................51
SECTION 6.10. Priorities.....................................................52
SECTION 6.11. Undertaking for Costs..........................................52
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................52
SECTION 7.02. Rights of Trustee..............................................53
SECTION 7.03. Individual Rights of Trustee...................................54
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 7.04. Trustee's Disclaimer...........................................54
SECTION 7.05. Notice of Default..............................................54
SECTION 7.06. Reports by Trustee to Holders..................................55
SECTION 7.07. Compensation and Indemnity.....................................55
SECTION 7.08. Replacement of Trustee.........................................56
SECTION 7.09. Successor Trustee by Merger, Etc. .............................57
SECTION 7.10. Eligibility; Disqualification..................................57
SECTION 7.11. Preferential Collection of Claims Against Company..............57
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.......................57
SECTION 8.02. Legal Defeasance and Covenant Defeasance.......................58
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance..........59
SECTION 8.04. Application of Trust Money.....................................61
SECTION 8.05. Repayment to the Company.......................................61
SECTION 8.06. Reinstatement..................................................61
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.....................................62
SECTION 9.02. With Consent of Holders........................................62
SECTION 9.03. Effect on Senior Debt..........................................63
SECTION 9.04. Compliance with TIA............................................64
SECTION 9.05. Revocation and Effect of Consents..............................64
SECTION 9.06. Notation on or Exchange of Notes...............................64
SECTION 9.07. Trustee To Sign Amendments, Etc. ..............................64
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt.............................65
SECTION 10.02. No Payment on Notes in Certain Circumstances..................65
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc. ..............66
SECTION 10.04. Payments May Be Paid Prior to Dissolution.....................67
SECTION 10.05. Subrogation...................................................67
SECTION 10.06. Obligations of the Company Unconditional......................67
SECTION 10.07. Notice to Trustee.............................................68
SECTION 10.08. Reliance on Judicial Order or Certificate of Liquidating
Agent.......................................................68
SECTION 10.09. Trustee's Relation to Senior Debt.............................68
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Debt.......................69
SECTION 10.11. Noteholders Authorize Trustee To Effectuate Subordination
of Notes....................................................69
SECTION 10.12. This Article Ten Not To Prevent Events of Default.............70
SECTION 10.13. Trustee's Compensation Not Prejudiced.........................70
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
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----
<S> <C> <C>
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls..................................................70
SECTION 11.02. Notices.......................................................70
SECTION 11.03. Communications by Holders with Other Holders..................71
SECTION 11.04. Certificate and Opinion as to Conditions Precedent............71
SECTION 11.05. Statements Required in Certificate or Opinion.................71
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.....................72
SECTION 11.07. Legal Holidays................................................72
SECTION 11.08. Governing Law.................................................72
SECTION 11.09. No Adverse Interpretation of Other Agreements.................72
SECTION 11.10. No Recourse Against Others....................................72
SECTION 11.11. Successors....................................................73
SECTION 11.12. Counterparts..................................................73
SECTION 11.13. Severability..................................................73
SECTION 11.14. Judgment Currency.............................................73
The Company hereby agrees to indemnify the Trustee, its directors, its
officers and each person, if any, who controls the
Trustee within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any loss incurred
by such person as a result of any judgment or order
being given or made against the Company for any U.S.
dollar amount due under this Agreement and such judgment
or order being expressed and paid in a currency (the
"Judgment Currency") other than United States dollars
and as a result of any variation as between (i) the rate
of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange
in The City of New York at which such party on the date
of payment of such judgment or order is able to purchase
United States dollars with the amount of the Judgment
Currency actually received by such party. The foregoing
indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid.
The term "spot rate of exchange" shall include any
premiums and costs of exchange payable in connection with
the purchase of, or conversion into, United States
dollars.....................................................73
ARTICLE TWELVE
GUARANTEE
SECTION 12.01. Unconditional Guarantee.......................................73
SECTION 12.02. Severability..................................................74
SECTION 12.03. Limitation of Guarantor's Liability...........................74
SECTION 12.04. Execution of Guarantee........................................74
SECTION 12.05. Subordination of Subrogation and Other Rights.................75
ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Guarantee Subordinated to Guarantor Senior Debt...............75
</TABLE>
-iv-
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 13.02. No Payment in Certain Circumstances...........................75
SECTION 13.03. Payment Over of Proceeds upon Dissolution, Etc. ..............76
SECTION 13.04. Payments May Be Paid Prior to Dissolution.....................77
SECTION 13.05. Subrogation...................................................78
SECTION 13.06. Obligations of Guarantors Unconditional.......................78
SECTION 13.07. Notice to Trustee.............................................78
SECTION 13.08. Reliance on Judicial Order or Certificate of Liquidating
Agent.......................................................79
SECTION 13.09. Trustee's Relation to Guarantor Senior Debt...................79
SECTION 13.10. Subordination Rights Not Impaired by Acts or Omissions of
the Company, the Guarantors or Holders of Guarantor
Senior Debt.................................................79
SECTION 13.11. Noteholders Authorize Trustee to Effectuate Subordination
of Guarantees...............................................80
SECTION 13.12. This Article Thirteen Not To Prevent Events of Default........80
SECTION 13.13. Trustee's Compensation Not Prejudiced.........................80
Exhibit A - Form of Initial Note........................................A-1
Exhibit B - Form of Exchange Note.......................................B-1
Exhibit C - Form of Certificate To Be Delivered upon Exchange or
Registration of Transfer of Securities....................C-1
Exhibit D - Form of Transferee Letter of Representation.................D-1
Exhibit E - Form of Certificate to be delivered in Connection with
Regulation S Transfers....................................E-1
</TABLE>
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
-v-
<PAGE>
INDENTURE, dated as of January 29, 1999, between Tokheim Corporation,
an Indiana corporation (the "Company"), each of the Subsidiaries of the Company
named on the signature pages hereto as Guarantors (the "Guarantors"), as
guarantors, and U.S. Bank Trust National Association, a national banking
corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11 3/8%
Senior Subordinated Notes due 2008 (the "Initial Notes") and Series B 11 3/8%
Senior Subordinated Notes due 2008 (the "Exchange Notes," and together with the
Initial Notes, the "Notes") and, to provide therefor, the Company and each
Guarantor has duly authorized the execution and delivery of this Indenture. All
things necessary to make the Notes, when duly issued and executed by the
Company, and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid and binding agreement of the Company
and the Guarantors, have been done.
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02(a).
"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 Limited.
"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 securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of
the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"all or substantially all" shall have the meaning given such phrase in
the Revised Model Business Corporation Act.
<PAGE>
"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 comprise 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; (ii) sales of accounts receivable that the Company has classified as
uncollectible; (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 5.01,
(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 this Indenture; 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.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02.
"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 that is not a Legal Holiday.
"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.
-2-
<PAGE>
"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, eurodollar time deposits 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 this
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.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"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.
-3-
<PAGE>
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"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, 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
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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) and (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 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
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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).
"Covenant Defeasance" has the meaning provided in Section 8.02.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator 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.
"Default Notice" has the meaning provided in Section 10.02.
"Depository" and "DTC" mean The Depository Trust Company, its nominees
and successors.
"Designated Senior Debt" means (i) Indebtedness under or in respect
of the New Credit Agreement or the ESOP Credit Agreements 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 Agreements" means those certain credit agreements 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 by Section
4.12)) 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 and any assignments thereof.
"Euro Senior Subordinated Notes" means the Euro 75,000,000 11 3/8%
Senior Subordinated Notes due 2008, issued pursuant to an indenture, dated the
date of this Agreement, by and among the Company, the Guarantors, as guarantors,
and U.S. Bank Trust National Association, as trustee.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
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"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
"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 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 Note" has the meaning provided in Section 2.01.
"Guarantee" means any guarantee of the Notes by any Guarantor pursuant
to this Indenture.
"Guarantor" means any Subsidiary of the Company which guarantees the
Notes pursuant to this Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor, 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 any Indebtedness of such Guarantor,
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 Guarantee of such Guarantor. 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 such interest is an allowed claim under
applicable law) on, and all other monetary obligations of such Guarantor owing
in respect of (x) all monetary obligations of every nature of the Company
under the New Credit Agreement and the ESOP Credit Agreements including
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations and (z) all obligations under 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 or any Affiliate of such Guarantor to a Subsidiary of the
Guarantor or any of such Affiliate's Subsidiaries, (ii) Indebtedness to, or
guaranteed on behalf of, any shareholder, director, officer or employee of a
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
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federal, state, local or other taxes owed or owing by a Guarantor, (vi)
Indebtedness incurred in violation of Section 4.12, (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 a Guarantor, (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of a Guarantor and (ix) any guarantees of the
Schlumberger Junior Subordinated Notes or Warrant Repurchase Indebtedness, or
guarantees of any Refinancing of the Schlumberger Junior Subordinated Notes or
the Warrant Repurchase Indebtedness.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" has the meaning provided Section 4.12.
"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 Obligations 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 Indenture, 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 in accordance with the terms hereof.
"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 Notes" has the meaning provided in the preamble to this
Indenture.
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"Initial Purchasers" means BT Alex. Brown, ABN AMRO Incorporated,
Credit Lyonnais Securities (USA) Inc., First Chicago Capital Markets, Inc.,
Gleacher NatWest International, PaineWebber Incorporated and Schroder & Co. Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the 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, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"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 4.10, 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.
"Legal Defeasance" has the meaning provided in Section 8.02.
"Legal Holiday" has the meaning provided in Section 11.07.
"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).
"Liquidated Damages" means all liquidated damages owing pursuant to
the Registration Rights Agreement.
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"Maturity Date" means August 1, 2008.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"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.
"Net Proceeds Offer" has the meaning provided in Section 4.16.
"Net Proceeds Offer Amount" has the meaning provided in Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning provided in Section
4.16.
"Net Proceeds Offer Trigger Date" has the meaning provided in Section
4.16.
"New Credit Agreement" means the Second Amended and Restated Credit
Agreement among the Company, certain of its Subsidiaries, the lenders party
thereto in their capacities as lenders thereunder, NBD Bank, N.A., as
administrative agent, and Credit Lyonnais, as collateral agent, 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 by Section 4.12)) 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.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Portion of Net Proceeds" has the meaning provided in Section
4.16.
"Notes" means the Initial Notes and the Exchange Notes treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
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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.
"Offering Memorandum" means the Offering Memorandum dated January 26,
1999, pursuant to which the Initial Notes were offered, and any supplement
thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.04 and 11.05, as they relate to the making of an
Officers' Certificate.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion from legal counsel, who
may be counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 11.04 and 11.05, as they relate to
the giving of an Opinion of Counsel.
"Other Debt" has the meaning provided in Section 4.16.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes and this Indenture;
(ii) Indebtedness incurred pursuant to the New Credit Agreement and
the ESOP Credit Agreements 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 Agreements, 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), and (B) $250.0 million in the aggregate with respect to
Indebtedness under the New 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 the Issue Date;
(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) (A) 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 Indenture (and are
used for bona fide hedging, and not speculative, purposes); and (B) 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 (y) such Interest Swap
Obligations are required under the terms of the New Credit Agreement;
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(v) Indebtedness under Currency Agreements; provided that in the case
of Currency Agreements which relate to Indebtedness, such Currency
Agreements (x) (A) are designed to protect against fluctuations in currency
value (and are used for bona fide hedging, and not speculative, purposes);
and (B) 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 (y) are required under the terms of the New 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 New 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 New 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 Indenture 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 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 its 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
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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;
(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
Indenture;
(xv) Schlumberger Junior Subordinated Notes;
(xvi) Warrant Repurchase Indebtedness;
(xvii) 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 the face value of such Traits;
(xviii) 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;
(xix) Indebtedness from bank overdraft facilities not to exceed
$15.0 million at any time;
(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 New Credit Agreement); and
(xxi) the Euro Senior Subordinated Notes.
"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 Indenture;
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(iii) Investments in cash and Cash Equivalents; (iv) loans and advances to
employees and officers of the Company and its Subsidiaries totaling up to $5.0
million in the aggregate (A) in the ordinary course of business for bona fide
business purposes or (B) to purchase 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 Indenture and in compliance with the New 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 Section 4.16; (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) being 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 this
Indenture;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.12; 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 on 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 Indenture and under which the
Company or any of its Subsidiaries is lessee;
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(xviii) Liens placed on Traits used as collateral in exchange for
loans provided to the Company or its Subsidiaries;
(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 this
Indenture; and
(xx) Liens on any property or assets of the Company or any Subsidiary
securing on a paripassu basis all of the Notes and the Euro Senior
Subordinated Notes.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"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.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"Public Equity Offering" means an underwritten public offering of
Qualified Capital Stock of the Company by the Company pursuant to a registration
statement filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the Notes, whether
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
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"Reference Date" has the meaning provided in Section 4.10.
"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
4.12 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi)
or (xvii) 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 the Schlumberger Junior Subordinated Notes, Warrant Repurchase Indebtedness
or any Refinancing thereof, then such Refinancing Indebtedness shall (i) be
subordinate or junior to the Notes at least to the same extent and in the same
manner as the Schlumberger Junior Subordinated Notes as in effect on the Issue
Date, (ii) provide for no cash interest payments prior to October 2004, (iii)
have covenants no more adverse to the Company than the Schlumberger Junior
Subordinated Notes and (iv) have an effective interest rate not greater than
14%, provided, however, that prior to the incurrence of such Indebtedness,
Moody's Investors Services, Inc. will have affirmed that its rating of the Notes
will not decrease by one or more gradations below its rating in effect on the
Issue Date.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated January 29, 1999 among the Company, the Guarantors and the
Initial Purchasers relating to the Notes for the benefit of themselves and the
Holders, as the same may be amended or modified from time to time in accordance
with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"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 Payment" has the meaning provided in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
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"Revolving Credit Facility" means one or more revolving credit
facilities under the New Credit Agreement.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Corporation and its successors.
"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 the Company of any property,
whether owned by the Company or any Subsidiary of the Company 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 Netherland Antilles
corporation.
"Schlumberger Junior Subordinated Notes" means (i) the $40.0 million
Junior Subordinated Notes issued by the Company to Schlumberger in connection
with the Acquisition pursuant to the Junior Subordinated Notes Indenture, as
amended up to the Issue Date, between the Company and Harris Trust and Saving
Bank, as trustee and (ii) additional subordinated notes issued as payment of
interest thereon.
"Schlumberger Warrants" means the warrants issued by the Company to
Schlumberger as part of the consideration for the Acquisition.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"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
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 or any Subsidiary of the Company owing in respect of,
(x) the New Credit Agreement and the ESOP Credit Agreements, including
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations and (z) Obligations under 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,
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(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 4.12, (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, (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company and (ix) the Schlumberger Junior
Subordinated Notes, any Warrant Repurchase Indebtedness or any Refinancing of
the Schlumberger Junior Subordinated Notes or any Warrant Repurchase
Indebtedness.
"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 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 any Guarantee of the Notes by any
Guarantor pursuant to this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.04.
"Traits" means "traites" (as defined under French law), accounts
receivable or invoices.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Warrant Repurchase Indebtedness" means (i) up to $20.0 million of
Indebtedness incurred by the Company to repurchase Schlumberger Warrants (or a
pro rata portion of $20.0 million, if less than all the Schlumberger Warrants
are repurchased) plus reasonable fees and expenses incurred in connection
therewith; provided, however, that such Indebtedness (a) is subordinated to the
Notes at least to the same extent as the Schlumberger Junior Subordinated Notes,
(b) contains covenants no more adverse to the Company than the Schlumberger
Junior Subordinated Notes, (c) bears interest at an effective rate not to exceed
14% per annum, which interest shall not be paid in cash prior to October 2004,
(d) contains no mandatory prepayment provisions and (e) matures at least 6
months after the maturity of the Notes plus (ii) additional Indebtedness with
the same terms incurred in payment of interest thereon; provided, however, that
prior to the incurrence of such Indebted-
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ness, Moody's will have affirmed that its rating of the Notes will not decrease
by one or more gradations below its rating in effect on the Issue Date.
"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. 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:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the 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 therein.
SECTION 1.03. 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 as in effect on the date hereof;
(3) "or" is not exclusive;
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(4) words in the singular include the plural, and words in the
plural include the singular; and
(5) "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 TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or Depository rule or usage. The Company
and the Trustee shall approve the form of the Notes and any notation, legend or
endorsement on them. Each Note shall be dated the date of its issuance and
shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Global Note"), deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Notes"). Notes offered and sold in reliance on any other exemption
from registration under the Securities Act other than as described in the
preceding paragraph shall be issued, and Notes offered and sold in reliance on
Rule 144A may be issued, in the form of permanent certificated Notes in
registered form, in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). The Offshore Physical Notes and the U.S. Physical Notes are
sometimes collectively herein referred to as the "Physical Notes." Physical
Notes shall initially be registered in the name of the Depository or the nominee
of such Depository and be delivered to the Trustee as custodian for such
Depository.
Except as described in this paragraph, holders of interests in the
Global Notes will not have Notes registered in their names, will not receive
physical delivery of Notes in certificated form and will not be considered the
registered owners or holder of Notes for any purpose. So long as DTC (or its
nominee) or the Common Depositary, as the case may be, is the registered owner
or holder of a Global Note, such party will be considered the sole owner or
holder of the Notes represented by such Global Note for all purposes under the
Indentures and the Notes. Accordingly, each person owning a beneficial interest
in a Global Note must rely on the procedures of DTC, Euroclear and Cedel Bank,
as the case may be, and their participants or account holders to exercise any
rights and remedies of a holder of Notes under the Indenture. Payments of
principal and interest on the Global Notes will be made to DTC or its nominee,
or to the Common Depositary on behalf of Euroclear and Cedel Bank, as the case
may be, as the registered owners thereof.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requi-
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site corporate actions) shall attest to, the Notes for the Company by manual or
facsimile signature. The Company's seal shall also be reproduced on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed $123,000,000 and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
of Initial Notes, in each case upon written orders of the Company in the form of
an Officers' Certificate. The Officers' Certificate shall specify the amount of
Notes to be authenticated, the date on which the Notes are to be authenticated
and the aggregate principal amount of Notes outstanding on the date of
authentication, whether the Notes are to be Initial Notes or Exchange Notes, and
shall further specify the amount of such Notes to be issued as the Global Note,
Offshore Physical Notes or U.S. Physical Notes. The aggregate principal amount
of Notes outstanding at any time may not exceed $123,000,000 except as provided
in Section 2.07.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to clause (ii) of the first sentence of the immediately preceding
paragraph, the Company shall use its reasonable best efforts to obtain the same
"CUSIP" number for such Notes as is printed on the Notes outstanding at such
time; provided, however, that if any series of Notes issued under this Indenture
subsequent to the Issue Date is determined, pursuant to an Opinion of Counsel of
the Company in a form reasonably satisfactory to the Trustee to be a different
class of security than the Notes outstanding at such time for federal income tax
purposes, the Company may obtain a "CUSIP" number for such Notes that is
different than the "CUSIP" number printed on the Securities then outstanding.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York, and, for
so long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of such stock exchange so require, in Luxembourg) where (a) Notes may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Notes may be presented or surrendered for payment (the "Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register of
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the Notes and of their transfer and exchange. The Company, upon prior written
notice to the Trustee, may have one or more co-Registrars and one or more
additional paying agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional Paying Agents and the term "Registrar" includes
any co-Registrar. Neither the Company nor any Affiliate of the Company may act
as Paying Agent or Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name
and address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Company initially appoints DTC as Depository. The Depository, the Paying Agent
or Registrar may resign upon 30 days notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee at least five days before each
Record Date and at such other times as the Trustee may request in writing a list
as of such date and in such form as the Trustee may reasonably require of the
names and addresses of the Holders, which list may be conclusively relied upon
by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.16 and 2.17, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal
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principal amount of Notes of other authorized denominations of the same series,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its requirements for such transaction are met; provided,
however, that the Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfer and exchanges, the Company shall execute and
the Trustee shall authenticate Notes (and each of the Guarantors shall execute a
Guarantee thereon) at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge in connection therewith payable by the transferor of
such Securities (other than any such transfer taxes or similar governmental
charge payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.15,
4.16 or 9.06, in which event the Company shall be responsible for the payment of
such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements for replacement of Notes are met. If required by the
Trustee or the Company, such Holder must provide an affidavit of lost
certificate and an indemnity bond or other indemnity, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Note is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note shall constitute an additional obligation of the Company and
the Guarantors.
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives an Opinion of Counsel that the replaced Note is held by a bona
fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
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If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company, the Guarantors or any of their respective Affiliates shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer of the Trustee
actually knows are so owned shall be so considered. The Company shall notify
the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Notes, of the aggregate principal amount of such Notes so
repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, dispose of
and deliver evidence of such disposal of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company may not
issue new Notes to replace Notes that it has paid or delivered to the Trustee
for cancellation. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the applicable rate of interest then borne by the Notes. The
Company shall, to the extent lawful, pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the rate of
interest then borne by the Notes.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Com-
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pany for the payment of defaulted interest or the next succeeding Business Day
if such date is not a Business Day. At least 15 days before the subsequent
special record date, the Company shall mail to each Holder, as of a recent date
selected by the Company, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(1) shall be paid to
Holders as of the Record Date for the Interest Payment Date for which interest
has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
Redemption Date, Change of Control Payment Date, Net Proceeds Offer Payment Date
and on the Maturity Date, the Company shall have deposited with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date, Redemption Date, Change of Control Payment
Date, Net Proceeds Offer Payment Date or Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Change of Control Payment Date, Net
Proceeds Offer Payment Date or Maturity Date, as the case may be.
SECTION 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
face thereof until January 29, 2001, unless otherwise agreed to by the Company
and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (2) AGREES THAT
IT WILL NOT, PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED
PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN "ACCREDITED
INVESTOR" (AS DE-
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FINED IN RULE 501(a)(1),(2),(3), OR (7) UNDER THE ACT) (AN "ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND, IF THE COMPANY SO REQUESTS, BASED UPON AN OPINION OF COUNSEL, OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT, AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE ACT.
Each Global Note shall also bear the following legend:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. Book-Entry Provisions for Global Note.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
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Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global 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 the Global 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 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 Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.17. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the Global Note if (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for the Global Note and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b) of this Section 2.16, the Registrar shall (if one or more Physical
Notes are to be issued) reflect on its books and records the date and a decrease
in the principal amount of the Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b) of this Section 2.16, the Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Notes. When Physical Notes are
presented to the Registrar with a request:
(i) to register the transfer of the Physical Notes; or
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(ii) to exchange such Physical Notes for an equal principal amount
of Physical Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.17 for such
transactions are met; provided, however, that the Physical Notes presented or
surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and
(II) in the case of Physical Notes the offer and sale of which have
not been registered under the Securities Act, such Physical Notes shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Note is being delivered to the Registrar by a
Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect
(substantially in the form of Exhibit C hereto); or
(B) if such Physical Note is being transferred to a QIB in accordance
with Rule 144A, a certification to that effect (substantially in
the form of Exhibit C hereto); or
(C) if such Physical Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect
(substantially in the form of Exhibit C hereto) and a transferee
letter of representation substantially in the form of Exhibit D
hereto and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such Physical Note is being transferred in reliance on Rule
144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit C hereto) and, at
the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Physical Notes is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit C hereto), a transferor
certificate for Regulation S transfers substantially in the form
of Exhibit E hereto and, at the option of the Company, and
Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(F) if such Physical Note is being transferred in reliance on another
exemption from the registration requirements of the Securities
Act, a certification to that effect (substantially in the form of
Exhibit C hereto) and, at the option of the Company, an Opinion
of Counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act.
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(b) Restrictions on Transfer of a Physical Note for a Beneficial
Interest in a Global Note. A Physical Note the offer and sale of which has not
been registered under the Securities Act may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set forth
below. Upon receipt by the Registrar of a Physical Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Registrar, together with:
(A) certification, substantially in the form of Exhibit C hereto,
that such Physical Note is being transferred (I) to a QIB, (II)
to an Accredited Investor or (III) in an offshore transaction in
compliance with Regulation S and, with respect to (II) and (III),
at the option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act; and
(B) written instructions directing the Registrar to make, or to
direct the Depository to make, an endorsement on the applicable
Global Note to reflect an increase in the aggregate amount of the
Notes represented by the Global Note,
then the Registrar shall cancel such Physical Note and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Registrar, the principal amount of Notes
represented by the applicable Global Note to be increased accordingly. If no
Global Note is then outstanding, the Company shall, unless events in either
clause (i) or (ii) of Section 2.16(b) have occurred and are continuing, issue
and the Trustee shall, upon written instructions from the Company in accordance
with Section 2.02, authenticate such a Global Note in the appropriate principal
amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor. Upon
receipt by the Registrar of written instructions, or such other instruction as
is customary for the Depository, from the Depository or its nominee, requesting
the registration of transfer of an interest in a Global Note to another type of
Global Note, together with the applicable Global Notes (or, if the applicable
type of Global Note required to represent the interest as requested to be
transferred is not then outstanding, only the Global Note representing the
interest being transferred), the Registrar shall cancel such Global Notes (or
Global Note), and the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.02, authenticate, new
Global Notes of the types so canceled (or the type so canceled and applicable
type required to represent the interest as requested to be transferred)
reflecting the applicable increase and decrease of the principal amount of Notes
represented by such types of Global Notes, giving effect to such transfer. If
the applicable type of Global Note required to represent the interest as
requested to be transferred is not outstanding at the time of such request, the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate a new Global Note of such
type in principal amount equal to the principal amount of the interest requested
to be transferred.
(d) Transfer of a Beneficial Interest in a Global Note for a Physical
Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Physical Note;
provided, however, that prior to the registration, a transferee that is a
QIB or Institutional Accredited Investor may not exchange a beneficial
interest in Global Note for a Physical Note. Upon receipt by the Registrar
of written instructions, or such other form of instructions as is customary
for the Depository, from the Depository or its nominee on behalf of any
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Person (subject to the previous sentence) having a beneficial interest in a
Global Note and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such transfer
or exchange of a beneficial interest in Notes the offer and sale of which
have not been registered under the Securities Act, the following additional
information and documents:
(A) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit C hereto) and,
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act;
(B) if such beneficial interest is being transferred in reliance on
Regulation S under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit E hereto) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(C) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the Company,
an Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act,
then the Registrar will cause, in accordance with the standing instructions
and procedures existing between the Depository and the Registrar, the
aggregate principal amount of the applicable Global Note to be reduced and,
following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in accordance
with Section 2.02, the Trustee will authenticate and deliver to the
transferee a Physical Note in the appropriate principal amount.
(ii) Notes issued in exchange for a beneficial interest in a Global
Note pursuant to this Section 2.17(d) shall be registered in such names and
in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Registrar in writing. The Registrar shall deliver such
Physical Notes to the Persons in whose names such Physical Notes are so
registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless, and the Trustee is hereby authorized to deliver Notes without the
Private Placement Legend if, (i) there is delivered to the Trustee an Opinion of
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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; (ii)
such Note has been sold pursuant to an effective registration statement under
the Securities Act (including pursuant to a registration); or (iii) the date of
such transfer, exchange or replacement is two years after the later of (x) the
Issue Date and (y) the last date that the Company or any affiliate (as defined
in Rule 144 under the Securities Act) of the Company was the owner of such Notes
(or any predecessor thereto).
(g) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Participants or beneficial
owners of interest in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 7 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at any
time, selection of the Notes to be redeemed shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no Notes of
a principal amount of $1,000 or less shall be redeemed in part; provided,
further, that if a partial redemption is made with the proceeds of a Public
Equity Offering, selection of the Notes or portions
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thereof for redemption shall be made by the Trustee only on a pro rata basis or
on as nearly a pro rata basis as is practicable (subject to DTC procedures),
unless such method is otherwise prohibited. Notice 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 Notes to be redeemed at its registered address. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon delivery of the
original Note to the Paying Agent and cancellation of the original Note. On and
after the redemption date, interest will cease to accrue on Notes or portions
thereof called for redemption as long as the Company has deposited with the
Paying Agents in New York and Luxembourg funds in satisfaction of the applicable
redemption price pursuant to this Indenture.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 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, with
a copy to the Trustee and any Paying Agent. At the Company's written request,
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. So long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, the Company will cause a
notice of such redemption to be published in a daily newspaper of general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such redemption.
Each notice for redemption shall identify the Notes to be redeemed
(including the CUSIP number thereon, if any,) and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption
is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof will
be issued; and
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(8) 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.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant record dates referred to in the Notes.
SECTION 3.05. Deposit of Redemption Price.
On or before 2:00 p.m., New York time, on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes to be redeemed
on that date. The Paying Agent shall promptly return to the Company any U.S.
Legal Tender so deposited which is not required for that purpose, except with
respect to monies owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on
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demand at the rate borne by the Notes plus 2% per annum. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, and, for so long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of such stock exchange so require, in Luxembourg, the
office or agency required under Section 2.03. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.02 hereof. The
Company hereby initially designates (i) the Trustee at its address set forth in
Section 11.02 hereof as its office or agency in The Borough of Manhattan, The
City of New York, for such purposes and (ii) so long as the Securities are
listed on the Luxembourg Stock Exchange and the rules of such stock exchange so
require, Bankers Trust Luxembourg S.A., 14, Boulevard F.D. Roosevelt, L-2450
Luxembourg, as its office or agency in Luxembourg for such purposes.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five and Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its Subsidiaries in accordance with the
respective organizational documents of each such Subsidiary and the material
rights (charter and statutory) and franchises of the Company and each such
Subsidiary; provided, however, that the Company shall not be required to
preserve, with respect to itself, any material right or franchise and, with
respect to any of its Subsidiaries, any such existence, material right or
franchise, if the Board of Directors of the Company shall determine in good
faith that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Subsidiaries, taken as a whole.
SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
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SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain its material properties in good working order and condition (subject to
ordinary wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business; provided, however, that nothing in this Section 4.05 shall
prevent the Company or any of its Subsidiaries from discontinuing the operation
and maintenance of any of its properties, if such discontinuance is, in the
good faith judgment of the Board of Directors or senior management of the
Company or the Subsidiary, as the case may be, desirable in the conduct of their
respective businesses.
(b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the Board
of Directors of the Company, for companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of the Company's fiscal year, which currently ends on November 30 of
each year, an Officers' Certificate stating that a review of its activities and
the activities of its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled its obligations
under this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of such Officer's knowledge the Company during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such year
and at the date of such certificate there is no Default or Event of Default that
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe the Default or Event of Default
and its status with particularity. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.08 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that a Default or Event of Default
under this Indenture has occurred 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.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.02 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action and the status thereof within five
Business Days of its becoming aware of such occurrence.
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SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 4.08. SEC Reports.
(a) The Company (at its own expense) shall file with the SEC and
shall file with the Trustee within 15 days after it files them with the SEC
copies of the quarterly and annual reports and of the information, documents,
and other reports, if any (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe), which the Company is required
to file with the SEC 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). Upon qualification of this Indenture
under the TIA, the Company shall also comply with the provisions of TIA (S)
314(a).
(b) At the Company's expense, the Company 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 filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar at the time of such mailing or
furnishing to stockholders.
(c) The Company shall provide to any Holder any information
reasonably requested by such Holder concerning the Company (including financial
statements) necessary in order to permit such Holder to sell or transfer Notes
in compliance with Rule 144A under the Securities Act.
(d) For so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such Exchange so require, copies of all reports and
information described above will be available during normal business hours at
the office of the Paying Agent in Luxembourg.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company 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 the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company 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 Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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SECTION 4.10. Limitation on 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, (c) make any Investment
(other than Permitted Investments) or (d) repurchase or redeem the Schlumberger
Junior Subordinated Notes, the Schlumberger Warrants, the Warrant Repurchase
Indebtedness or Refinancing Indebtedness the proceeds of which are used to
repurchase or redeem the Schlumberger Junior Subordinated Notes , the
Schlumberger Warrants or the Warrant Repurchase Indebtedness (other than a
repurchase or redemption using proceeds of Refinancing Indebtedness), or make
any cash payments of interest thereon during (l) a blockage period in effect
with respect to any such junior Indebtedness or (2) the time when the Company
could, by the terms of such Indebtedness, otherwise defer such interest or pay
such interest in-kind (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 Section 4.12 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 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 (iii)(x)
above, 100% of the aggregate net cash proceeds of any equity contribution
received by the Company after the Issue Date 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 Public Equity Offering to the extent used to redeem the Notes or
from a sale as described in clause (2) (ii) of the next succeeding paragraph).
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
within 60 days after the date of declaration of such 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 or of any of the Indebtedness
described in clause (d) of the immediately preceding paragraph, 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 clause 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 Indenture; (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; or (5) the
purchase, redemption or acquisition of the
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Schlumberger Warrants with proceeds from the issuance of Warrant Repurchase
Indebtedness; or (6) the purchase, redemption, acquisition, or refinancing of
the Schlumberger Junior Subordinated Notes with Refinancing Indebtedness. 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), (4) and (5) 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 this 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 4.11. 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 paragraph
(b) below 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 clause (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 this
Indenture; (iii) Restricted Payments permitted by this Indenture; (iv)
transactions permitted by, and complying with Section 5.01; (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 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 Indenture.
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SECTION 4.12. 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 4.13. Limitation on Dividends 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 pay or
guarantee any Indebtedness or other obligation owed to the Company or any other
Subsidiary of the Company; 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 New Credit Agreement or the
ESOP Credit Agreements; 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), (5) or (6) 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), (5) or (6).
SECTION 4.14. Prohibition on Incurrence of Senior Subordinated Debt.
The Company will not incur or suffer to exist Indebtedness that is
senior in right of payment to the Notes and subordinate in right of payment to
any Senior Debt of the Company. The Guarantors will not incur or suffer to exist
Indebtedness that is senior in right of payment to any Guarantee and subordinate
in right of payment to any Guarantor Senior Debt.
SECTION 4.15. 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
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.
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Prior to the mailing of the notice referred to below, but in any event
within 30 days following any Change of Control, the Company covenants to (i)
repay in full all Indebtedness and terminate all commitments under the New
Credit Agreement and all other Senior Debt whose terms require repayment upon a
Change of Control or offer to repay in full and terminate all commitments under
all Indebtedness under the New 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 New Credit Agreement and all
other Senior Debt to permit the repurchase of the Notes as provided below.
(b) Within 30 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company shall 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. For so long as
the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require, the Company will cause a copy of such notice to be
published in a daily newspaper with general circulation in Luxembourg (which is
expected to be the Luxemburger Wort) and the Luxembourg Stock Exchange will be
advised of the Change of Control Offer. The notice to the Holders shall contain
all instructions and materials necessary to enable such Holders to tender 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 4.15 and that all 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 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 Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Note 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 Note purchased pursuant to a
Change of Control 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, including, if applicable, the Paying
and Transfer Agent in Luxembourg, 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
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided that each Note pur-
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chased and each new 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 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 Notes so
tendered and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to the Holders of 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
Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. Any Notes not so accepted shall be promptly mailed by the Company
to the Holder thereof. For purposes of this Section 4.15, the Trustee shall act
as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change
of Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-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 Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 4.15, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.15 by virtue thereof.
SECTION 4.16. 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 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 Pro-
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ceeds 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 this
paragraph).
Notwithstanding the immediately preceding paragraph, 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 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 paragraph shall constitute Net Cash Proceeds subject to
the provisions of the immediately preceding paragraph.
Notwithstanding the second immediately preceding paragraph, in the
event that any other Indebtedness of the Company that ranks pari passu with the
Notes (the "Other Debt") requires an offer to purchase to be made to repurchase
such Other Debt upon the consummation of an Asset Sale, the Company may apply
the Net Proceeds Offer Amount otherwise required to be applied to a Net Proceeds
Offer to offer to purchase such Other Debt. With respect to any Net Proceeds
Offer Amount, the Company shall make the Net Proceeds Offer in respect thereof
at the same time as the analogous offer to purchase is made pursuant to any
Other Debt and the Net Proceeds Offer Payment Date in respect thereof shall be
the same as the purchase date in respect thereof pursuant to any Other Debt.
For purposes of this covenant, "Note Portion of Net Proceeds Offer
Amount" means (1) if no Other Debt is being offered to be purchased, the amount
of the Net Proceeds and (2) if Other Debt is being offered to be purchased, the
amount of the Net Proceeds Offer Amount equal to the product of (x) the Net
Proceeds Offer Amount and (y) a fraction the numerator of which is the aggregate
amount of all Securities tendered pursuant to the Net Proceeds Offer related to
such Net Proceeds Offer Amount (the "Note Amount") and the denominator of which
is the sum of the Note and the aggregate amount as of the relevant purchase date
of all Other Debt tendered and purchased pursuant to a concurrent offer to
purchase such Other Debt made at the time of such Net Proceeds Offer.
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 Trustee, and shall comply with the procedures
set forth in this Indenture. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of exchange so require, the Company will
cause a copy of such notice to be published in a daily newspaper with general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of the Net Proceeds Offer. 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.
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(b) Each notice of a Net Proceeds Offer pursuant to this Section 4.16
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 Notes
pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section
4.16 and that all Notes tendered will be accepted for payment; provided,
however, that if the aggregate principal amount of Notes 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 Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or multiples thereof shall be purchased);
(2) 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 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 Note not tendered will continue to accrue interest;
(4) 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;
(5) 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;
(6) 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
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes 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 Notes or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b)(1) above,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Notes to be purchased and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the pur-
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chase price plus accrued interest, if any. For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Net
Proceeds Offer shall be returned by the Trustee to the Company.
The Company will comply with the requirements of Rule 14e-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
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
SECTION 4.17. Limitation on 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 4.18. 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 and Liens securing
Guarantor Senior Debt; (C) Liens securing the Notes and the Guarantees; (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 Indenture and which has been incurred in accordance with
the provisions of this 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 4.19. Additional Subsidiary Guarantees.
The Company will cause any current and future Subsidiary of the
Company that Guarantees any Senior Debt of the Company or Indebtedness of the
Company that is subordinated to the Notes to simultaneously execute and deliver
a supplemental indenture pursuant to which it will become a Guarantor under this
Indenture.
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SECTION 4.20. Limitation on Amendments to Schlumberger Junior
Subordinated Notes and Warrant Repurchase Indebtedness.
The Company shall not amend the indentures or other agreements
governing the terms of the Schlumberger Junior Subordinated Notes or Warrant
Repurchase Indebtedness, or any Refinancing Indebtedness thereof, in any way
adverse to the Holders of the Notes.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation or Sale of Assets of the Company.
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 premium, if any, and
interest on all of the Notes and the performance of every covenant
contained in the Notes, this Indenture and the Registration Rights
Agreement to be performed or observed on the part of the Company;
(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, 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, as the case may be, 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 complies with the ap-
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plicable provisions of this Indenture and that all conditions precedent in
this Indenture relating to such transaction have been satisfied.
For so long as the Notes are listed on the Luxembourg Stock Exchange
and the rules of such exchange so require, copies of all reports and information
described above will be available during normal business hours at the office of
the Transfer Agent in Luxembourg.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, 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
this Indenture and the Notes with the same effect as if such surviving entity
had been named as such.
SECTION 5.03. Merger, Consolidation and Sale of Assets of Guarantors.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with Section 4.16) will not, and the
Company will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
(i) the entity formed by or surviving any such consolidation or merger (if other
than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia;
(ii) such entity assumes by supplemental indenture all of the obligations of the
Guarantor on the Guarantee; (iii) immediately before and after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (ii) of the first paragraph of Section 5.01.
Any merger or consolidation of a Guarantor with and into the Company (with the
Company being the surviving entity) or another Guarantor of the Company need
only comply with clause (iv) of Section 5.01.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on, or Liquidated Damages (if
any), with respect to any Notes when the same becomes due and payable and
the default continues for a period of 30 days (whether or not such payment
shall be prohibited under Article Ten);
(2) the Company fails to pay the principal on the Notes when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to
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purchase Notes tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer), whether or not such payment shall be prohibited under
Article Ten;
(3) the Company defaults in the observance or performance of any
other covenant or agreement contained in this 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 at least 25% of the outstanding principal
amount of the Notes (except in the case of a default with respect to
Section 5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) 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;
(5) 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;
(6) except as permitted by this Indenture, any Guarantee shall be
held in a judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Guarantee;
(7) the Company or any Significant Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consents to the appointment of a Custodian of it or for substantially
all of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (E) makes a general
assignment for the benefit of its creditors, or (F) takes any corporate
action to authorize or effect any of the foregoing; or
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any Significant
Subsidiary, (B) appoint a Custodian of the Company or any Significant
Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days.
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SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in Sections 6.01(7) or (8) above with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in principal amount of
outstanding Notes may declare the principal of and accrued interest on all the
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 New Credit Agreement or the ESOP Credit Agreements, shall become immediately
due and payable upon the first to occur of an acceleration under the New Credit
Agreement or the ESOP Credit Agreements or 5 business days after receipt by the
Company and the Representative under the New Credit Agreement or the ESOP Credit
Agreements of such Acceleration Notice.
(b) If an Event of Default specified in Section 6.01(7) or (8) above
with respect to the Company shall occur and be continuing, then all unpaid
principal of, premium, if any, and accrued and unpaid interest on all of the
outstanding 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.
(c) At any time after a declaration of acceleration with respect to
the Notes in accordance with Section 6.02(a) and (b), the Holders of a majority
in principal amount of the outstanding Notes may rescind and cancel such
declaration and its consequences if (i) the rescission would not conflict with
any judgment or decree, (ii) 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) 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(7) or (8) above, the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. The holders of a majority in aggregate principal amount of Notes then
outstanding may waive any existing Default or Event of Default under this
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Notes. 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 by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder 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.
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SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
aggregate principal amount of Notes then outstanding by notice to the Trustee
may waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Note as specified in
clauses (1) and (2) of Section 6.01. The Company shall deliver to the Trustee
an Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
paragraph of this Section 6.04 shall be in lieu of (S) 316(a)(1)(B) of the TIA
and such (S) 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder (it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders), or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; and provided further
that this provision shall not affect the rights of the Trustee set forth in
Section 7.01(d). In the event the Trustee takes any action or follows any
direction pursuant to this Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of (S) 316(a)(1)(A) of the TIA, and such (S) 316(a)(1)(A)
of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
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(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over such other
Noteholder.
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 a Note, on or
after the respective due dates expressed in such Note, 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 in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in Section 4.01 and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Noteholder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, and any other amounts due the Trustee under Section 7.07.
The Company's payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07 hereunder. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Noteholder in any such proceeding; provided, however, that the Trustee may,
on behalf of the Noteholders, vote for the election of a trustee in bankruptcy
or similar official and may be a member of a creditors' committee.
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SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company or
any Guarantor directly without the Trustee, to Holders for their collection
costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Noteholders pursuant to this Section 6.10.
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 a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture against the Trustee.
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(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) Notwithstanding anything to the contrary herein contained, 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 paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(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.
(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 6.02, 6.04 and 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any 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 for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not herein expressly provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any resolution, certificate, Officers'
Certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note or other paper or 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 the
document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate, an Opinion of
Counsel or both, which shall conform to Sections 11.04 and 11.05. 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 execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys, and the Trustee shall not be
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responsible for the misconduct or negligence of any agent or attorney
(other than an agent who is an employee of the Trustee) appointed with due
care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, 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, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any 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 recitals contained herein and in the Notes shall be taken as
statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
the Trustee has actual knowledge of such Default or Event of Default, the
Trustee shall mail to each Noteholder notice of the uncured Default or Event of
Default within 90 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of principal of, or
interest on, any Note, including an accelerated payment and the failure to make
payment on the Change of Control Payment Date pursuant to a Change of Control
Offer or on the Proceeds Purchase Date pursuant to a Net Proceeds Offer and,
except in the case of a
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failure to comply with Article Five hereof, the Trustee may withhold the notice
if and so long as its Board of Directors, the executive committee of its Board
of Directors or a committee of its directors and/or Trust Officers in good faith
determines that withholding the notice is in the interest of the Noteholders.
This Section 7.05 shall be in lieu of the proviso to (S) 315(b) of the TIA, and
such proviso of (S) 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each January 29, the Trustee shall, to the extent
that any of the events described in TIA (S) 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Noteholder a brief report dated
as of such date that complies with TIA (S) 313(a). The Trustee also shall
comply with TIA (S)(S) 313(b), (c) and (d).
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and filed with the SEC and each securities exchange, if
any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any securities exchange or of any delisting thereof and the Trustee
shall comply with TIA (S) 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. 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 fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture or in connection with the
collection of any funds. Such expenses shall include the reasonable fees and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the administration of this trust including
the reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their rights,
powers or duties hereunder. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity. At the
Trustee's sole discretion, the Company shall defend the claim and the Trustee
shall cooperate and may participate in the defense; provided that any settlement
of a claim shall be approved in writing by the Trustee. Alternatively, the
Trustee may at its option have separate counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel; provided
that the Company will not be required to pay such fees and expenses if it
assumes the Trustee's defense and there is no conflict of interest between the
Company and the Trustee in connection with such defense as reasonably determined
by the Trustee. The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except
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assets or money held in trust to pay principal of or interest on particular
Notes. The Trustee's right to receive payment of any amounts due under this
Section 7.07 shall not be subordinate to any other liability or indebtedness of
the Company (even though the Notes may be subordinate to such other liability or
indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may 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 becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, 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. A successor Trustee shall mail notice of its succession to each
Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding 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 Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding 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.
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SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
In addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA (S) 310(a)(2). 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. The provisions of TIA (S) 310 shall apply to the Company, as
obligor of the Notes.
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. The
provisions of TIA (S) 311 shall apply to the Company, as obligor on the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
This Indenture will be discharged and will cease to be of further
effect (except those obligations referred to in the penultimate paragraph of
this Section 8.01), and the Company and the Guarantors will be discharged from
their respective obligations under the Notes and the Guarantees, if all Notes
theretofore authenticated and delivered (other than mutilated, destroyed, lost
or stolen Notes which have been replaced and paid or Notes for whose payment
U.S. Legal Tender has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company, as provided in
Section 8.05, or discharged from such trust) have been delivered to the Trustee
for cancellation, or if:
(a) either (i) pursuant to Article Three, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Notes under arrangements
satisfactory to the Trustee for the giving of such notice or (ii) all Notes
not theretofore delivered to the Trustee for cancellation have otherwise
become due and payable hereunder;
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(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender in such amount as is
sufficient to pay the entire Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, the date of such deposit (in the
case of Notes that have become due and payable) or to the stated principal
of, premium, if any, and interest on the outstanding Notes to maturity or
redemption; provided that the Trustee shall have been irrevocably
instructed to apply such U.S. Legal Tender to the payment of said
principal, premium, if any, and interest with respect to the Notes and,
provided, further, that from and after the time of deposit, the money
deposited shall not be subject to the rights of holders of Senior Debt
pursuant to the provisions of Article Ten or to the rights of holders of
Guarantor Senior Debt pursuant to the provisions of Article Thirteen;]
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the satisfaction and discharge of this Indenture have
been complied with. Such Opinion of Counsel shall also state that such
satisfaction and discharge does not result in a default under the New
Credit Agreement (if then in effect) or any other agreement or instrument
then known to such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall survive
until the Notes are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Notes are no longer outstanding, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and each Guarantor's
obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph (b) or
(c) below be applied to all outstanding Notes upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03, be
deemed to have been discharged from their respective obligations with respect to
all outstanding Notes and the Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "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 Notes
and the Guarantees, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 8.04 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all their other
respective obliga-
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tions under such Notes, the Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Notes and the Guarantees
and any amounts deposited under Section 8.03 hereof shall cease to be subject to
any obligations to, or the rights of, any holder of Senior Debt under Article
Ten or otherwise or any holder of Guarantor Senior Debt under Article Thirteen
or otherwise, except for the following provisions, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (ii) the Company's obligations with respect to such Notes under Article
Two and Section 4.02 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (iv) this Article Eight. Subject to compliance with this Article
Eight, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03 hereof,
be released from its obligations under the covenants contained in Sections 4.10
through 4.19 and Article Five hereof with respect to the outstanding Notes and
the Guarantees on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes and the Guarantees
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes and the Guarantees shall not be deemed outstanding for accounting
purposes) and Holders of the Notes and the Guarantees and any amounts deposited
under Section 8.03 hereof shall cease to be subject to any obligations to, or
the rights of, any holder of Senior Debt under Article Ten or otherwise or any
holder of Guarantor Senior Debt under Article Thirteen or otherwise. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Notes and the Guarantees, the Company and each Guarantor may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event or Default
under Section 6.01(3) hereof, but, except as specified above, the remainder of
this Indenture, such Notes and the Guarantees shall be unaffected thereby. In
addition, upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), subject to the satisfaction of the conditions
set forth in Section 8.03 hereof, Sections 6.01(3), 6.01(4) and 6.01(5) shall
not constitute Events of Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) hereof to the outstanding Notes and the Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, U.S. Legal Tender or 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, premium, if any, and interest
on the Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be provided that the Trustee shall have
received an irrevoca-
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ble written order from the Company instructing the Trustee to apply such
U.S. Legal Tender or the proceeds of such U.S. Government Obligations to
said payments with respect to the Notes;
(b) in the case of an election under Section 8.02(b) hereof, 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 this 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 of the Notes 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;
(c) in the case of an election under Section 8.02(c) hereof, 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 of the Notes 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Article Eight concurrently with such incurrence) or insofar as Sections
6.01(7) and 6.01(8) hereof are concerned, at any time in the period ending
on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of or constitute a default under this 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;
(f) 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;
(g) 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 tl clauses (b), (c) and (e) above); and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Senior Debt of the Company other than the Notes,
and (ii) assuming no intervening bankruptcy or insolvency of the Company
between the date of deposit and the 91st day following the deposit and that
no Holder is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.
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SECTION 8.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article Eight,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
principal of, premium, if any, and interest on the Notes. The Trustee shall be
under no obligation to invest said U.S. Legal Tender or U.S. Government
Obligations except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.03 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, 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 8.05. Repayment to the Company.
Subject to Sections 8.01, 8.02, 8.03, 8.04 and 8.06 of this Article
Eight, the Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess U.S. Legal Tender or U.S. Government Obligations held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; provided that the Trustee or such
Paying Agent, before being required to make any payment, may at the expense of
the Company cause to be published once in a newspaper of general circulation in
the City of New York and, for so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, in a newspaper with
general circulation in Luxembourg (which is expected to be the Luxemburger Wort)
or mail to each Holder entitled to such money notice that such money remains
unclaimed, and that after a date specified therein which shall be at least 30
days from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Noteholders entitled to such money must look to the Company for payment
as general creditors unless an applicable law designates another Person.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Article Eight 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 Guarantor's respective obligations
under this Indenture, the Guarantees and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Eight
until such time as the Trustee or Paying Agent is permitted to apply all such
U.S. Legal Tender or U.S. Government Obligations in accordance with this Article
Eight; provided that if the Company has made any payment of principal, premium,
if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the
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rights of the Holders of such Notes to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or the Guarantees
without notice to or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Noteholders or that does not adversely affect the rights of
any Noteholder;
(6) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will
be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities; or
(7) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
SECTION 9.02. With Consent of Holders.
(a) Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture, the Notes or the
Guarantees, without notice to any other Noteholders. Subject to Section 6.07,
the Holder or Holders of a majority in aggregate principal amount of the
outstanding Notes may waive compliance by the Company or any Guarantor with any
provision of this Indenture, the Notes or the Guarantees without notice to
any other Noteholder. No amendment, supple-
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ment or waiver, including a waiver pursuant to Section 6.04, shall, without the
consent of each Holder of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of, premium, if any,
and interest on such Holder's Notes on or after the due date thereof or to
bring suit to enforce such payment, permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default, other
than ones with respect to the payment of principal of or interest on the
Notes; or
(6) modify Articles Ten, Twelve or Thirteen or the definitions used
in Articles Ten, Twelve or Thirteen in a manner which adversely affects the
Holders of the Notes in any material respect.
provided, however, that any amendment the purpose of which is to permit the
incurrence of additional Indebtedness under this Indenture shall not be
construed as adversely affecting the ranking of the Notes.
(b) Without the consent of Holders of not less than 66 2/3% in
aggregate principal amount of 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 or modify any of the provisions or definitions
with respect thereto.
(c) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Effect on Senior Debt.
No amendment of this Indenture shall adversely affect the rights of
any holder of (i) Senior Debt under Article Ten of this Indenture or (ii)
Guarantor Senior Debt under Article Thirteen of this Indenture, without the
consent of such holder.
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SECTION 9.04. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of 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 revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (1)
through (6) of Section 9.02(a), in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of and interest
on a Note, on or after the respective due dates expressed in such Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates without the consent of such Holder.
SECTION 9.06. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such
notation or exchange shall be made at the sole cost and expense of the Company.
SECTION 9.07. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this
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Article Nine is authorized or permitted by this Indenture. Such Opinion of
Counsel shall not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article Ten; and the
Trustee and each Person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Notes by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations on the
Senior Debt, whether outstanding on the Issue Date or thereafter incurred; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
SECTION 10.02. No Payment on Notes in Certain Circumstances.
(a) 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 Article Eight) shall be made by the Company or any of
its Subsidiaries with respect to any Obligations on the Notes or to acquire any
of the Notes for cash or property.
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 instruments 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 described under Article Eight) with respect to any Obligations on the
Notes or (y) acquire any of the 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
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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).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity
of the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) 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 total or partial 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, before any payment or distribution
of any kind or character is made on account of any Obligations on the Notes, or
for the acquisition of any of the Notes for cash or property or otherwise. Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the Holders
of the Notes or the Trustee under this Indenture would be entitled, except for
the provisions hereof, shall be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of Senior Debt remaining unpaid until all Obligations on Senior Debt then due
have been paid in full in cash or Cash Equivalents after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Debt.
(b) 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 securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt then due
re-
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maining unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(c) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual knowledge
by the Trustee that a given payment would be prohibited by Section 10.02 or
10.03, the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of, and interest on, the Notes to
the Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment would otherwise become due and payable a Trust Officer
shall have actually received the written notice provided for in the second
sentence of Section 10.02(a) or in Section 10.07 (provided that, notwithstanding
the foregoing, such application shall otherwise be subject to the provisions of
the first sentence of Section 10.02(a) and Section 10.03). The Company shall
give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.
SECTION 10.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Debt until the Notes shall be
paid in full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Debt by or on behalf of the Company
or by or on behalf of the Holders by virtue of this Article Ten which otherwise
would have been made to the Holders shall, as between the Company and the
Holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Debt, it being understood that the provisions of this Article Ten
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Notes, on the one hand, and the holders of the Senior Debt,
on the other hand.
SECTION 10.06. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and any 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 the Senior Debt, nor shall anything herein or therein prevent the
Holder of any Note or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
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subject to the rights, if any, in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Debt or a
Representative therefor, together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, 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.
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the 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
Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied cove-
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nants or obligations with respect to the holders of Senior Debt shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions
of the 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 Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Notes, the subordination provided in this Article Ten, and
appoints the Trustee its attorney-in-fact for such purposes, 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
otherwise) tending towards liquidation of the business and assets of the
Company, the filing of a claim for the unpaid balance of its Notes and accrued
interest in the form required in those proceedings.
If the Trustee 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 the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their Representative to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
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SECTION 10.12. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA 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 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Tokheim Corporation
10501 Corporate Drive
Fort Wayne, Indiana 46845
Facsimile No.: (219) 484-1110
Attn: Executive Vice President, Finance and Administration
if to the Trustee:
U.S. Bank Trust National Association
100 Wall Street
16th Floor
New York, New York 10005
Facsimile No: (212) 809-5459
Attention: Corporate Trust Administration
if to the Luxembourg Paying and Transfer Agent, if any:
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Bankers Trust Luxembourg S.A.
P.O. Box 807
14, Boulevard F.D. Roosevelt
L-2450 Luxembourg
Facsimile No: 352-473-136
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. 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; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA (S) 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
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(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 Person, he has made
such examination or investigation as is reasonably 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 each such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or Chicago, Illinois or at such place of payment are not required to be
open. If a payment date is a Legal Holiday at such place, payment may be made
at such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE AND THE NOTES 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
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Noteholder by accepting a Note waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Notes.
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SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which will be deemed an original, and all of which together shall constitute one
and the same instrument. Delivery of an executed counterpart sent by telecopier
shall be effective as delivery of a manually executed counterpart.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SECTION 11.14. Judgment Currency.
The Company hereby agrees to indemnify the Trustee, its directors, its
officers and each person, if any, who controls the Trustee within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any loss
incurred by such person as a result of any judgment or order being given or made
against the Company for any U.S. dollar amount due under this Agreement and such
judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in The City of New York at which such party
on the date of payment of such judgment or order is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
ARTICLE TWELVE
GUARANTEE
SECTION 12.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally guarantees to each Holder of a
Note authenticated by the Trustee and to the Trustee and its successors and
assigns that: the principal of, premium thereon (if any) and interest on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise, and interest on the
overdue principal and interest on any overdue interest on the Notes and all
other obligations of the Company to the Holders or the Trustee hereunder or
under the Notes will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; subject,
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however, to the limitations set forth in Section 12.03. Each Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of such Guarantor. Each Guarantor 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 the
Company, protest, notice and all demands whatsoever and covenants that the
Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or any
Guarantor or any custodian, trustee, liquidator or other similar official acting
in relation to the Company or a Guarantor, any amount paid by the Company or a
Guarantor to the Trustee or such Holder, the Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purpose of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall become due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 12.02. Severability.
In case any provision of this Article Twelve shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 12.03. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof, each Holder and the
Trustee, hereby confirm that it is the intention of all such parties that the
Guarantee does not constitute a fraudulent transfer or conveyance for purposes
of Title 11 of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. Federal
or state or other applicable law. To effectuate the foregoing intention, each
Holder and each Guarantor hereby irrevocably agree that the obligations of a
Guarantor under its Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of such Guarantor in respect of the obligations of such Guarantor
pursuant to Section 12.04, result in the obligations of such Guarantor not
constituting such a fraudulent transfer or conveyance.
SECTION 12.04. Execution of Guarantee.
To further evidence the Guarantee to the Holders, each Guarantor
hereby agrees to execute a guarantee to be endorsed on and made a part of each
Note ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its guarantee set forth in Section 12.01 shall remain in full
force and effect notwithstanding any failure to endorse on each Note a
guarantee. Each such guarantee shall be signed on behalf of each Guarantor by
its Chairman of the Board, its President or one of its Vice Presidents prior to
the authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such guarantee on behalf of such Guarantor.
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Such signature upon the guarantee may be a manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the guarantee, and in
case such officer who shall have signed the guarantee shall cease to be such
officer before the Note on which such guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Note nevertheless may be authenticated and delivered or disposed of as though
the Person who signed the guarantee had not ceased to be such officer of such
Guarantor.
SECTION 12.05. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under the Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Notes in accordance with
the provisions provided therefor in this Indenture.
ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Guarantee Subordinated to Guarantor Senior Debt.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Notes, by its acceptance thereof, likewise covenants and agrees, that
such Guarantor's Guarantee shall be issued subject to the provisions of this
Article Thirteen; and the Trustee and each Person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that the payment of all Obligations on the Notes pursuant to such
Guarantee shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents of all Obligations on the Guarantor Senior Debt of such
Guarantor, whether outstanding on the Issue Date or thereafter incurred; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Guarantor Senior Debt of such Guarantor, and that each holder of
Guarantor Senior Debt of such Guarantor whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired
Guarantor Senior Debt of such Guarantor in reliance upon the covenants and
provisions contained in this Indenture, the Notes and the Guarantees.
SECTION 13.02. No Payment in Certain Circumstances.
(a) 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 of any Guarantor, no payment of any kind or character (other than payments
by a trust previously established pursuant to Article Eight) shall be made by
such Guarantor with respect to any Obligations on such Guarantor's Guarantee or
to acquire any of the Notes for cash or property.
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 instruments creating or evidencing such Designated Senior Debt,
permitting the holders of such Designated Senior Debt then outstanding to
accelerate the maturity
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thereof, and if the Representative for the respective issue of Designated Senior
Debt gives 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, during Blockage Period no Guarantor shall (x)
make any payment of any kind or character (other than payments by a trust
previously established pursuant to the provisions described under Article Eight)
with respect to any Obligations on the Guarantees or (y) acquire any of the
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).
(b) In the event that, notwithstanding the foregoing, any payment from
any Guarantor shall be received by the Trustee or any Holder when such payment
is prohibited by Section 13.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt of such Guarantor (pro rata to such holders on the basis of the
respective amount of Guarantor Senior Debt of such Guarantor held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Guarantor Senior Debt of such Guarantor, if any,
received from the holders of Guarantor Senior Debt of such Guarantor (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from such Guarantor and only amounts included in the
information provided to the Trustee shall be paid to the holders of Guarantor
Senior Debt of such Guarantor.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.02 or to pursue any rights or
remedies hereunder.
SECTION 13.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) 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 total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all of such Guarantor's Obligations due upon all Guarantor
Senior Debt of such Guarantor 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 of such Guarantor, before any payment or
distribution of any kind or character is made on account of any Obligations on
such Guarantor's Guarantees, or for the acquisition of any of the Notes by such
Guarantor, for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by such Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such
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payment or distribution, or by the Holders or by the Trustee under this
Indenture if received by them, directly to the holders of Guarantor Senior Debt
of such Guarantor (pro rata to such holders on the basis of the respective
amounts of Guarantor Senior Debt of such Guarantor held by such holders) or
their respective Representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Guarantor Senior Debt of such Guarantor
may have been issued, as their respective interests may appear, for application
to the payment of Guarantor Senior Debt of such Guarantor remaining unpaid until
all Obligations on Guarantor Senior Debt of such Guarantor then due have been
paid in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Guarantor
Senior Debt of such Guarantor.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by Section 13.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Guarantor Senior Debt of such Guarantor (pro rata to such
holders on the basis of the respective amount of Guarantor Senior Debt of such
Guarantor held by such holders) or their respective Representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Guarantor
Senior Debt of such Guarantor may have been issued, as their respective
interests may appear, for application to the payment of Guarantor Senior Debt of
such Guarantor then due remaining unpaid until all such Guarantor Senior Debt of
such Guarantor has been paid in full in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt of such Guarantor.
(c) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of all or substantially all
of its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Guarantor
Senior Debt of such Guarantor shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume such Guarantor's obligations hereunder in accordance with
Article Five hereof.
SECTION 13.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture shall prevent (i) any Guarantor, except under the conditions described
in Sections 13.02 and 13.03, from making payments at any time for the purpose of
making payments of principal of and interest on the Notes or payments on the
Guarantees of such Guarantor, or from depositing with the Trustee any moneys for
such payments, or (ii) in the absence of actual knowledge by the Trustee that a
given payment would be prohibited by Section 13.02 or 13.03, the application by
the Trustee of any moneys deposited with it for the purpose of making such
payments of principal of, and interest on, the Notes or payments on the
Guarantees of such Guarantor to the Holders entitled thereto unless at least two
Business Days prior to the date upon which such payment would otherwise become
due and payable a Trust Officer shall have actually received the written notice
provided for in the second sentence of Section 13.02(a) or in Section 13.07
(provided that, notwithstanding the foregoing, such application shall otherwise
be subject to the provisions of the first sentence of Section 13.02(a) and
Section 13.03). Each Guarantor shall give prompt written notice to the Trustee
of any dissolution, winding-up, liquidation or reorganization of such Guarantor.
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SECTION 13.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt of each Guarantor, the Holders of the Notes shall be
subrogated to the rights of the holders of Guarantor Senior Debt of such
Guarantor to receive payments or distributions of cash, property or securities
of such Guarantor applicable to the Guarantor Senior Debt of such Guarantor
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Guarantor
Senior Debt of such Guarantor by or on behalf of such Guarantor or by or on
behalf of the Holders by virtue of this Article Thirteen which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders
of the Notes, be deemed to be a payment by such Guarantor to or on account of
the Guarantor Senior Debt of such Guarantor, it being understood that the
provisions of this Article Thirteen are and are intended solely for the purpose
of defining the relative rights of the Holders of the Notes, on the one hand,
and the holders of the Guarantor Senior Debt of such Guarantor, on the other
hand.
SECTION 13.06. Obligations of Guarantors Unconditional.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture, the Notes or the Guarantees is intended to or shall impair, as among
any Guarantor, its creditors other than the holders of Guarantor Senior Debt of
such Guarantor, and the Holders, the obligation of such Guarantor, which is
absolute and unconditional, to pay to the Holders the principal of and any
interest on the Notes and any payments due on the Guarantees 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 the Guarantor Senior Debt of such Guarantor,
nor shall anything herein or therein prevent the Holder of any Note or the
Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of such Guarantor received upon the
exercise of any such remedy.
SECTION 13.07. Notice to Trustee.
Each Guarantor shall give prompt written notice to the Trustee of any
fact known to such Guarantor which would prohibit the making of any payment to
or by the Trustee in respect of the Notes or Guarantees pursuant to the
provisions of this Article Thirteen. Regardless of anything to the contrary
contained in this Article Thirteen or elsewhere in this Indenture, the Trustee
shall not be charged with knowledge of the existence of any default or event of
default with respect to any Guarantor Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from such Guarantor, or from a
holder of Guarantor Senior Debt or a Representative therefor, together with
proof satisfactory to the Trustee of such holding of Guarantor Senior Debt or of
the authority of such Representative, and, prior to the receipt of any such
written notice, the Trustee shall be entitled to assume (in the absence of
actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
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 Thirteen, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amounts of Guarantor
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Thirteen, 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.
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SECTION 13.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article Thirteen, the Trustee, subject to the provisions of Article
Seven hereof, and the Holders of the Notes shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, receiver, assignee
for the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or the Holders of the Notes, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Guarantor Senior Debt of such Guarantor and
other Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen.
SECTION 13.09. Trustee's Relation to Guarantor Senior Debt.
The Trustee and any agent of any Guarantor or the Trustee shall be
entitled to all the rights set forth in this Article Thirteen with respect to
any Guarantor Senior Debt which may at any time be held by it in its individual
or any other capacity to the same extent as any other holder of Guarantor Senior
Debt and nothing in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Thirteen, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Guarantor Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
SECTION 13.10. Subordination Rights Not Impaired by Acts or Omissions
of the Company, the Guarantors or Holders of Guarantor
Senior Debt.
No right of any present or future holders of any Guarantor 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 any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by Company or any Guarantor with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Thirteen or the
obligations hereunder of the Holders of the Notes to the holders of the
Guarantor Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Guarantor Senior Debt, or otherwise amend or supplement in any manner
Guarantor Senior Debt, or any instrument evidencing the same or any agreement
under which Guarantor Senior Debt is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (iii) release any Person liable in any manner
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for the payment or collection of Guarantor Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company, any Guarantor and any
other Person.
SECTION 13.11. Noteholders Authorize Trustee to Effectuate
Subordination of Guarantees.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Guarantor
Senior Debt and the Holders of Notes, the subordination provided in this Article
Thirteen, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its Notes or any amounts due on the Guarantees and accrued interest
in the form required in those proceedings.
If the Trustee 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 the Guarantor Senior Debt
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes, the Guarantees or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 13.12. This Article Thirteen Not To Prevent Events of
Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Thirteen will not be
construed as preventing the occurrence of an Event of Default.
SECTION 13.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Thirteen will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
[Signature Pages Follow]
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SIGNATURES
----------
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
Issuer:
TOKHEIM CORPORATION
By:
-------------------------------------
Name:
Title:
Guarantors:
ENVIROTRONIC SYSTEMS, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
S-1
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.,
as Guarantor
By:
-------------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION,
as Guarantor
By:
-------------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION,
as Guarantor
By:
-------------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.,
as Guarantor
By:
-------------------------------------
Name:
Title:
TOKHEIM RPS, LLC,
as Guarantor
By:
-------------------------------------
Name:
Title:
S-2
<PAGE>
TOKHEIM SERVICES, LLC,
as Guarantor
By:
-------------------------------------
Name:
Title:
Trustee:
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
By:
-------------------------------------
Name:
Title:
S-3
<PAGE>
EXHIBIT A
---------
CUSIP No.:
TOKHEIM CORPORATION
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
No. $
TOKHEIM CORPORATION, an Indiana corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOKHEIM CORPORATION
By:
-------------------------------------
Name:
Title:
Dated: January 29, 1999 By:
-------------------------------------
Name:
Title:
A-1
<PAGE>
Certificate of Authentication
This is one of the Dollar denominated 11 3/8% Senior Subordinated
Notes due 2008 referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
Dated: January 29, 1999 By:
-------------------------------------
Authorized Signatory
A-2
<PAGE>
(REVERSE OF SECURITY)
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TOKHEIM CORPORATION, an Indiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from January 29, 1999. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing August 1, 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 and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes plus 2%
per annum.
The Notes are not entitled to the benefit of any mandatory sinking
fund.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. Payments of principal and premium, if any,
will be made (on presentation of such Notes if in certificated form) at the
corporate trust office of the Paying Agent in New York City or, for so long as
the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require and subject to any applicable laws and regulations, at the
office of the Paying Agent in Luxembourg by United States dollar check drawn on,
or wire transfer to a United States dollar account maintained by the Holder
with, a bank located in New York City. The Company shall 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 ("U.S. Legal Tender") by a check
drawn on a bank in New York City. However, the Company may pay principal and
interest by its check payable in such U.S. Legal Tender. The Company may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust National
Association, a national banking corporation (the "Trustee"), will act as Paying
Agent and Registrar in the Borough of Manhattan, The City of New York, and, for
so long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of such exchange shall require, Bankers Trust Luxembourg S.A. will act as Paying
Agent and Registrar in Luxembourg. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of January 29, 1999 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of
Initial Notes of the Company designated as its 11 3/8% Senior Subordinated Notes
due 2008 (the "Notes"). The Notes are limited in aggregate principal amount to
$123,000,000. The Notes include the Initial Notes and the Exchange Notes, as
defined below, issued in exchange for the Initial Notes pursuant to the
Indenture. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company.
A-3
<PAGE>
5. Subordination. The Notes are unsecured obligations of the Company
and subordinated in right of payment, in the manner and to the extent set forth
in the Indenture, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt of the Company, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Guarantee. The obligations of the Company hereunder are guaranteed
on a senior subordinated basis by the Guarantors. Each Guarantee by a Guarantor
is subordinated in right of payment to all Guarantor Senior Debt of such
Guarantor to the same extent that the Notes are subordinated to Senior Debt of
the Company.
7. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after February 1, 2004, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on
February 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
Year Percentage
---- ----------
2004................................................... 105.688%
2005................................................... 103.792%
2006................................................... 101.896%
2007 and thereafter.................................... 100.000%
(b) Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to February 1, 2002, the Company may, at its
option, use the net cash proceeds of one or more Public Equity Offerings (as
defined in the Indenture) to redeem up to an aggregate of 35% of the initial
principal amount of the Notes originally issued in the offering at a redemption
price equal to 111.375% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 55%
of the initial aggregate principal amount of Notes originally issued in the
offering remains outstanding immediately after any such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
8. Notice of Redemption. Notice of redemption under paragraphs 7(a)
and 7(b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the Company
will cause a copy of such notice to be published in a newspaper with general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such redemption. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes
A-4
<PAGE>
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
9. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture. For so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange so require, the Company will cause
a copy of such notice to be published in a newspaper with general circulation in
Luxembourg (which is expected to be the Luxemburger Wort) and the Luxembourg
Stock Exchange will be advised of such offer to purchase.
10. Registration Rights. Pursuant to the Registration Rights
Agreement by and among the Company, the Guarantors and the Initial Purchasers,
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Note shall have the right to exchange this Note for the
Company's Series B 11 3/8% Senior Subordinated Notes due 2008 (the "Exchange
Notes"), which have been registered under the Securities Act, in like principal
amount and having terms identical in all material respects to the Initial Notes.
The Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
11. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
12. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
13. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
14. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
15. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
A-5
<PAGE>
16. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other Person, sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
17. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
18. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
19. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
20. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
21. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
22. Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THIS NOTE AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS
TO THE EXTENT THAT APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
23. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
24. 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 Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
25. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
A-6
<PAGE>
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Tokheim Corporation, 10501 Corporate
Drive, Fort Wayne, Indiana 46845, Attn: Executive Vice President, Finance and
Administration.
A-7
<PAGE>
[FORM OF GUARANTEE]
-------------------
SENIOR SUBORDINATED GUARANTEE
Each Guarantor (capitalized terms used herein have the meanings given
such terms in the Indenture referred to in the Note upon which this notation is
endorsed) hereby unconditionally guarantees on a senior subordinated basis (such
guarantee being referred to herein as the "Guarantee") the due and punctual
payment of the principal of, premium, if any, and interest on the Notes, whether
at maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal, premium, if any, and interest on the Notes,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Twelve of the Indenture.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt of each Guarantor, to the extent and in the
manner provided in Article Twelve and Article Thirteen of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law to the extent the law of another jurisdiction would be required thereby.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
ENVIROTRONIC SYSTEMS, INC.
By:
-----------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
-----------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
-----------------------------------
Name:
Title:
A-8
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.
By:
-----------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
-----------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:
-----------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
-----------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
-----------------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
-----------------------------------
Name:
Title:
A-9
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ____________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:________________________ Signed:_______________________________
(Sign exactly as your name
appears on the other side of
this Note)
Medallion Guarantee: __________________________________________________________
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) January 29, 2001, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-10
<PAGE>
Check One
---------
(1) [_] to the Company or a subsidiary thereof; or
(2) [_] pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) [_] outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) [_] pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) [_] pursuant to an effective registration statement under the Securities
Act; or
(7) [_] pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
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<PAGE>
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Date:____________________ Signed:________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee: ________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date: ___________________ _______________________________________
NOTICE: To be executed by an executive
officer
A-12
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$__________________
Date:____________________ _____________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular without
alteration or enlargement or any change whatsoever
and be guaranteed by the endorser's bank or broker.
Medallion Guarantee:______________________________
A-13
<PAGE>
EXHIBIT B
---------
CUSIP No.:
TOKHEIM CORPORATION
SERIES B 11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
No. $
TOKHEIM CORPORATION, an Indiana corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of Dollars, on August 1,
2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOKHEIM CORPORATION
By:
--------------------------
Name:
Title:
Dated: January 29, 1998 By:
--------------------------
Name:
Title:
B-1
<PAGE>
Certificate of Authentication
This is one of the Series B Dollar denominated 11 3/8% Senior
Subordinated Notes due 2008 referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
Dated: January 29, 1999 By:
-------------------------------------
Authorized Signatory
B-2
<PAGE>
(REVERSE OF SECURITY)
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TOKHEIM CORPORATION, an Indiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from January 29, 1999. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing August 1, 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 and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes plus 2%
per annum.
The Notes are not entitled to the benefit of any mandatory sinking
fund.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. Payments of principal and premium, if any,
will be made (on presentation of such Notes if in certificated form) at the
corporate trust office of the Paying Agent in New York City or, for so long as
the Notes are listed on the Luxembourg Stock Exchange and the rules of such
exchange so require and subject to any applicable laws and regulations, at the
office of the Paying Agent in Luxembourg by United States dollar check drawn on,
or wire transfer to a United States dollar account maintained by the Holder
with, a bank located in New York City. The Company shall 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 ("U.S. Legal Tender") by a check
drawn on a bank in New York City. However, the Company may pay principal and
interest by its check payable in such U.S. Legal Tender. The Company may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust National
Association, a New York banking corporation (the "Trustee"), will act as Paying
Agent and Registrar, and, for so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange shall require, Bankers Trust
Luxembourg S.A., will act as Paying Agent and Registrar in Luxembourg. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to
the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of January 29, 1999 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of
Initial Notes of the Company designated as its 11 3/8% Senior Subordinated Notes
due 2008 (the "Initial Notes"). The Notes are limited in aggregate principal
amount to $123,000,000. The Notes include the Initial Notes and the Exchange
Notes, as defined below, issued in exchange for the Initial Notes pursuant to
the Indenture. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company.
B-3
<PAGE>
5. Subordination. The Notes are unsecured obligations of the Company
subordinated in right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Guarantee. The obligations of the Company hereunder are guaranteed
on a senior subordinated basis by the Guarantors. Each Guarantee by a Guarantor
is subordinated in right of payment to all Guarantor Senior Debt of such
Guarantor to the same extent that the Notes are subordinated to Senior Debt of
the Company.
7. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after February 1, 2004, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on August
1 of the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
Year Percentage
----- ----------
2004................................................... 105.688%
2005................................................... 103.792%
2006................................................... 101.896%
2007 and thereafter.................................... 100.000%
(b) Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to February 1, 2002, the Company may, at its
option, use the net cash proceeds of one or more Public Equity Offerings (as
defined in the Indenture) to redeem up to an aggregate of 35% of the initial
principal amount of the Notes originally issued in the Offering at a redemption
price equal to 111.375% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 55%
of the initial aggregate principal amount of Notes originally issued in the
Offering remains outstanding immediately after any such redemption:
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
8. Notice of Redemption. Notice of redemption under paragraphs 7(a)
and 7(b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the Company
will cause a copy of such Notice to be published in a newspaper of general
circulation (which is expected to be the Luxemburger Wort) and the Luxembourg
Stock Exchange will be advised of such redemption. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes
B-4
<PAGE>
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
9. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture. For so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange shall require, the Company will
cause a copy of such Notice to be published in a newspaper of general
circulation (which is expected to be the Luxemburger Wort) and the Luxembourg
Stock Exchange will be advised of such offer to purchase.
10. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection therewith
as permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Notes or portions thereof selected for redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other Person, sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
B-5
<PAGE>
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THIS NOTE AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
22. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. 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 Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Tokheim Corporation, 10501 Corporate
Drive, Fort Wayne, Indiana 46845, Attn: Executive Vice President, Finance and
Administration.
B-6
<PAGE>
[FORM OF GUARANTEE]
-------------------
SENIOR SUBORDINATED GUARANTEE
Each Guarantor (capitalized terms used herein have the meanings given
such terms in the Indenture referred to in the Note upon which this notation is
endorsed) hereby unconditionally guarantees on a senior subordinated basis (such
guarantee being referred to herein as the "Guarantee") the due and punctual
payment of the principal of, premium, if any, and interest on the Notes, whether
at maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal, premium, if any, and interest on the Notes,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Twelve of the Indenture.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt of each Guarantor, to the extent and in the
manner provided in Article Twelve and Article Thirteen of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law to the extent the law of another jurisdiction would be required thereby.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
ENVIROTRONIC SYSTEMS, INC
By:
--------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
--------------------------------
Name:
Title:
B-7
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.
By:
--------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
--------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:
--------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
--------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
--------------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
--------------------------------
Name:
Title:
B-8
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: ___________________ Signed: ___________________________________________
(Sign Exactly as your name appears on the
other side of this Note)
Medallion Guarantee: _________________________
B-9
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Date: ____________________ _______________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Medallion Guarantee: _______________________
B-10
<PAGE>
EXHIBIT C
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 11 3/8% Senior Subordinated Notes due 2008
(the "Notes") Tokheim Corporation
This Certificate relates to $_______ principal amount of Notes held in
the form of* ___ a beneficial interest in a Global Note or* _______ Physical
Notes by ______ (the "Transferor").
The Transferor:*
[_] has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Note held by the Depository a Physical
Note or Physical Notes in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Note (or the portion thereof indicated above); or
[_] has requested by written order that the Registrar exchange or register
the transfer of a Physical Note or Physical Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "Act"), because*:
[_] Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Act), in reliance on Rule 144A.
[_] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit D to the Indenture.
[_] Such Note is being transferred in reliance on Regulation S under the
Act. [An Opinion of Counsel to the effect that such transfer does not require
registration under the Act accompanies this certification.]
[_] Such Note is being transferred in reliance on Rule 144 under the Act.
[An Opinion of Counsel to the effect that such transfer does not require
registration under the Act accompanies this certification.]
[_] Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Act other than Rule 144A
or Rule 144 under the Act to a person other than an institutional "accredited
investor." [An Opinion of Counsel to the effect that such transfer does not
require registration under the Act accompanies this certification.]
________________________________
[INSERT NAME OF TRANSFEROR]
By: ____________________________
[Authorized Signatory]
Date: __________________
*Check applicable box.
C-1
<PAGE>
EXHIBIT D
---------
Form of Transferee Letter of Representation
-------------------------------------------
Attention: Corporate Trust Division
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 11 3/8% Senior Subordinated Notes due 2008 of Tokheim
Corporation (the "Company") and any guarantee thereof (the "Notes"). Upon
transfer, the Notes would be registered in the name of the new beneficial owner
as follows:
Name:______________________
Address:___________________
Taxpayer ID Number:________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Notes and we
invest in or purchase securities similar to the Notes in the normal course of
our business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to
a registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, (e) in an offshore transaction in accordance with Regulation S under
the Securities Act (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the Note if the Note is not in book-
entry form), and, if such transfer is being effected by certain transferors
prior to the expiration of the "40-day distribution compliance period" (within
the meaning of Rule 903(b)(2) of Regulation S under the Securities Act), a
certificate that may be obtained from the Trustee is delivered by the
transferee, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
D-1
<PAGE>
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
If any resale or other transfer of the Notes is proposed to be made pursuant to
clause (d) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Company and the Trustee, which shall provide, among other
things, that the transferee is an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it
is acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. The Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (d) or (e) above to require the
delivery of an opinion of counsel, certificates and/or other information
satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE:
By: ________________________________
D-2
<PAGE>
EXHIBIT E
---------
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
Attention: Corporate Trust Administration
Re: 11 3/8% Senior Subordinated Notes due 2008
(the "Notes") Tokheim Corporation
Ladies and Gentlemen:
In connection with our proposed sale of $ ____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: _________________________
E-1
<PAGE>
Exhibit 4.23
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of January 29, 1999
By and Among
TOKHEIM CORPORATION,
THE GUARANTORS NAMED HEREIN,
As Issuers,
and
BT ALEX. BROWN INCORPORATED
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
GLEACHER NATWEST INTERNATIONAL
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
and
SCHRODER & CO. INC.,
As Initial Purchasers
================================================================================
$123,000,000
11 3/8 % SENIOR SUBORDINATED NOTES DUE 2008
<PAGE>
-i-
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Definitions............................................................ 1
2. Exchange Offer......................................................... 4
3. Shelf Registration..................................................... 8
4. Additional Interest.................................................... 9
5. Registration Procedures................................................ 10
6. Registration Expenses.................................................. 18
7. Indemnification........................................................ 19
8. Rule 144 and 144A...................................................... 22
9. Underwritten Registrations............................................. 23
10. Miscellaneous.......................................................... 23
(a) No Inconsistent Agreements......................................... 23
(b) Adjustments Affecting Registrable Securities....................... 23
(c) Amendments and Waivers............................................. 24
(d) Notices............................................................ 24
(e) Successors and Assigns............................................. 25
(f) Counterparts....................................................... 26
(g) Headings........................................................... 26
(h) Governing Law...................................................... 26
(i) Severability....................................................... 26
(j) Securities Held by the Company or Its Affiliates................... 26
(k) Third Party Beneficiaries.......................................... 26
(l) Judgment Currency.................................................. 26
</TABLE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of
January 29, 1999, is being entered into by and among Tokheim Corporation, an
Indiana corporation (the "Company"), the subsidiaries of the Company listed on
the signature pages hereto as guarantors (the "Guarantors," and together with
the Company, the "Issuers") and BT Alex. Brown Incorporated, Credit Lyonnais
Securities (USA) Inc., First Chicago Capital Markets, Inc., Gleacher NatWest
International, ABN AMRO Incorporated, PaineWebber Incorporated and Schroder &
Co. Inc. (the "Initial Purchasers").
This Agreement is being entered into in connection with the Purchase
Agreement, dated January 26, 1999, by and among the Company, the Guarantors and
the Initial Purchasers (the "Purchase Agreement"), which provides for the sale
by the Company to the Initial Purchasers of $123,000,000 aggregate principal
amount of the Company's 11 3/8% Senior Subordinated Notes due 2008 (the
"Notes"), guaranteed on a senior subordinated basis by the Guarantors (the
"Guarantees," and, together with the Notes, the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers
have agreed to provide the registration rights set forth in this Agreement for
the benefit of the Initial Purchasers and their direct and indirect transferees.
The execution and delivery of this Agreement is a condition to the obligation of
the Initial Purchasers to purchase the Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the first introductory paragraph hereto.
Applicable Period: See Section 2(b) hereof.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the first introductory paragraph hereto.
Effectiveness Date: The 150th day after the Issue Date.
<PAGE>
-2-
Effectiveness Period: See Section 3(a) hereof.
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Securities: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Registration Statement: See Section 2(a) hereof.
Filing Date: The 90th day after the Issue Date.
Guarantees: See the second introductory paragraph hereto.
Guarantors: As of the date hereof, the subsidiaries of the Company
listed on the signature pages hereto and, as of any other date, subsidiaries of
the Company that are Guarantors under the Indenture as of such date.
Holder: Any holder of a Registrable Security or Registrable
Securities.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of January 29, 1999 by and among
the Company, the Guarantors and U.S. Bank Trust National Association, as
trustee, pursuant to which the Securities are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the first introductory paragraph hereto.
Inspectors: See Section 5(o) hereof.
Issue Date: The date on which the original Securities were sold to
the Initial Purchasers pursuant to the Purchase Agreement.
Issuers: See the first introductory paragraph hereto.
NASD: See Section 5(s) hereof.
<PAGE>
-3-
Notes: See the second introductory paragraph hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b) hereof.
Person: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Securities: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement, including post-
effective amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph hereto.
Records: See Section 5(o) hereof.
Registrable Securities: Each Security upon original issuance of the
Securities and at all times subsequent thereto, each Exchange Security as to
which Section 2(c)(v) hereof is applicable upon original issuance and at all
times subsequent thereto and each Private Exchange Security upon original
issuance thereof and at all times subsequent thereto, until in the case of any
such Security, Exchange Security or Private Exchange Security, as the case may
be, the earliest to occur of (i) a Registration Statement (other than, with
respect to any Exchange Security as to which Section 2(c)(v) hereof is
applicable, the Exchange Registration Statement) covering such Security,
Exchange Security or Private Exchange Security, as the case may be, has been
declared effective by the SEC and such Security (unless such Security was not
tendered for exchange by the Holder thereof), Exchange Security or Private
Exchange Security, as the case may be, has been disposed of in accordance with
such effective Registration Statement, (ii) such Security, Exchange Security or
Private Exchange Security, as the case may be, is sold in compliance with Rule
144, or (iii) such Security, Exchange Security or
<PAGE>
-4-
Private Exchange Security, as the case may be, ceases to be outstanding for
purposes of the Indenture.
Registration Statement: Any registration statement of the Company and
the Guarantors, including, but not limited to, the Exchange Registration
Statement, that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
Underwritten registration or underwritten offering: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
<PAGE>
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(a) The Issuers agree to file with the SEC no later than the Filing
Date an offer to exchange (the "Exchange Offer") any and all of the Registrable
Securities (other than the Private Exchange Securities, if any) for a like
aggregate principal amount of debt securities of the Company, guaranteed on a
senior subordinated basis by the Guarantors, which are identical in all material
respects to the Securities (the "Exchange Securities") (and which are entitled
to the benefits of the Indenture or a trust indenture which is identical in all
material respects to the Indenture (other than such changes to the Indenture or
any such identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof under
the TIA) and which, in either case, has been qualified under the TIA), except
that the Exchange Securities (other than Private Exchange Securities, if any)
shall have been registered pursuant to an effective Registration Statement under
the Securities Act and shall contain no restrictive legend thereon. The
Exchange Offer shall be registered under the Securities Act on the appropriate
form (the "Exchange Registration Statement") and shall comply with all
applicable tender offer rules and regulations under the Exchange Act. The
Issuers agree to use their respective best efforts to (x) cause the Exchange
Registration Statement to be declared effective under the Securities Act on or
before the Effectiveness Date; (y) keep the Exchange Offer open for at least 20
business days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 195th day following the Issue Date. If after
such Exchange Registration Statement is declared effective by the SEC, the
Exchange Offer or the issuance of the Exchange Securities thereunder is
prevented by any stop order, injunction or other order or requirement of the SEC
or any other governmental agency or court, such Exchange Registration Statement
shall be deemed not to have become effective for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be required to represent
that any Exchange Securities received by it will be acquired in the ordinary
course of its business, that at the time of the consummation of the Exchange
Offer such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Securities in violation of the
provisions of the Securities Act, and that such Holder is not an affiliate of
any of the Issuers within the meaning of the Securities Act. Upon consummation
of the Exchange Offer in accordance with this Section 2, the Issuers shall have
no further obligation to register Registrable Securities (other than Private
Exchange Securities and other than in respect of any Exchange Securities as to
which clause 2(c)(v) hereof applies) pursuant to Section 3 hereof. No
securities other than the Exchange Securities shall be included in the Exchange
Registration Statement.
(b) The Issuers shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
<PAGE>
-6-
of Exchange Securities received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"). Such "Plan of Distribution" section shall also
expressly permit the use of the Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including all
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Securities.
The Issuers shall use their respective best efforts to keep the
Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein for a period of 180 days after consummation of the
Exchange Offer (or such longer period if extended pursuant to the last paragraph
of Section 5 hereof) (the "Applicable Period"), in order to permit such
Prospectus to be lawfully delivered by any Participating Broker-Dealer subject
to the prospectus delivery requirements of the Securities Act for such period of
time as is necessary to comply with applicable law in connection with any resale
of the Exchange Securities.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company shall, upon the
request of any of the Initial Purchasers, simultaneously with the delivery of
the Exchange Securities in the Exchange Offer issue and deliver to the Initial
Purchasers in exchange (the "Private Exchange") for such Securities held by the
Initial Purchasers a like principal amount of debt securities of the Company,
guaranteed on a senior subordinated basis by the Guarantors, that are identical
in all material respects to the Exchange Securities (the "Private Exchange
Securities") (and which are issued pursuant to the same indenture as the
Exchange Securities) except for the placement of a restrictive legend on such
Private Exchange Securities. The Private Exchange Securities shall bear the
same CUSIP number as the Exchange Securities.
Interest on the Exchange Securities and the Private Exchange
Securities will accrue from the last interest payment date on which interest was
paid on the Securities surrendered in exchange therefor or, if no interest has
been paid on the Securities, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York; and
<PAGE>
-7-
(3) permit Holders to withdraw tendered Securities 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.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Issuers shall:
(1) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private Exchange;
(2) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Securities, Exchange Securities or Private Exchange Securities,
as the case may be, equal in principal amount to the Securities of such
Holder so accepted for exchange.
The Exchange Securities and the Private Exchange Securities may be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event shall provide that (1) the
Exchange Securities shall not be subject to the transfer restrictions set forth
in the Indenture and (2) the Private Exchange Securities shall be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange
Securities and the Securities shall vote and consent together on all matters as
one class and that none of the Exchange Securities, the Private Exchange
Securities or the Securities will have the right to vote or consent as a
separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the SEC, the Issuers are not permitted to
effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 195
days of the Issue Date, (iii) any holder of Private Exchange Securities so
requests at any time after the consummation of the Private Exchange but within
two years after the date hereof, (iv) the Holders of not less than a majority in
aggregate principal amount of the Registrable Securities reasonably determine
that the interests of the Holders would be materially adversely affected by
consummation of the Exchange Offer or (v) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange
Securities on the date of the exchange that may be sold without restriction
under federal securities laws (other than due solely to the status of such
Holder as an affiliate of any Issuer within the meaning of the Securities Act),
then the Issuers shall promptly deliver to the Holders and the Trustee written
notice thereof (the "Shelf Notice") to the Trustee and in the case of clauses
(i), (ii) and (iv), all Holders, in the case of
<PAGE>
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clause (iii), the Holders of the Private Exchange Securities and in the case of
clause (v), the affected Holder, and shall file a Shelf Registration pursuant to
Section 3 hereof.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c) hereof,
then:
(a) Shelf Registration. The Issuers shall as promptly as reasonably
practicable file with the SEC a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 covering all of the Registrable
Securities (the "Shelf Registration"). If the Issuers shall not have yet filed
an Exchange Registration Statement, the Issuers shall use their respective best
efforts to file with the SEC the Shelf Registration on or prior to the Filing
Date. The Shelf Registration shall be on Form S-1 or another appropriate form
permitting registration of such Registrable Securities for resale by Holders in
the manner or manners designated by them (including, without limitation, one or
more underwritten offerings). The Issuers shall not permit any securities other
than the Registrable Securities to be included in the Shelf Registration.
The Issuers shall use their respective best efforts to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and to keep the Shelf Registration continuously effective
under the Securities Act until the date which is three years from the Issue
Date, subject to extension pursuant to the last paragraph of Section 5 hereof
(the "Effectiveness Period"), or such shorter period ending when all Registrable
Securities covered by the Shelf Registration have been sold in the manner set
forth and as contemplated in the Shelf Registration.
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period (other than
because of the sale of all of the securities registered thereunder), the Issuers
shall use their respective best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Issuers shall promptly supplement
and amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement or by any underwriter of such
Registrable Securities.
<PAGE>
-9-
4. Additional Interest
(a) Each Issuer and the Initial Purchasers agree that the Holders of
Registrable Securities will suffer damages if any Issuer fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Issuers agree to pay, as liquidated damages, additional interest on the
Securities ("Additional Interest") under the circumstances and to the extent set
forth below:
(i) if neither the Exchange Registration Statement nor the Shelf
Registration has been filed on or prior to the Filing Date, then,
commencing on the 91st day after the Issue Date, Additional Interest shall
accrue on the Notes over and above the stated interest at a rate of 0.50%
per annum for the first 90 days immediately following the Filing Date, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 90-day period;
(ii) if neither the Exchange Registration Statement nor the Shelf
Registration is declared effective by the SEC on or prior to the
Effectiveness Date, then, commencing on the 151st day after the Issue Date,
Additional Interest shall accrue on the Securities included or which should
have been included in such Registration Statement over and above the stated
interest at a rate of 0.50% per annum for the first 90 days immediately
following the Effectiveness Date, such Additional Interest rate increasing
by an additional 0.50% per annum at the beginning of each subsequent 90-day
period; and
(iii) if (A) the Issuers have not exchanged Exchange Securities
for all Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 195th day after the Issue Date or (B) the
Exchange Registration Statement ceases to be effective at any time prior to
the time that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (unless
all the Securities have been sold thereunder), then Additional Interest
shall accrue (over and above any interest otherwise payable on such
Securities) at a rate of 0.50% per annum for the first 90 days commencing
on (x) the 196th day after the Issue Date with respect to the Securities
validly tendered and not exchanged by the Issuers, in the case of (A)
above, or (y) the day the Exchange Registration Statement ceases to be
effective in the case of (B) above, or (z) the day such Shelf Registration
ceases to be effective in the case of (C) above, such Additional Interest
rate increasing by an additional 0.50% per annum at the beginning of each
such subsequent 90-day period;
<PAGE>
-10-
provided, however, that the Additional Interest rate on any affected Security
may not exceed in the aggregate 1.00% per annum; and provided, further, that
(1) upon the filing of the Exchange Registration Statement or a Shelf
Registration (in the case of clause (i) of this Section 4(a)), (2) upon the
effectiveness of the Exchange Registration Statement or the Shelf Registration
(in the case of clause (ii) of this Section 4(a)), or (3) upon the exchange of
Exchange Securities for all Securities tendered and not validly withdrawn (in
the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness of
the Exchange Registration Statement which had ceased to remain effective (in the
case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the Shelf
Registration which had ceased to remain effective (in the case of (iii)(C) of
this Section 4(a)), Additional Interest on the affected Securities as a result
of such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue.
(b) The Issuers shall notify the Trustee within one business day after
every date on which an event occurs in respect of which Additional Interest is
required to be paid (an "Event Date"). Any amounts of Additional Interest due
pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable to the Holders of affected Securities in cash semi-annually on each
February 1 and August 1 (to the holders of record on the January 15 and July 15
immediately preceding such dates), commencing with the first such date occurring
after any such Additional Interest commences to accrue. The amount of
Additional Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the affected Registrable Securities of
such Holders, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed), and the denominator
of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuers shall effect such registration(s) to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Issuers hereunder, the
Issuers shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by Sections 2
or 3 hereof, and use its best efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; provided, however,
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2
hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the Applicable
Period, before filing any Regis-
<PAGE>
-11-
tration Statement or Prospectus or any amendments or supplements thereto, the
Issuers shall, if requested, furnish to and afford the Holders of the
Registrable Securities covered by such Registration Statement or each such
Participating Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case at least
five business days prior to such filing or such later date as is reasonable
under the circumstances). The Issuers shall not file any Registration Statement
or Prospectus or any amendments or supplements thereto in respect of which the
Holders must be afforded an opportunity to review prior to the filing of such
document, if the Holders of a majority in aggregate principal amount of the
Registrable Securities covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period or
until consummation of the Exchange Offer, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by
applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus; the Issuers shall be deemed not to
have used their respective best efforts to keep a Registration Statement
effective during the Applicable Period if any of them voluntarily takes any
action that would result in selling Holders of the Registrable Securities
covered thereby or Participating Broker-Dealers seeking to sell Exchange
Securities not being able to sell such Registrable Securities or such Exchange
Securities during that period unless (i) such action is required by applicable
law, (ii) such action is taken by the Issuers in good faith and for valid
business reasons (not including avoidance of the Issuers' obligations hereunder)
including the acquisition or divestiture of a business or assets, or (iii) the
Issuers comply with this Agreement, including without limitation, the provisions
of paragraph 5(k) hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, notify the selling Holders
<PAGE>
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of Registrable Securities, or each such Participating Broker-Dealer, as the case
may be, their counsel and the managing underwriters, if any, promptly (but in
any event within two business days), and confirm such notice in writing, (i)
when a Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon request,
obtain, at the sole expense of the Issuers, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a prospectus is
required by the Securities Act to be delivered in connection with sales of the
Registrable Securities or resales of Exchange Securities by Participating
Broker-Dealers upon written notice by any such Participating Broker-Dealer of a
resale the representations and warranties of any Issuer contained in any
agreement (including any underwriting agreement), contemplated by Section 5(n)
hereof cease to be true and correct, (iv) of the receipt by any Issuer of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable
Securities or the Exchange Securities to be sold by any Participating Broker-
Dealer for offer or sale in any jurisdiction, or the initiation or threatening
of any proceeding for such purpose, (v) of the happening of any event, the
existence of any condition of which any Issuer is aware or any information
becoming known that makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(vi) of the determination by the Issuers that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use their respective best efforts to prevent the issuance of any
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities or the
Exchange Securities for sale in any jurisdiction, and, if any such order is
issued, to use its best efforts to obtain the withdrawal of any such order at
the earliest possible moment.
<PAGE>
-13-
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any), or the Holders
of a majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for any
of them reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after any Issuer has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, furnish to each selling Holder of Registrable
Securities and to each such Participating Broker-Dealer who so requests and to
counsel and each managing underwriter, if any, at the sole expense of the
Issuers, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, deliver to each selling Holder of Registrable
Securities, or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, at the sole expense of the
Issuers, as many copies of the Prospectus or Prospectuses (including each form
of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, each Issuer
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents,
if any, and dealers (if any), in connection with the offering and sale of the
Registrable Securities covered by, or the sale by Participating Broker-Dealers
of the Exchange Securities pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, use their re-
<PAGE>
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spective best efforts to register or qualify such Registrable Securities (and to
cooperate with selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities) for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder, Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request in writing; provided, however, that where
Exchange Securities held by Participating Broker-Dealers or Registrable
Securities are offered other than through an underwritten offering, the Issuers
agree to cause their counsel to perform Blue Sky investigations and file
registrations and qualifications required to be filed pursuant to this Section
5(h); keep each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to be kept
effective and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Exchange
Securities held by Participating Broker-Dealers or the Registrable Securities
covered by the applicable Registration Statement; provided, however, that no
Issuer shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) Use their respective best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Holders thereof or the underwriter or underwriters, if any, to
dispose of such Registrable Securities, except as may be required solely as a
consequence of the nature of a selling Holder's business, in which case each
Issuer will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
<PAGE>
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prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuers, a supplement or post-effective amendment to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder or to the purchasers of the
Exchange Securities to whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not 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, in light of the circumstances under
which they were made, not misleading.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with
certificates for the Registrable Securities or Exchange Securities, as the case
may be, in a form eligible for deposit with The Depository Trust Company and
(ii) provide a CUSIP number for the Registrable Securities or Exchange
Securities, as the case may be.
(m) In connection with any underwritten offering of Registrable
Securities pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings of debt securities similar
to the Securities and take all such other actions as are reasonably requested by
the managing underwriter or underwriters in order to facilitate the registration
or the disposition of such Registrable Securities and, in such connection, (i)
make such representations and warranties to, and covenants with, the
underwriters with respect to the business of the Company and its subsidiaries
and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings of debt
securities similar to the Securities, and confirm the same in writing if and
when requested; (ii) obtain the written opinion of counsel to the Company and
written updates thereof in form, scope and substance reasonably satisfactory to
the managing underwriter or underwriters, addressed to the underwriters covering
the matters customarily covered in opinions requested in underwritten offerings
of debt securities similar to the Securities and such other matters as may be
reasonably requested by the managing underwriter or underwriters; (iii) obtain
"cold comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings of
debt securities similar to the Securities and such other matters as reasonably
requested by the managing un-
<PAGE>
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derwriter or underwriters as permitted by Statement of Auditing Standards No.
71; and (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable than those
set forth in Section 7 hereof (or such other provisions and procedures
acceptable to Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing underwriter
or underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make available for inspection by any selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
instruments of the Company and its subsidiaries (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees of
the Company and its subsidiaries to supply all information reasonably requested
by any such Inspector in connection with such Registration Statement. Records
which the Company determines, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (iii) disclosure of such information is,
in the opinion of counsel for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly or indirectly,
involving or potentially involving such Inspector and arising out of, based
upon, relating to, or involving this Agreement, or any transactions contemplated
hereby or arising hereunder, or (iv) the information in such Records has been
made generally available to the public. Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to agree
that information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such information
is generally available to the public. Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to further
agree that it will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow
<PAGE>
-17-
the Company to undertake appropriate action to prevent disclosure of the Records
deemed confidential at the Company's sole expense.
(o) Provide an indenture trustee for the Registrable Securities or the
Exchange Securities, as the case may be, and use its best efforts to cause the
Indenture or the trust indenture provided for in Section 2(a) hereof, as the
case may be, to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Securities; and in connection therewith, cooperate with the trustee
under any such indenture and the Holders of the Registrable Securities, to
effect such changes to such indenture as may be required for such indenture to
be so qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable such indenture to be so qualified in a timely
manner.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act).
(q) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the Company
shall mark, or cause to be marked, on such Registrable Securities that such
Registrable Securities are being cancelled in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be; in no event
shall such Registrable Securities be marked as paid or otherwise satisfied.
(r) Cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(s) Use their respective best efforts to take all other steps
necessary or advisable to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any Registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities as the Company
may, from time to time, reasonably request. The
<PAGE>
-18-
Company may exclude from such registration the Registrable Securities of any
seller or Participating Broker-Dealer who fails to furnish such information
within a reasonable time after receiving such request. Each seller as to which
any Shelf Registration is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such seller not materially
misleading.
Each Holder of Registrable Securities and each Participating Broker-
Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon actual receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus or Exchange
Securities to be sold by such Holder or Participating Broker-Dealer, as the case
may be, until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by any Issuer shall be borne by the Issuers whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Securities or Exchange Securities and
determination of the eligibility of the Registrable Securities or Exchange
Securities for investment under the laws of such jurisdictions (x) where the
holders of Registrable Securities are located, in the case of the Exchange
Securities, or (y) as provided in Section 5(h) hereof, in the case of
Registrable Securities or Exchange Securities to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Securities
or Exchange Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
re-
<PAGE>
-19-
quested by the managing underwriter or underwriters, if any, by the Holders of
a majority in aggregate principal amount of the Registrable Securities included
in any Registration Statement or sold by any Participating Broker-Dealer, as
the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and fees and disbursements of special
counsel for the sellers of Registrable Securities (subject to the provisions of
Section 6(b) hereof), (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(n)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) rating agency fees, if any,
and any fees associated with making the Registrable Securities or Exchange
Securities eligible for trading through The Depository Trust Company, (vii)
Securities Act liability insurance, if the Issuers desire such insurance, (viii)
fees and expenses of all other Persons retained by the Issuers, (ix) internal
expenses of the Issuers (including, without limitation, all salaries and
expenses of officers and employees of the Issuers performing legal or accounting
duties), (x) the expense of any annual audit, (xi) the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange, if applicable, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.
(b) The Issuers shall, jointly and severally, (i) reimburse the
Holders of the Registrable Securities being registered in a Shelf Registration
for the reasonable fees and disbursements, not to exceed $25,000, of not more
than one counsel (in addition to appropriate local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Registrable
Securities to be included in such Registration Statement and (ii) reimburse
reasonable out-of-pocket expenses (other than legal expenses) of Holders of
Registrable Securities incurred in connection with the registration and sale of
the Registrable Securities pursuant to a Shelf Registration or in connection
with the exchange of Registrable Securities pursuant to the Exchange Offer.
7. Indemnification
(a) The Issuers agree, jointly and severally, to indemnify and hold
harmless each Holder of Registrable Securities offered pursuant to a Shelf
Registration Statement and each Participating Broker- Dealer selling Exchange
Securities during the Applicable Period, the affiliates, directors, officers,
agents, representatives and employees of each such Person or its affiliates, and
each other Person, if any, who controls any such Person or its affiliates within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the reasonable
legal fees and other expenses actually incurred in connection with any suit,
action or proceeding or any claim asserted) caused by, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained
<PAGE>
-20-
in any Registration Statement pursuant to which the offering of such
Registrable Securities or Exchange Securities, as the case may be, is registered
(or any amendment thereto) or related Prospectus (or any amendments or
supplements thereto) or any related preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers will not be required to
indemnify a Participant if (i) such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of such Participant expressly for use
therein or (ii) if such untrue statement or omission or alleged untrue statement
or omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding, unless the person asserting the claim failed to receive a copy of
the Prospectus (as amended or supplemented) as a result of noncompliance by the
Issuers with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless each Issuer, its directors and officers and each Person who
controls any Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only (i) with reference to information
furnished to the Company in writing by or on behalf of such Participant
expressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus or (ii) with respect to any
untrue statement or representation made by such Participant in writing to the
Company. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Securities or Exchange Securities giving rise to such obligations. In
connection with any underwritten public offering, the underwriting agreement
shall include customary indemnification of the Issuers by the underwriters.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the fail-
<PAGE>
-21-
ure to so notify the Indemnifying Person shall not relieve it of any obligation
or liability which it may have hereunder or otherwise (unless and only to the
extent that such failure results in the loss or compromise of any material
rights or defenses by the Indemnifying Person). In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person shall
have failed within a reasonable period of time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the Indemnifying Person shall not, in
connection with any one such proceeding or separate but substantially similar
related proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred. Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Securities and Exchange Securities sold by all such Participants
and any such separate firm for the Company, its directors, its officers and such
control Persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent, but if settled with such consent or
if there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or has been
a party, and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement (A) includes an unconditional written release of
such Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein (other than by reason of the
exceptions provided therein), then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such In-
<PAGE>
-22-
demnified Person as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect (i) the relative benefits received
by the Indemnifying Person or Persons on the one hand and the Indemnified Person
or Persons on the other from the offering of the Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers on the
one hand or such Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Securities
or Exchange Securities, as the case may be, exceeds the amount of any damages
that such Participant has otherwise been required to pay or has paid 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 contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and 144A
Each of the Issuers covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act
<PAGE>
-23-
and the Exchange Act and, if at any time any of the Issuers is not required to
file such reports, it will, upon the request of any Holder of Registrable
Securities, make publicly available such information as is legally necessary to
permit sales pursuant to Rule 144 and Rule 144A under the Securities Act. Each
of the Issuers further covenants for so long as any Registrable Securities
remain outstanding, to make available to any Holder or beneficial owner of
Registrable Securities in connection with any sale thereof and any prospective
purchaser of such Registrable Securities from such Holder or beneficial owner
the information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Securities pursuant to Rule 144A.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Securities included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. No Issuer has entered, as of the
date hereof, and no Issuer will, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof. No Issuer has entered and no
Issuer will enter into any agreement with respect to any of its securities which
will grant to any Person piggy-back registration rights with respect to a
Registration Statement.
(b) Adjustments Affecting Registrable Securities. No Issuer will,
directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
<PAGE>
-24-
(c) 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, otherwise than with the prior
written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable 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
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly adversely
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Securities or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:
BT Alex. Brown Incorporated
Credit Lyonnais Securities (USA) Inc.
First Chicago Capital Markets, Inc.
Gleacher NatWest International
ABN AMRO Incorporated
PaineWebber Incorporated
Schroder & Co. Inc.
c/o BT Alex. Brown Incorporated
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance
Department
<PAGE>
-25-
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: Michael A. Becker, Esq.
2. if to the Initial Purchasers, at the address specified in Section
10(d)(1);
3. if to any Issuer, as follows:
Tokheim Corporation
P.O. Box 360
Fort Wayne, IN 46801
Facsimile No: (219) 484-1110
Attention: Executive Vice President, Finance and
Administration
with a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Suite 2100
Facsimile No: (312) 407-0411
Attention: William R. Kunkel
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that this Agreement shall not inure to the benefit of
or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registrable Securities.
<PAGE>
-26-
(f) 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. Delivery of an executed
counterpart by telecopier shall be in effect as delivery of a manually executed
counterpart.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. 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 WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. 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 best 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.
(j) Securities Held by the Company or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by any Issuer or
their respective affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries . Holders of Registrable Securities
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons..
(l) Judgment Currency Each (x) Issuer, jointly and severally,
hereby agrees to indemnify each Participant against any loss incurred by such
person as a result of
<PAGE>
-27-
any judgment or order being given or made against any Participant and (y)
Participant hereby agrees, severally and not jointly, to indemnify each Issuer,
against any loss incurred by such person as a result of any judgment or order
being given against any Issuer for any amount due under this Agreement and such
judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in The City of New York at which such party
on the date of payment of such judgment or order is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
[Signature Pages Follow]
<PAGE>
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TOKHEIM CORPORATION
By:
-----------------------------
Name:
Title:
<PAGE>
S-2
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
BT ALEX. BROWN INCORPORATED
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
GLEACHER NATWEST INTERNATIONAL
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
SCHRODER & CO. INC.
BY: BT ALEX BROWN INCORPORATED
By:
----------------------------
Name:
Title:
<PAGE>
S-3
Each of the subsidiaries of the Company specified below agrees to
become a party to this Registration Rights Agreement as a Guarantor as of the
date hereof.
ENVIROTRONIC SYSTEMS, INC.
By:
----------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
----------------------------
Name:
Title:
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
By:
----------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
----------------------------
Name:
Title:
<PAGE>
S-4
TOKHEIM EQUIPMENT CORPORATION
By:
----------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
----------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
----------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
----------------------------
Name:
Title:
<PAGE>
Exhibit 4.24
================================================================================
TOKHEIM CORPORATION
as Issuer
THE GUARANTORS NAMED HEREIN
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
_______________
INDENTURE
_______________
Dated as of January 29, 1999
Euro 75,000,000
11 3/8% Senior Subordinated Notes due 2008
and
Series B 11 3/8% Senior Subordinated Notes due 2008
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- - ------- ----------
<S> <C> <C>
310 (a)(1)................................................................ 7.10
(a)(2)................................................................ 7.10
(a)(3)................................................................ N.A.
(a)(4)................................................................ N.A.
(a)(5)................................................................ 7.08; 7.10
(b)................................................................... 7.08; 7.10; 11.02
(c)................................................................... N.A.
311 (a)................................................................... 7.11
(b)................................................................... 7.11
(c)................................................................... N.A.
312 (a)................................................................... 2.05
(b)................................................................... 11.03
(c)................................................................... 11.03
313 (a)................................................................... 7.06
(b)(1)................................................................ N.A.
(b)(2)................................................................ 7.06
(c)................................................................... 7.06; 11.02
(d)................................................................... 7.06
314 (a)................................................................... 4.07; 4.08; 11.02
(b)................................................................... N.A.
(c)(1)................................................................ 11.04
(c)(2)................................................................ 11.04
(c)(3)................................................................ N.A.
(d)................................................................... N.A.
(e)................................................................... 11.05
(f)................................................................... N.A.
315 (a)................................................................... 7.01(b)
(b)................................................................... 7.05; 11.02
(c)................................................................... 7.01(a)
(d)................................................................... 7.01(c)
(e)................................................................... 6.11
316 (a)(last sentence).................................................... 2.09
(a)(1)(A)............................................................. 6.05
(a)(1)(B)............................................................. 6.04
(a)(2)................................................................ N.A.
(b)................................................................... 6.07
(c)................................................................... 9.05
317 (a)(1)................................................................ 6.08
(a)(2)................................................................ 6.09
(b)................................................................... 2.04
318 (a)................................................................... 11.01
(c)................................................................... 11.01
</TABLE>
- - ----------------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
----
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.............20
SECTION 1.03. Rules of Construction.........................................20
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating...............................................21
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount......22
SECTION 2.03. Registrar and Paying Agent....................................23
SECTION 2.04. Paying Agent To Hold Assets in Trust..........................23
SECTION 2.05. Noteholder Lists..............................................24
SECTION 2.06. Transfer and Exchange.........................................24
SECTION 2.07. Replacement Notes.............................................24
SECTION 2.08. Outstanding Notes.............................................25
SECTION 2.09. Treasury Notes................................................25
SECTION 2.10. Temporary Notes...............................................25
SECTION 2.11. Cancellation..................................................25
SECTION 2.12. Defaulted Interest............................................26
SECTION 2.13. CUSIP Number..................................................26
SECTION 2.14. Deposit of Moneys.............................................26
SECTION 2.15. Restrictive Legends...........................................26
SECTION 2.16. Book-Entry Provisions for Global Note.........................28
SECTION 2.17. Registration of Transfers and Exchanges.......................29
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee............................................32
SECTION 3.02. Selection of Notes To Be Redeemed.............................33
SECTION 3.03. Notice of Redemption..........................................33
SECTION 3.04. Effect of Notice of Redemption................................34
SECTION 3.05. Deposit of Redemption Price...................................34
SECTION 3.06. Notes Redeemed in Part........................................34
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes..............................................35
SECTION 4.02. Maintenance of Office or Agency...............................35
SECTION 4.03. Corporate Existence...........................................35
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Page
----
SECTION 4.04. Payment of Taxes and Other Claims.............................36
SECTION 4.05. Maintenance of Properties and Insurance.......................36
SECTION 4.06. Compliance Certificate; Notice of Default.....................36
SECTION 4.07. Compliance with Laws..........................................37
SECTION 4.08. SEC Reports...................................................37
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.......................38
SECTION 4.10. Limitation on Restricted Payments.............................38
SECTION 4.11. Limitation on Transactions with Affiliates....................39
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness...........40
SECTION 4.13. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries......................................40
SECTION 4.14. Prohibition on Incurrence of Senior Subordinated Debt.........41
SECTION 4.15. Change of Control.............................................41
SECTION 4.16. Limitation on Asset Sales.....................................42
SECTION 4.17. Limitation on Preferred Stock of Subsidiaries.................45
SECTION 4.18. Limitation on Liens...........................................45
SECTION 4.19. Additional Subsidiary Guarantees..............................46
SECTION 4.20. Limitation on Amendments to Schlumberger Junior
Subordinated Notes and Warrant Repurchase Indebtedness......46
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the Company.......46
SECTION 5.02. Successor Corporation Substituted.............................47
SECTION 5.03. Merger, Consolidation and Sale of Assets of Guarantors........47
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.............................................48
SECTION 6.02. Acceleration..................................................49
SECTION 6.03. Other Remedies................................................50
SECTION 6.04. Waiver of Past Defaults.......................................50
SECTION 6.05. Control by Majority...........................................50
SECTION 6.06. Limitation on Suits...........................................51
SECTION 6.07. Rights of Holders To Receive Payment..........................51
SECTION 6.08. Collection Suit by Trustee....................................51
SECTION 6.09. Trustee May File Proofs of Claim..............................51
SECTION 6.10. Priorities....................................................52
SECTION 6.11. Undertaking for Costs.........................................52
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.............................................53
SECTION 7.02. Rights of Trustee.............................................54
SECTION 7.03. Individual Rights of Trustee..................................54
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<PAGE>
Page
----
SECTION 7.04. Trustee's Disclaimer..........................................55
SECTION 7.05. Notice of Default.............................................55
SECTION 7.06. Reports by Trustee to Holders.................................55
SECTION 7.07. Compensation and Indemnity....................................55
SECTION 7.08. Replacement of Trustee........................................56
SECTION 7.09. Successor Trustee by Merger, Etc..............................57
SECTION 7.10. Eligibility; Disqualification.................................57
SECTION 7.11. Preferential Collection of Claims Against Company.............57
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations......................58
SECTION 8.02. Legal Defeasance and Covenant Defeasance......................59
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.........60
SECTION 8.04. Application of Trust Money....................................61
SECTION 8.05. Repayment to the Company......................................61
SECTION 8.06. Reinstatement.................................................62
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders....................................62
SECTION 9.02. With Consent of Holders.......................................63
SECTION 9.03. Effect on Senior Debt.........................................64
SECTION 9.04. Compliance with TIA...........................................64
SECTION 9.05. Revocation and Effect of Consents.............................64
SECTION 9.06. Notation on or Exchange of Notes..............................65
SECTION 9.07. Trustee To Sign Amendments, Etc...............................65
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt............................65
SECTION 10.02. No Payment on Notes in Certain Circumstances.................65
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc...............66
SECTION 10.04. Payments May Be Paid Prior to Dissolution....................67
SECTION 10.05. Subrogation..................................................67
SECTION 10.06. Obligations of the Company Unconditional.....................68
SECTION 10.07. Notice to Trustee............................................68
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent..........................................68
SECTION 10.09. Trustee's Relation to Senior Debt............................69
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.........69
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.....................................69
SECTION 10.12. This Article Ten Not To Prevent Events of Default............70
SECTION 10.13. Trustee's Compensation Not Prejudiced........................70
-iii-
<PAGE>
ARTICLE ELEVEN
MISCELLANEOUS
Page
----
SECTION 11.01. TIA Controls.................................................70
SECTION 11.02. Notices......................................................70
SECTION 11.03. Communications by Holders with Other Holders.................72
SECTION 11.04. Certificate and Opinion as to Conditions Precedent...........72
SECTION 11.05. Statements Required in Certificate or Opinion................72
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar....................72
SECTION 11.07. Legal Holidays...............................................73
SECTION 11.08. Governing Law................................................73
SECTION 11.09. No Adverse Interpretation of Other Agreements................73
SECTION 11.10. No Recourse Against Others...................................73
SECTION 11.11. Successors...................................................73
SECTION 11.12. Counterparts.................................................73
SECTION 11.13. Severability.................................................73
SECTION 11.14. Judgment Currency............................................74
The Company hereby agrees to indemnify the Trustee, its directors,
its officers and each person, if any, who controls
the Trustee within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act against any
loss incurred by such person as a result of any
judgment or order being given or made against the
Company for any U.S. dollar amount due under this
Agreement and such judgment or order being expressed
and paid in a currency (the "Judgment Currency")
other than United States dollars and as a result of
any variation as between (i) the rate of exchange at
which the United States dollar amount is converted
into the Judgment Currency for the purpose of such
judgment or order and (ii) the spot rate of exchange
in The City of New York at which such party on the
date of payment of such judgment or order is able to purchase
United States dollars with the amount of the Judgment Currency
actually received by such party. The foregoing indemnity shall
continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "spot rate of
exchange" shallinclude any premiums and costs of exchange
payable in connection with the purchase of, or conversion
into, United States dollars.....................................74
ARTICLE TWELVE
GUARANTEE
SECTION 12.01. Unconditional Guarantee......................................74
SECTION 12.02. Severability.................................................75
SECTION 12.03. Limitation of Guarantor's Liability..........................75
SECTION 12.04. Execution of Guarantee.......................................75
SECTION 12.05. Subordination of Subrogation and Other Rights................75
ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Guarantee Subordinated to Guarantor Senior Debt..............76
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<PAGE>
Page
----
SECTION 13.01. Guarantee Subordinated to Guarantor Senior Debt..............76
SECTION 13.02. No Payment in Certain Circumstances..........................76
SECTION 13.03. Payment Over of Proceeds upon Dissolution, Etc...............77
SECTION 13.04. Payments May Be Paid Prior to Dissolution....................78
SECTION 13.05. Subrogation..................................................78
SECTION 13.06. Obligations of Guarantors Unconditional......................78
SECTION 13.07. Notice to Trustee............................................79
SECTION 13.08. Reliance on Judicial Order or Certificate of
Liquidating Agent..........................................79
SECTION 13.09. Trustee's Relation to Guarantor Senior Debt..................79
SECTION 13.10. Subordination Rights Not Impaired by Acts or Omissions
of the Company, the Guarantros or Holders of
Guarantor Senior Debt......................................80
SECTION 13.11. Noteholders Authorize Trustee to Effectuate
Subordination of Guarantees................................80
SECTION 13.12. This Article Thirteen Not To Prevent Events of Default.......81
SECTION 13.13. Trustee's Compensation Not Prejudiced........................81
Exhibit A -- Form of Initial Note........................................A-1
Exhibit B -- Form of Exchange Note.......................................B-1
Exhibit C -- Form of Certificate To Be Delivered upon Exchange
or Registration of Transfer of Securities.................C-1
Exhibit D -- Form of Transferee Letter of Representation.................D-1
Exhibit E -- Form of Certificate to be delivered in Connection
with Regulation S Transfers...............................E-1
Note: This Table of Contents shall not, for any purpose, be deemed
to be part of this Indenture.
-v-
<PAGE>
INDENTURE, dated as of January 29, 1999, between Tokheim Corporation,
an Indiana corporation (the "Company"), each of the subsidiaries of the Company
named on the signature pages hereto as Guarantors (the "Guarantors"), as
guarantor, and U.S. Bank Trust National Association, a national banking
corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11 3/8%
Senior Subordinated Notes due 2008 (the "Initial Notes") and Series B 11 3/8%
Senior Subordinated Notes due 2008 (the "Exchange Notes," and together with the
Initial Notes, the "Notes") and, to provide therefor, the Company and each
Guarantor has duly authorized the execution and delivery of this Indenture. All
things necessary to make the Notes, when duly issued and executed by the
Company, and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid and binding agreement of the Company
and the Guarantors, have been done.
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02(a).
"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 Limited.
"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 securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"all or substantially all" shall have the meaning given such phrase in
the Revised Model Business Corporation Act.
<PAGE>
"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 comprise 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; (ii) sales of accounts receivable that the Company has classified as
uncollectible; (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 5.01,
(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 this Indenture; 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.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02.
"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 that is not a Legal Holiday.
"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.
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<PAGE>
"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, eurodollar time deposits 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.
"Cedel" means Cedel Bank, societe anonyme.
"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
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.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"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.
-3-
<PAGE>
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"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, 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
-4-
<PAGE>
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) and (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 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
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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).
"Covenant Defeasance" has the meaning provided in Section 8.02.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator 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.
"Default Notice" has the meaning provided in Section 10.02.
"Depository" and "DTC" mean Euroclear or Cedel or a Person designated
as the common depository by Euroclear or Cedel.
"Designated Senior Debt" means (i) Indebtedness under or in respect of
the New Credit Agreement or the ESOP Credit Agreements 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.
"Dollar Senior Subordinated Notes" means the $123,000,000 11 3/8%
Senior Subordinated Notes due 2008, issued pursuant to an indenture, dated the
date of this Agreement, by and among the Company, the Guarantors, as guarantors,
and U.S. Bank Trust National Association, as trustee.
"ESOP Credit Agreements" means those certain credit agreements 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 by Section
4.12)) 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 and any assignments thereof.
"Euro" means the currency that was introduced at the start of the
third stage of economic and monetary union pursuant to the treaty establishing
the European Economic Community, as amended by the Treaty on European Union,
signed at Maastricht, the Netherlands on February 7, 1992.
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"Euroclear" means Morgan Guarantee Trust Company of New York (Brussels
Office) as operator of the Euroclear System.
"Euro Government Obligations" means direct obligations of, and
obligations guaranteed by, any member country of the European Community which
has adopted the Euro as its sole currency for the payment of which the full
faith and credit of such country is pledged.
"Euro Legal Tender" means such legal coin or currency denominated in
Euro as at the time of payment shall be legal tender for the payment of public
and private debts.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
"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 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 Note" has the meaning provided in Section 2.01.
"Guarantee" means any guarantee of the Notes by any Guarantor pursuant
to this Indenture.
"Guarantor" means any Subsidiary of the Company which guarantees the
Notes pursuant to this Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor, 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 any Indebtedness of such Guarantor,
whether outstanding on the Issue Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evi-
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dencing 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 Guarantee
of such Guarantor. 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 such interest is an allowed claim under applicable law) on, and
all other monetary obligations of the Company owing in respect of (x) all
monetary obligations of every nature of such Guarantor under the New Credit
Agreement and the ESOP Credit Agreements including obligations to pay principal
and interest, reimbursement obligations under letters of credit, fees, expenses
and indemnities, (y) all Interest Swap Obligations and (z) all obligations under
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 or any Affiliate of such
Guarantor to a Subsidiary of the Guarantor or any of such Affiliate's
Subsidiaries, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder,
director, officer or employee of a 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 a Guarantor, (vi) Indebtedness incurred in violation of
Section 4.12, (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 a guarantor, (viii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of a Guarantor and
(ix) any guarantees of the Schlumberger Junior Subordinated Notes or the Warrant
Repurchase Indebtedness, or guarantees of any Refinancing of the Schlumberger
Junior Subordinated Notes or the Warrant Repurchase Indebtedness.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"incur" has the meaning provided Section 4.12.
"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 Obligations 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 Indenture, and if such price is based upon, or
measured by, the fair market value of such
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<PAGE>
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 in accordance with the terms hereof.
"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 Notes" has the meaning provided in the preamble to this
Indenture.
"Initial Purchasers" means BT Alex. Brown, Credit Lyonnais Securities
(U.S.A.) Inc., First Chicago Capital Markets, Inc., Gleacher Natwest
International, Schroder & Co. Inc., and PaineWebber Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the 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, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"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 4.10, 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.
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<PAGE>
"Issue Date" means the date of original issuance of the Notes.
"Legal Defeasance" has the meaning provided in Section 8.02.
"Legal Holiday" has the meaning provided in Section 11.07.
"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).
"Liquidated Damages" means all liquidated damages owing pursuant to
the Registration Rights Agreement.
"Maturity Date" means August 1, 2008.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"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.
"Net Proceeds Offer" has the meaning provided in Section 4.16.
"Net Proceeds Offer Amount" has the meaning provided in Section 4.16.
"Net Proceeds Offer Payment Date" has the meaning provided in Section
4.16.
"Net Proceeds Offer Trigger Date" has the meaning provided in Section
4.16.
"New Credit Agreement" means the Second Amended and Restated Credit
Agreement among the Company, certain of its Subsidiaries, the lenders party
thereto in their capacities as lenders thereunder, NBD Bank, N.A., as
administrative agent, and Credit Lyonnais, as collateral agent, 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 by Section 4.12)) all or any portion of the
Indebtedness under such agree-
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<PAGE>
ment or any successor or replacement agreement and whether by the same or any
other agent, lender or group of lenders.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Portion of Net Proceeds" has the meaning provided in Section
4.16.
"Notes" means the Initial Notes and the Exchange Notes treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated January 26,
1999, pursuant to which the Initial Notes were offered, and any supplement
thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.04 and 11.05, as they relate to the making of an
Officers' Certificate.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion from legal counsel, who
may be counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 11.04 and 11.05, as they relate to
the giving of an Opinion of Counsel.
"Other Debt" has the meaning provided in Section 4.10.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes and this Indenture;
(ii) Indebtedness incurred pursuant to the New Credit Agreement and
the ESOP Credit Agreements 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 Agreements, 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), and (B) $250.0 million in the aggregate with respect to
Indebtedness under the New Credit Agreement, reduced by any required
permanent repayments, if any (which are accompanied by a corresponding
permanent commitment reduction), thereunder;
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(iii) Other Indebtedness of the Company and its Subsidiaries
outstanding on the Issue Date;
(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) (A) 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 Indenture (and are
used for bona fide hedging, and not speculative, purposes); and (B) 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; (y) or such Interest Swap
Obligations are required under the terms of the New Credit Agreement;
(v) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements (x)(A) are designed to protect against fluctuations in currency
value (and are used for bona fide hedging, and not speculative, purposes)
and (B) 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 (y) are required under the terms of the New 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 New 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 New 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 Indenture 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 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;
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<PAGE>
(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 its 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;
(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
Indenture;
(xv) Schlumberger Junior Subordinated Notes;
(xvi) Warrant Repurchase Indebtedness;
(xvii) 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 the face value of such Traits;
(xviii) 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;
(xix) Indebtedness from bank overdraft facilities not to exceed $15.0
million at any time;
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(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 New Credit Agreement); and
(xxi) the Dollar Senior Subordinated Notes.
"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 Indenture;
(iii) Investments in cash and Cash Equivalents; (iv) loans and advances to
employees and officers of the Company and its Subsidiaries totaling up to $5.0
million in the aggregate (A) in the ordinary course of business for bona fide
business purposes or (B) to purchase 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 Indenture and in compliance with the New 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 Section 4.16; (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) being 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 re-
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view 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;
(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
Indenture;
(xiii) Liens securing Indebtedness under Currency Agreements;
(xiv) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.12; 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;
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(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 on 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 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;
(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 this
Indenture; and
(xx) Liens on any property or assets of the Company or any
Subsidiary securing on a paripassu basis all of the Notes and the Dollar
Senior Subordinated Notes.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"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.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"Public Equity Offering" means an underwritten public offering of
Qualified Capital Stock of the Company by the Company pursuant to a registration
statement filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
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"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means the Record Dates specified in the Notes, whether
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Reference Date" has the meaning provided in Section 4.10.
"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
4.12 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi)
or (xvii) 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 the Schlumberger Junior Subordinated Notes, Warrant Repurchase Indebtedness
or any Refinancing thereof, then such Refinancing Indebtedness shall (i) be
subordinate or junior to the Notes at least to the same extent and in the same
manner as the Schlumberger Junior Subordinated Notes as in effect on the Issue
Date, (ii) provide for no cash interest payments prior to October 2004, (iii)
have covenants no more adverse to the Company than the Schlumberger Junior
Subordinated Notes and (iv) have an effective interest rate not greater than
14%, provided, however, that prior to the incurrence of such indebtedness,
Moody's Investors Service, Inc. will have affirmed that its rating of the Notes
will not decrease by one or more gradations below its rating in effect on the
Issue Date.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated January 29, 1999 among the Company, the Guarantors and the
Initial Purchasers relating to the Notes for the benefit of themselves and the
Holders, as the same may be amended or modified from time to time in accordance
with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
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"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 Payment" has the meaning provided in Section 4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"Revolving Credit Facility" means one or more revolving credit
facilities under the New Credit Agreement.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Corporation and its successors.
"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 the Company of any property,
whether owned by the Company or any Subsidiary of the Company 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 Netherlands Antilles
corporation.
"Schlumberger Junior Subordinated Notes" means (i) the $40.0 million
Junior Subordinated Notes issued by the Company to Schlumberger in connection
with the Acquisition pursuant to the Junior Subordinated Notes Indenture, as
amended up to the Issue Date, between the Company and Harris Trust and Saving
Bank, as trustee and (ii) additional subordinated notes issued as payment of
interest thereon.
"Schlumberger Warrants" means the warrants issued by the Company to
Schlumberger as part of the consideration for the Acquisition.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"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
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not be senior in right of payment to the 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 or any
Subsidiary of the Company owing in respect of, (x) the New Credit Agreement and
the ESOP Credit Agreements, including obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Swap Obligations and (z) Obligations under
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 4.12, (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, (viii) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company and (ix) the
Schlumberger Junior Subordinated Notes, any Warrant Repurchase Indebtedness or
any Refinancing of the Schlumberger Junior Subordinated Notes or any Warrant
Repurchase Indebtedness.
"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 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 any Guarantee of the Notes by any
Guarantor pursuant to this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.04.
"Traits" means "traites" (as defined under French law), accounts
receivable or invoices.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Warrant Repurchase Indebtedness" means (i) up to $20.0 million of
Indebtedness incurred by the Company to repurchase Schlumberger Warrants (or a
pro rata portion of $20.0 million, if less than all the Schlumberger Warrants
are repurchased) plus reasonable fees and expenses incurred in connection
therewith, provided, however, that such Indebtedness (a) is subordinated to the
Notes at least to the same extent as the
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Schlumberger Junior Subordinated Notes, (b) contains covenants no more adverse
to the Company than the Schlumberger Junior Subordinated Notes, (c) bears
interest at an effective rate not to exceed 14% per annum, which interest shall
not be paid in cash prior to October 2004, (d) contains no mandatory prepayment
provisions and (e) matures at least 6 months after the maturity of the Notes
plus (ii) additional Indebtedness with the same terms incurred in payment of
interest thereon, provided, however, that prior to the incurrence of such
Indebtedness, Moody's will have affirmed that its rating of the Notes will not
decrease by one or more gradations below its rating in effect on the issue date.
"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. 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:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the 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 therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular; and
(5) "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 TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit B hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or Depository rule or usage. The Company
and the Trustee shall approve the form of the Notes and any notation, legend or
endorsement on them. Each Note shall be dated the date of its issuance and
shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Global Note"), deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Notes"). Notes offered and sold in reliance on any other exemption
from registration under the Securities Act other than as described in the
preceding paragraph shall be issued, and Notes offered and sold in reliance on
Rule 144A may be issued, in the form of permanent certificated Notes in
registered form, in substantially the form set forth in Exhibit A (the "U.S.
Physical Notes"). The Offshore Physical Notes and the U.S. Physical Notes are
sometimes collectively herein referred to as the "Physical Notes." Physical
Notes shall initially be registered in the name of the Depository or the nominee
of such Depository and be delivered to the Trustee as custodian for such
Depository.
Except as described in this paragraph, holders of interests in the
Global Note will not have Notes registered in their names, will not receive
physical delivery of Notes in certificated form and will not be considered the
registered owners or holders of Notes for any purpose. So long as DTC (or its
nominee) or the Common Depositary, as the case may be, is the registered owner
or holder of a Global Note, such party will be considered the sole owner or
holder of the Notes represented by such Global Note for all purposes under the
Indenture and the Notes. Accordingly, each person owning a beneficial interest
in a Global Note must rely on the procedures of DTC, Euroclear and Cedel Bank,
as the case may be, and their participants or account holders to exercise any
rights and remedies of a holder of Notes under the Indentures. Payments of
principal and interest on the Global Notes will be made to DTC or its nominee,
or to the Common Depositary on behalf of Euroclear and Cedel Bank, as the case
may be, as the registered owners thereof.
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The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing use of Euroclear" and the "General Terms and
Conditions of Cedel Bank and "Customer Handbook of Cedel shall be applicable to
interests in the Global Note that are held by the Agent and Members through
Euroclear or Cedel.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed Euro 75,00,000 and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
of Initial Notes, in each case upon written orders of the Company in the form of
an Officers' Certificate. The Officers' Certificate shall specify the amount of
Notes to be authenticated, the date on which the Notes are to be authenticated
and the aggregate principal amount of Notes outstanding on the date of
authentication, whether the Notes are to be Initial Notes or Exchange Notes, and
shall further specify the amount of such Notes to be issued as the Global Note,
Offshore Physical Notes or U.S. Physical Notes. The aggregate principal amount
of Notes outstanding at any time may not exceed Euro 75,00,000 except as
provided in Section 2.07.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to clause (ii) of the first sentence of the immediately preceding
paragraph, the Company shall use its reasonable best efforts to obtain the same
"CUSIP" and "ISIN" number for such Notes as is printed on the Notes outstanding
at such time; provided, however, that if any series of Notes issued under this
Indenture subsequent to the Issue Date is determined, pursuant to an Opinion of
Counsel of the Company in a form reasonably satisfactory to the Trustee to be a
different class of security than the Notes outstanding at such time for federal
income tax purposes, the Company may obtain a "CUSIP" and "ISIN" number for such
Notes that is different than the "CUSIP" and "ISIN" number printed on the
Securities then outstanding.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
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The Notes shall be issuable in fully registered form only, without
coupons, in denominations of Euro 1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York, and, for
so long as the Notes are listed on the Luxembourg Stock Exchange and the rules
of such stock exchange so require, in Luxembourg) where (a) Notes may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Notes may be presented or surrendered for payment (the "Paying
Agent") and (c) notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company, upon prior written
notice to the Trustee, may have one or more co-Registrars and one or more
additional paying agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional Paying Agent, and the term "Registrar" includes
any co-Registrar. Neither the Company nor any Affiliate of the Company may act
as Paying Agent or Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name
and address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as, Paying Agent and as
Registrar (acting through its London Branch) and agent for service of demands
and notices in connection with the Notes, until such time as the Trustee has
resigned or a successor has been appointed. The Company initially appoints as
Depository MSS (Nominees) Limited, the nominee of Midland Bank plc, as common
depository for and behalf of Morgan Guaranty Trust Company of New York, Brussels
office, as Operator of Euroclear. The Depository, the Paying Agent or Registrar
may resign upon 30 days notice to the Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
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SECTION 2.05. 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee at least five days before each
Record Date and at such other times as the Trustee may request in writing a list
as of such date and in such form as the Trustee may reasonably require of the
names and addresses of the Holders, which list may be conclusively relied upon
by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.16 and 2.17, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations of the same series, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes (and each of the Guarantors shall execute a Guarantee
thereon) at the Registrar's or co-Registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge in connection therewith payable by the transferor of such
Securities (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.15, 4.16
or 9.06, in which event the Company shall be responsible for the payment of such
taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements for replacement of Notes are met. If required by the
Trustee or the Company, such Holder must provide an affidavit of lost
certificate and an indemnity bond or other indemnity, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Note is replaced. The
Company may charge such Holder for its reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note shall constitute an additional obligation of the Company and
the Guarantors.
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SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives an Opinion of Counsel that the replaced Note is held by a bona
fide purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company, the Guarantors or any of their respective Affiliates shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer of the Trustee
actually knows are so owned shall be so considered. The Company shall notify
the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Notes, of the aggregate principal amount of such Notes so
repurchased or otherwise acquired.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.02
definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, dispose of
and deliver evidence of such disposal of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company may not
issue new Notes to replace Notes that it has paid or delivered to the Trustee
for cancellation. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebted-
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ness represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the applicable rate of interest then borne by the Notes. The
Company shall, to the extent lawful, pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the rate of
interest then borne by the Notes.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, as of a recent date selected by the Company, with a copy to the Trustee,
a notice that states the subsequent special record date, the payment date and
the amount of defaulted interest, and interest payable on such defaulted
interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(1) shall be paid to
Holders as of the Record Date for the Interest Payment Date for which interest
has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use "CUSIP" and/or "ISIN"
numbers, and if so, the Trustee shall use the CUSIP and ISIN numbers in notices
of redemption or exchange as a convenience to Holders; provided that no
representation is hereby deemed to be made by the Trustee as to the correctness
or accuracy of the CUSIP or ISIN number printed in the notice or on the Notes,
and that reliance may be placed only on the other identification numbers printed
on the Notes. The Company shall promptly notify the Trustee of any change in
the CUSIP or ISIN number.
SECTION 2.14. Deposit of Moneys.
Prior to 12:00 noon London time on the Business Day prior to each
Interest Payment Date, Redemption Date, Change of Control Payment Date, Net
Proceeds Offer Payment Date and on the Maturity Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Redemption
Date, Change of Control Payment Date, Net Proceeds Offer Payment Date or
Maturity Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Redemption
Date, Change of Control Payment Date, Net Proceeds Offer Payment Date or
Maturity Date, as the case may be.
SECTION 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
face thereof until January 29, 2001, unless otherwise agreed to by the Company
and the Holder thereof:
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (2) AGREES THAT
IT WILL NOT, PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED
PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE ACT, (C) INSIDE THE UNITED STATES TO AN "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1),(2),(3), OR (7) UNDER THE ACT) (AN
"ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND, IF THE COMPANY SO REQUESTS, BASED UPON AN OPINION OF COUNSEL, OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF
THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT, AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE ACT.
Each Global Note shall also bear the following legend:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
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TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. Book-Entry Provisions for Global Note.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global 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 the Global 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 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 Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.17. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the Global Note if (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for the Global Note and a
successor Depository is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b) of this Section 2.16, the Registrar shall (if one or more Physical
Notes are to be issued) reflect on its books and records the date and a decrease
in the principal amount of the Global Note in an amount equal to the principal
amount of the beneficial interest in the Global Note to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b) of this Section 2.16, the Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
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(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Notes. When Physical Notes are
presented to the Registrar with a request:
(i) to register the transfer of the Physical Notes; or
(ii) to exchange such Physical Notes for an equal principal amount
of Physical Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.17 for such
transactions are met; provided, however, that the Physical Notes presented or
surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and
(II) in the case of Physical Notes the offer and sale of which have
not been registered under the Securities Act, such Physical Notes shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Note is being delivered to the Registrar by a
Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect
(substantially in the form of Exhibit C hereto); or
(B) if such Physical Note is being transferred to a Q1B in accordance
with Rule 144A, a certification to that effect (substantially in
the form of Exhibit C hereto); or
(C) if such Physical Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect
(substantially in the form of Exhibit C hereto) and a transferee
letter of representation substantially in the form of Exhibit D
hereto and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such Physical Note is being transferred in reliance on Rule
144 under the Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit C hereto) and, at
the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
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(E) if such Physical Notes is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit C hereto), a transferor
certificate for Regulation S transfers substantially in the form
of Exhibit E hereto and, at the option of the Company, and
Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(F) if such Physical Note is being transferred in reliance on another
exemption from the registration requirements of the Securities
Act, a certification to that effect (substantially in the form of
Exhibit C hereto) and, at the option of the Company, an Opinion
of Counsel reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Physical Note for a Beneficial
Interest in a Global Note. A Physical Note the offer and sale of which has not
been registered under the Securities Act may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set forth
below. Upon receipt by the Registrar of a Physical Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Registrar, together with:
(A) certification, substantially in the form of Exhibit C hereto,
that such Physical Note is being transferred (I) to a QIB, (II)
to an Accredited Investor or (III) in an offshore transaction in
compliance with Regulation S and, with respect to (II) and (III),
at the option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act; and
(B) written instructions directing the Registrar to make, or to
direct the Depository to make, an endorsement on the applicable
Global Note to reflect an increase in the aggregate amount of the
Notes represented by the Global Note,
then the Registrar shall cancel such Physical Note and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Registrar, the principal amount of Notes
represented by the applicable Global Note to be increased accordingly. If no
Global Note is then outstanding, the Company shall, unless events in either
clause (i) or (ii) of Section 2.16(b) have occurred and are continuing, issue
and the Trustee shall, upon written instructions from the Company in accordance
with Section 2.02, authenticate such a Global Note in the appropriate principal
amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor. Upon
receipt by the Registrar of written instructions, or such other instruction as
is customary for the Depository, from the Depository or its nominee, requesting
the registration of transfer of an interest in a Global Note to another type of
Global Note, together with the applicable Global Notes (or, if the applicable
type of Global Note required to represent the interest as requested to be
transferred is not then outstanding, only the Global Note representing the
interest being transferred), the Registrar shall cancel such Global Notes (or
Global Notes), and the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.02, authenticate, new
Global Notes of the types so canceled (or the type so canceled and applicable
type required to represent the interest as requested to be transferred)
reflecting the applicable increase and decrease of the principal amount of Notes
represented by such types of Global Notes, giving effect to such transfer. If
the applicable
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type of Global Note required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Company shall
issue and the Trustee shall, upon written instructions from the Company in
accordance with Section 2.02, authenticate a new Global Note of such type in
principal amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Note for a Physical
Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Physical Note;
provided, however, that prior to the registration, a transferee that is a
QIB or Institutional Accredited Investor may not exchange a beneficial
interest in Global Note for a Physical Note. Upon receipt by the Registrar
of written instructions, or such other form of instructions as is customary
for the Depository, from the Depository or its nominee on behalf of any
Person (subject to the previous sentence) having a beneficial interest in a
Global Note and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such transfer
or exchange of a beneficial interest in Notes the offer and sale of which
have not been registered under the Securities Act, the following additional
information and documents:
(A) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit C hereto) and,
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act;
(B) if such beneficial interest is being transferred in reliance on
Regulation S under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit E hereto) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(C) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the Company,
an Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act,
then the Registrar will cause, in accordance with the standing instructions
and procedures existing between the Depository and the Registrar, the
aggregate principal amount of the applicable Global Note to be reduced and,
following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in accordance
with Section 2.02, the Trustee will authenticate and deliver to the
transferee a Physical Note in the appropriate principal amount.
(ii) Notes issued in exchange for a beneficial interest in a Global
Note pursuant to this Section 2.17(d) shall be registered in such names and
in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Reg-
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istrar in writing. The Registrar shall deliver such Physical Notes to the
Persons in whose names such Physical Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless, and the Trustee is hereby authorized to deliver Notes without the
Private Placement Legend if, (i) there is delivered to the Trustee 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; (ii)
such Note has been sold pursuant to an effective registration statement under
the Securities Act (including pursuant to a registration); or (iii) the date of
such transfer, exchange or replacement is two years after the later of (x) the
Issue Date and (y) the last date that the Company or any affiliate (as defined
in Rule 144 under the Securities Act) of the Company was the owner of such Notes
(or any predecessor thereto).
(g) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Participants or beneficial
owners of interest in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 7 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
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The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at any
time, selection of the Notes to be redeemed shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which such Notes are listed or, if such Notes are not then listed on
a national securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate; provided, however, that no Notes of
a principal amount of Euro 1,000 or less shall be redeemed in part; provided,
further, that if a partial redemption is made with the proceeds of a Public
Equity Offering, selection of the Notes or portions thereof for redemption shall
be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis
as is practicable (subject to the procedures of the Depository), unless such
method is otherwise prohibited. Notice 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 Notes to be redeemed at its registered address. If any Note is to
be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in a principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon delivery of the original Note to
the Paying Agent and cancellation of the original Note. On and after the
redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption as long as the Company has deposited with the Paying
Agents in New York and Luxembourg funds in satisfaction of the applicable
redemption price pursuant to this Indenture.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 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, with
a copy to the Trustee and any Paying Agent. At the Company's written request,
the Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. So long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require the Company will cause a
notice of such redemption to be published in a daily newspaper of general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such redemption.
Each notice for redemption shall identify the Notes to be redeemed
(including the CUSIP number thereon, if any) and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption
is being made;
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(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
and
(8) 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.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant record dates referred to in the Notes.
SECTION 3.05. Deposit of Redemption Price.
On or before 2:00 p.m. London time on the Business Day prior to the
Redemption Date, the Company shall deposit with the Paying Agent Euro Legal
Tender sufficient to pay the Redemption Price plus accrued interest, if any, of
all Notes to be redeemed on that date. The Paying Agent shall promptly return
to the Company any Euro Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and in this Indenture. An
installment of principal of or interest on the Notes shall be considered paid on
the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date Euro Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Notes plus 2% per annum. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, and, for so long as the Securities are listed on the Luxembourg Stock
Exchange and the rules of such stock exchange so require, in Luxembourg, the
office or agency required under Section 2.03. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.02 hereof. The
Company hereby initially designates (i) the Trustee at its address set forth in
Section 11.02 hereof as its office or agency in The Borough of Manhattan, The
City of New York, for such purposes, (ii) so long as the Securities are listed
on the Luxembourg Stock Exchange and the rules of such stock exchange so
require, Bankers Trust Luxembourg S.A., 14, Boulevard F.D. Roosevelt, L-2450
Luxembourg, as its office or agency in Luxembourg for such purposes and (iii)
the Paying Agent at its address set forth in Section 11.02 here of as its office
or agency in London, for such purposes.
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five and Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of its Subsidiaries in accordance with the
respective organizational documents of each such Subsidiary and the material
rights (charter and statutory) and franchises of the Company and each such
Subsidiary; provided, however, that the Company shall not be required to
preserve, with respect to itself, any material right or franchise and, with
respect to any of its Subsidiaries, any such existence, material right or
franchise, if the Board of Directors of the Company shall determine in good
faith that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Subsidiaries, taken as a whole.
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SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain its material properties in good working order and condition (subject to
ordinary wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business; provided, however, that nothing in this Section 4.05 shall
prevent the Company or any of its Subsidiaries from discontinuing the operation
and maintenance of any of its properties, if such discontinuance is, in the good
faith judgment of the Board of Directors or senior management of the Company or
the Subsidiary, as the case may be, desirable in the conduct of their respective
businesses.
(b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the Board
of Directors of the Company, for companies similarly situated in the industry.
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of the Company's fiscal year, which currently ends on November 30 of each
year, an Officers' Certificate stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of such Officer's knowledge the Company during
such preceding fiscal year has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such year
and at the date of such certificate there is no Default or Event of Default that
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe the Default or Event of Default
and its status with particularity. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.08
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would
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lead them to believe that a Default or Event of Default under this Indenture has
occurred 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.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.02 hereof,
by registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action and the status thereof within five
Business Days of its becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Subsidiaries, taken as a whole.
SECTION 4.08. SEC Reports.
(a) The Company (at its own expense) shall file with the SEC and shall
file with the Trustee within 15 days after it files them with the SEC copies of
the quarterly and annual reports and of the information, documents, and other
reports, if any (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe), which the Company is required to file
with the SEC 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). Upon qualification of this Indenture under the TIA,
the Company shall also comply with the provisions of TIA (S) 314(a).
(b) At the Company's expense, the Company 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 filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar at the time of such mailing or
furnishing to stockholders.
(c) The Company shall provide to any Holder any information reasonably
requested by such Holder concerning the Company (including financial statements)
necessary in order to permit such Holder to sell or transfer Notes in compliance
with Rule 144A under the Securities Act.
(d) For so long as the Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, copies of all reports and
information described above will be available during normal business hours at
the office of the Paying Agent in Luxembourg.
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SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company 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 the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company 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 Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10. Limitation on 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, (c) make any Investment
(other than Permitted Investments) or (d) repurchase or redeem the Schlumberger
Junior Subordinated Notes, the Schlumberger Warrants, the Warrant Repurchase
Indebtedness or Refinancing Indebtedness the proceeds of which are used to
repurchase or redeem the Schlumberger Junior Subordinated Notes, the
Schlumberger Warrants or the Warrant Repurchase Indebtedness (other than a
repurchase or redemption using proceeds of Refinancing Indebtedness), or make
any cash payments of interest thereon during (l) a blockage period in effect
with respect to any such junior Indebtedness or (2) the time when the Company
could, by the terms of such Indebtedness, otherwise defer such interest or pay
such interest in-kind, (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 Section 4.12 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 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 (iii)(x)
above, 100% of the aggregate net cash proceeds of any equity contribution
received by the Company after the Issue Date 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 Public Equity Offering to the extent used to redeem the Notes or
from a sale as described in clause (2) (ii) of the next succeeding paragraph).
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
within 60 days after the date of declaration of such dividend if the dividend
would have been permitted on the date of declaration; or (2) the acquisition of
any shares of
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Capital Stock of the Company or of any of the Indebtedness described in clause
(d) of the immediately preceding paragraph, 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 clause 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 Indenture; (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; or (5) the purchase,
redemption or acquisition of the Schlumberger Warrants with proceeds from the
issuance of Warrant Repurchase Indebtedness; or (6) the purchase, redemption,
acquisition, or refinancing of the Schlumberger Junior Subordinated Notes with
Refinancing Indebtedness. 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),
(4) and (5) 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 this 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 4.11. 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 paragraph (b) below 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 clause (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 this
In-
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denture; (iii) Restricted Payments permitted by this Indenture; (iv)
transactions permitted by, and complying with Section 5.01; (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 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 Indenture.
SECTION 4.12. 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 4.13. Limitation on Dividends 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 pay or
guarantee any Indebtedness or other obligation owed to the Company or any other
Subsidiary of the Company; 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 New Credit Agreement or the
ESOP Credit Agreements; 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), (5) or (6) 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), (5) or (6).
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SECTION 4.14. Prohibition on Incurrence of Senior Subordinated Debt.
The Company will not incur or suffer to exist Indebtedness that is
senior in right of payment to the Notes and subordinate in right of payment to
any Senior Debt of the Company. The Guarantors will not incur or suffer to exist
Indebtedness that is senior in right of payment to any Guarantee and subordinate
in right of payment to any Guarantor Senior Debt.
SECTION 4.15. 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
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.
Prior to the mailing of the notice referred to below, but in any event
within 30 days following any Change of Control, the Company covenants to (i)
repay in full all Indebtedness and terminate all commitments under the New
Credit Agreement and all other Senior Debt whose terms require repayment upon a
Change of Control or offer to repay in full and terminate all commitments under
all Indebtedness under the New 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 New Credit Agreement and all
other Senior Debt to permit the repurchase of the Notes as provided below.
(b) Within 30 days following the date upon which the Change of Control
occurred (the "Change of Control Date"), the Company shall 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. For so long as the Notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange so
require, the Company will cause a copy of such notice to be published in a daily
newspaper with general circulation in Luxembourg (which is expected to be the
Luxemburger Wort) and the Luxembourg Stock Exchange will be advised of such
Change of Control Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender 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 4.15 and that all 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 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 Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
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(5) that Holders electing to have a Note purchased pursuant to a
Change of Control 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, including, if applicable, the Paying
and Transfer Agent in Luxembourg, 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
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes 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; 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 Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent Euro Legal Tender sufficient
to pay the purchase price plus accrued interest, if any, of all Notes so
tendered and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof being purchased by
the Company. The Paying Agent shall promptly mail to the Holders of 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
Notes equal in principal amount to any unpurchased portion of the Notes
surrendered. Any Notes not so accepted shall be promptly mailed by the Company
to the Holder thereof. For purposes of this Section 4.15, the Trustee shall act
as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change
of Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-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 Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 4.15, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.15 by virtue thereof.
SECTION 4.16. 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
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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 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 this paragraph).
Notwithstanding the immediately preceding paragraph, 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 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 paragraph shall constitute Net Cash Proceeds subject to
the provisions of the immediately preceding paragraph.
Notwithstanding the second immediately preceding paragraph, in the
event that any other Indebtedness of the Company that ranks pari passu with the
Notes (the "Other Debt") requires an offer to purchase to be made to repurchase
such Other Debt upon the consummation of an Asset Sale, the Company may apply
the Net Proceeds Offer Amount otherwise required to be applied to a Net Proceeds
Offer to offer to purchase such Other Debt so long as the amount of Net Proceeds
Offer Amount applied to purchase the Notes is not less than the Note Portion of
Net Proceeds. With respect to any Net Proceeds Offer Amount, the Company shall
make the Net Proceeds Offer in respect thereof at the same time as the analogous
offer to purchase is made pursuant to any Other Debt and the Net Proceeds Offer
Payment Date in respect thereof shall be the same as the purchase date in
respect thereof pursuant to any Other Debt.
For purposes of this covenant, "Note Portion of Net Proceeds Offer
Amount" means (1) if no Other Debt is being offered to be purchased, the amount
of the Net Proceeds and (2) if Other Debt is being offered to be purchased, the
amount of the Net Proceeds Offer Amount equal to the product of (x) the Net
Proceeds Offer Amount and (y) a fraction the numerator of which is the aggregate
amount of all Securities tendered pursuant to the Net Proceeds Offer related to
such Net Proceeds Offer Amount (the "Note Amount") and the denominator of which
is the sum of the Note and the aggregate amount as of the relevant purchase date
of all Other Debt tendered and purchased pursuant to a concurrent offer to
purchase such Other Debt made at the time of such Net Proceeds Offer.
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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 Trustee, and shall comply with the procedures
set forth in this Indenture. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such Exchange so require, the Company
will cause a copy of such notice to be published in a daily newspaper with
general circulation in Luxembourg (which is expected to be the Luxembourger
Wort) and the Luxembourg Stock Exchange will be advised of the Net Proceeds
Offer. Upon receiving notice of the Net Proceeds Offer, Holders may elect to
tender their Notes in whole or in part in integral multiples of Euro 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.
(b) Each notice of a Net Proceeds Offer pursuant to this Section 4.16
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 Notes
pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.16
and that all Notes tendered will be accepted for payment; provided,
however, that if the aggregate principal amount of Notes 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 Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000 or multiples thereof shall be purchased);
(2) 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 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 Note not tendered will continue to accrue interest;
(4) 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;
(5) 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;
(6) 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
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased; and
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(7) that Holders whose Notes are purchased only in part will be issued
new Notes in a principal amount equal to the unpurchased portion of the
Notes 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 Notes or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b)(1) above,
(ii) deposit with the Paying Agent Euro Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Notes to be purchased and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate stating the Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price plus accrued interest,
if any. For purposes of this Section 4.16, the Trustee shall act as the Paying
Agent.
Any amounts remaining after the purchase of Notes pursuant to a Net
Proceeds Offer shall be returned by the Trustee to the Company.
The Company will comply with the requirements of Rule 14e-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
4.16, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.16 by virtue thereof.
SECTION 4.17. Limitation on 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 4.18. 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 and Liens securing
Guarantor Senior Debt; (C) Liens securing the Notes and the Guarantees; (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 Indenture and which has been incurred in accordance with
the provisions of this 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 Refi-
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nanced 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 4.19. Additional Subsidiary Guarantees.
The Company will cause any current and future Subsidiary of the
Company that Guarantees any Senior Debt of the Company or Indebtedness of the
Company that is subordinated to the Notes to simultaneously execute and deliver
a supplemental indenture pursuant to which it will become a Guarantor under this
Indenture.
SECTION 4.20. Limitation on Amendments to Schlumberger Junior
Subordinated Notes and Warrant Repurchase Indebtedness.
The Company shall not amend the indentures or other agreements
governing the terms of the Schlumberger Junior Subordinated Notes or Warrant
Repurchase Indebtedness, or any Refinancing Indebtedness thereof, in any way
adverse to the Holders of the Notes.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation or Sale of Assets of the
Company.
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 premium, if any, and
interest on all of the Notes and the performance of every covenant
contained in the Notes, this Indenture and the Registration Rights
Agreement to be performed or observed on the part of the Company;
(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;
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(iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause (i)(2)(y) above
(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;
(iv) the Company or the Surviving Entity, as the case may be,
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 complies with the applicable provisions of this
Indenture and that all conditions precedent in this Indenture relating to
such transaction have been satisfied; and
For so long as the Notes are listed on the Luxembourg Stock Exchange
and the rules of such exchange so require, copies of all reports and information
described above will be available during normal business hours at the office of
the Transfer Agent in Luxembourg.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, 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
this Indenture and the Notes with the same effect as if such surviving entity
had been named as such.
SECTION 5.03. Merger, Consolidation and Sale of Assets of Guarantors.
Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with Section 4.16) will not, and the
Company will not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
(i) the entity formed by or surviving any such consolidation or merger (if other
than the Guarantor) or to which such sale, lease, conveyance or other
disposition shall have been made is a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia;
(ii) such entity assumes by supplemental indenture all of the obligations of the
Guarantor on the Guarantee; (iii) immediately before and after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (ii) of the first paragraph of Section 5.01.
Any merger or consolidation of a Guarantor with and into the Company (with the
Company being the surviving entity) or another Guarantor of the Company need
only comply with clause (iv) of Section 5.01.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on, or Liquidated Damages (if
any), with respect to any Notes when the same becomes due and payable and
the default continues for a period of 30 days (whether or not such payment
shall be prohibited under Article Ten);
(2) the Company fails to pay the principal on the Notes when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer),
whether or not such payment shall be prohibited under Article Ten;
(3) the Company defaults in the observance or performance of any
other covenant or agreement contained in this 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 at least 25% of the outstanding principal
amount of the Notes (except in the case of a default with respect to
Section 5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(4) 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;
(5) 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;
(6) except as permitted by this Indenture, any Guarantee shall be
held in a judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Guarantee;
(7) the Company or any Significant Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C)
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consents to the appointment of a Custodian of it or for substantially all
of its property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, (E) makes a general
assignment for the benefit of its creditors, or (F) takes any corporate
action to authorize or effect any of the foregoing; or
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any Significant
Subsidiary, (B) appoint a Custodian of the Company or any Significant
Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days.
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in Sections 6.01(7) or (8) above with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in principal amount of
outstanding Notes may declare the principal of and accrued interest on all the
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 New Credit Agreement or the ESOP Credit Agreements, shall become immediately
due and payable upon the first to occur of an acceleration under the New Credit
Agreement or the ESOP Credit Agreements or 5 business days after receipt by the
Company and the Representative under the New Credit Agreement or the ESOP Credit
Agreements of such Acceleration Notice.
(b) If an Event of Default specified in Section 6.01(7) or (8) above
with respect to the Company shall occur and be continuing, then all unpaid
principal of, premium, if any, and accrued and unpaid interest on all of the
outstanding 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.
(c) At any time after a declaration of acceleration with respect to
the Notes in accordance with Section 6.02(a) and (b), the Holders of a majority
in principal amount of the outstanding Notes may rescind and cancel such
declaration and its consequences if (i) the rescission would not conflict with
any judgment or decree, (ii) 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) 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(7) or (8) above, the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. The holders of a majority in aggregate principal amount of Notes then
outstanding may waive any existing Default or Event of Default under this
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Notes. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder 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.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
aggregate principal amount of Notes then outstanding by notice to the Trustee
may waive an existing Default or Event of Default and its consequences, except a
Default in the payment of principal of or interest on any Note as specified in
clauses (1) and (2) of Section 6.01. The Company shall deliver to the Trustee
an Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
paragraph of this Section 6.04 shall be in lieu of (S) 316(a)(1)(B) of the TIA
and such (S) 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder (it being understood that the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders), or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction; and provided further
that this provision shall not affect the rights of the Trustee set forth in
Section 7.01(d). In the event the Trustee takes any action or follows any
direction pursuant to this Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of (S) 316(a)(1)(A) of the TIA, and such (S) 316(a)(1)(A)
of the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
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SECTION 6.06. Limitation on Suits.
A Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over such other
Noteholder.
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 a Note, on or
after the respective due dates expressed in such Note, 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 in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in Section 4.01 and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custo-
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dian in any such judicial proceedings is hereby authorized by each Noteholder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Noteholders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. The Company's payment obligations
under this Section 6.09 shall be secured in accordance with the provisions of
Section 7.07 hereunder. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding; provided, however, that the Trustee may, on behalf of the
Noteholders, vote for the election of a trustee in bankruptcy or similar
official and may be a member of a creditors' committee.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company or
any Guarantor directly without the Trustee, to Holders for their collection
costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Noteholders pursuant to this Section 6.10.
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 a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture against the Trustee.
(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) Notwithstanding anything to the contrary herein contained, 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 paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(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.
(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 6.02, 6.04 and 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any 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 for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not herein expressly provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any resolution, certificate, Officers'
Certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note or other paper or 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 the
document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require an Officers' Certificate, an Opinion of
Counsel or both, which shall conform to Sections 11.04 and 11.05. 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 execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys, and the Trustee shall not be responsible for the
misconduct or negligence of any agent or attorney (other than an agent who
is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, 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, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
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SECTION 7.04. Trustee's Disclaimer.
The recitals contained herein and in the Notes shall be taken as
statements of the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
the Trustee has actual knowledge of such Default or Event of Default, the
Trustee shall mail to each Noteholder notice of the uncured Default or Event of
Default within 90 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of principal of, or
interest on, any Note, including an accelerated payment and the failure to make
payment on the Change of Control Payment Date pursuant to a Change of Control
Offer or on the Proceeds Purchase Date pursuant to a Net Proceeds Offer and,
except in the case of a failure to comply with Article Five hereof, the Trustee
may withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Noteholders. This Section 7.05 shall be in lieu of the proviso to (S)
315(b) of the TIA, and such proviso of (S) 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each January 29, the Trustee shall, to the extent
that any of the events described in TIA (S) 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Noteholder a brief report dated
as of such date that complies with TIA (S) 313(a). The Trustee also shall
comply with TIA (S)(S) 313(b), (c) and (d).
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and filed with the SEC and each securities exchange, if
any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any securities exchange or of any delisting thereof and the Trustee
shall comply with TIA (S) 313(d).
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. 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 fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture or in connection with the
collection of any funds. Such expenses shall include the reasonable fees and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
stockholders and directors and officers for, and hold them harmless against, any
loss, liability or expense incurred by them except for such actions to the
extent caused by any negligence, bad faith or willful misconduct on their part,
arising out of
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or in connection with the administration of this trust including the reasonable
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided that any settlement of a
claim shall be approved in writing by the Trustee. Alternatively, the Trustee
may at its option have separate counsel of its own choosing and the Company
shall pay the reasonable fees and expenses of such counsel; provided that the
Company will not be required to pay such fees and expenses if it assumes the
Trustee's defense and there is no conflict of interest between the Company and
the Trustee in connection with such defense as reasonably determined by the
Trustee. The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes. The
Trustee's right to receive payment of any amounts due under this Section 7.07
shall not be subordinate to any other liability or indebtedness of the Company
(even though the Notes may be subordinate to such other liability or
indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may 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 becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring
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Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding 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 Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding 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, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
In addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA (S) 310(a)(2). 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. The provisions of TIA (S) 310 shall apply to the Company, as
obligor of the Notes.
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. The
provisions of TIA (S) 311 shall apply to the Company, as obligor on the Notes.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
This Indenture will be discharged and will cease to be of further
effect (except those obligations referred to in the penultimate paragraph of
this Section 8.01), and the Company and the Guarantors will be discharged from
their respective obligations under the Notes and the Guarantees, if all Notes
theretofore authenticated and delivered (other than mutilated, destroyed, lost
or stolen Notes which have been replaced and paid or Notes for whose payment
Euro Legal Tender has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company, as provided in
Section 8.05, or discharged from such trust) have been delivered to the Trustee
for cancellation or if:
(a) either (i) pursuant to Article Three, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Notes under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Notes not theretofore
delivered to the Trustee for cancellation have become due and payable
hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, Euro Legal Tender in such amount as is
sufficient to pay the entire Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation principal of, premium, if any,
and interest on the outstanding Notes to the date of such deposit (in the
case of Notes that have become due and payable or to the stated maturity or
redemption date, as the case may be; provided that the Trustee shall have
been irrevocably instructed to apply such Euro Legal Tender to the payment
of said principal, premium, if any, and interest with respect to the Notes
and, provided, further, that from and after the time of deposit, the money
deposited shall not be subject to the rights of holders of Senior Debt
pursuant to the provisions of Article Ten or to the rights of holders of
Guarantor Senior Debt pursuant to the provisions of Article Thirteen;
(c) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the satisfaction and discharge of this Indenture have
been complied with. Such Opinion of Counsel shall also state that such
satisfaction and discharge does not result in a default under the New
Credit Agreement (if then in effect) or any other agreement or instrument
then known to such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05 and 8.06 shall survive
until the Notes are no longer outstanding pursuant to the
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last paragraph of Section 2.08. After the Notes are no longer outstanding, the
Company's obligations in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and each Guarantor's
obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph (b) or
(c) below be applied to all outstanding Notes upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03, be
deemed to have been discharged from their respective obligations with respect to
all outstanding Notes and the Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "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 Notes
and the Guarantees, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 8.04 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all their other
respective obligations under such Notes, the Guarantees and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), and Holders of the Notes and the
Guarantees and any amounts deposited under Section 8.03 hereof shall cease to be
subject to any obligations to, or the rights of, any holder of Senior Debt under
Article Ten or otherwise or any holder of Guarantor Senior Debt under Article
Thirteen or otherwise, except for the following provisions, which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (ii) the Company's obligations with respect to such Notes under Article
Two and Section 4.02 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (iv) this Article Eight. Subject to compliance with this Article
Eight, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03 hereof,
be released from its obligations under the covenants contained in Sections 4.10
through 4.19 and Article Five hereof with respect to the outstanding Notes and
the Guarantees on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes and the Guarantees
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes and the Guarantees shall not be deemed outstanding for accounting
purposes) and Holders of the Notes and the Guarantees and any amounts deposited
under Section 8.03 hereof shall cease to be subject to any obligations to, or
the rights of, any holder of Senior Debt under Article Ten or otherwise or any
holder of Guarantor Senior Debt under Article Thirteen or otherwise. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Notes and the Guarantees, the Company and each Guarantor may omit to comply with
and shall have no liability
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in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event or Default under Section 6.01(3)
hereof, but, except as specified above, the remainder of this Indenture, such
Notes and the Guarantees shall be unaffected thereby. In addition, upon the
Company's exercise under paragraph (a) hereof of the option applicable to this
paragraph (c), subject to the satisfaction of the conditions set forth in
Section 8.03 hereof, Sections 6.01(3), 6.01(4) and 6.01(5) shall not constitute
Events of Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) hereof to the outstanding Notes and the Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, Euro Legal Tender or 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, premium, if any, and interest
on the Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, provided that the Trustee shall have
received an irrevocable written order from the Company instructing the
Trustee to apply such Euro Legal Tender or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes;
(b) in the case of an election under Section 8.02(b) hereof, 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 this 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 of the Notes 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;
(c) in the case of an election under Section 8.02(c) hereof, 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 of the Notes 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Article Eight concurrently with such incurrence) or insofar as Sections
6.01(7) and 6.01(8) hereof are concerned, at any time in the period ending
on the 91st day after the date of such deposit;
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(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of or constitute a default under this 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;
(f) 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;
(g) 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 (b), (c) and (e) above); and
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (i) the trust funds will not be subject to any
rights of any holders of Senior Debt of the Company other than the Notes,
and (ii) assuming no intervening bankruptcy or insolvency of the Company
between the date of deposit and the 91st day following the deposit and that
no Holder is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.
SECTION 8.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust Euro Legal Tender or
Euro Government Obligations deposited with it pursuant to this Article Eight,
and shall apply the deposited Euro Legal Tender and the money from Euro
Government Obligations in accordance with this Indenture to the payment of
principal of, premium, if any, and interest on the Notes. The Trustee shall be
under no obligation to invest said Euro Legal Tender or Euro Government
Obligations except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Euro Legal Tender or Euro
Government Obligations deposited pursuant to Section 8.03 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any Euro Legal Tender or Euro Government Obligations held by it as
provided in Section 8.03 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, 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 8.05. Repayment to the Company.
Subject to Sections 8.01, 8.02, 8.03, 8.04, and 8.06 of this Article
Eight, the Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess Euro Legal Tender or Euro Government Obligations held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal, premium, if any,
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or interest that remains unclaimed for two years; provided that the Trustee or
such Paying Agent, before being required to make any payment, may at the expense
of the Company cause to be published once in a newspaper of general circulation
in the City of New York and, for so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, in a
newspaper with general circulation in Luxembourg (which is expected to be the
Luxemburger Wort) or mail to each Holder entitled to such money notice that such
money remains unclaimed, and that after a date specified therein which shall be
at least 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company, Noteholders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any Euro Legal
Tender or Euro Government Obligations in accordance with Article Eight 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 obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Article
Eight until such time as the Trustee or Paying Agent is permitted to apply all
such Euro Legal Tender or Euro Government Obligations in accordance with Article
Eight; provided that if the Company has made any payment of principal, premium,
if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the Euro Legal Tender or Euro Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or the Guarantees
without notice to or consent of any Noteholder:
(1) to cure any ambiguity, defect or inconsistency; provided that
such amendment or supplement does not, in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Noteholders or that does not adversely affect the rights of
any Noteholder;
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(6) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes will
be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities; or
(7) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
SECTION 9.02. With Consent of Holders.
(a) Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture or the Notes, without
notice to any other Noteholders. Subject to Section 6.07, the Holder or Holders
of a majority in aggregate principal amount of the outstanding Notes may waive
compliance by the Company or any Guarantor with any provision of this Indenture,
the Notes or the Guarantees without notice to any other Noteholder. No
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
shall, without the consent of each Holder of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of, premium, if any,
and interest on such Holder's Notes on or after the due date thereof or to
bring suit to enforce such payment, permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default, other
than ones with respect to the payment of principal of or interest on the
Notes; or
(6) modify Articles Ten, Twelve or Thirteen or the definitions used
in Articles Ten, Twelve or Thirteen in a manner which adversely affects the
Holders of the Notes in any material respect;
provided, however, that any amendment the purpose of which is to permit the
incurrence of additional Indebtedness under this Indenture shall not be
construed as adversely affecting the ranking of the Notes.
(b) Without the consent of Holders of not less than 66 2/3% in
aggregate principal amount of Notes then outstanding, no such amendment,
supplement or waiver may amend, change or modify in any mate-
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rial 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 or modify any of the provisions or
definitions with respect thereto.
(c) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Effect on Senior Debt.
No amendment of this Indenture shall adversely affect the rights of
any holder of (i) Senior Debt under Article Ten of this Indenture or (ii)
Guarantor Senior Debt under Article Thirteen of this Indenture, without the
consent of such holder.
SECTION 9.04. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture, the Notes or
the Guarantees shall comply with the TIA as then in effect.
SECTION 9.05. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of 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 revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder, unless it makes a change described in any of clauses (1)
through (6) of Section 9.02(a), in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of
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and interest on a Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
SECTION 9.06. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such
notation or exchange shall be made at the sole cost and expense of the Company.
SECTION 9.07. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder of
the Notes, by its acceptance thereof, likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article Ten; and the
Trustee and each Person holding any Note, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Notes by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations on the
Senior Debt, whether outstanding on the Issue Date or thereafter incurred; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
SECTION 10.02. No Payment on Notes in Certain Circumstances.
(a) 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 Article Eight) shall be made by the Company or any of
its Subsidiaries with respect to any Obligations on the Notes or to acquire any
of the Notes for cash or property.
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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 instruments 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 described under Article Eight) with respect to any Obligations on the
Notes or (y) acquire any of the 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).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (pro rata to such
holders on the basis of the respective amount of Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity
of the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) 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 total or partial 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, before any payment or distribution
of any kind or character is made on account of any Obligations on the Notes, or
for the acquisition of any of the Notes for cash or property or otherwise. Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the Holders
of the Notes or
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the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all Obligations on Senior Debt then due have been paid in full in
cash or Cash Equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior Debt.
(b) 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 securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt then due
remaining unpaid until all such Senior Debt has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(c) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
10.02 and 10.03, from making payments at any time for the purpose of making
payments of principal of and interest on the Notes, or from depositing with the
Trustee any moneys for such payments, or (ii) in the absence of actual knowledge
by the Trustee that a given payment would be prohibited by Section 10.02 or
10.03, the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of, and interest on, the Notes to
the Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment would otherwise become due and payable a Trust Officer
shall have actually received the written notice provided for in the second
sentence of Section 10.02(a) or in Section 10.07 (provided that, notwithstanding
the foregoing, such application shall otherwise be subject to the provisions of
the first sentence of Section 10.02(a) and Section 10.03). The Company shall
give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.
SECTION 10.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of
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cash, property or securities of the Company applicable to the Senior Debt until
the Notes shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of the Senior Debt by or on behalf
of the Company or by or on behalf of the Holders by virtue of this Article Ten
which otherwise would have been made to the Holders shall, as between the
Company and the Holders of the Notes, be deemed to be a payment by the Company
to or on account of the Senior Debt, it being understood that the provisions of
this Article Ten are and are intended solely for the purpose of defining the
relative rights of the Holders of the Notes, on the one hand, and the holders of
the Senior Debt, on the other hand.
SECTION 10.06. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and any 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 the Senior Debt, nor shall anything herein or therein prevent the
Holder of any Note or the Trustee on its behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 10.07. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Debt or a
Representative therefor, together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, 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.
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy,
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receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, receiver, assignee for the benefit of
creditors, agent or other person making such payment or distribution, delivered
to the Trustee or the Holders of the Notes, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
the 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 Ten.
SECTION 10.09. Trustee's Relation to Senior Debt.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 10.10. Subordination Rights Not Impaired by Acts or Omissions
of the 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 Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior
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Debt and the Holders of Notes, the subordination provided in this Article Ten,
and appoints the Trustee its attorney-in-fact for such purposes, 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
otherwise) tending towards liquidation of the business and assets of the
Company, the filing of a claim for the unpaid balance of its Notes and accrued
interest in the form required in those proceedings.
If the Trustee 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 the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their Representative to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 10.12. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
SECTION 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA 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 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Tokheim Corporation
10501 Corporate Drive
Fort Wayne, Indiana 46845
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Facsimile No.: (219) 484-1110
Attn: Executive Vice President, Finance and Administration
if to the Trustee:
U.S. Bank Trust National Association
100 Wall Street
16th Floor
New York, New York 10005
Facsimile No: (212) 809-5459
Attention: Corporate Trust Administration
if to the Luxembourg Paying and Transfer Agent, if any:
Bankers Trust Luxembourg S.A.
P.O. Box 807
14, Boulevard F.D. Roosevelt
L-2450 Luxembourg
Facsimile No: 352-473-136
Attention: Corporate Trust Administration
if to the Paying Agent:
Midland Bank plc
HSBC Issuer Services
Mariner House
Pepys Street
London EC3 N4DA
England
Facsimile No.: 44-171-260-5846
Attn: Corporate Trust Administration
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. 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; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
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Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA (S) 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(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 Person, he has made
such examination or investigation as is reasonably 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 each such
Person, such condition or covenant has been complied with.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
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SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or Chicago, Illinois or at such place of payment are not required to be
open. If a payment date is a Legal Holiday at such place, payment may be made
at such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE AND THE NOTES 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
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Noteholder by accepting a Note waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Notes.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.12. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which will be deemed an original, and all of which together shall constitute one
and the same instrument. Delivery of an executed counterpart sent by telecopier
shall be effective as delivery of a manually executed counterpart.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired
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thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
SECTION 11.14. Judgment Currency.
The Company hereby agrees to indemnify the Trustee, its directors, its
officers and each person, if any, who controls the Trustee within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any loss
incurred by such person as a result of any judgment or order being given or made
against the Company for any U.S. dollar amount due under this Agreement and such
judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in The City of New York at which such party
on the date of payment of such judgment or order is able to purchase United
States dollars with the amount of the Judgment Currency actually received by
such party. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States dollars.
ARTICLE TWELVE
GUARANTEE
SECTION 12.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally guarantees to each Holder of a
Note authenticated by the Trustee and to the Trustee and its successors and
assigns that: the principal of, premium thereon (if any) and interest on the
Notes will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise, and interest on the
overdue principal and interest on any overdue interest on the Notes and all
other obligations of the Company to the Holders or the Trustee hereunder or
under the Notes will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; subject, however, to the limitations set
forth in Section 12.03. Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of such
Guarantor. Each Guarantor 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 the Company,
protest, notice and all demands whatsoever and covenants that the Guarantee will
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or any Guarantor or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or a Guarantor, any amount paid by the Company or a Guarantor to the Trustee or
such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between such Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of the Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guar-
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anteed hereby, and (y) in the event of any acceleration of such obligations as
provided in Article Six, such obligations (whether or not due and payable) shall
become due and payable by such Guarantor for the purpose of the Guarantee.
SECTION 12.02. Severability.
In case any provision of this Article Twelve shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 12.03. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof, each Holder and the
Trustee, hereby confirm that it is the intention of all such parties that the
Guarantee does not constitute a fraudulent transfer or conveyance for purposes
of Title 11 of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. Federal
or state or other applicable law. To effectuate the foregoing intention, each
Holder and each Guarantor hereby irrevocably agree that the obligations of a
Guarantor under its Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of such Guarantor in respect of the obligations of such Guarantor
pursuant to Section 12.04, result in the obligations of such Guarantor not
constituting such a fraudulent transfer or conveyance.
SECTION 12.04. Execution of Guarantee.
To further evidence the Guarantee to the Holders, each Guarantor
hereby agrees to execute a guarantee to be endorsed on and made a part of each
Note ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its guarantee set forth in Section 12.01 shall remain in full
force and effect notwithstanding any failure to endorse on each Note a
guarantee. Each such guarantee shall be signed on behalf of each Guarantor by
its Chairman of the Board, its President or one of its Vice Presidents prior to
the authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such guarantee on behalf of such Guarantor. Such
signature upon the guarantee may be a manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the guarantee, and in
case such officer who shall have signed the guarantee shall cease to be such
officer before the Note on which such guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Note nevertheless may be authenticated and delivered or disposed of as though
the Person who signed the guarantee had not ceased to be such officer of such
Guarantor.
SECTION 12.05. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under the Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Notes in accordance with
the provisions provided therefor in this Indenture.
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ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Guarantee Subordinated to Guarantor Senior Debt.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Notes, by its acceptance thereof, likewise covenants and agrees, that
such Guarantor's Guarantee shall be issued subject to the provisions of this
Article Thirteen; and the Trustee and each Person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that the payment of all Obligations on the Notes pursuant to such
Guarantee shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
or Cash Equivalents of all Obligations on the Guarantor Senior Debt of such
Guarantor, whether outstanding on the Issue Date or thereafter incurred; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Guarantor Senior Debt of such Guarantor, and that each holder of
Guarantor Senior Debt of such Guarantor whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have acquired
Guarantor Senior Debt of such Guarantor in reliance upon the covenants and
provisions contained in this Indenture, the Notes and the Guarantees.
SECTION 13.02. No Payment in Certain Circumstances.
(a) 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 of any Guarantor, no payment of any kind or character (other than payments
by a trust previously established pursuant to Article Eight) shall be made by
such Guarantor with respect to any Obligations on such Guarantor's Guarantee or
to acquire any of the Notes for cash or property.
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 instruments 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 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, during Blockage Period
no Guarantor shall (x) make any payment of any kind or character (other than
payments by a trust previously established pursuant to the provisions described
under Article Eight) with respect to any Obligations on the Guarantees or (y)
acquire any of the 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).
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(b) In the event that, notwithstanding the foregoing, any payment from
any Guarantor shall be received by the Trustee or any Holder when such payment
is prohibited by Section 13.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt of such Guarantor (pro rata to such holders on the basis of the
respective amount of Guarantor Senior Debt of such Guarantor held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Guarantor Senior Debt of such Guarantor, if any,
received from the holders of Guarantor Senior Debt of such Guarantor (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from such Guarantor and only amounts included in the
information provided to the Trustee shall be paid to the holders of Guarantor
Senior Debt of such Guarantor.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.02 or to pursue any rights or
remedies hereunder.
SECTION 13.03. Payment Over of Proceeds upon Dissolution, Etc.
(a) 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 total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all of such Guarantor's Obligations due upon all Guarantor
Senior Debt of such Guarantor 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 of such Guarantor, before any payment or
distribution of any kind or character is made on account of any Obligations on
such Guarantor's Guarantees, or for the acquisition of any of the Notes by such
Guarantor, for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by such Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them, directly to the holders of Guarantor Senior Debt of such
Guarantor (pro rata to such holders on the basis of the respective amounts of
Guarantor Senior Debt of such Guarantor held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Guarantor Senior Debt of such Guarantor may have
been issued, as their respective interests may appear, for application to the
payment of Guarantor Senior Debt of such Guarantor remaining unpaid until all
Obligations on Guarantor Senior Debt of such Guarantor then due have been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Guarantor
Senior Debt of such Guarantor.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by Section 13.03(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Guarantor Senior Debt of such Guarantor (pro rata to such
holders on the basis of the respective amount of Guarantor Senior Debt of such
Guarantor held by such holders) or their respective Representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Guarantor
Senior Debt of such Guarantor may have been issued, as their respective
interests may appear, for application to the payment of Guarantor Senior Debt of
such Guarantor then
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due remaining unpaid until all such Guarantor Senior Debt of such Guarantor has
been paid in full in cash or Cash Equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Debt of such Guarantor.
(c) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of all or substantially all
of its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Guarantor
Senior Debt of such Guarantor shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume such Guarantor's obligations hereunder in accordance with
Article Five hereof.
SECTION 13.04. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture shall prevent (i) any Guarantor, except under the conditions described
in Sections 13.02 and 13.03, from making payments at any time for the purpose of
making payments of principal of and interest on the Notes or payments on the
Guarantees of such Guarantor, or from depositing with the Trustee any moneys for
such payments, or (ii) in the absence of actual knowledge by the Trustee that a
given payment would be prohibited by Section 13.02 or 13.03, the application by
the Trustee of any moneys deposited with it for the purpose of making such
payments of principal of, and interest on, the Notes or payments on the
Guarantees of such Guarantor to the Holders entitled thereto unless at least
two Business Days prior to the date upon which such payment would otherwise
become due and payable a Trust Officer shall have actually received the written
notice provided for in the second sentence of Section 13.02(a) or in Section
13.07 (provided that, notwithstanding the foregoing, such application shall
otherwise be subject to the provisions of the first sentence of Section 13.02(a)
and Section 13.03). Each Guarantor shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or reorganization of such
Guarantor.
SECTION 13.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt of each Guarantor, the Holders of the Notes shall be
subrogated to the rights of the holders of Guarantor Senior Debt of such
Guarantor to receive payments or distributions of cash, property or securities
of such Guarantor applicable to the Guarantor Senior Debt of such Guarantor
until the Notes shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Guarantor
Senior Debt of such Guarantor by or on behalf of such Guarantor or by or on
behalf of the Holders by virtue of this Article Thirteen which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders
of the Notes, be deemed to be a payment by such Guarantor to or on account of
the Guarantor Senior Debt of such Guarantor, it being understood that the
provisions of this Article Thirteen are and are intended solely for the purpose
of defining the relative rights of the Holders of the Notes, on the one hand,
and the holders of the Guarantor Senior Debt of such Guarantor, on the other
hand.
SECTION 13.06. Obligations of Guarantors Unconditional.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture, the Notes or the Guarantees is intended to or shall impair, as among
any Guarantor, its creditors other than the holders of Guarantor Senior Debt of
such Guarantor, and the Holders, the obligation of such Guarantor, which is
absolute and unconditional, to pay to the Holders the principal of and any
interest on the Notes and any payments due on the Guarantees as and when the
same shall
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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 the Guarantor Senior Debt of such Guarantor, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, in respect of cash,
property or securities of such Guarantor received upon the exercise of any such
remedy.
SECTION 13.07. Notice to Trustee.
Each Guarantor shall give prompt written notice to the Trustee of any
fact known to such Guarantor which would prohibit the making of any payment to
or by the Trustee in respect of the Notes or Guarantees pursuant to the
provisions of this Article Thirteen. Regardless of anything to the contrary
contained in this Article Thirteen or elsewhere in this Indenture, the Trustee
shall not be charged with knowledge of the existence of any default or event of
default with respect to any Guarantor Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from such Guarantor, or from a
holder of Guarantor Senior Debt or a Representative therefor, together with
proof satisfactory to the Trustee of such holding of Guarantor Senior Debt or of
the authority of such Representative, and, prior to the receipt of any such
written notice, the Trustee shall be entitled to assume (in the absence of
actual knowledge to the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that any
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 Thirteen, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amounts of Guarantor
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Thirteen, 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.
SECTION 13.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article Thirteen, the Trustee, subject to the provisions of Article
Seven hereof, and the Holders of the Notes shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, receiver, assignee
for the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or the Holders of the Notes, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Guarantor Senior Debt of such Guarantor and
other Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Thirteen.
SECTION 13.09. Trustee's Relation to Guarantor Senior Debt.
The Trustee and any agent of any Guarantor or the Trustee shall be
entitled to all the rights set forth in this Article Thirteen with respect to
any Guarantor Senior Debt which may at any time be held by it in its individual
or any other capacity to the same extent as any other holder of Guarantor Senior
Debt and nothing in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder.
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With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Thirteen, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Guarantor Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
SECTION 13.10. Subordination Rights Not Impaired by Acts or Omissions
of the Company, the Guarantors or Holders of Guarantor
Senior Debt.
No right of any present or future holders of any Guarantor 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 any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by Company or any Guarantor with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Thirteen or the
obligations hereunder of the Holders of the Notes to the holders of the
Guarantor Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Guarantor Senior Debt, or otherwise amend or supplement in any manner
Guarantor Senior Debt, or any instrument evidencing the same or any agreement
under which Guarantor Senior Debt is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Guarantor Senior Debt; and (iv) exercise or refrain
from exercising any rights against the Company, any Guarantor and any other
Person.
SECTION 13.11. Noteholders Authorize Trustee to Effectuate
Subordination of Guarantees.
Each Holder of Notes by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Guarantor
Senior Debt and the Holders of Notes, the subordination provided in this Article
Thirteen, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of any Guarantor, the filing of a claim for the unpaid
balance of its Notes or any amounts due on the Guarantees and accrued interest
in the form required in those proceedings.
If the Trustee 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 the Guarantor Senior Debt
or their Representative are or is hereby authorized to have the right to file
and are or is hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representa-
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tive to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes, the Guarantees or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Guarantor Senior Debt or their Representative to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 13.12. This Article Thirteen Not To Prevent Events of
Default.
The failure to make a payment on account of principal of or interest
on the Notes or any payment due on the Guarantees by reason of any provision of
this Article Thirteen will not be construed as preventing the occurrence of an
Event of Default.
SECTION 13.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Thirteen will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
[Signature Pages Follow]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
Issuer:
TOKHEIM CORPORATION
By:
----------------------------
Name:
Title:
Guarantors:
ENVIROTRONIC SYSTEMS, INC.,
as Guarantor
By:
----------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.,
as Guarantor
By:
----------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.,
as Guarantor
By:
----------------------------
Name:
Title:
S-1
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.,
as Guarantor
By:
----------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION,
as Guarantor
By:
----------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION,
as Guarantor
By:
----------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.,
as Guarantor
By:
----------------------------
Name:
Title:
TOKHEIM RPS, LLC,
as Guarantor
By:
----------------------------
Name:
Title:
S-2
<PAGE>
TOKHEIM SERVICES, LLC,
as Guarantor
By:
----------------------------
Name:
Title:
Trustee:
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
By:
----------------------------
Name:
Title:
S-3
<PAGE>
EXHIBIT A
CUSIP No.:
TOKHEIM CORPORATION
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
No. Euro
TOKHEIM CORPORATION, an Indiana corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of Euro 75,000,000 on
August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOKHEIM CORPORATION
By:
-------------------------------
Name:
Title:
Dated: January 29, 1999 By:
-------------------------------
Name:
Title:
A-1
<PAGE>
Certificate of Authentication
This is one of the Euro denominated 11 3/8% Senior Subordinated Notes
due 2008 referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
Dated: January 29, 1999 By:
--------------------------------
Authorized Signatory
A-2
<PAGE>
(REVERSE OF SECURITY)
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TOKHEIM CORPORATION, an Indiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from January 29, 1999. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing August 1, 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 and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes plus 2%
per annum.
The Notes are not entitled to the benefit of any mandatory sinking
fund.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. Payments of principal and premium, if any,
will be made (on presentation of such Notes if in certificated form) by credit
or transfer to a Euro account maintained by the Holder in the place of payment
specified by the Holder. Holders of Notes who receive payment in currency other
than Euro must make arrangements at their own expense. The Company shall deliver
such interest, principal or other payment to the Paying Agent no later than
12:00 noon London time on the Business Day prior to the date such payment is
due. However, the Company may pay principal and interest by its check payable in
Euro. The Company may deliver any such interest payment to the Paying Agent or
to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust National
Association, a national banking corporation (the "Trustee"), will act through
MSS (Nominees) Limited, the nominee of Midland Bank plc, London branch, as
Paying Agent and Registrar in the Borough of Manhattan, The City of New York,
and, for so long as the Notes are listed on the Luxembourg Stock Exchange and
the rules of each Exchange shall require, Bankers Trust Luxembourg S.A. will act
as Paying Agent and Registrar in Luxembourg. The Company may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture,
dated as of January 29, 1999 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of
Initial Notes of the Company designated as its 11 3/8% Senior Subordinated Notes
due 2008 (the "Notes"). The Notes are limited in aggregate principal amount to
Euro 75,000,000. The Notes include the Initial Notes and the Exchange Notes, as
defined below, issued in exchange for the Initial Notes pursuant to the
Indenture. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company.
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<PAGE>
5. Subordination. The Notes are unsecured obligations of the
Company and subordinated in right of payment, in the manner and to the extent
set forth in the Indenture, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt of the Company, whether outstanding on the date
of the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such
purposes.
6. Guarantee. The obligations of the Company hereunder are
guaranteed on a senior subordinated basis by the Guarantors. Each Guarantee by a
Guarantor is subordinated in right of payment to all Guarantor Senior Debt of
such Guarantor to the same extent that the Notes are subordinated to Senior Debt
of the Company.
7. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after February 1, 2004, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on
February 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption.
<TABLE>
<CAPTION>
<S> <C>
Year Percentage
- - ---- ----------
2004....................... 105.688%
2005....................... 103.792%
2006....................... 101.896%
2007 and thereafter........ 100.000%
</TABLE>
(b) Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to February 1, 2002, the Company may, at its
option, use the net cash proceeds of one or more Public Equity Offerings (as
defined in the Indenture) to redeem up to an aggregate of 35% of the initial
principal amount of the Notes originally issued in the Offering at a redemption
price equal to 111.375% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 55%
of the initial aggregate principal amount of Notes originally issued in the
Offering remains outstanding immediately after any such redemption.
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
8. Notice of Redemption. Notice of redemption under paragraphs 7(a)
and 7(b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange so require, the Company
will cause a copy of such notice to be published in a newspaper with general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such redemption. Notes in
denominations larger than Euro 1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes
A-4
<PAGE>
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
9. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture. For so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such Exchange shall require, the Company will
cause a copy of such notice to be published in a newspaper with general
circulation in Luxembourg (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such offer to purchase.
10. Registration Rights. Pursuant to the Registration Rights
Agreement by and among the Company, the Guarantors and the Initial Purchasers,
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Note shall have the right to exchange this Note for the
Company's Series B 11 3/8% Senior Subordinated Notes due 2008 (the "Exchange
Notes"), which have been registered under the Securities Act, in like principal
amount and having terms identical in all material respects to the Initial Notes.
The Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
11. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of Euro 1,000 and integral multiples of
Euro 1,000. A Holder shall register the transfer of or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
12. Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
13. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
14. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee Euro Legal Tender or Euro Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
15. Amendment; Supplement; Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Notes to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Notes in
addition to or in place of certificated Notes, or comply with Article Five of
the Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
A-5
<PAGE>
16. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other Person, sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
17. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
18. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in their interest.
19. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
20. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
21. Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
22. Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
NOTE AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS TO THE
EXTENT THAT APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
23. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST
(= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
24. 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 Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
25. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
A-6
<PAGE>
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Tokheim Corporation, 10501 Corporate
Drive, Fort Wayne, Indiana 46845, Attn: Executive Vice President, Finance and
Administration.
A-7
<PAGE>
[FORM OF GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each Guarantor (capitalized terms used herein have the meanings given
such terms in the Indenture referred to in the Note upon which this notation is
endorsed) hereby unconditionally guarantees on a senior subordinated basis (such
guarantee being referred to herein as the "Guarantee") the due and punctual
payment of the principal of, premium, if any, and interest on the Notes, whether
at maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal, premium, if any, and interest on the Notes,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Twelve of the Indenture.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt of each Guarantor, to the extent and in the
manner provided in Article Twelve and Article Thirteen of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law to the extent the law of another jurisdiction would be required thereby.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
ENVIROTRONIC SYSTEMS, INC.
By:
------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
------------------------------
Name:
Title:
A-8
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.
By:
------------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
------------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:
------------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
------------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
------------------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
------------------------------------
Name:
Title:
A-9
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint________________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Signed: /s/
----------------------- ------------------------------------
(Sign exactly as your name appears on
the other side of this Note)
Medallion Guarantee:
--------------------------
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) January 29, 2001, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-10
<PAGE>
Check One
(1) [_] to the Company or a subsidiary thereof; or
(2) [_] pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) [_] outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) [_] pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) [_] pursuant to an effective registration statement under the Securities
Act; or
(7) [_] pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
A-11
<PAGE>
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Date: Signed: /s/
------------------- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Medallion Guarantee:
-----------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:
------------------- ------------------------------------------------
NOTICE: To be executed by an executive officer
A-12
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
Euro
-----------------
Date:
----------------------- -----------------------------------------------
NOTICE: The signature on this assignment must
correspond with the name as it appears upon
the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed by
the endorser's bank or broker.
Medallion Guarantee:
-----------------------------
A-13
<PAGE>
EXHIBIT B
ISIN No.:
TOKHEIM CORPORATION
SERIES B 11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
No. Euro
TOKHEIM CORPORATION, an Indiana corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of Euro 75,000,000 August 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note contained
herein and the Indenture (as defined), which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
TOKHEIM CORPORATION
By:
------------------------------
Name:
Title:
Dated: By:
------------------------------
Name:
Title:
B-1
<PAGE>
Certificate of Authentication
This is one of the Series B Euro denominated 11 3/8% Senior
Subordinated Notes due 2008 referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
Dated: January 29, 1999 By:
--------------------------------
Authorized Signatory
B-2
<PAGE>
(REVERSE OF SECURITY)
11 3/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TOKHEIM CORPORATION, an Indiana corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from January 29, 1999. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing August 1, 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 and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful from time to time on demand at the rate borne by the Notes plus 2%
per annum.
The Notes are not entitled to the benefit of any mandatory sinking
fund.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. Payments of principal and premium, if any,
will be made (on presentation of such Notes if in certificated form) by credit
or transfer to a Euro account maintained by the Holder in the place of payment
specified by the Holder, Holders of Notes who receive payment in currency other
than the Euro must make arrangements at their own expense. The Company shall
deliver such interest, principal or other payment to the Paying Agent no later
than 12:00 noon London time on the Business Day prior to the date such payment
is due. However, the Company may pay principal and interest by its check payable
in Euro. The Company may deliver any such interest payment to the Paying Agent
or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust National
Association, a New York banking corporation (the "Trustee"), will act through
MSS (Nominees) Limited, the nominee of Midland Bank plc, London branch, as
Paying Agent and Registrar in London, England, and, for so long as the Notes are
listed on the Luxembourg Stock Exchange and the rules of such exchange shall
require, Bankers Trust Luxembourg S.A., will act as Paying Agent and Registrar
in Luxembourg. The Company may change any Paying Agent, Registrar or co-
Registrar without notice to the Holders.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of January 29, 1999 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. This Note is one of a duly authorized issue of
Initial Notes of the Company designated as its 11 3/8% Senior Subordinated Notes
due 2008 (the "Initial Notes"). The Notes are limited in aggregate principal
amount to Euro 75,000,000. The Notes include the Initial Notes and the Exchange
Notes, as defined below, issued in exchange for the Initial Notes pursuant to
the Indenture. The Initial Notes and the Exchange Notes are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and said Act for a statement of them. The
Notes are general unsecured obligations of the Company.
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<PAGE>
5. Subordination. The Notes are unsecured obligations of the Company
subordinated in right of payment, in the manner and to the extent set forth in
the Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder by his
acceptance hereof agrees to be bound by such provisions and authorizes and
expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
6. Guarantee. The obligations of the Company hereunder are
guaranteed on a senior subordinated basis by the Guarantors. Each Guarantee by a
Guarantor is subordinated in right of payment to all Guarantor Senior Debt of
such Guarantor to the same extent that the Notes are subordinated to Senior Debt
of the Company.
7. Redemption.
(a) Optional Redemption. The Notes will be redeemable, at the
Company's option, in whole at any time or in part from time to time, on and
after February 1, 2004, upon not less than 30 nor more than 60 days' notice, at
the following redemption prices (expressed as percentages of the principal
amount thereof) if redeemed during the twelve-month period commencing on
February 1 of the year set forth below, plus, in each case, accrued and unpaid
interest thereon, if any, to the date of redemption:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2004................................................... 105.688%
2005................................................... 103.792%
2006................................................... 101.896%
2007 and thereafter.................................... 100.000%
</TABLE>
(b) Optional Redemption Upon Public Equity Offerings. At any time, or
from time to time, on or prior to February 1, 2002, the Company may, at its
option, use the net cash proceeds of one or more Public Equity Offerings (as
defined in the Indenture) to redeem up to an aggregate of 35% of the initial
principal amount of the Notes originally issued in the Offering at a redemption
price equal to 111.375% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of redemption; provided that at least 55%
of the initial aggregate principal amount of Notes originally issued in the
Offering remains outstanding immediately after any such redemption:
In order to effect the foregoing redemption with the proceeds of any
Public Equity Offering, the Company shall make such redemption not more than 120
days after the consummation of any such Public Equity Offering.
8. Notice of Redemption. Notice of redemption under paragraphs 7(a)
and 7(b) of this Note will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. For so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such exchange shall require, the
Company will cause a copy of such Notice to be published in a newspaper of
general circulation (which is expected to be the Luxemburger Wort) and the
Luxembourg Stock Exchange will be advised of such redemption. Notes in
denominations larger than Euro 1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes
B-4
<PAGE>
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
9. Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture. For so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such exchange shall require, the Company will
cause a copy of such Notice to be published in a newspaper of general
circulation (which is expected to be the Luxemburger Wort) and the Luxembourg
Stock Exchange will be advised of such offer to purchase.
10. Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, in denominations of Euro 1,000 and integral multiples of
Euro 1,000. A Holder shall register the transfer of or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.
11. Persons Deemed Owners. The registered Holder of a Note shall be
as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any
time deposits with the Trustee Euro Legal Tender or Euro Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and any existing Default or Event of Default or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes, or comply with Article Five of the Indenture or make any
other change that does not adversely affect in any material respect the rights
of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock, enter
into transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other Person, sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such limitations.
B-5
<PAGE>
16. Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
20. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THIS NOTE AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS TO
THE EXTENT THAT APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
22. Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. 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 Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Tokheim Corporation, 10501 Corporate
Drive, Fort Wayne, Indiana 46845, Attn: Executive Vice President, Finance and
Administration.
B-6
<PAGE>
[FORM OF GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each Guarantor (capitalized terms used herein have the meanings given
such terms in the Indenture referred to in the Note upon which this notation is
endorsed) hereby unconditionally guarantees on a senior subordinated basis (such
guarantee being referred to herein as the "Guarantee") the due and punctual
payment of the principal of, premium, if any, and interest on the Notes, whether
at maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal, premium and interest on the Notes, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee, all in accordance with the terms set forth in Article
Twelve of the Indenture.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth, and
are expressly subordinated and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt of each Guarantor, to the extent and in the
manner provided in Article Twelve and Article Thirteen of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law to the extent the law of another jurisdiction would be required thereby.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
ENVIROTRONIC SYSTEMS, INC.
By:
--------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
--------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
--------------------------------
Name:
Title:
B-7
<PAGE>
SUNBELT HOSE & PETROLEUM EQUIPMENT, INC.
By:
--------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
--------------------------------
Name:
Title:
TOKHEIM EQUIPMENT CORPORATION
By:
--------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
--------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
--------------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
--------------------------------
Name:
Title:
B-8
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint________________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: Signed:
------------------- ------------------------------------------
(Sign exactly as your name appears on the
other side of this Note)
Medallion Guarantee:
--------------------------------------
B-9
<PAGE>
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [_]
Section 4.16 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
Euro
-------------------
Date:
-------------------------- --------------------------------------------
NOTICE: The signature on this assignment
must correspond with the name as it appears
upon the face of the within Note in every
particular without alteration or enlargement
or any change whatsoever and be guaranteed
by the endorser's bank or broker.
Medallion Guarantee:
--------------------------------
B-10
<PAGE>
EXHIBIT C
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 11 3/8% Senior Subordinated Notes due 2008
(the "Notes") Tokheim Corporation
This Certificate relates to Euro_______ principal amount of Notes held
in the form of* ___ a beneficial interest in a Global Note or* _______ Physical
Notes by ______ (the "Transferor").
The Transferor:*
[_] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depository a
Physical Note or Physical Notes in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Note (or the portion thereof indicated above); or
[_] has requested by written order that the Registrar exchange or
register the transfer of a Physical Note or Physical Notes.
[_] In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Notes does not require registration under the Securities Act of
1933, as amended (the "Act"), because*:
[_] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[_] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit D to the Indenture.
[_] Such Note is being transferred in reliance on Regulation S under
the Act. [An Opinion of Counsel to the effect that such transfer does not
require registration under the Act accompanies this certification.]
[_] Such Note is being transferred in reliance on Rule 144 under the
Act. [An Opinion of Counsel to the effect that such transfer does not require
registration under the Act accompanies this certification.]
[_] Such Note is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Act accompanies this certification.]
-------------------------------
[INSERT NAME OF TRANSFEROR]
By:
---------------------------
[Authorized Signatory]
Date:
-------------------
*Check applicable box.
C-1
<PAGE>
EXHIBIT D
---------
Form of Transferee Letter of Representation
-------------------------------------------
Attention: Corporate Trust Division
Ladies and Gentlemen:
This certificate is delivered to request a transfer of Euro________
principal amount of the 11 3/8% Senior Subordinated Notes due 2008 of Tokheim
Corporation (the "Company") and any guarantee thereof (the "Notes"). Upon
transfer, the Notes would be registered in the name of the new beneficial owner
as follows:
Name:
----------------------------
Address:
-------------------------
Taxpayer ID Number:
--------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act, that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, (e) in an offshore transaction in accordance with Regulation S under
the Securities Act (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the Note if the Note is not in book-
entry form), and, if such transfer is being effected by certain transferors
prior to the expiration of the "40-day distribution compliance period" (within
the meaning of Rule 903(b)(2) of Regulation S under the Securities Act), a
certificate that may be obtained from the Trustee is delivered by the
transferee, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
D-1
<PAGE>
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws. If
any resale or other transfer of the Notes is proposed to be made pursuant to
clause (d) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Company and the Trustee, which shall provide, among other
things, that the transferee is an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it
is acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. The Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (d) or (e) above to require the
delivery of an opinion of counsel, certificates and/or other information
satisfactory to the Company and the Trustee.
Dated: TRANSFEREE:
------------------------
By:
-------------------------------------
D-2
<PAGE>
EXHIBIT E
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
Attention: Corporate Trust Administration
Re: 11 3/8% Senior Subordinated Notes due 2008
(the "Notes") Tokheim Corporation
Ladies and Gentlemen:
In connection with our proposed sale of Euro ____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------------------
E-1
<PAGE>
Exhibit 4.25
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of January 29, 1999
By and Among
TOKHEIM CORPORATION,
THE GUARANTORS NAMED HEREIN,
as Issuers,
and
BT ALEX. BROWN INCORPORATED
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
GLEACHER NATWEST INTERNATIONAL
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
and
SCHRODER & CO. INC.,
as Initial Purchasers
================================================================================
Euro 75,000,000
11 3/8% SENIOR SUBORDINATED NOTES DUE 2008
<PAGE>
-i-
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Definitions........................................................... 1
2. Exchange Offer........................................................ 4
3. Shelf Registration.................................................... 7
4. Additional Interest................................................... 8
5. Registration Procedures............................................... 10
6. Registration Expenses................................................. 18
7. Indemnification....................................................... 19
8. Rule 144 and 144A..................................................... 22
9. Underwritten Registrations............................................ 22
10. Miscellaneous.......................................................... 22
(a) No Inconsistent Agreements........................................ 22
(b) Adjustments Affecting Registrable Securities...................... 23
(c) Amendments and Waivers............................................ 23
(d) Notices........................................................... 23
(e) Successors and Assigns............................................ 25
(f) Counterparts...................................................... 25
(g) Headings.......................................................... 25
(h) Governing Law..................................................... 25
(i) Severability...................................................... 26
(j) Securities Held by the Company or Its Affiliates.................. 26
(k) Third Party Beneficiaries......................................... 26
(l) Judgment Currency................................................. 26
</TABLE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of January 29,
1999, is being entered into by and among Tokheim Corporation, an Indiana
corporation (the "Company"), the subsidiaries of the Company listed on the
signature pages hereto as guarantors (the "Guarantors," and together with the
Company, the "Issuers") and BT Alex. Brown Incorporated, Credit Lyonnais
Securities (USA) Inc., First Chicago Capital Markets, Inc., Gleacher Natwest
International, ABN AMRO Incorporated, PaineWebber Incorporated and Schroder &
Co. Inc. (The "Initial Purchasers").
This Agreement is being entered into in connection with the Purchase
Agreement, dated January 26, 1999, by and among the Company, the Guarantors and
the Initial Purchasers (the "Purchase Agreement"), which provides for the sale
by the Company to the Initial Purchasers of Euro 75,000,000 aggregate principal
amount of the Company's 11 3/8% Senior Subordinated Notes due 2008 (the
"Notes"), guaranteed on a senior subordinated basis by the Guarantors (the
"Guarantees," and, together with the Notes, the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers
have agreed to provide the registration rights set forth in this Agreement for
the benefit of the Initial Purchasers and their direct and indirect transferees.
The execution and delivery of this Agreement is a condition to the obligation of
the Initial Purchasers to purchase the Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a) hereof.
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the first introductory paragraph hereto.
Applicable Period: See Section 2(b) hereof.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the first introductory paragraph hereto.
Effectiveness Date: The 150th day after the Issue Date.
Effectiveness Period: See Section 3(a) hereof.
<PAGE>
-2-
Event Date: See Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Securities: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Registration Statement: See Section 2(a) hereof.
Filing Date: The 90th day after the Issue Date.
Guarantees: See the second introductory paragraph hereto.
Guarantors: As of the date hereof, the subsidiaries of the Company
listed on the signature pages hereto and, as of any other date, subsidiaries of
the Company that are Guarantors under the Indenture as of such date.
Holder: Any holder of a Registrable Security or Registrable
Securities.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Person: See Section 7(c) hereof.
Indenture: The Indenture, dated as of January 29, 1999 by and among
the Company, the Guarantors and U.S. Bank Trust National Association, as
trustee, pursuant to which the Securities are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: See the first introductory paragraph hereto.
Inspectors: See Section 5(o) hereof.
Issue Date: The date on which the original Securities were sold to
the Initial Purchasers pursuant to the Purchase Agreement.
Issuers: See the first introductory paragraph hereto.
Judgment Currency: See Section 10(l)
NASD: See Section 5(s) hereof.
<PAGE>
-3-
Notes: See the second introductory paragraph hereto.
Participant: See Section 7(a) hereof.
Participating Broker-Dealer: See Section 2(b) hereof.
Person: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Securities: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement, including post-
effective amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the second introductory paragraph hereto.
Records: See Section 5(o) hereof.
Registrable Securities: Each Security upon original issuance of the
Securities and at all times subsequent thereto, each Exchange Security as to
which Section 2(c)(v) hereof is applicable upon original issuance and at all
times subsequent thereto and each Private Exchange Security upon original
issuance thereof and at all times subsequent thereto, until in the case of any
such Security, Exchange Security or Private Exchange Security, as the case may
be, the earliest to occur of (i) a Registration Statement (other than, with
respect to any Exchange Security as to which Section 2(c)(v) hereof is
applicable, the Exchange Registration Statement) covering such Security,
Exchange Security or Private Exchange Security, as the case may be, has been
declared effective by the SEC and such Security (unless such Security was not
tendered for exchange by the Holder thereof), Exchange Security or Private
Exchange Security, as the case may be, has been disposed of in accordance with
such effective Registration Statement, (ii) such Security, Exchange Security or
Private Exchange Security, as the case may be, is sold in compliance with Rule
144, or (iii) such Security, Exchange Security or Private Exchange Security, as
the case may be, ceases to be outstanding for purposes of the Indenture.
<PAGE>
-4-
Registration Statement: Any registration statement of the Company and
the Guarantors, including, but not limited to, the Exchange Registration
Statement, that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule 144)
or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Securities and Private
Exchange Securities (if any).
Underwritten registration or underwritten offering: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
(a) The Issuers agree to file with the SEC no later than the Filing
Date an offer to exchange (the "Exchange Offer") any and all of the Registrable
Securities (other than the Private Exchange Securities, if any) for a like
aggregate principal amount of debt securities of the
<PAGE>
-5-
Company, guaranteed on a senior subordinated basis by the Guarantors, which are
identical in all material respects to the Securities (the "Exchange Securities")
(and which are entitled to the benefits of the Indenture or a trust indenture
which is identical in all material respects to the Indenture (other than such
changes to the Indenture or any such identical trust indenture as are necessary
to comply with any requirements of the SEC to effect or maintain the
qualification thereof under the TIA) and which, in either case, has been
qualified under the TIA), except that the Exchange Securities (other than
Private Exchange Securities, if any) shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain no
restrictive legend thereon. The Exchange Offer shall be registered under the
Securities Act on the appropriate form (the "Exchange Registration Statement")
and shall comply with all applicable tender offer rules and regulations under
the Exchange Act. The Issuers agree to use their respective best efforts to (x)
cause the Exchange Registration Statement to be declared effective under the
Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer
open for at least 20 business days (or longer if required by applicable law)
after the date that notice of the Exchange Offer is mailed to Holders; and (z)
consummate the Exchange Offer on or prior to the 195th day following the Issue
Date. If after such Exchange Registration Statement is declared effective by the
SEC, the Exchange Offer or the issuance of the Exchange Securities thereunder is
prevented by any stop order, injunction or other order or requirement of the SEC
or any other governmental agency or court, such Exchange Registration Statement
shall be deemed not to have become effective for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be required to represent
that any Exchange Securities received by it will be acquired in the ordinary
course of its business, that at the time of the consummation of the Exchange
Offer such Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Securities in violation of the
provisions of the Securities Act, and that such Holder is not an affiliate of
any of the Issuers within the meaning of the Securities Act. Upon consummation
of the Exchange Offer in accordance with this Section 2, the Issuers shall have
no further obligation to register Registrable Securities (other than Private
Exchange Securities and other than in respect of any Exchange Securities as to
which clause 2(c)(v) hereof applies) pursuant to Section 3 hereof. No securities
other than the Exchange Securities shall be included in the Exchange
Registration Statement.
(b) The Issuers shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the Staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"). Such "Plan of Distribution" section shall also
expressly permit the use of the Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including all
Par-
<PAGE>
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ticipating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Securities.
The Issuers shall use their respective best efforts to keep the
Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein for a period of 180 days after consummation of the
Exchange Offer (or such longer period if extended pursuant to the last paragraph
of Section 5 hereof) (the "Applicable Period"), in order to permit such
Prospectus to be lawfully delivered by any Participating Broker-Dealer subject
to the prospectus delivery requirements of the Securities Act for such period of
time as is necessary to comply with applicable law in connection with any resale
of the Exchange Securities.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company shall, upon the
request of any of the Initial Purchasers, simultaneously with the delivery of
the Exchange Securities in the Exchange Offer issue and deliver to the Initial
Purchasers in exchange (the "Private Exchange") for such Securities held by the
Initial Purchasers a like principal amount of debt securities of the Company,
guaranteed on a senior subordinated basis by the Guarantors, that are identical
in all material respects to the Exchange Securities (the "Private Exchange
Securities") (and which are issued pursuant to the same indenture as the
Exchange Securities) except for the placement of a restrictive legend on such
Private Exchange Securities. The Private Exchange Securities shall bear the
same CUSIP number as the Exchange Securities.
Interest on the Exchange Securities and the Private Exchange
Securities will accrue from the last interest payment date on which interest was
paid on the Securities surrendered in exchange therefor or, if no interest has
been paid on the Securities, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer with an
address in the Borough of Manhattan, The City of New York; and
(3) permit Holders to withdraw tendered Securities 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.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Issuers shall:
<PAGE>
-7-
(1) accept for exchange all Securities tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;
(2) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each Holder
of Securities, Exchange Securities or Private Exchange Securities, as the
case may be, equal in principal amount to the Securities of such Holder so
accepted for exchange.
The Exchange Securities and the Private Exchange Securities may be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event shall provide that (1) the
Exchange Securities shall not be subject to the transfer restrictions set forth
in the Indenture and (2) the Private Exchange Securities shall be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Securities, the Private Exchange
Securities and the Securities shall vote and consent together on all matters as
one class and that none of the Exchange Securities, the Private Exchange
Securities or the Securities will have the right to vote or consent as a
separate class on any matter.
(c) If, (i) because of any change in law or in currently prevailing
interpretations of the Staff of the SEC, the Issuers are not permitted to
effect an Exchange Offer, (ii) the Exchange Offer is not consummated within 195
days of the Issue Date, (iii) any holder of Private Exchange Securities so
requests at any time after the consummation of the Private Exchange but within
two years after the date hereof, (iv) the Holders of not less than a majority in
aggregate principal amount of the Registrable Securities reasonably determine
that the interests of the Holders would be materially adversely affected by
consummation of the Exchange Offer or (v) in the case of any Holder that
participates in the Exchange Offer, such Holder does not receive Exchange
Securities on the date of the exchange that may be sold without restriction
under federal securities laws (other than due solely to the status of such
Holder as an affiliate of any Issuer within the meaning of the Securities Act),
then the Issuers shall promptly deliver to the Holders and the Trustee written
notice thereof (the "Shelf Notice") to the Trustee and in the case of clauses
(i), (ii) and (iv), all Holders, in the case of clause (iii), the Holders of the
Private Exchange Securities and in the case of clause (v), the affected Holder,
and shall file a Shelf Registration pursuant to Section 3 hereof.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c) hereof,
then:
<PAGE>
-8-
(a) Shelf Registration. The Issuers shall as promptly as reasonably
practicable file with the SEC a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 covering all of the Registrable
Securities (the "Shelf Registration"). If the Issuers shall not have yet filed
an Exchange Registration Statement, the Issuers shall use their respective best
efforts to file with the SEC the Shelf Registration on or prior to the Filing
Date. The Shelf Registration shall be on Form S-1 or another appropriate form
permitting registration of such Registrable Securities for resale by Holders in
the manner or manners designated by them (including, without limitation, one or
more underwritten offerings). The Issuers shall not permit any securities other
than the Registrable Securities to be included in the Shelf Registration.
The Issuers shall use their respective best efforts to cause the Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date and to keep the Shelf Registration continuously effective
under the Securities Act until the date which is three years from the Issue
Date, subject to extension pursuant to the last paragraph of Section 5 hereof
(the "Effectiveness Period"), or such shorter period ending when all Registrable
Securities covered by the Shelf Registration have been sold in the manner set
forth and as contemplated in the Shelf Registration.
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period (other than
because of the sale of all of the securities registered thereunder), the Issuers
shall use their respective best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Issuers shall promptly supplement
and amend the Shelf Registration if required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement or by any underwriter of such
Registrable Securities.
4. Additional Interest
(a) Each Issuer and the Initial Purchasers agree that the Holders of
Registrable Securities will suffer damages if any Issuer fails to fulfill its
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Issuers agree to pay, as liquidated damages, additional interest on the
Securities ("Additional Interest") under the circumstances and to the extent set
forth below:
(i) if neither the Exchange Registration Statement nor the Shelf
Registration has been filed on or prior to the Filing Date, then,
commencing on the 91st day after the
<PAGE>
-9-
Issue Date, Additional Interest shall accrue on the Notes over and above
the stated interest at a rate of 0.50% per annum for the first 90 days
immediately following the Filing Date, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of each
subsequent 90-day period;
(ii) if neither the Exchange Registration Statement nor the Shelf
Registration is declared effective by the SEC on or prior to the
Effectiveness Date, then, commencing on the 151st day after the Issue Date,
Additional Interest shall accrue on the Securities included or which should
have been included in such Registration Statement over and above the stated
interest at a rate of 0.50% per annum for the first 90 days immediately
following the Effectiveness Date, such Additional Interest rate increasing
by an additional 0.50% per annum at the beginning of each subsequent 90-day
period; and
(iii) if (A) the Issuers have not exchanged Exchange Securities for
all Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 195th day after the Issue Date or (B) the
Exchange Registration Statement ceases to be effective at any time prior to
the time that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration has been declared effective and such Shelf Registration
ceases to be effective at any time during the Effectiveness Period (unless
all the Securities have been sold thereunder), then Additional Interest
shall accrue (over and above any interest otherwise payable on such
Securities) at a rate of 0.50% per annum for the first 90 days commencing
on (x) the 196th day after the Issue Date with respect to the Securities
validly tendered and not exchanged by the Issuers, in the case of (A)
above, or (y) the day the Exchange Registration Statement ceases to be
effective in the case of (B) above, or (z) the day such Shelf Registration
ceases to be effective in the case of (C) above, such Additional Interest
rate increasing by an additional 0.50% per annum at the beginning of each
such subsequent 90-day period;
provided, however, that the Additional Interest rate on any affected Security
may not exceed in the aggregate 1.00% per annum; and provided, further, that
(1) upon the filing of the Exchange Registration Statement or a Shelf
Registration (in the case of clause (i) of this Section 4(a)), (2) upon the
effectiveness of the Exchange Registration Statement or the Shelf Registration
(in the case of clause (ii) of this Section 4(a)), or (3) upon the exchange of
Exchange Securities for all Securities tendered and not validly withdrawn (in
the case of clause (iii)(A) of this Section 4(a)), or upon the effectiveness of
the Exchange Registration Statement which had ceased to remain effective (in the
case of (iii)(B) of this Section 4(a)), or upon the effectiveness of the Shelf
Registration which had ceased to remain effective (in the case of (iii)(C) of
this Section 4(a)), Additional Interest on the affected Securities as a result
of such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue.
<PAGE>
-10-
(b) The Issuers shall notify the Trustee within one business day after
every date on which an event occurs in respect of which Additional Interest is
required to be paid (an "Event Date"). Any amounts of Additional Interest due
pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable to the Holders of affected Securities in cash semi-annually on each
February 1 and August 1 (to the holders of record on the January 15 and July 15
immediately preceding such dates), commencing with the first such date occurring
after any such Additional Interest commences to accrue. The amount of
Additional Interest will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the affected Registrable Securities of
such Holders, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed), and the denominator
of which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant
to Sections 2 or 3 hereof, the Issuers shall effect such registration(s) to
permit the sale of the securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by the Issuers hereunder, the
Issuers shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by Sections 2
or 3 hereof, and use its best efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; provided, however,
that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2
hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities during the Applicable
Period, before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Issuers shall, if requested, furnish to and afford
the Holders of the Registrable Securities covered by such Registration Statement
or each such Participating Broker-Dealer, as the case may be, their counsel and
the managing underwriters, if any, a reasonable opportunity to review copies of
all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed (in each case
at least five business days prior to such filing or such later date as is
reasonable under the circumstances). The Issuers shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document, if the Holders of a majority in aggregate principal
amount of the Registrable Securities covered by such Registration Statement, or
any such Participating Broker-Dealer, as the case may be, their counsel, or the
managing underwriters, if any, shall reasonably object.
<PAGE>
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(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Registration Statement, as the
case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period or
until consummation of the Exchange Offer, as the case may be; cause the related
Prospectus to be supplemented by any Prospectus supplement required by
applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and comply with the
provisions of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement as so amended or in such Prospectus as so supplemented and with
respect to the subsequent resale of any securities being sold by a Participating
Broker-Dealer covered by any such Prospectus; the Issuers shall be deemed not to
have used their respective best efforts to keep a Registration Statement
effective during the Applicable Period if any of them voluntarily takes any
action that would result in selling Holders of the Registrable Securities
covered thereby or Participating Broker-Dealers seeking to sell Exchange
Securities not being able to sell such Registrable Securities or such Exchange
Securities during that period unless (i) such action is required by applicable
law, (ii) such action is taken by the Issuers in good faith and for valid
business reasons (not including avoidance of the Issuers' obligations hereunder)
including the acquisition or divestiture of a business or assets, or (iii) the
Issuers comply with this Agreement, including without limitation, the provisions
of paragraph 5(k) hereof and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, notify the selling Holders of Registrable
Securities, or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, promptly (but in any event within
two business days), and confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuers, one conformed copy of such Registration Statement or post-
effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Securities or resales of
Exchange Securities by Participating Broker-Dealers upon written notice by any
such Participating Broker-Dealer of a resale the representations and warranties
of any Issuer contained in any agreement (including any underwriting agreement),
con-
<PAGE>
-12-
templated by Section 5(n) hereof cease to be true and correct, (iv) of the
receipt by any Issuer of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or any
of the Registrable Securities or the Exchange Securities to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition of which any Issuer is
aware or any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the determination by the Issuers that a post-
effective amendment to a Registration Statement would be appropriate.
(d) Use their respective best efforts to prevent the issuance of any
order suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities or the
Exchange Securities for sale in any jurisdiction, and, if any such order is
issued, to use its best efforts to obtain the withdrawal of any such order at
the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if
requested by the managing underwriter or underwriters (if any), or the Holders
of a majority in aggregate principal amount of the Registrable Securities being
sold in connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for any
of them reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after any Issuer has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment, and
(iii) supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, furnish to each selling Holder of Registrable
Securities and to each such Participating Broker-Dealer who so requests and to
counsel and each managing underwriter, if any, at the sole expense of the
Issuers, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment
<PAGE>
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thereto, including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, deliver to each selling Holder of Registrable
Securities, or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, at the sole expense of the
Issuers, as many copies of the Prospectus or Prospectuses (including each form
of preliminary prospectus) and each amendment or supplement thereto and any
documents incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, each Issuer
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents,
if any, and dealers (if any), in connection with the offering and sale of the
Registrable Securities covered by, or the sale by Participating Broker-Dealers
of the Exchange Securities pursuant to, such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, use their respective best efforts to register or qualify such
Registrable Securities (and to cooperate with selling Holders of Registrable
Securities or each such Participating Broker-Dealer, as the case may be, the
managing underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities) for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder, Participating Broker-Dealer, or the
managing underwriter or underwriters reasonably request in writing; provided,
however, that where Exchange Securities held by Participating Broker-Dealers or
Registrable Securities are offered other than through an underwritten offering,
the Issuers agree to cause their counsel to perform Blue Sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of the
Exchange Securities held by Participating Broker-Dealers or the Registrable
Securities covered by the applicable Registration Statement; provided, however,
that no Issuer shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction.
<PAGE>
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(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriter or underwriters, if any, or Holders may reasonably
request.
(j) Use their respective best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Holders thereof or the underwriter or underwriters, if any, to
dispose of such Registrable Securities, except as may be required solely as a
consequence of the nature of a selling Holder's business, in which case each
Issuer will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the sole expense of the
Issuers, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder or to the purchasers of the Exchange Securities to whom
such Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not 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, in light of the circumstances under which they were made,
not misleading.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Securities, (i) provide the Trustee with
certificates for the Registrable Securities or Exchange Securities, as the case
may be, in a form eligible for deposit with The Depository Trust Company and
(ii) provide a CUSIP number for the Registrable Securities or Exchange
Securities, as the case may be.
(m) In connection with any underwritten offering of Registrable
Securities pursuant to a Shelf Registration, enter into an underwriting
agreement as is customary in underwritten offerings of debt securities similar
to the Securities and take all such other actions as are reasonably requested by
the managing underwriter or underwriters in order to facilitate the regis-
<PAGE>
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tration or the disposition of such Registrable Securities and, in such
connection, (i) make such representations and warranties to, and covenants with,
the underwriters with respect to the business of the Company and its
subsidiaries and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten offerings of
debt securities similar to the Securities, and confirm the same in writing if
and when requested; (ii) obtain the written opinion of counsel to the Company
and written updates thereof in form, scope and substance reasonably satisfactory
to the managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings of debt securities similar to the Securities and such other matters as
may be reasonably requested by the managing underwriter or underwriters; (iii)
obtain "cold comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings of
debt securities similar to the Securities and such other matters as reasonably
requested by the managing underwriter or underwriters as permitted by Statement
of Auditing Standards No. 71; and (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate principal amount of
Registrable Securities covered by such Registration Statement and the managing
underwriter or underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each closing
under such underwriting agreement, or as and to the extent required thereunder.
(n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof,
or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, make available for inspection by any selling
Holder of such Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
instruments of the Company and its subsidiaries (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employ-
<PAGE>
-16-
ees of the Company and its subsidiaries to supply all information reasonably
requested by any such Inspector in connection with such Registration Statement.
Records which the Company determines, in good faith, to be confidential and any
Records which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (iii) disclosure of such
information is, in the opinion of counsel for any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising out
of, based upon, relating to, or involving this Agreement, or any transactions
contemplated hereby or arising hereunder, or (iv) the information in such
Records has been made generally available to the public. Each selling Holder of
such Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as the
basis for any market transactions in the securities of the Company unless and
until such information is generally available to the public. Each selling Holder
of such Registrable Securities and each such Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to prevent
disclosure of the Records deemed confidential at the Company's sole expense.
(o) Provide an indenture trustee for the Registrable Securities or the
Exchange Securities, as the case may be, and use its best efforts to cause the
Indenture or the trust indenture provided for in Section 2(a) hereof, as the
case may be, to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Securities; and in connection therewith, cooperate with the trustee
under any such indenture and the Holders of the Registrable Securities, to
effect such changes to such indenture as may be required for such indenture to
be so qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable such indenture to be so qualified in a timely
manner.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act).
(q) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Securities by Holders to the Company (or to
such other Person as directed by the Company) in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the Company
shall mark, or cause to be marked, on such Registrable
<PAGE>
-17-
Securities that such Registrable Securities are being cancelled in exchange for
the Exchange Securities or the Private Exchange Securities, as the case may be;
in no event shall such Registrable Securities be marked as paid or otherwise
satisfied.
(r) Cooperate with each seller of Registrable Securities covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
(s) Use their respective best efforts to take all other steps
necessary or advisable to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
The Company may require each seller of Registrable Securities or
Participating Broker-Dealer as to which any Registration is being effected to
furnish to the Company such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities as the Company
may, from time to time, reasonably request. The Company may exclude from such
registration the Registrable Securities of any seller or Participating Broker-
Dealer who fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such seller not materially misleading.
Each Holder of Registrable Securities and each Participating Broker-
Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon actual receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus or Exchange
Securities to be sold by such Holder or Participating Broker-Dealer, as the case
may be, until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
shall have received (x) the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof or (y) the Advice.
<PAGE>
-18-
6. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by any Issuer shall be borne by the Issuers whether or not
the Exchange Offer or a Shelf Registration is filed or becomes effective,
including, without limitation, (i) all registration and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and expenses
of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Registrable Securities or Exchange Securities and
determination of the eligibility of the Registrable Securities or Exchange
Securities for investment under the laws of such jurisdictions (x) where the
holders of Registrable Securities are located, in the case of the Exchange
Securities, or (y) as provided in Section 5(h) hereof, in the case of
Registrable Securities or Exchange Securities to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Securities
or Exchange Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the managing underwriter or underwriters, if any, by the Holders of
a majority in aggregate principal amount of the Registrable Securities included
in any Registration Statement or sold by any Participating Broker-Dealer, as
the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and fees and disbursements of special
counsel for the sellers of Registrable Securities (subject to the provisions of
Section 6(b) hereof), (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(n)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) rating agency fees, if any,
and any fees associated with making the Registrable Securities or Exchange
Securities eligible for trading through The Depository Trust Company, (vii)
Securities Act liability insurance, if the Issuers desire such insurance, (viii)
fees and expenses of all other Persons retained by the Issuers, (ix) internal
expenses of the Issuers (including, without limitation, all salaries and
expenses of officers and employees of the Issuers performing legal or accounting
duties), (x) the expense of any annual audit, (xi) the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange, if applicable, and (xii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.
(b) The Issuers shall, jointly and severally, (i) reimburse the
Holders of the Registrable Securities being registered in a Shelf Registration
for the reasonable fees and disbursements, not to exceed $25,000, of not more
than one counsel (in addition to appropriate local counsel) chosen by the
Holders of a majority in aggregate principal amount of the Registrable
Securities to be included in such Registration Statement and (ii) reimburse
reasonable out-of-pocket expenses (other than legal expenses) of Holders of
Registrable Securities incurred
<PAGE>
-19-
in connection with the registration and sale of the Registrable Securities
pursuant to a Shelf Registration or in connection with the exchange of
Registrable Securities pursuant to the Exchange Offer.
7. Indemnification
(a) The Issuers agree, jointly and severally, to indemnify and hold
harmless each Holder of Registrable Securities offered pursuant to a Shelf
Registration Statement and each Participating Broker- Dealer selling Exchange
Securities during the Applicable Period, the affiliates, directors, officers,
agents, representatives and employees of each such Person or its affiliates, and
each other Person, if any, who controls any such Person or its affiliates within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the reasonable
legal fees and other expenses actually incurred in connection with any suit,
action or proceeding or any claim asserted) caused by, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement pursuant to which the offering of such
Registrable Securities or Exchange Securities, as the case may be, is registered
(or any amendment thereto) or related Prospectus (or any amendments or
supplements thereto) or any related preliminary prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers will not be required to
indemnify a Participant if (i) such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of such Participant expressly for use
therein or (ii) if such untrue statement or omission or alleged untrue statement
or omission was contained or made in any preliminary prospectus and corrected in
the Prospectus or any amendment or supplement thereto and the Prospectus does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact that was the subject matter of the related
proceeding, unless the person asserting the claim failed to receive a copy of
the Prospectus (as amended or supplemented) as a result of noncompliance by the
Issuers with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless each Issuer, its directors and officers and each Person who
controls any Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only (i) with reference to information
furnished to the Company in writing by or on behalf of such Participant
expressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus or (ii) with respect to any
untrue statement or representation made by such Participant in writing to the
Company. The liability of any Participant under this para-
<PAGE>
-20-
graph shall in no event exceed the proceeds received by such Participant from
sales of Registrable Securities or Exchange Securities giving rise to such
obligations. In connection with any underwritten public offering, the
underwriting agreement shall include customary indemnification of the Issuers by
the underwriters.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise (unless and only to the extent that such failure
results in the loss or compromise of any material rights or defenses by the
Indemnifying Person). In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed in writing to the
contrary, (ii) the Indemnifying Person shall have failed within a reasonable
period of time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any one
such proceeding or separate but substantially similar related proceeding in the
same jurisdiction arising out of the same general allegations, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed promptly as they are incurred. Any such separate firm for the
Participants and such control Persons of Participants shall be designated in
writing by Participants who sold a majority in interest of Registrable
Securities and Exchange Securities sold by all such Participants and any such
separate firm for the Company, its directors, its officers and such control
Persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent, but if settled with such consent or
if there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding
<PAGE>
-21-
in respect of which any Indemnified Person is or has been a party, and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement (A) includes an unconditional written release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in the first and second
paragraphs of this Section 7 is for any reason unavailable to, or insufficient
to hold harmless, an Indemnified Person in respect of any losses, claims,
damages or liabilities referred to therein (other than by reason of the
exceptions provided therein), then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
(i) the relative benefits received by the Indemnifying Person or Persons on the
one hand and the Indemnified Person or Persons on the other from the offering of
the Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuers on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Securities
or Exchange Securities, as the case may be, exceeds the amount of any damages
that such Participant has otherwise been required to pay or has paid by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
Person
<PAGE>
-22-
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and 144A
Each of the Issuers covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder in a timely manner in accordance
with the requirements of the Securities Act and the Exchange Act and, if at any
time any of the Issuers is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available such
information as is legally necessary to permit sales pursuant to Rule 144 and
Rule 144A under the Securities Act. Each of the Issuers further covenants for
so long as any Registrable Securities remain outstanding, to make available to
any Holder or beneficial owner of Registrable Securities in connection with any
sale thereof and any prospective purchaser of such Registrable Securities from
such Holder or beneficial owner the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable
Securities pursuant to Rule 144A.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Securities included in such offering and reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. No Issuer has entered, as of the
date hereof, and no Issuer will, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders of Registrable Securities
<PAGE>
-23-
in this Agreement or otherwise conflicts with the provisions hereof. No Issuer
has entered and no Issuer will enter into any agreement with respect to any of
its securities which will grant to any Person piggy-back registration rights
with respect to a Registration Statement.
(b) Adjustments Affecting Registrable Securities. No Issuer will,
directly or indirectly, take any action with respect to the Registrable
Securities as a class that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
(c) 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, otherwise than with the prior
written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Registrable 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
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly adversely
affect, impair, limit or compromise the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Securities or any Participating
Broker-Dealer, at the most current address of such Holder or Participating
Broker-Dealer, as the case may be, set forth on the records of the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers as follows:
<PAGE>
-24-
BT Alex. Brown Incorporated
Credit Lyonnais Securities (USA) Inc.
First Chicago Capital Markets, Inc.
Gleacher NatWest International
ABN AMRO Incorporated
PaineWebber Incorporated
Schroder & Co. Inc.
c/o BT Alex. Brown Incorporated
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No.: (212) 250-7200
Attention: Corporate Finance Department
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: Michael A. Becker, Esq.
2. if to the Initial Purchasers, at the address specified in Section
10(d)(1);
3. if to any Issuer, as follows:
Tokheim Corporation
P.O. Box 360
Fort Wayne, IN 46801
Facsimile No: (219) 484-1110
Attention: Executive Vice President, Finance
and Administration
<PAGE>
-25-
with a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Suite 2100
Chicago, IL 60606,
Facsimile No: (312) 407-0411
Attention: William R. Kunkel
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that this Agreement shall not inure to the benefit of
or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registrable Securities.
(f) 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. Delivery of an executed
counterpart by telecopier shall be in effect as delivery of a manually executed
counterpart.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. 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 WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
<PAGE>
-26-
(i) Severability. 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 best 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.
(j) Securities Held by the Company or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by any Issuer or
their respective affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Registrable Securities
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(l) Judgment Currency. Each (x) Issuer, jointly and severally,
hereby agrees to indemnify each Participant against any loss incurred by such
person as a result of any judgment or order being given or made against any
Participant and (y) Participant hereby agrees, severally and not jointly, to
indemnify each Issuer against any loss incurred by such person as a result of
any judgment or order being given or made against any Issuer for any amount due
under this Agreement and such judgment or order being expressed and paid in a
currency (the "Judgment Currency") other than United States dollars and as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange in The City of New
York at which such party on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment Currency
actually received by such party. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
[Signature Pages Follow]
<PAGE>
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TOKHEIM CORPORATION
By:
------------------------------
Name:
Title:
<PAGE>
S-2
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
BT ALEX. BROWN INCORPORATED
CREDIT LYONNAIS SECURITIES (USA) INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
GLEACHER NATWEST INTERNATIONAL
ABN AMRO INCORPORATED
PAINEWEBBER INCORPORATED
SCHRODER & CO. INC.
BY: BT ALEX. BROWN INCORPORATED
By:
------------------------------
Name:
Title:
<PAGE>
S-3
Each of the subsidiaries of the Company specified below agrees to
become a party to this Registration Rights Agreement as a Guarantor as of the
date hereof.
ENVIROTRONIC SYSTEMS, INC.
By:
------------------------------
Name:
Title:
GASBOY INTERNATIONAL, INC.
By:
------------------------------
Name:
Title:
MANAGEMENT SOLUTIONS, INC.
By:
------------------------------
Name:
Title:
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
By:
------------------------------
Name:
Title:
TOKHEIM AUTOMATION CORPORATION
By:
------------------------------
Name:
Title:
<PAGE>
S-4
TOKHEIM EQUIPMENT CORPORATION
By:
------------------------------
Name:
Title:
TOKHEIM INVESTMENT CORP.
By:
------------------------------
Name:
Title:
TOKHEIM RPS, LLC
By:
------------------------------
Name:
Title:
TOKHEIM SERVICES, LLC
By:
------------------------------
Name:
Title:
<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (11) - Earnings Per Share
For the twelve month periods ended November 30, 1998, 1997 and 1996.
Basic earnings per share is based on the weighted average number of common
shares outstanding during each year presented. Dilutive earnings per share is
based on the weighted average number of common shares outstanding and the
assumed exercise of dilutive common stock equivalents from the exercise of
certain options and warrants less the number of shares assumed to be repurchased
using the average market price of the Company's common stock during the period
using the treasury stock method.
The following table presents information necessary to calculate earnings per
share for the twelve month periods ended November 30, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Basic
----------------------------------------------
Twelve Months Ended
----------------------------------------------
November 30, November 30, November 30,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding......................... 11,371 8,042 7,939
Net earnings (loss)..................................... $ (27,668) $ 2,094 (2,009)
Preferred stock dividends............................... (1,484) (1,512) (1,543)
------------ ------------ ------------
Earnings (loss) applicable to common stock.............. $ (29,152) $ 582 (3,552)
============ =========== ============
Net earnings (loss) loss per common share............... $ (2.56) $ 0.08 (0.45)
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Diluted
----------------------------------------------
Twelve Months Ended
----------------------------------------------
November 30, November 30, November 30,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding......................... 11,371 8,042 7,939
Share equivalents.................................... 639 177 68
Weighted average conversion of preferred stock....... 765 786 800
------------ ------------ ------------
Adjusted outstanding................................. 12,775 9,005 8,807
============ ============ ============
Net earnings (loss)..................................... $ (27,668) $ 2,094 (2,009)
Incremental RSP expense................................. (1,484) (1,512) (1,543)
------------ ------------ ------------
Earnings (loss) applicable to common stock.............. $ (29,152) $ 582 (3,552)
============ ============ ============
Net earnings (loss) loss per common share............... $ (2.28) $ 0.06 (0.40)
============ ============ ============
</TABLE>
For financial reporting purposes, the loss per common share, assuming dilution,
is considered to be the same as basic since the effect of the common stock
equivalents would be antidilutive.
<PAGE>
Exhibit 21.1
Subsidiaries*
<TABLE>
<CAPTION>
F/S
Tokheim% Jurisdiction of Information
Subsidiary Name Ownership(R) Incorporation Included By
--------------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Management Solutions, Inc. (A) 100.00% USA - Colorado Consolidated
Tokheim Equipment Corporation (A) 100.00% USA - Delaware Consolidated
Tokheim RPS, LLC (K) 100.00% USA - Delaware Consolidated
Sunbelt Hose & Petroleum Equipment, Inc. (B) 100.00% USA - Georgia Consolidated
Envirotronic Systems, Inc. (A) 100.00% USA - Indiana Consolidated
Gasboy International, Inc. (B) 100.00% USA - Pennsylvania Consolidated
Tokheim Automation Corporation (A) 100.00% USA - Texas Consolidated
Tokheim Services LLC (Q) 100.00% USA - Indiana Consolidated
Tokheim Investment Corp. (A) 100.00% USA - Texas Consolidated
Tokheim Austria GesmbH (G) 100.00% Austria Consolidated
Tokheim Belgium N.V. (P) 99.64% Belgium Consolidated
Socatam S.A. (F) 99.91% Cameroon Consolidated
Tokheim and Gasboy of Canada Limited (C) 100.00% Canada - Ontario Consolidated
Tokheim Czech Republic (F) 100.00% Czech Republic Consolidated
Tokheim Scandinavia A/S (J) 100.00% Denmark Consolidated
Tokheim Sofitam S.A. (B) 100.00% France Consolidated
Tokheim Sofitam Application S.A. (E) 100.00% France Consolidated
Outelec (F) (less than) 1.00% France Equity Method
Excelsior S.A. (F) 20.00% France Equity Method
Serip S.A. (F) 35.80% France Equity Method
Solutions Services Systems France S.A. (F) 100.00% France Consolidated
Tokheim Holding GmbH (A) 100.00% Germany Consolidated
Tokheim GmbH (G) 100.00% Germany Consolidated
Deutsche Verwaltungseesellschaft GmbH (G) 100.00% Germany Consolidated
Tokheim Germann GmbH (N) 100.00% Germany Consolidated
Tokheim Tanksysteme GmbH (N) 100.00% Germany Consolidated
Tokheim Hungary Measurements & Systems KFT (F) 100.00% Hungary Consolidated
Tulla Electronics Limited (B) 100.00% Ireland Consolidated
Tokheim Ireland Limited (B) 100.00% Ireland Consolidated
CME - Rimic S.r.l. (F) 100.00% Italy Consolidated
Tokheim Sofitam Italia S.r.l. (F) 70.00% Italy Consolidated
Cocitam S.A. (F) 98.60% Ivory Coast Consolidated
Matam S.A. (F) 100.00% Morocco Consolidated
Tokheim Z.O.O. (O) 100.00% Poland Consolidated
Russgermann (O) 25.00% Russia Equity Method
Cosetam S.A. (H) 100.00% Senegal Consolidated
Tokheim Slovakia S.R.O. (F) 100.00% Slovakia Consolidated
Tokheim Properties (Proprietary) Limited (D) 100.00% South Africa Consolidated
Tokheim South Africa (Proprietary) Limited (D) 100.00% South Africa Consolidated
Tokheim Sofitam Iberica S.A. (F) 99.81% Spain Consolidated
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Koppens Iberica S.A. (M) 100.00% Spain Consolidated
Tokheim Sofitam N.V. (F) 100.00% Belgium Consolidated
Coguerel S.A. (F) 100.00% France Consolidated
Vautrin (F) 100.00% France Consolidated
Tokheim Swaziland (Proprietary) Limited (L) 100.00% Swaziland Consolidated
Tokheim Switzerland S.A. (B) 100.00% Switzerland Consolidated
Bennett & Sauser S.A. (F) 47.14% Switzerland Consolidated
Tokheim Holding Netterlands B.V. (B) 100.00% The Netherlands Consolidated
Koppens Automatic Fabrieken B.V. (I) 100.00% The Netherlands Consolidated
Tokheim Sales B.V.** (I) 100.00% The Netherlands Consolidated
Tokheim Netherlands B.V. (I) 100.00% The Netherlands Consolidated
Koppens Holding Nederland B.V. (I) 100.00% The Netherlands Consolidated
Tokheim Europe B.V. (I) 100.00% The Netherlands Consolidated
HMA Rotterdam B.V. (J) 100.00% The Netherlands Consolidated
Cottam Sarl (F) 100.00% Tunisia Consolidated
Tokheim Sofitam UK Limited (B) 100.00% United Kingdom Consolidated
Sofitam Pump Services Ltd. (F) 51.31% United Kingdom Consolidated
</TABLE>
* Subsidiaries immediately after transaction; does not take into account
subsequent liquidations, mergers, or other transactions.
**In liquidation.
A) Directly owned by Tokheim Corporation.
B) Directly owned by Tokheim Corporation's subsidiary Tokheim Investment
Corporation, or directors' qualifying shares.
C) Directly owned 65% by Tokheim Corporation's subsidiary Tokheim Investment
Corporation and 35% by Tokheim Corporation's subsidiary Gasboy
International, Inc.
D) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim and
Gasboy of Canada Limited.
E) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
S.A.
F) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
Application S.A.
G) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Holding
GmbH.
H) Directly owned 66.67% by Tokheim Corporation's indirect subsidiary Tokheim
Sofitam Application S.A. and 33.33% by Tokheim Corporation's indirect
subsidiary Cocitan S.A.
I) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Holding
Netherlands B.V.
J) Directly owned by Tokheim Corporation's indirect subsidiary Koppers Holding
Nederland B.V.
K) Directly owned by Tokheim Corporation's indirect subsidiary Gasboy
International, Inc.
L) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim South
Africa (Proprietary) Limited.
M) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Sofitam
Iberica S.A.
N) Directly owned by Tokheim Corporation's indirect subsidiary Deutsche
Verwaltungsgesellschaft GmbH.
O) Directly owned by Tokheim Corporation's indirect subsidiary Tokheim Germann
GmbH.
2
<PAGE>
P) Directly owned 99.6% by Tokheim Corporation's indirect subsidiary Koppens
Holding Nederland B.V. and 0.04% by Tokheim Corporation's indirect
subsidiary Koppens Automatic Fabrieken B.V.
Q) Directly owned 99% by Tokheim Corporation and 1% by Tokheim Corporation's
Subsidiary Tokheim Investment Corporation.
R) All subsidiaries are consolidated, except for Outelec, Excelsior S.A.,
Serip S.A., and Russgermann, which are accounted for using the equity
method.
3
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Tokheim Corporation on Form S-8 (file No. 1-6018) of our report dated
February 19, 1999, on our audits of the consolidated financial statements of
Tokheim Corporation and subsidiaries as of November 30, 1998 and 1997, and for
the years ended November 30, 1998, 1997, and 1996, which report is included in
this Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
Fort Wayne, Indiana
February 28, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Tokheim Corporation's November 30, 1998, annual financial statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000098559
<NAME> TOKHEIM CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> NOV-30-1998
<CASH> 26,801
<SECURITIES> 0
<RECEIVABLES> 174,808
<ALLOWANCES> 2,115
<INVENTORY> 123,033<F1>
<CURRENT-ASSETS> 341,666
<PP&E> 150,626<F2>
<DEPRECIATION> 72,721
<TOTAL-ASSETS> 776,642
<CURRENT-LIABILITIES> 249,070
<BONDS> 232,500
12,130<F3>
0
<COMMON> 89,659<F4>
<OTHER-SE> (45,028)<F5>
<TOTAL-LIABILITY-AND-EQUITY> 776,642
<SALES> 466,440
<TOTAL-REVENUES> 466,440
<CGS> 345,031<F6>
<TOTAL-COSTS> 345,031<F6>
<OTHER-EXPENSES> 13,685
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,257
<INCOME-PRETAX> (2,698)
<INCOME-TAX> 1,046
<INCOME-CONTINUING> (3,744)
<DISCONTINUED> 0
<EXTRAORDINARY> (23,924)
<CHANGES> 0
<NET-INCOME> 27,668
<EPS-PRIMARY> (2.56)
<EPS-DILUTED> (2.56)
<FN>
<F1> Represents gross inventory net of loss reserves.
<F2> Represents gross PP&E.
<F3> Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$6,987 and treasury stock of $4,883.
<F4> Represents common stock of $90,354 less treasury stock of $695.
<F5> Represents accumulated deficit of $19,295 less minimum pension liability of
$3,135 and foreign currency translation adjustments of $22,598.
<F6> Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
